Low-Income and Minority Serving Institutions: Education Has Taken Steps to Improve Monitoring and Assistance, but Further Progress Is Needed
Published: 2007-06-04T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Institutions that may receive funding under Titles III and V include Historically Black Colleges and Universities (HBCUs), Tribal Colleges, Hispanic Serving Institutions, Alaska Native Serving Institutions, Native Hawaiian Serving Institutions, and other postsecondary institutions that serve low-income students. In fiscal year 2006, these programs provided $448 million in funding for over 500 grantees, nearly double fiscal year 1999 funding of $230 million. GAO examined these programs to determine (1) how institutions used their Title III and Title V grants and the benefits they received from using these grant funds, (2) what objectives and strategies the Department of Education (Education) has developed for Title III and Title V programs, and (3) to what extent Education monitors and provides assistance to these institutions. This testimony updates a September 2004 report on these programs (GAO-04-961). To update our work, GAO reviewed Education policy and planning documents, and program materials and grantee performance reports; interviewed Education officials; and analyzed Education data on grantee characteristics.
section_title: What GAO Found
paragraphs: In their performance reports, the six grantees we reviewed most commonly reported using Title III and Title V grant funds to strengthen academic quality; improve support for students and student success; and improve institutional management and reported a wide range of benefits. For example, Sinte Gleska, a tribal college in South Dakota, used part of its Title III grant to fund the school's distance learning department, to provide students access to academic and research resources otherwise not available in its rural isolated location. Our review of grant files found that institutions experienced challenges, such as staffing problems, which sometimes resulted in implementation delays. For example, one grantee reported delays in implementing its management information system due to the turn over of experienced staff. As a result of these implementation challenges, grantees sometimes need additional time to complete planned activities. Although Education has established outcome based objectives and performance measures, it needs to take steps to align some strategies and objectives, and develop additional performance measures. Education has established an overall strategy to improve the academic, administrative, and fiscal stability of grantees, along with objectives and performance measures focused on student outcomes, such as graduation rates. In 2004, we reported that Education's strategic planning efforts in were focused on program outputs that did not assess programmatic impacts, such as the percentage of goals that grantees met or exceeded, rather than outcomes. While Education has made progress in developing outcome based measures, we found insufficient links between its strategies for improving administrative and fiscal stability with its student outcome objective. To address challenges in measuring institutional progress in areas such as administrative and fiscal stability, Education is conducting a study of the financial health of low income and minority serving institutions supported by Title III and Title V. Education has made changes to better target monitoring and assistance in response to recommendations GAO made in 2004, however, additional study is needed to determine the effectiveness of these efforts. For example, Education uses risk indicators designed to better target grantees that may require site visits. While Education implemented an electronic monitoring system, it lacks the ability to systematically track grantee performance as designed. While Education provides technical assistance through various methods, its ability to target assistance remains limited in that its feedback mechanisms may not encourage open communication. Specifically, Education relies on grantee performance reports that are tied to funding decisions to solicit feedback.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the federal government’s  programs to support low-income and minority serving institutions (MSIs).  We previously reported on the Department of Education’s efforts to  monitor and assist these institutions. Beginning in 1965, Congress created  several programs under the Higher Education Act (HEA) to strengthen and  support developing postsecondary institutions. In subsequent  reauthorizations, Congress expanded the HEA to include programs that  support institutions that provide low-income and minority students with  access to higher education. These programs are generally referred to as  Titles III and V of the HEA. The amount of federal funds available for these  programs has nearly doubled from about $230 million in fiscal year 1999 to  about $448 million in fiscal year 2007. Given the recent expansion of these  programs and that HEA is slated for reauthorization this year, this hearing  presents a timely opportunity to explore these grant programs. My  testimony today focuses on (1) how institutions used their Title III and  Title V grants and the benefits they received from using these grant funds,  (2) what objectives and strategies the Department of Education  (Education) has developed for Title III and Title V programs, and (3) to  what extent Education monitors and provides assistance to Title III and  Title V institutions.
In summary, we found that grantees most commonly reported using Title  III and Title V grant funds to strengthen academic quality; improve support  for students and student success; and improve institutional management  and reported a wide range of benefits. For example, Sinte Gleska, a tribal  college in South Dakota, used part of its Title III grant to fund the school’s  distance learning department, and to provide students access to academic  and research resources otherwise not available at its rural isolated  location.
However, our review of grant files found that institutions experienced  challenges, such as staffing problems, which sometimes resulted in  implementation delays. For example, one grantee reported delays in  implementing its management information system due to the turnover of  experienced staff. In addition, Education officials told us that common  problems include delays in construction of facilities and hiring of staff. As  a result of these implementation challenges, grantees sometimes need  additional time to complete planned activities.
Although Education has established outcome based objectives and  performance measures, it needs to take additional steps to align some of  its strategies and objectives, and develop additional performance  measures. Education has established an overall strategy to improve the  academic, administrative, and fiscal stability of HBCUs, HSIs, and Tribal  Colleges, along with objectives and performance measures focused on  maintaining or increasing student outcomes, such as graduation rates.  When we reported on Education’s strategic planning efforts in our 2004  report, its measures were focused on program outputs rather than  outcomes, which did not assess programmatic impacts. While Education  has made progress in developing more outcome based measures, we found  insufficient links between its strategies for improving administrative and  fiscal stability with its objectives to increase student outcomes. To address  challenges in measuring institutional progress in areas such as  administrative and fiscal stability, Education is conducting a study of the  financial health of low income and minority serving institutions supported  by Title III and Title V programs.
Education has made changes to better target monitoring and assistance in  response to recommendations we made in our 2004 report, however,  additional study is needed to determine the effectiveness of these efforts.  For example, Education uses risk indicators designed to better target at  risk grantees that may require site visits, but a more extensive review is  required to determine the quality of these visits. While Education  implemented an electronic monitoring system, it lacks the ability to  systematically track grantee performance as designed. Education has  expanded its training specific to monitoring and assistance by offering  courses such as an overview of grant monitoring. However, more  information is needed to assess how well courses meet staff needs  because Education’s new training recordkeeping system does not contain  information from prior systems. While Education provides technical  assistance through various methods, its ability to target assistance remains  limited in that its feedback mechanisms may not encourage open  communication.
To determine how institutions used Title III and Title V funds and the  resulting benefits, we reviewed Education’s 2006 Annual Performance  Reports for six grantee institutions of Title III and Title V grant programs  to determine uses and benefits of grant funds, and challenges associated  with project implementation. Education selected these institutions based  on our request for examples of schools with typical grant experience. The  results from our review cannot be generalized to all grantees, and we did  not independently verify the accuracy of the information that grantees  reported. To determine the objectives, strategies, and performance  measures Education has developed for Title III and Title V programs, we  talked with Education officials and reviewed program and planning  documents. To determine how Education monitors and provides  assistance to the Title III and Title V grantees, we interviewed Education  officials and reviewed documents, including program policies and  guidance. We also reviewed applicable laws and regulations, and analyzed  data regarding the characteristics of fiscal year 2006 grantee institutions as  reported in the Integrated Postsecondary Education Data System (IPEDS).  To assess the completeness of the IPEDS data, we reviewed the National  Center for Education Statistics’ documentation on how the data were  collected and performed electronic tests to identify missing or out-of- range values. On the basis of these reviews and tests, we found the data  sufficiently reliable for our purposes. Our work was performed in May  2007 in accordance with generally accepted government auditing  standards.
subsections: section_title: Background
paragraphs: Postsecondary institutions that serve large proportions of economically  disadvantaged and minority students are eligible to receive grants from  Education through Title III and Title V of the Higher Education Act, as  amended, to improve academic and program quality, expand educational  opportunities, address institutional management issues, enhance  institutional stability, and improve student services and outcomes.  Institutions eligible for funding under Titles III and V include Historically  Black Colleges and Universities (HBCUs), Tribal Colleges, Hispanic  Serving Institutions (HSIs), Alaska Native and Native Hawaiian  Institutions, and other undergraduate institutions of higher education that  serve low-income students. While these institutions differ in terms of the  racial and ethnic makeup of their students, they serve a disproportionate  number of financially needy students and have limited financial resources,  such as endowment funds, with which to serve them. (See app. I for  characteristics of Title III and Title V institutions and their students.) Title  III and Title V statutory provisions generally outline broad program goals  for strengthening participating institutions, but provide grantees with  flexibility in deciding which approaches will best meet their needs. An  institution can use the grants to focus on one or more activities that will  help it achieve the goals articulated in its comprehensive development  plan—a plan that each applicant must submit with its grant application  outlining its strategy for achieving growth and self-sufficiency. The  statutory and regulatory eligibility criteria for all of the programs, with the  exception of the HBCU program, contain requirements that institutions  applying for grants serve a significant number of economically  disadvantaged students. See table 1 for additional information about  eligibility requirements.
Historically, one of the primary missions of Title III has been to support  Historically Black Colleges and Universities, which play a significant role  in providing postsecondary opportunities for African American, low- income, and educationally disadvantaged students. These institutions  receive funding, in part, to remedy past discriminatory action of the states  and the federal government against black colleges and universities. For a  number of years, all institutions that serve financially needy students— both minority serving and nonminority serving—competed for funding  under the Strengthening Institutions Program, also under Title III.  However, in 1998, the Higher Education Act was amended to create new  grant programs specifically designated to provide financial support for  Tribal Colleges, Alaska Native and Native Hawaiian Institutions, and  Hispanic Serving Institutions. These programs have provided additional  opportunities for Minority Serving Institutions to compete for federal grant  funding. In 1999, the first year of funding for the expanded programs, 55  Hispanic Serving, Tribal, Alaska Native, and Native Hawaiian Institutions  were awarded grants, and as of fiscal year 2006, 197 such institutions had  new or continuation grants. (See table 2).
The grant programs are designed to increase the self-sufficiency and  strengthen the capacity of eligible institutions. Congress has identified  many areas in which institutions may use funds for improving their  academic programs. Authorized uses include, but are not limited to,  construction, maintenance, renovation or improvement of educational  facilities; purchase or rental of certain kinds of equipment or services;  support of faculty development; and purchase of library books,  periodicals, and other educational materials.
section_title: Grantees Reported a Range of Uses and Benefits for Title III and Title V Grants but Cited Some Implementation Challenges
paragraphs: In their grant performance reports, the six grantees we recently reviewed  most commonly reported using Title III and Title V grant funds to  strengthen academic quality; improve support for students and student  success; and improve institutional management and reported a range of  benefits. To a lesser extent, grantees also reported using grant funds to  improve their fiscal stability. However, our review of grant files found that  institutions experienced challenges, such as staffing problems, which  sometimes resulted in implementation delays.
Efforts to Improve Academic Quality—Four of the six grantees we  reviewed reported focusing at least one of their grant activities on  improving academic quality. The goal of these efforts was to enhance  faculty effectiveness in the classroom and to improve the learning  environment for students. For example, Ilisagvik College, an Alaska  Native Serving Institution, used part of its Title III, part A Alaska Native  and Native Hawaiian grant to provide instruction and student support  services to prepare students for college-level math and English courses.  According to the institution, many of its students come to college  unprepared for math and English, and grant funds have helped the  school to increase completion rates in these courses by 14 percentage  points.
Efforts to Improve Support for Students and Student Success—Four  of the six grantees we reviewed reported focusing at least one of their  grant activities on improving support for students and student success.  This area includes, among other things, tutoring, counseling, and  student service programs designed to improve academic success. Sinte  Gleska, a tribal college in South Dakota, used part of its Title III grant  to fund the school’s distance learning department. Sinte Gleska  reported that Title III has helped the school develop and extend its  programs, particularly in the area of course delivery through  technology. In addition, the school is able to offer its students access to  academic and research resources otherwise not available in its rural  isolated location.
Efforts to Improve Institutional Management—Four of the six  grantees we reviewed reported focusing at least one of their grant  activities on improving institutional management. Examples in this  area include improving the technological infrastructure, constructing  and renovating facilities, and establishing or enhancing management  systems, among others. For example, Chaminade University, a Native  Hawaiian Serving Institution, used part of its Title III grant to enhance  the school’s academic and administrative information system.  According to Chaminade University, the new system allows students to  access class lists and register on-line, and readily access their student  financial accounts. Additionally, the Title III grant has helped provide  students with the tools to explore course options and develop financial  responsibility.
Efforts to Improve Fiscal Stability at Grantee Institutions—Two of  the six institutions we reviewed reported focusing at least one of their  grant activities on improving its fiscal stability. Examples include  activities such as establishing or enhancing a development office,  establishing or improving an endowment fund, and increasing research  dollars. Development officers at Concordia College, a historically black  college in Alabama, reported using its Title III grant to raise the  visibility of the college with potential donors.
While grantees reported a range of uses and benefits, four of the six  grantees also reported challenges in implementing their projects. For  example, one grantee reported delays in implementing its management  information system due to the turn-over of experienced staff. Another  grantee reported project delays because needed software was not  delivered as scheduled. In addition, Education officials told us that  common problems for grantees include delays in constructing facilities  and hiring. As a result of these implementation challenges, grantees  sometimes need additional time to complete planned activities. For  example, 45 percent of the 49 grantees in the Title V, developing Hispanic  Serving Institutions program that ended their 5-year grant period in  September 2006 had an available balance greater than $1,000, ranging from  less than 1 percent (about $2,500) to 16 percent (about $513,000) of the  total grant. According to Education regulations, grantees generally have  the option of extending the grant for 1 year after the 5-year grant cycle has  ended to obligate remaining funds.
section_title: Education Has Developed New Objectives, Strategies, and Performance Measures that Focus on Program Outcomes, but Challenges Remain
paragraphs: Education has established a series of new objectives, strategies, and  performance measures that are focused on key student outcomes for Title  III and Title V programs. As part of Education’s overall goal for higher  education within its 2007-2012 Strategic Plan, Education established a  supporting strategy to improve the academic, administrative, and fiscal  stability of HBCUs, HSIs, and Tribal Colleges. Education has also  established objectives in its annual program performance plans to  maintain or increase student enrollment, persistence, and graduation  rates at all Title III and Title V institutions, and has developed  corresponding performance measures. When we reported on Education’s  strategic planning efforts in our 2004 report, it measured its progress in  achieving objectives by measuring outputs, such as the percentage of  institutional goals that grantees had related to academic quality that were  met or exceeded. However, these measures did not assess the  programmatic impact of its efforts. Education’s new objectives and  performance measures are designed to be more outcome focused. In  addition, the targets for these new performance measures were  established based on an assessment of Title III and Title V institutions’  prior performance compared to performance at all institutions that  participate in federal student financial assistance programs. Education  officials told us that they made these changes, in part, to address concerns  identified by the Office of Management and Budget that Education did not  have specific long-term performance measures that focus on outcomes  and meaningfully reflect the purpose of the program  Education needs to take additional steps to align some of its strategies and  objectives, and develop additional performance measures. GAO has  previously reported that performance plans may be improved if strategies  are linked to specific performance goals and the plans describe how the  strategies will contribute to the achievement of those goals. We found  insufficient links between strategies and objectives in Education’s  strategic plans and annual program performance plans. Specifically,  Education needs to better link its strategies for improving administrative  and fiscal stability with its objectives to increase or maintain enrollment,  persistence, and graduation rates because it is unclear how these  strategies impact Education’s chosen outcome measures.
In fact, GAO and other federal agencies have previously found Education  faces challenges in measuring institutional progress in areas such as  administrative and fiscal stability. To address part of this problem,  Education is conducting a study of the financial health of low-income and  minority serving institutions supported by Title III and Title V funds to  determine, among other things, the major factors influencing financial  health and whether the data Education collects on institutions can be used  to measure fiscal stability. Education officials expect the study to be  completed in 2008.
section_title: Education Has Made Some Changes Designed to Better Target Monitoring and Assistance, but Its Efforts Remain Limited
paragraphs: Education made changes designed to better target monitoring and  assistance in response to recommendations we made in our 2004 report;  however, additional work is needed to ensure the effectiveness of these  efforts. Specifically, we recommended that the Secretary of Education  take steps to ensure that monitoring and technical assistance plans are  carried out and targeted to at-risk grantees and the needs of grantees guide  the technical assistance offered. Education needed to take several actions  to implement this recommendation, including completing its electronic  monitoring tools and training programs to ensure that department staff are  adequately prepared to monitor and assist grantees and using  appropriately collected feedback from grantees to target assistance.
Education has taken steps to better target at-risk grantees, but more  information is needed to determine its effectiveness. In assessing risk,  department staff are to use a variety of sources, including expenditure of  grant funds, review of performance reports, and federally required audit  reports. However, according to a 2007 report issued by Education’s Office  of Inspector General, program staff did not ensure grantees complied with  federal audit reporting requirements. As a result, Education lacks  assurance that grantees are appropriately managing federal funds, which  increases the potential risk for waste, fraud, and abuse. In addition to  reviewing grantee fiscal, performance, and compliance information,  program staff are also required to consider a number of factors affecting  the ability of grantees to manage their grants in the areas of project  management and implementation, funds management, communication,  and performance measurement. Education reports that identifying  appropriate risk factors have been a continuous process and that these  factors are still being refined. On the basis of results of the risk  assessments, program staff are to follow up with grantees to determine  whether they are in need of further monitoring and assistance. Follow-up  can take many forms, ranging from telephone calls and e-mails to on-site  compliance visits and technical assistance if issues cannot not be readily  addressed. In targeting grantees at risk, Education officials told us that the  department has recently changed its focus to improve the quality of  monitoring while making the best use of limited resources. For example,  Education officials said that risk criteria are being used to target those  grantees most in need of sites visits rather than requiring staff to conduct a  minimum number each year. Based on information Education provided,  program staff conducted site visits at 28 of the 517 institutions receiving  Title III and Title V funding in fiscal year 2006, but a more extensive review  is required to determine the nature and quality of them.
Education’s ability to effectively target monitoring and assistance to  grantees may be hampered because of limitations in its electronic  monitoring system, which are currently being addressed. Education  implemented this system in December 2004 and all program staff were  required to use the system as part of their daily monitoring activities. The  system was designed to access funding information from existing systems,  such as its automated payment system, as well as to access information  from a departmental database that contains institutional performance  reports. According to Education, further refinements to its electronic  monitoring system to systematically track and monitor grantees. For  example, the current system does not allow users to identify the risk by  institution. Education also plans to automate and integrate the risk-based  plan with their electronic monitoring system. Education anticipates the  completion of system enhancements by the end of 2007. Because efforts  are ongoing, Education has limited ability to systematically track grantee  performance and fiscal information.
Regarding training, Education reports that it has expanded course  offerings to program staff specific to monitoring and assistance. Education  officials told us that the department has only a few mandated courses, but  noted that a number of training courses are offered, such as grants  monitoring overview and budget review and analysis, to help program staff  acquire needed skills for monitoring and assistance. However, because  Education recently moved to a new training recordkeeping system that  does not include information from prior systems, we were unable to  determine the extent to which program staff participated in these  offerings. We reported in 2004 that staff were unaware of the guidelines  for monitoring grantees and more information is needed to determine the  extent to which new courses are meeting the needs of program staff.
While Education provides technical assistance through program  conferences, workshops, and routine interaction between program  officers and grantees, Education’s ability to target assistance remains  limited, in that its feedback mechanisms may not encourage open  communication. Education officials told us that they primarily rely on  grantee feedback transmitted in annual performance reports and  communication between program officers and grantees. As we reported in  2004, Education stated that it was considering ways to collect feedback  separate from its reporting process for all its grant programs but no such  mechanisms have been developed.
section_title: Prior Recommendations and Agency Response
paragraphs: We previously recommended that the Secretary of Education take steps to  ensure that monitoring and technical assistance plans are carried out and  targeted to at-risk grantees and the needs of grantees guide the technical  assistance offered. These steps should include completing its automated  monitoring tools and training programs to ensure that department staff are  adequately prepared to monitor and assist grantees and using  appropriately collected feedback from grantees to target assistance.
Education agreed with our recommendation, and has taken actions to  target its monitoring and technical assistance to at-risk grantees. However,  additional study is needed to determine the effectiveness of these efforts.
Mr. Chairman, this completes my prepared statement. I would be happy to  respond to any questions you or other Members of the Subcommittee may  have at this time.
section_title: GAO Contacts
paragraphs: For further information regarding this testimony, please contact me at  (202) 512-7215. Individuals making key contributions to this testimony  include Debra Prescott, Tranchau (Kris) Nguyen, Claudine Pauselli,  Christopher Lyons, Carlo Salerno, Sheila McCoy, and Susan Bernstein.
section_title: Appendix I: Characteristics of Fiscal Year 2006 Title III and Title V Grantees
paragraphs: Federal grants include Pell Grants and other federal grants awarded to individual students.
This is an admission policy whereby the institution will accept any student who applies.  (2) Data for average percentage of students with federal grant aid is from fiscal year 2004.
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