A Management Review of Winthrop University
January 1997
REPORT (PDF) SUMMARY (PDF)
Members of the General Assembly who were concerned about management of Winthrop University requested that we audit the university. This audit primarily reviews the management decisions and practices carried out since 1989.
We found that, overall, Winthrop needs to ensure that public funds are expended in accordance with state law and opinions of the attorney general. Further, certain management decisions may have caused the university to lose substantial amounts of revenue. Winthrop’s board of trustees and management should develop procedures to ensure compliance with state laws governing the payment of out-of-state tuition. Winthrop’s undergraduate tuition is the highest of all public institutions in South Carolina. Certain practices by Winthrop management have contributed to Winthrop’s high tuition costs.
Some of the concerns we address may not be isolated to Winthrop University. In previous audits of state universities, we identified similar concerns with the "discretionary" spending of public funds and the administration of scholarships.
Our findings are summarized as follows.
Management of Business and Finance
Winthrop has allowed out-of-state graduate students to pay in-state tuition. For example, more than 300 out-of-state graduate students were enrolled in the fall 1995 semester. Winthrop reported that only 18 students paid the out-of-state tuition rate. Allowing out-of-state graduate students to pay in-state tuition cost Winthrop approximately $375,000 in academic year 1995-96.
Because of Winthrop’s granting of unauthorized fee waivers to out-of-state graduate students, the university will receive approximately $41,000 more in state funds than it is entitled to.
Winthrop has not administered its Executive Master of Business Administration Program in accordance with sound business principles. The university did not enforce the payment of tuition for more than 120 students enrolled between 1987 and 1994, and does not know if these students paid all of their fees. In 1995, Winthrop discovered that 31 of 36 EMBA students enrolled at that time owed $190,000.
After discovering that EMBA students were not paying their fees, the university did not review the records of previously enrolled students to determine how much they owed. Further, the university allowed some EMBA students to graduate in 1995 although they had not paid all of their fees.
Winthrop spends revenue derived from laundry facilities and vending machines at the discretion of management. Expenditures of these revenues for professional basketball, football, and baseball tickets may have violated state law. Expenditures for first class air travel, luncheons for administrators, faculty, and staff, and contributions to nonprofit organizations might not promote a direct public purpose and be legitimately connected to the mission of Winthrop. Therefore, they may not be in compliance with state law.
Winthrop’s foundation raises and spends funds on behalf of the university. Our review indicated that in FY 94-95, the foundation expended 57% of its budget on grants and scholarships, 30% on administration and fund-raising, 5% for benefits for the president, and 8% for other expenses. We found no abuses in expenditures of foundation funds.
In 1991, Winthrop began charging students a technology fee, which is now $100 per semester. The university did not specify how these funds should be spent.
Winthrop has awarded its president and vice presidents longer-term contracts than those provided at other comparable universities. In addition, Winthrop’s president hired and paid a consultant before entering into a written contract to outline the consultant’s duties.
We found no evidence that a board member was inappropriately involved in the sale of a building to Winthrop University.
Academic and Operational Issues
Reports concerning Winthrop’s average SAT scores for incoming freshmen have been misleading. For example, Winthrop reports that the average SAT for "regularly" admitted freshmen in the fall 1995 semester was 990. However, 36% of the freshmen were not included in this average. When the scores of those excluded are considered (and ACT scores are converted to equivalent SAT scores), the SAT average score was 925, a difference of 65 points from the reported average.
Our sample found that 11 (27%) of 41 students receiving academic scholarships did not meet the objective criteria for the scholarships. For example, one scholarship required an SAT score of 1200, but the student scored only 1080.
We found that Winthrop awards scholarships to students from France studying in a one-semester program at Winthrop without regard to their academic credentials. In addition, these scholarships, which are financed by the program in France, allow these students to receive in-state tuition.
Our review indicated that top-level administrators’ salaries increased by an average of 11% from 1993 to 1996, professors’ salaries increased by an average of 9.4%, associate professors’ salaries increased by 10.1%, and assistant professors’ salaries increased by 10.6% during this time period. Department chair salaries increased by an average of 12%.
In March 1995, Winthrop’s board hired a consultant to review various management and financial concerns. Winthrop may wish to implement several recommendations which have not been implemented.