“My sense is that universities, in general, are pretty flush with cash and not really price sensitive,” said Rep. Mike Duffey, R-Worthington, chair of the Ohio House Finance Subcommittee on Higher Education.
Duffey, a primary sponsor of the bill, hopes that these audits might bring to light some inefficiencies, and ultimately bring down the cost of college.
The Auditor’s Office already can conduct financial audits of these institutions. However, financial audits only look into fraud or misuse. Performance audits look for inefficiencies.
For instance, Duffey said the auditor might look to see if one school spends more for purchasing or on search firms, compared to its peers.
“I’d say a lot more is lost on inefficiency (than fraud),” Duffey said.
Yost and the Ohio Society of CPA’s are among the bill’s proponents.
Richard Vedder, an economist at Ohio University and head of the Center for College Affordability and Productivity, told state lawmakers earlier this month that the state should audit the performance of its universities.
“While there are good and legitimate reasons why universities should be given a good deal of independence and autonomy in the conduct of their operations, there are compelling arguments that this independence should not extend so far as to exclude the expenditures of these funds from the close scrutiny that a performance audit can provide,” he said in testimony to the Ohio House’s Government Accountability and Oversight Committee.
“Since 2011, there have been 55 performance audits of Ohio school districts, with an estimated $77 million in savings, providing an extremely high return given the relatively low cost of the auditing. Neighboring states such as Pennsylvania and Michigan have conducted performance audits of institutions of higher education in recent years. Why shouldn’t we?”
None of the universities in the state provided written statements or spoke before the Ohio House prior to the passage of the bill.
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