Utah’s higher ed institutions must boost efficiencies to meet challenges, audit concludes

Albert Einstein reportedly once wrote that life’s a lot like riding a bicycle — if you want to stay balanced, you’ve got to keep moving forward.

The authors of a performance audit presented Tuesday to Utah’s Legislative Audit Subcommittee would likely say the same thing about the state’s system of higher education: Keep peddling forward.

Utah’s degree-granting public institutions face “disruptive challenges in the very near future,” according to a report prepared by the Office of the Legislative Auditor General.

Student enrollment in public schools, the report warned, is projected to decline — even as competing private institutions are expanding and employers are relaxing degree standards.

The Utah System of Higher Education must “proactively prepare for shifting supply and demand for future skilled labor.”

Additionally, Utah’s college and university presidents “do not have the information required” to determine which degree programs are efficient. And coordination gaps between the schools could derail optimal success if not remedied.

“A more unified and coordinated system of higher education is needed in Utah moving forward,” the report concluded.

The audit noted there are positive things happening in the governance of Utah’s higher education system — including the creation of a centralized budget request process for each institution, along with stronger tuition oversight and increased scrutiny of institutions’ creation of new programs.

But the report also emphasized a trio of challenges demanding the attention of Utah’s higher education institutions.

The audit’s central message If colleges and universities expect to stay relevant, they will need to move forward and adapt.

First challenge: Projected enrollment decline

Utah’s public colleges and universities are currently enjoying booming enrollment numbers.

But after 2028, enrollment at the state’s higher education institutions is expected to slowly decline.

“By 2060, Utah’s school- and college-age groups are projected to represent only 15% and 10% of the population, respectively,” according to the audit.

The state’s higher education system, wrote the authors, will have to adapt to optimize existing and future resources.

Second challenge: Relaxed degree standards

Increasingly, employers in Utah and across the country are eliminating the requirement for a bachelor’s degree. Auditors do offer a caveat to that trend, acknowledging that some degrees are more highly-valued for some positions and that current economic factors may influence such trends.

Third challenge: Decrease in demand

Private and online degree-granting institutions are increasingly attracting in-state students. Utah’s system of higher education, according to the report, “must increase efficiency and maximize taxpayer funding to better compete.”

Over the past eight years, the costs of operating Utah’s higher education institutions outpaced student enrollment increases. “Because USHE institutions continue to grow in many ways despite decelerated increases in student enrollment, the system will need to find ways to adapt and become more efficient,” according to the report.

To meet such challenges and remain relevant, auditors recommended that Utah’s higher education presidents prioritize programs that attract students.

“According to Envision Utah’s 2023 High School Survey, the most important factor for students planning to attend college is employment outcomes. This aligns with national sentiment.”

Auditors recommended that the Office of the Commissioner of Higher Education work with institutions to develop and oversee a uniform methodology “to calculate program-level return on investment — including program costs and completion rates.”

Additionally, the OCHE and school presidents should use program costs, enrollments, completion rates, employment outcomes and workforce demand “to determine if programs should be expanded, reduced or discontinued.”

Better coordination is also needed between the OCHE and Utah’s Department of Workforce Services to align workforce demand data, driving “proper programmatic investment of taxpayer funds.

Auditors pointed out that professions such as nursing and accounting are industries where Utah’s public schools are not currently supplying the full workforce demands. Private, nontraditional institutions are gaining ground and claiming increases in the industry market shares.

House Speaker Mike Schultz, R-Hooper, noted his concern that growing numbers of Utah students are utilizing the costly private sector to, say, pursue high-demand nursing education.

In their report, auditors recommended that lawmakers consider the costs and benefits of providing “targeted funding” to areas of high workforce need — and consider holding institutions more accountable for the funding they provide to these areas of high workforce need.

Needed: Better system-wide coordination and planning — and less competition

The audit also concluded that the state’s degree-granting institutions are not fully coordinated. In fact, institutions are “engaging in competitive behavior when some institutions are not positioned to succeed.”

Such competition environments could undermine successful outcomes.

“By ‘competitive environment’ we do not imply that institutions should not strive to excel and achieve. Our concern, rather, is where individual institutional interests work against creating the most efficient use of public funds.”

Data can also be utilized to eliminate inefficiencies across Utah’s public universities and colleges, according to the report. Auditors discovered some “potentially unnecessary duplication” in some programs — including programs with low student enrollment and graduations.

“We conclude that institutions must be more detailed and discerning in their justified need for programs.”

For some degree programs, the report suggested that institutions can find partnering opportunities to more efficiently deliver similar learning across the system.

Additionally, some degree programs being offered at Utah institutions have graduates being paid near the federal poverty line. Other programs have low job placement.

“We acknowledge that some programs may provide a social good that transcends pay considerations,” the report noted. “However, it is also worth noting that USHE institutions offer programs that lead to poorer student outcomes than other programs.

“With better data, presidents can position their institutions to make data informed decisions and act more collaboratively.”

House Minority Leader Angela Romero, D-Salt Lake City, commented during the auditors’ review Tuesday that some of the classes she had while a student at the University of Utah would likely not be classified as “high performing”.

“But they helped me become a more well-rounded person,” she said, adding that simply drawing from data points may not reveal “the whole picture, when we’re talking about higher education.”

Senator Evan Vickers, R-Cedar City, said he supports institution presidents finding solutions to ensure their graduates are prepared for the workforce, but added he also understands Romero’s sentiments.

Vickers remembers taking classes in college that did not lead directly to his degree, “but they helped solidify my own thought processes.”

Schultz referenced low-demand degrees being offered across multiple institutions. “Clearly, resources are not being allocated to where the growth needs are — and in some cases, they are being allocated to where we are not being that efficient.”

Finally, auditors recommended that the Legislature should consider requiring the Utah Board of Education to perform ongoing review of programs, administration and other operational efficiencies within the state’s higher education system.

Geoffrey Landward, Utah’s commissioner of higher education, said his office accepts all of the audit’s recommendations. “We’re already making progress … and we’re looking forward to continued partnership with you as legislative leaders, with our presidents and with the governor’s office to deliver for the state.”

Schultz thanked the auditors for their rigor and careful study of the state’s higher education system. He added he’s optimistic about the opportunities awaiting the state’s colleges and universities because of the capacity and commitment of the state’s school presidents and higher education leaders.

“You guys will be leading the nation and producing what students are looking for — as well as what the industries, economies and the overall society is looking for,” he said.

Senate Minority Leader Luz Escamilla, D-Salt Lake City, said higher education is at “a turning point” in the state and asked for continued inclusion in the discussion for Democrats on Capitol Hill.

“We have experts in many of these areas and we deeply care. Our districts are very committed to making sure we have the higher education system that our residents and citizens of this great state deserve and need. I think we’re moving in the right direction.”

Senate President Stuart Adams, R-Layton, concluded the discussion of the audit, saying there’s never been a greater need “for higher education, innovation and research than there is today.”