Report 2019-114 Recommendation 4 Responses

Report 2019-114: California State University: The Mandatory Fees Its Campuses Charge Receive Little Oversight Yet They Represent an Increasing Financial Burden to Students (Release Date: May 2020)

Recommendation #4 To: University, California State

To ensure that CSU campuses adequately identify the need for their proposed mandatory fee amounts, the Chancellor's Office should extend its review responsibilities to include increases to existing mandatory fees.

Annual Follow-Up Agency Response From September 2023

Audit and Advisory Services (A&AS) completed three campus-based mandatory student fees audits as part of its annual audit plan for 2021-2022. The audits were completed in December 2021, May 2022, and August 2022. In general, A&AS noted that the campuses had appropriate frameworks for the administration of student fees. CSU management believes that these steps are sufficient and will not take further action.

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken

The Chancellor's Office's response does not address our recommendation. Our review found that campuses violated fee policy requirements related to increasing existing fees, including those related to making expenditure projections consulting with students before implementing a fee increase. However, the Chancellor's Office does not review campuses' processes for increasing fees to ensure that those processes comply with the policy before allowing a fee to go into effect. Further, we called out the violations mentioned above in the report and the Chancellor's Office did not dispute those findings, despites its statement now that its audits did not identify issues. Finally, it has not indicated that it intervened to address the violations, nor that it intends to do so. Therefore, the actions taken by the Chancellor's Office do not implement our recommendation.

Annual Follow-Up Agency Response From October 2022

Audit and Advisory Services (A&AS) completed three campus-based mandatory student fees audits as part of its annual audit plan for 2021-2022. The audits were completed in December 2021, May 2022, and August 2022. In general, A&AS noted that the campuses had appropriate frameworks for the administration of student fees.

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken

The Chancellor's Office's response does not address our recommendation. Our review found that campuses violated fee policy requirements related to increasing existing fees. As we explain on page 30 of our report, two campuses failed to make required expenditure projections for proposed fee increases. For other fee increases, campuses also violated fee policy requirements related to consulting with students before implementing a fee increase, as we discuss on pages 33 and 34. However, the Chancellor's Office currently does not review proposed fee increases to ensure that those campuses' processes comply with the policy.

As we have stated in previous assessments, CSU's approach to addressing the issues we found through additional internal audits is not sufficient. In the event those audits identify issues with campuses' fee processes, it will be after mandatory fee increases are already in place and students have been paying them. Further, although we called out the above violations in the report and the Chancellor's Office did not dispute those findings, it has not indicated that it intervened to address the violations, nor that it intends to do so. Therefore, notwithstanding CSU's statements about the conclusions of its recent audits, we stand by our recommendation that the Chancellor's Office should extend its review responsibilities to include proposed increases to existing mandatory fees .

Annual Follow-Up Agency Response From October 2021

At the May 2021 meeting, the Board of Trustees approved audits of campus-based mandatory fees as part of the division of Audit and Advisory Services annual audit plan for 2021-2022. The audits will assess whether the campuses adhered to CSU policy with regard to the establishment, assessment, and implementation of the fees. The first of these audits started on September 27, 2021, and two more are currently planned.

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken

As with its previous responses, the Chancellor's Office's reported actions do not address our recommendation. Our review found that campuses violated fee policy requirements related to increasing existing fees. As we explain on page 30 of our report, two campuses failed to make required expenditure projections for proposed fee increases. For other fee increases, campuses also violated fee policy requirements related to consulting with students before implementing a fee increase, as we discuss on pages 33 and 34. However, the Chancellor's Office currently does not review campuses' processes for increasing fees to ensure that those processes comply with the policy.

Even if the Chancellor's Office's actions succeed in identifying such violations in the future, it will be after mandatory fee increases are already in place and students have been paying them, rather than before the increases are imposed. Further, although we called out the above violations in the report and the Chancellor's Office did not dispute those findings, it has not indicated that it intervened to address the violations, nor that it intends to do so. Therefore, we question whether the Chancellor's Office will take any action if and when its own staff identify similar violations after the fact. Therefore, we stand by our recommendation that the Chancellor's Office should extend its review responsibilities to include proposed increases to existing mandatory fees so that CSU campuses adequately identify the need for their proposed mandatory fee amounts.

1-Year Agency Response

At the May 2021 meeting, the Board of Trustees is expected to approve audits of campus-based mandatory fees as part of the division of Audit and Advisory Services annual audit plan for 2021-2022. The audits will assess whether the campuses adhered to CSU policy with regard to the establishment, assessment, and implementation of the fees.

California State Auditor's Assessment of 1-Year Status: No Action Taken

The Chancellor's Office's response does not address our recommendation. Our review found that campuses violated fee policy requirements related to increasing existing fees. As we explain on page 30 of our report, two campuses failed to make required expenditure projections for proposed fee increases. For other fee increases, campuses also violated fee policy requirements related to consulting with students before implementing a fee increase, as we discuss on pages 33 and 34. However, the Chancellor's Office currently does not review campuses' processes for increasing fees to ensure that those processes comply with the policy.

Even if the Chancellor's Office's planned actions succeed in identifying such violations in the future, it will be after mandatory fee increases are already in place and students have been paying them, rather than before the increases are imposed. Further, although we called out the above violations in the report and the Chancellor's Office did not dispute those findings, it has not indicated that it intervened to address the violations, nor that it intends to do so. Therefore, we question whether the Chancellor's Office will take any action if and when its own staff identify similar violations after the fact. Therefore, we stand by our recommendation that the Chancellor's Office should extend its review responsibilities to include proposed increases to existing mandatory fees so that CSU campuses adequately identify the need for their proposed mandatory fee amounts.

6-Month Agency Response

The Chancellor has asked the division of Audit and Advisory Services to conduct more frequent periodic reviews of campus-based mandatory fees to ensure that campuses continue to adhere to CSU policy with regard to their establishment, assessment, and implementation. The division of Audit and Advisory Services is developing its 2021-22 audit plan and will include at least one fee audit in the audit plan it submits to the Board of Trustees for approval in May 2021.

California State Auditor's Assessment of 6-Month Status: No Action Taken

The Chancellor's Office's response does not address our recommendation. Rather, the response mischaracterizes our audit results by stating that it will "ensure campuses continue to adhere to CSU policy." In fact, our review found that campuses violated fee policy requirements related to increasing existing fees. As we explain on page 30 of our report, two campuses failed to make required expenditure projections for proposed fee increases. For other fee increases, campuses also violated fee policy requirements related to consulting with students before implementing a fee increase, as we discuss on pages 33 and 34. However, the Chancellor's Office currently does not review campuses' processes for increasing fees to ensure that those processes comply with the policy.

Even if the Chancellor's Office's planned actions succeed in identifying such violations in the future, it will be after mandatory fee increases are already in place and students have been paying them, rather than before the increases are imposed. The fact that the Chancellor's Office does not plan to begin this work until 2021 further delays any potential indication and suggests the Chancellor's Office is not serious about addressing the problems we identified. Further, although we called out the above violations in the report and the Chancellor's Office did not dispute those findings, it has not indicated that it intervened to address the violations, nor that it intends to do so. Therefore, we question whether the Chancellor's Office will take any action if and when its own staff identify similar violations after the fact. Therefore, we stand by our recommendation that the Chancellor's Office should extend its review responsibilities to include proposed increases to existing mandatory fees so that CSU campuses adequately identify the need for their proposed mandatory fee amounts.

60-Day Agency Response

The Chancellor has asked the division of Audit and Advisory Services to conduct more frequent periodic reviews of campus-based mandatory fees to ensure that campuses continue to adhere to CSU policy with regard to their establishment, assessment, and implementation. The division of Audit and Advisory Services plans to begin these reviews in 2021, after the audit plan is approved by the Board of Trustees.

California State Auditor's Assessment of 60-Day Status: No Action Taken

The Chancellor's Office's response does not address our recommendation. Rather, the response mischaracterizes our audit results by stating that it will "ensure campuses continue to adhere to CSU policy." In fact, our review found that campuses violated fee policy requirements related to increasing existing fees. As we explain on page 30 of our report, two campuses failed to make required expenditure projections for proposed fee increases. For other fee increases, campuses also violated fee policy requirements related to consulting with students before implementing a fee increase, as we discuss on pages 33 and 34. However, the Chancellor's Office currently does not review campuses' processes for increasing fees to ensure that those processes comply with the policy.

Even if the Chancellor's Office's planned actions succeed in identifying such violations in the future, it will be after mandatory fee increases are already in place and students have been paying them, rather than before the increases are imposed. The fact that the Chancellor's Office does not plan to begin this work until 2021 further delays any potential indication and suggests the Chancellor's Office is not serious about addressing the problems we identified. Further, although we called out the above violations in the report and the Chancellor's Office did not dispute those findings, it has not indicated that it intervened to address the violations, nor that it intends to do so. Therefore, we question whether the Chancellor's Office will take any action if and when its own staff identify similar violations after the fact. Therefore, we stand by our recommendation that the Chancellor's Office should extend its review responsibilities to include proposed increases to existing mandatory fees so that CSU campuses adequately identify the need for their proposed mandatory fee amounts.

All Recommendations in 2019-114

Agency responses received are posted verbatim.