Inside Iowa State: Iowa State University

October 25, 2002

Consultants: Free institutions from some state regulations

by Linda Charles
Additional tuition would go to increase student financial aid, cover mandatory cost increases and hire new faculty, President Gregory Geoffroy told the Board of Regents, State of Iowa, during its meeting Oct. 16-17 in Cedar Falls.

Hiring new faculty is the university's highest priority, he added.

Under the proposal, resident undergraduate tuition for the 2003-04 academic year would go up $650, to $4,342 (a 17.6 percent increase). Non-resident undergraduates would pay $13,684, an increase of $1,300 or 10.5 percent.

The regents are expected to vote on the proposed increases during the November meeting at Iowa State.

Independent agencies
In other business, the regents received a consultants' report that recommends the state universities be considered "independent agencies" rather than "state agencies."

MGT of America staff said the key distinction between an "independent" and "state" agency is the extent to which an agency relies on state appropriations to carry out its state-mandated mission.

MGT staff note that state money accounted for only 43 percent of the funding for the three regent universities during FY2002. In addition, the report says, the regent universities generate $1.26 from non-state sources for every $1 of state appropriations.

MGT is a consulting firm hired by the regents to conduct an organizational review of the regents institutions in the state. The Tallahassee-based firm has been studying higher education institutions for more than 25 years.

State regulations
Independent agency status, according to MGT staff, would free regent institutions from many of the statutory requirements that regulate state agencies. The report notes that the regent institutions operate more like communities or businesses, and on a larger scale, than other state agencies.

Among statutory regulations that constrain the regent institutions, MGT staff reported, is a requirement that unused funds be returned to state coffers at the end of the year unless they can be encumbered for certain items, such as repair projects or equipment purchases. Removing this requirement would allow the universities to use money where it is needed rather than spending it only on items that can be encumbered at the end of the year.

Construction is another area in which state regulations impede the universities, the report says. Currently, universities must use the state competitive bid process for construction in excess of $15,000. MGT staff recommends that be raised to at least $100,000 and perhaps up to $250,000. The report also suggests that methods other than awarding the bid to the lowest bidder be considered.