Bill protects students, establishes new reporting guidelines for public higher education system
BOSTON — In the wake of a series of high-profile closures of small colleges throughout the Commonwealth, the Massachusetts State Senate unanimously advanced legislation Wednesday that will establish new requirements relative to higher education financial reporting and oversight in an effort to support both students and the institutions of higher education themselves.
The legislation establishes new accountability measures, including the development of student-focused contingency plans if that public college or university is expected to close. In addition, it requires the development of a training program for school board of trustee members to promote better oversight of public colleges and universities.
“Students, professors, and employees of higher education institutions should not be caught off-guard when financial instability causes a sudden closure,” said Senator James T. Welch (D-West Springfield). “This bill will ensure that colleges are upfront about their financial well-being, and therefore allows students and staff to prepare well ahead of time if there are questions about stability.”
Among its provisions, the legislation seeks to address issues surrounding the closure of higher education institutions by requiring annual financial reports from public colleges and universities. Under the bill, the Board of Higher Education (BHE) is tasked with creating an assessment system to examine whether an institution is at risk of imminent closure; if so, the institution is required to prepare a contingency plan for closure.
Higher education institutions are also required to notify the BHE of any known financial circumstances that may result in closure or the inability to fulfill obligations. Failure to comply with the requirements of the legislation may result in penalties from BHE.
To help ensure that college and university trustees understand their legal, fiduciary and ethical obligations under the law, the legislation requires the Department of Higher Education to develop a training program on topics critical to the proper oversight of a public institution of higher education. Relevant topics may include fraud prevention, fiduciary responsibilities, ethical procurement and state finance law. Trustees would be required to complete the training every four years.
The Massachusetts House of Representatives passed similar legislation in early October. Action in both branches follows several recent instances of school closures, most notably last year’s sudden closure of Mount Ida College in Newton, as well as disclosures of other fiscal issues at other public higher education institutions.
An Act to support improved financial stability in higher education now returns to the House for further consideration.