In a recently-released report about the Department of Education’s administration of its financial responsibility regulations (the regulations–34 CFR Part 668, Subpart L–assess the financial stability of colleges and universities), a task force of the National Association of Independent Colleges and Universities (NAICU) found the Department failed to consistently follow its regs, failed to update its definitions to reflect changes in accounting standards, erroneously classified losses reported in income statements as expenses, and failed to fully take into account the “total financial circumstances” of institutions before labeling them as failing.

The report–which includes six recommendations for improvement (pp. 15-24)–arose as a result of ongoing differences between the federal financial responsibility assessment results and professional determinations of an institution’s financial well-being.