Congress enacted section 117 of the Higher Education Act, as amended, (Section 117) mandating financial transparency of institutions of higher education (institution) through required reporting of gifts from and contracts with a foreign source. Applicable institutions must file a disclosure report by one of the two annual reporting deadlines, January 31 or July 31, whichever is sooner, once the reporting obligation has been triggered. Section 117 helps to raise awareness of potential foreign influence on college campuses which could help stakeholders assess, detect, and respond to potential threats to U.S. academic and research pursuits, free speech on campuses, and national security.
The objective of our inspection was to evaluate Federal Student Aid’s (FSA) oversight of institutions’ reporting of foreign gifts and contracts under Section 117. To answer our objective, we reviewed FSA’s oversight activities, along with FSA’s monitoring plan, policies, and procedures related to its oversight of institutional reporting under Section 117. We also determined if FSA is accurately posting the data it receives from institutions.
We found that FSA’s oversight of institutions’ reporting of foreign gifts and contracts under Section 117 needs improvement. Specifically, FSA’s oversight activities are limited to reviewing whistleblower tips, Department of Education news bulletins, and other media reports for potential institutional noncompliance with Section 117 and providing technical assistance to institutions. FSA does not have any monitoring plans, policies, or procedures in place for its oversight of Section 117 reporting. Additionally, we found that FSA is accurately posting the data it receives from institutions through its Section 117 reporting portal onto its public-facing website; however, FSA could improve its Section 117 reporting portal to assist in identifying and reducing data input errors.
We made six recommendations to improve FSA’s oversight of institutions’ reporting of foreign gifts and contracts under Section 117. Recommendations included assessing FSA’s planned resourcing of Section 117 oversight, developing and implementing a monitoring plan, requiring Section 117-related data certifications each year from a high-level official at all applicable institutions, and including edit checks and instructions in the Section 117 reporting portal system that would help to ensure that institutions are properly classifying and providing required information for restricted gifts and contracts.
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