Over the last eight months, KU MBA students have called into question the use of differential tuition funds at the KU School of Business. In previous columns and newspaper articles, students have articulated their concerns with the effectiveness of the use of these funds and the governance of these funds when compared to the requisite requirements for the funds as outlined by a proposal that was approved by the Kansas Board of Regents. As the result of the Dean’s decision to eliminate oversight of these funds, students pushed for an outside audit. With BKD’s recently completed review of how the differential tuition funds have been spent, the University has taken a step forward in helping to restore transparency at the School of Business.
We have never claimed criminal activity, just that there was no oversight and accountability for these funds. The review completed by BKD confirms that proper governance of these funds did not exist. With its findings that the student advisory committee was disbanded after its first year and that none of the required financial statements were ever produced or distributed, our key concerns with the lack of transparency and accountability by the leadership of the School have been confirmed. BKD’s recommendation that the accounting system and related internal controls behind the differential tuition fund be changed so as to use standard fund accounting shows just how recklessly these funds were supervised. Furthermore, BKD’s statement that the availability of funds was the determining factor as to whether expenditures were paid by general or differential tuition funds shows that these funds were expensed in a slush fund-like manner. The School was fortunate that the expenses broadly matched the original differential tuition proposal. One big question that remains is if differential tuition funds had such poor controls, what does this say about the controls in place to protect state funds?
The original differential tuition proposal was without a doubt a very ambitious document with numerous qualitative factors that are hard to measure. However, the agreement did state that the funds should be used in a manner that improved the School’s ranking and that the Dean’s Office was to be held accountable for the efficient use of these funds. To us, it is clear that these funds have not been used efficiently. Despite the School offering several new majors and collecting $29.9M in additional tuition, the School has, according to BKD, seen “total instructors” drop from 126 the year before differential tuition to 108 last year, causing class sizes to soar. Statistics like these naturally make students question whether the School has been managed properly and differential tuition funds used efficiently.
One of the primary goals of differential tuition was to use the funds to help propel the School of Business into the Top 25 of national rankings. In 2004, the School of Business ranked 30th among public institutions in the U.S. News and World Report magazine, and 57th overall. In 2010, the School ranked 35th among public institutions and again, 57th overall. Despite collecting $29.9M in differential tuition, the School of Business has slipped in national rankings.
Furthermore, the inefficient manner in which the School has been operated, and differential tuition funds used, can be seen in the following data taken from the AACSB (The Association to Advance Collegiate Schools of Business) for the 2009-2010 year:
The KU School of Business had a total operating budget of $16.8M and an enrollment of 1,613, meaning that the School spent $10,400 per student to achieve a 2010 ranking that tied it at 57th overall.
The Trulaske College of Business at MU had a total operating budget of $19.9M and an enrollment of 4,299, spending $4,600 per student to achieve a 2010 ranking that tied it at 42nd overall, according to U.S. News and World Report.
Also tied at 42nd overall was The Price College of Business at OU, which had a total operating budget of $18M and an enrollment of 3,113; a mere $5,700 per student.
The business programs at MU and OU are both direct competitors to the KU School of Business, yet despite being the third highest funded School of Business in the Big 12 on a per-student basis — thanks to differential tuition — the School is still not competitive with our regional peers.
Why do we, as MBA students, care about the oversight and accountability of the differential tuition funds? For the same reason we have seen such swings in politics over the last two election cycles — we simply do not feel we are getting our money’s worth. For students, perception is reality and our reality lies in our experiences: promises that haven‘t been upheld, decreasing academic standards, increasing class sizes, lacking curriculum, lost international programs, problems associated with a multi-campus program, limited advising support relative to the undergraduate students and a multitude of other concerns we’ve already communicated.
This has been a difficult and arduous process. In our eyes, the current administration has lost sight of what is important to the students. As a result, the School and MBA program in particular have suffered a serious decline that cannot be adequately substantiated through a one-time review. At the end of the day, it is our tuition dollars that fund this program. As a result, students should have a continuing voice in how it operates. We are disappointed that — through both public and private channels — no specific goals, actionable timelines, or criteria for judging progress have been put forth by KU leadership.
We would like to ask Provost Vitter to work with us to move the School forward. Throughout this whole process, Dean Fuerst has publicly and privately described us as a small group of “disaffected” students who are upset about merely driving to the Edwards Campus for class every week. That could not be further from the truth. We and the entire MBA program care deeply about our School, our alumni, and future Business School students. We raised these concerns because we wanted to make the KU School of Business better. Now that student concerns have been fully identified, the School has every opportunity to prioritize and begin rebuilding, a process we wholeheartedly encourage and support.
This a very exciting time for the Business School as it is searching for a new Dean, Associate Dean, and MBA director. The school is well funded from an operating perspective, has a vibrant alumni base that is excited for change and a well-regarded faculty base that is positioned to make numerous new hires. We look forward to the School of Business rising to its potential.