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

Letter

Background

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.

Grantees Reported a Range of Uses and Benefits for Title III and Title V Grants but Cited Some Implementation Challenges

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.

Education Has Developed New Objectives, Strategies, and Performance Measures that Focus on Program Outcomes, but Challenges Remain

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.

Education Has Made Some Changes Designed to Better Target Monitoring and Assistance, but Its Efforts Remain Limited

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.

Prior Recommendations and Agency Response

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.

GAO Contacts

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.

Appendix I: Characteristics of Fiscal Year 2006 Title III and Title V Grantees

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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