[Loughla]

Right, wrong, or indifferent, how do you suggest we ensure tax money is appropriately spent, outside of audits?

And I think you vastly overestimate the cost of staff accountants, business office staff and compliance officers at colleges and universities. Those 'bee watchers' aren't making six, seven or eight figure salaries. More like 35,XXX-55,XXX; a very reasonable figure for accountants.

[araes]

Ha, no issue with the red herring of accountant pay rates, just with the number of them there are. The ones I have real issues with pay for are the mucky mucks near the top [1], the increasing numbers of them there are [2], and the effect they have on tuition costs [3].

On reform, I'd say something similar to the IRS approach on taxes. Spend effort where there's a return on investment. IE, they're not going to audit people below the poverty line because they're sane, and the cost of the audit will be more than the return on back taxes. Similarly, don't audit $20 lunches, because five minutes of my time is worth more than the average we'll discover in errors.

In addition, an overall lower audit rate, but with randomized chance of audit that increases logarithmically as the charge goes up. Kind of similar to how the FAA checks pilot logs.

[1] http://www.post-gazette.com/image/2014/05/18/20140519college...

[2] http://www.washingtonmonthly.com/magazine/septemberoctober_2...

[3] http://watchdog.wpengine.netdna-cdn.com/wp-content/blogs.dir...

[Loughla]

I'm sorry about how lengthy this is, really I am.

Not sure how accountant pay rates are a red herring. You stated that they make 6, 7 and 8 figures; that's not accurate, I don't have hard statistics to back it up, but it just can't be. Also, the average institution (for my state) employs 1 staff accountant for every 500-600 students physically on campus, or every 800(ish) students counting on-line and commuter averages. That seems reasonable to me considering they do all of the accounting for the entire institution, not just student accounts.

[1] If you believe that college presidents have anything to do with internal controls of an institution, or have really any idea of what the audit compliance processes look like, you're stoned. The mucky mucks near the top have nothing to do with institutional audit compliance. The state and federal government does. You don't agree? Read http://www.gpo.gov/fdsys/pkg/FR-2013-12-26/pdf/2013-30465.pd... [CAUTION .PDF]

That's one of six federal statutes that I have to be versed in, and I'm only one of four people (but it actually replaced three others I had to know in the past, yay for streamlining!!).

[2] I never made a statement about administration, and it's not really pertinent to this argument. It's correct that there are more administrators now than there were in the 70's. Again, though, what impact that has on institutional audits is really up for question, and doesn't really make sense.

[3] What's the saying. . . Correlation does not equal causation. Administration costs are going up, correct. So are the costs of every other damned thing. Pair that with a decrease in funding from the state and declining enrollment in the last 5 years and now you've got something. The answer to high college costs is not only administrator pay. Of course that's not helping, but it's much, much larger than that; attempting to shift the blame to that one area is ignorant of many factors in public education funding.

AND FINALLY. Your entire last paragraph misses the mark entirely. The institution isn't auditing the individual about the $20 lunch. They're ensuring that they have internal proof of the cost, that it is allowable to the specific fund, and that all costs are 'reasonable and prudent'. External, state and federal auditors are responsible for auditing the institution. So while that $20 meal isn't important, 50 people buying $20 meals without reason are. Again, the beauty of controls is that they apply to everyone, they are impartial and they apply across the board. You don't get to pick which legislation and regulation to enforce based on price. You get to make sure your ducks are in a row so when the state steps in, they find nothing.

Oh, and "an overall lower audit rate, but with randomized chance of audit that increases logarithmically as the charge goes up" That's sort of how it works already. The states that I've worked in have audited every school that received public money over a certain threshold annually. Federal audits only occur in institutions who receive large amounts of federal money (the largest state institutions: think University of STATE), or those who have thrown up 'red flags' in their spending. . . . such as those that have incurred many, many $20 lunches without any documentation about why these expenses occurred. . . .

[snowwrestler]

> 50 people buying $20 meals without reason are.

If you take out "without reason," then 50 people buying $20 meals is not actually a problem.

If a person travels for 3 days and claims 3 dinners at $20 each, there is an obvious reason to claim them, and no reason to audit, even if a receipt is missing. In my experience, this is how personal expenses at corporations work, which by the way are also subject to significant audit and tax reporting requirements.

> Administration costs are going up, correct. So are the costs of every other damned thing.

This is not actually true; administration costs in academia are going up much faster than almost any other cost in the U.S.