Administration

Penn State response on Auditor General performance audit report

The Auditor General’s report includes findings and recommendations on University governance, campus safety and security, and access and affordability. These areas have been and remain critical areas of importance to Penn State (see full response for more details). While the University does not agree with each of the Auditor General’s findings and recommendations, it remains committed to the generations-long partnership with the Commonwealth and its land-grant mission.

Access and affordability have been key imperatives for Penn State President Eric Barron since being named the University’s president in 2014. Cost controls have been a focus of the entire University for decades, with nearly $383 million in cuts to recurring costs having been achieved since 1992. It should be acknowledged that Penn State has been able to continue providing access to a quality education to all qualified Pennsylvanians, including the first generation students who make up 27 percent of our student body.

The University has done so despite receiving one of the lowest levels of per-student support (ranking No. 47 nationally) of any state in the country, which is the primary driver of tuition cost (see chart); further costs include increasing pension and health care costs that are driven significantly by factors outside of the University’s control. This has been accomplished through streamlining and cost control, and without resorting to a strategy many other state public research universities have employed – strategically reducing in-state attendance in favor of higher paying out- of-state and international students. In fact, the percentage (approx. 68 percent) of Pennsylvania applicants admitted to Penn State has remained constant over the past 15 years.

The Legislature’s general support appropriation, used primarily to offset the cost of tuition for Pennsylvania resident students, has steadily decreased over many decades, putting upward pressure on the price of tuition. In fact, the University’s appropriation for 2016-17 is lower than it was in 2001-02. If Penn State’s state appropriation had kept pace with the consumer price index since 2001-02, the University would have received $134 million of additional appropriations in 2016-17, which would have translated to approximately a 19 percent tuition reduction for Pennsylvania resident students.

Pennsylvania’s state-related institutions receive far less appropriation per student than peers in other states. For example, based on information available to the University, Minnesota received $625 million in appropriations, and Nebraska received $579 million, for many fewer undergraduate students. In 2016 Penn State received $230.4 million in state funding for many more undergraduate students. An additional consideration, and cost driver, is that peer institutions in the Big Ten generally receive higher levels of capital allocation for infrastructure investment and renewal than Penn State. Pennsylvania ranks among the lowest in the country in terms of state support for higher education.

The University will continue to invest in programs like President Barron's Plan 4 program to help lower the cost of a degree while ensuring high levels of success for students with financial need, including creation of the Pathway to Success: Summer Start (PaSSS) program, enhancements to student advising, financial literacy instruction, and expanding the Student Transitional Experiences Program. In 2015-16 Penn State had no tuition increase for the first time in 49 years, however, the Commonwealth's investment in the University is critical to keeping a Penn State education affordable.

“We share the Auditor General’s desire for cost control, and are committed to continuing to work with the Governor and Legislature to address these challenges to keep a world-class Penn State education within reach for all Pennsylvanians,” said President Barron.

In the area of governance, Penn State’s Board of Trustees in 2012 voluntarily embarked on an ongoing process of reform to improve oversight and performance. The University is confident that the process undertaken to strengthen board governance was sound, having involved a comparative best practice analysis led by a recognized expert. The process included increased faculty, student and alumni representation, and increased oversight, transparency and performance. In addition, at 36, Penn State has an equal or lower number of voting trustees than the other Pennsylvania state-related institutions, Temple, Pitt and Lincoln universities. The board’s current, varied makeup and structure allows trustees to effectively fulfill their individual duties to Penn State. Further, 30-plus recommendations were enacted and the board was restructured, new committees and subcommittees were created to enhance oversight and engagement, and comprehensive revisions were made to the charter, bylaws and standing orders.

“Penn State’s board has had more than 30 voting trustees for more than a century,” said current Board Chairman Ira Lubert. “Over that time, the University has grown from a farmer’s high school to a world renowned public research institution. It is the level of trustee engagement, not the number of members, which is the critical factor that enables the board to provide the appropriate level of oversight.”

At all Penn State campuses, extensive efforts have been taken to promote a safe and secure place for living and learning. The safety of students, faculty and staff has been, and continues to be, a top priority. The University remains dedicated to full compliance with the Clery Act and the Drug Free Schools and Communities Act, and has made a multitude of reforms in recent years, focused on full compliance with all federal and state laws, and University policies. As noted by the Auditor General, Penn State was one of first universities to have employees dedicated to Clery reporting, rolled out its PSUAlert emergency messaging system and has designated websites for timely warnings and Annual Security Reports. Under former President Rod Erickson, in July 2012, Penn State adopted a robust policy establishing a clear process to ensure that a final job candidate's criminal history and any potential child abuse records are reviewed. Penn State also has established policies for conducting background checks for appropriate supervision of minors involved in University-sponsored programs.

The Auditor General randomly selected 76 of 732 youth camps held on our campuses for background check compliance. The Auditor General found six of these camps to be missing at least one required background check. With respect to the Auditor General’s findings related to background checks, Barron said that even one incomplete or missing background check is one too many, and Penn State is closely reviewing protocols. The Auditor General’s statement that 57 of the 732 camps were out of compliance is an estimate based on an assumed extrapolation of his statistical sampling and not based in fact.

The overall operation of the University is healthy, and our accreditors agree. The University’s bond ratings have continued to remain stable; rankings are strong; research consistently ranks near the top nationally in annual spending; and the University has launched startups and innovation hubs across the Commonwealth as part of Invent Penn State.

Last Updated October 25, 2023