The 30-page report released Friday was critical of the 11-person agency called the Nonpublic Postsecondary Education Commission. Although funding has actually increased while other parts of state government have shrunk, the agency hasn't keep as close a check on the private and out-of-state institutions permitted to grant more than 300 degrees and certificates to 120,000 students.
The commission primarily focuses on schools operating in the state after 1990, except those overseen by professional licensing boards or certain accrediting agencies. The list runs from bartending academies to art schools.
"Although NPEC has established a process to review institutions seeking authorization to operate in the state, our review found that it has not adequately documented the policies and procedures needed to guide standards administrators’ authorization decisions," the auditors wrote. They said a review of the files found inconsistencies in how schools were treated.
One of the chief jobs of the commission is to ensure that students do not lose their money paying a school that ultimately closes. But the commission is lax in keeping tabs on the financial health of the schools, the auditors concluded.
The instructions for filing financial documents haven't been updated since 1993, and the auditors found the agency took them on faith.
"Our discussions with the standards administrators revealed that none of them takes steps to verify the information such as by obtaining bank account statements, income tax returns, or other supporting documentation," wrote the auditors.
The auditors found files for some schools contained none of the required financial documents while at two in a sample of 41 were erroneous.
Administrators from the commission did not dispute most of the findings and made assurances that procedures would improve.