At least eight U.S. universities mounted internal investigations in the past three years after discovering that their employees had submitted false data that helped boost the institutions’ rankings.
In all but two of those cases, outside law firms were hired to review the evidence, interview witnesses and write the final reports. That kind of arms-length relationship, experts say, is key to avoiding the appearance of bias when a university investigates itself.
That is not how the University of Missouri System responded this month when Gov. Jay Nixon called for “an independent review” after articles in The Kansas City Star called into question several rankings achieved by the business school at the University of Missouri-Kansas City.
While the allegations about UMKC’s pursuit of rankings do not rise to the level faced by the eight universities, Nixon called The Star’s findings “troubling.” But rather than hire an outside firm with no ties to the UM System, its board of curators turned to the accounting firm that has served as the system’s internal auditor for many years.
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PricewaterhouseCoopers, or PwC, will review the issues raised in The Star stories, “and those facts will be reviewed by an appropriate academic expert not affiliated with the University of Missouri System or any of its campuses,” curators Chairman Don Downing said in a statement Aug. 1.
Beyond that, UM System officials declined to discuss the scope of the investigation, nor would PwC comment. UMKC officials have said they welcome the investigation.
PwC has been the system’s internal auditor since 1999 and is under contract to receive up to $1.2 million from the system next year. The firm, which in fiscal year 2013 provided services to 421 of the Fortune Global 500 companies, has received more than $3.9 million from the system in the past four years. PwC does financial, operational, compliance and investigative audits for the UM System.
While there is no reason to think the firm cannot perform an unbiased review, experts say, some contend the university would have been wiser to have hired someone without a continuing business relationship such as PwC.
“They could do it,” said Dan Hurley, associate vice president for government relations and state policy with the American Association of State Colleges and Universities. “But I would say an institution should conduct an internal audit with the understanding that the use of an outside firm ... brings an added measure of credence.”
Michael Poliakoff, vice president of policy for the American Council of Trustees and Alumni, said it’s better to get “far away from any parties that have any interest” in the subject of an investigation.
“If they go with a firm they have on retainer,” he said, “they have to evaluate whether it is independent enough to pass a public smell test as being unbiased.”
Nixon, through spokesman Scott Holste, expressed confidence in the curators’ decision: “Gov. Nixon appreciates the board’s quick and decisive action in response and awaits the outcome of this robust, comprehensive review by a highly respected, international accounting firm.”
A UM System spokesman would not say whether any other outside firms or agencies were considered for the job. But curator Wayne Goode said one reason PwC was chosen is that it was already working on an audit at UMKC, “not on this thing but in the area.”
In a March 31 letter to the UM System’s interim vice president for finance, PwC agreed to conduct a special audit for UMKC but did not specify what it was for.
However, it was well known at UMKC’s Henry W. Bloch School of Management that a special audit began this spring shortly after David Donnelly replaced Teng-Kee Tan as dean. In a recent interview, Donnelly said it was standard procedure after a leadership change.
High rankings in publications like U.S. News & World Report, Forbes and the Financial Times are key marketing tools schools use to grow enrollment, attract top faculty and open donors’ wallets.
But the pursuit of those rankings can, at times, lead schools to inflate test scores or make themselves look more exclusive by misrepresenting their admission rates. In 2013, Forbes removed schools for such abuses.
Most often, it is the schools themselves that report the misrepresentations and suffer the consequences. Tulane and Emory universities were among six colleges and universities that hired outside law firms to conduct investigations after discovering that test scores and other admissions data had been falsified and submitted to outside agencies.
The others in that group were Iona College, Claremont McKenna College and the law schools at the University of Illinois and Villanova University.
All six chose to hire outside law firms instead of the accounting firms they regularly used as independent auditors.
One of these six told The Star it used an outside firm to demonstrate the independent nature of the review, as well as to get a different perspective.
In two other cases, administrators at Bucknell University conducted their own in-house review, and George Washington University, like Missouri’s curators, hired one of its regular accounting firms to perform the review.
In all eight cases, the investigations turned up willful manipulation of admissions or test data by university employees.
A key difference between those cases and the investigation underway at UMKC is that those eight schools instigated the probes themselves without any suggestion from outside the institution.
At Tulane, for instance, a new business school dean ordered a review after noticing a discrepancy between test scores of its incoming students and the higher scores the school had been reporting to U.S. News & World Report.
Missouri’s curators ordered a review only after Nixon requested one be done in a letter dated two days after The Star’s articles were published.
The Star stories focused on the desire among UMKC officials to see the Bloch School ranked among the nation’s top business schools.
The articles raised questions about two rankings. One was a 2011 study published in the Journal of Product Innovation Management (JPIM) that ranked the Bloch School No. 1 in the world in innovation management research, above such notable business schools as Harvard and Stanford. That study was done by visiting Chinese scholars who worked on the UMKC campus at the invitation of Michael Song, the UMKC business school professor whom the JPIM study named the No. 1 researcher.
Song also reviewed the JPIM study before its publication, although those ties were not publicly revealed until The Star’s story appeared.
Also in question were the top 25 rankings that year and subsequent ones in The Princeton Review for the business school’s Regnier Institute for Entrepreneurship and Innovation. The Star’s investigation found several questions about the university’s use of data it submitted.
UMKC and Song maintain that the relationships with the authors of the JPIM study do not negate its findings and that school officials did not exaggerate or take shortcuts to gain the Princeton Review rankings.
UMKC also has noted that JPIM’s publisher reviewed the study and then commissioned an independent review, neither of which found any problems.
Likewise, the authors of the JPIM study deny that it was biased toward UMKC.
Before publication of The Star’s articles on UMKC, authors PianPian Yang and Lei Tao did not respond to reporters’ repeated requests for comment.
More than a week after the stories appeared, they sent an email responding to suggestions by some that the study was designed to deliver UMKC the No. 1 ranking.
“Contrary to the speculation,” they wrote, “we initiated the research idea, developed the research design, selected the research methods, collected the data, performed the analysis, and completed the research independently, without any influences from anyone at UMKC.”
While acknowledging that they completed their research while at UMKC, Yang and Tao said that “the majority of the research and draft of the ranking study was completed by the end of 2009, more than eight months before we became visiting scholars at UMKC.”
Should the PwC investigative report find any problems, Poliakoff said, the next steps will be for the curators and top university officials to fix them and restore public confidence.
“Right now the cow is out of the barn,” he said. “They have to deal with the problem and shut the barn door by establishing real clear policies.”
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