The Department of Education (ED) published a draft form Friday for institutions to report foreign gifts, following repeated requests from the higher education community for guidance on disclosure requirements and a handful of investigations into institutions’ reporting practices. The form will be open for public comment for 60 days.
The Higher Education Act (HEA) requires institutions to report foreign gifts or contracts of $250,000 or more. However, while institutions repeatedly requested guidance on reporting requirements in lieu of regulations — such as whether they kick in only when one gift meets or exceeds that amount, or when an aggregate of smaller gifts from one foreign entity does — ED has only issued two Dear Colleague Letters on the topic, neither of which addressed the flurry of questions from institutions.
Despite this, ED has recently opened investigations into Georgetown University, Texas A&M University, Cornell University, and Rutgers University, arguing that their foreign gift reporting “may not fully capture all gifts, contracts, and/or restricted and conditional gifts or contracts from or with all foreign sources.”
Last month, NASFAA wrote in a letter to ED that these investigations, combined with the lack of guidance on this issue, “have led institutions to believe that they are being put into an impossible situation, tantamount to a ‘gotcha’ that needlessly erodes the partnership between ED and our aid offices.”
While NASFAA in its letter urged ED to establish a rulemaking process for foreign gift reporting to allow higher education stakeholders to weigh in on disclosure requirements, ED last week published a notice in the Federal Register directing institutions to a six-page form that they would be required to use to report foreign gifts.
The form, which is divided into nine sections, asks institutions to disclose information about their gift or contract, such as the source of the gift and any conditions tied to it, as well as answer a series of detailed yes-or-no questions, ranging from if the source of the gift is a foreign government to whether the gift is conditional on the establishment of departments, lecture programs, or new faculty positions.
ED wrote that after reviewing the 21,052 disclosures it received from 162 universities between 2012 and 2018, 70% of institutions did not file “proper disclosures.”
“We believe that making these questions more detailed and moving them into a separate information collection instrument will help to ensure that institutions comply with the statutory disclosure requirement,” ED wrote.
ED estimated that it will take institutions 10 hours to complete their reporting, which they will need to do an average of five times a year.
The form is open for public comment until Nov. 5, 2019. NASFAA plans to submit comments to ED, and will continue to closely follow and seek clarification on this issue. If your institution has any feedback or comments you would like to share, please email NASFAA’s policy team.
Publication Date: 9/10/2019