By Owen Daugherty, NASFAA Staff Reporter
The Department of Education (ED) on Monday published its new online portal for higher education institutions to report foreign gifts and contracts valued at $250,000 or higher. The new reporting system goes into effect immediately and should be used for the upcoming July 31 reporting deadline, though if an institution submitted its reporting requirements using the previous form prior to June 22, those gifts or contracts already reported do not need to be re-submitted using the new system.
ED in a news release said the new portal will make it “easier for schools to report foreign gifts and contracts” and be in compliance with Section 117 of the Higher Education Act (HEA), adding that its own research and other reports “uncovered billions of dollars in unreported funds from foreign sources.”
“Colleges and universities owe it to all of us to be transparent about their foreign financial ties,” Education Secretary Betsy DeVos said in the release. “Transparency and accountability help protect academic freedom and our country’s national security and economic future. Today, we are making it even easier for colleges and universities to follow the law and provide the transparency Americans deserve.”
The release references an Electronic Announcement that details how institutions are to submit reports and what information must be reported.
The new portal requires institutions to provide more information about their foreign financial ties than what was previously mandated, a move that has drawn ire from many colleges and universities after more than a year of seeking clarification on the reporting required by the Section 117 statute. NASFAA first requested clarification from ED on foreign gift reporting requirements last summer.
A previous Information Collection Request (ICR) reaffirmed that institutions are not expected to report “gifts from or contracts with a foreign source under $250,000 unless the aggregate value of all gifts from and contracts with that foreign source within a calendar year total at least $250,000,” but that each separate gift or contract should be reported individually when the $250,000 threshold from a foreign source is reached in total.
ED first published notice of a new proposed form to collect information regarding the reporting of foreign gifts and contracts in September. NASFAA joined 29 other higher education organizations in a community letter to ED late last year during the ICR period, arguing that the department’s proposed request went beyond the scope of the law by “directing institutions to make disclosures — without statutory basis — of a vastly expanded amount of information and documents.”
Additionally, the letter argued the original ICR published in September dramatically expanded the reporting requirements for all institutions, significantly increasing both the burden and cost to schools obligated to report additional information. ED had the option of revising its initial ICR based on comments received before sending it to the Office of Management and Budget (OMB) for final approval.
In December, ED sent a revised ICR after it reviewed comments submitted on the ICR from September. The updated ICR clarified some questions from the higher education community related to the reporting threshold stated in Section 117, but largely resembled the original ICR. It also increased the reporting burden estimate for schools from 10 hours to 20 hours, based on public comment. The revised notice also clarified that reporting would be moved to a separate information collection instrument and away from the e-app schools used to report foreign gifts.
ED had requested OMB to conduct an emergency review of the new ICR by January 2. A community letter sent to ED — signed by NASFAA — opposed ED’s request for emergency processing, arguing that the request did not meet the requirements for an emergency review.
The December ICR was ultimately withdrawn and resubmitted by ED on February 10 as a standard, non-emergency request, allowing for a 30-day comment period. The February request removed the requirement for institutions to provide unredacted “true copies” of contracts and gift agreements, and OMB noted that ED would pursue the notice and comment rulemaking process to address the collection of "true copies."
The higher education community, including NASFAA, submitted comments on the February ICR, arguing that the new request exceeded the disclosure reporting required under the statutory authority set out in Section 117. The groups recommended that ED adhere to what the Section 117 statute requires for the reporting of gift and contract information, and limit reporting in the ICR to the definition of institution. After the comment period closed, but prior to OMB issuing a decision on the request, NASFAA joined in a letter sent to Education Secretary Betsy DeVos requesting a delay on ED's regulatory efforts related to both Section 117 and Title IX amid the COVID-19 crisis.
ED's revised proposed expansion of foreign gift and contract reporting requirements submitted in February was approved by OMB on April 13. The final request was essentially unchanged from the draft version released in February.
NASFAA and the higher education community had previously urged ED to establish a rulemaking process for foreign gift reporting to allow higher education stakeholders to offer advice and feedback on the best ways to provide institutions with clear information on the foreign gifts reporting process.
ED in recent years has ramped up its scrutiny of institutions’ ties with foreign entities following a bipartisan Senate report released in February 2019 that cited inaction by ED regarding the monitoring foreign gifts, particularly those of Chinese origin. ED subsequently launched investigations into Cornell University, Georgetown University, Texas A&M University, and Rutgers University — among other schools — due to alleged failures in properly reporting foreign gifts.
Publication Date: 6/23/2020