The rise in the number of students who opt for online higher education programs has led colleges contracting with third-party companies – called online program managers (OPM) – to help develop and deliver their online programs. However, the Government Accountability Office (GAO) found in a new report that the Department of Education (DoE) needs to strengthen how it monitors the arrangements between OPMs and higher education institutions.
As of July 2021, “at least 550 colleges worked with an OPM to support approximately 2,900 online education programs,” the report says. But the exact number of OPM arrangements is unknown, because of a lack of comprehensive data, and there could be more of them.
An accurate representation of that data is needed so that DoE can assess whether OPM arrangements comply with the incentive compensation ban.
“OPMs commonly recruit students for colleges, making these arrangements subject to the DoE’s oversight and the Higher Education Act’s ban on incentive compensation – which was designed to prevent abusive recruiting practices,” the report notes.
The department’s current monitoring instructions for annual audits and agency reviews do not ensure it obtains information about OPM arrangements to fully assess compliance with the ban on incentive compensation, GAO found. DoE also relies on independent auditors to collect information to identify potential violations of the incentive compensation ban, but the department does not offer clear instructions to those auditors.
In addition, DoE depends on high education institutions to provide information about their OPM arrangements during audits and agency reviews. But again, the department does not offer clear instructions on reviewing OPM arrangements and consequently, colleges do not always report such arrangements, GAO reported.
“Without clearer instructions to auditors and colleges about the information on OPM arrangements that must be assessed during compliance audits and agency reviews, there is a risk that [the DoE] will not have the information it needs to detect incentive compensation violations,” the report notes.
GAO made two recommendations to the department on how it could improve instructions for auditors and colleges to help DoE obtain the information needed to assess OPM arrangements for incentive compensation violations:
- The DoE Secretary should provide additional instructions to help auditors better identify and assess potential incentive compensation ban violations when a college contracts with an OPM; and
- The DoE Secretary should provide additional instructions to colleges regarding the information they must provide about their OPM arrangements during compliance audits and program reviews.
The DoE concurred with GAO’s recommendations and said it has begun to develop plans to address the recommendations.
