The enquiry is part of an ongoing review of how US universities receive funding from foreign countries such as China and Saudi Arabia.
“The more we dig, the more we find that too many are underreporting or not reporting”
It centres around a law requiring colleges and universities that process US federal student aid to report gifts from and contracts with any foreign source that exceed US$250,000 in value and to disclose any foreign ownership or control, twice each year.
In a statement, the department said that Yale University may have failed to report at least $375 million in foreign gifts and contracts and that it “chose” not to report any gifts and contracts over the last four years.
Harvard University may lack “appropriate institutional controls over foreign money”, according to the department, and has “failed to report fully all foreign gifts and contracts as required by law” in Section 117 of the Higher Education Act.
“This is about transparency,” said US secretary of Education, Betsy DeVos.
“If colleges and universities are accepting foreign money and gifts, their students, donors, and taxpayers deserve to know how much and from whom. Moreover, it’s what the law requires.
“Unfortunately, the more we dig, the more we find that too many are underreporting or not reporting at all. We will continue to hold colleges and universities accountable and work with them to ensure their reporting is full, accurate, and transparent, as required by the law,” she added.
But Sarah K. Spreitzer, director department of government and public affairs at ACE, told The PIE News that the department is “investigating institutions who don’t have a lot of clarification on what they are supposed to be reporting”.
Spreitzer explained that Harvard has been reporting gifts and contracts from foreign countries every year. However, the way they have reported is different from other institutions.
“They have reported one total number for gifts for a foreign country and then one aggregate number for contracts from all foreign countries,” she said.
“So when you look on the spreadsheet, they have a total amount of gifts from China or a total amount of contracts from China, but they don’t break it out by specific entities from that country.”
Spreitzer told The PIE that there is a lack of clarity over whether or not Harvard has reported its foreign funding in an acceptable way.
“That actually goes to a question that ACE asked the department back in January of 2019 that they never responded to,” she said.
“In our letter that we sent to the department, we asked ‘when is it sufficient to only list the country and report in aggregate?’ and we never got a response back.”
In response to this point, a spokesperson for The DoE told The PIE the department “does not always directly respond to unsolicited correspondence from industry lobbyists”.
However, the spokesperson said the department has “solicited, evaluated, and responded to the views and concerns of the higher education community and other members of the public” regarding Section 117 through the notice and comment process.
In the case of Yale, Spreitzer said that the university did miss four years of reporting, but issued a statement explaining that upon discovery of the error, it tried to update the information with the DoE.
“[Yale] sent [the department] the missing four years of data back in 2019 and the department responded by launching an investigation,” she explained.
“It doesn’t do anything to help transparency because this sends a message to the institutions that if they’re out of compliance and they try to get into compliance, then the department will launch an investigation,” she added.
“This sends a message to the institutions that… if try to get into compliance, then the department will launch an investigation”
TheDoE has published for public comment a “modern and robust” information collection system under the Paperwork Reduction Act to promote compliance and transparency.
However, Spreitzer argued that this new system will not improve transparency, and instead will create more questions for universities trying to report under Section 117.
“This was developed within the department. They haven’t talked to us, or other stakeholders, regarding it.
“I would just say it creates more questions that we can’t answer,” she added.