The Commission on Colleges expects a member institution to
have governance and administrative structures appropriate to higher education
and have financial and physical assets adequate to support the purpose
of the institution. Stability and security are crucial to institutional
well being, as are effective resource procurement, deployment and accountability.
Academic self-governance, a time-honored value, implies broad participation
in policy-making and implementation. Planning for and garnering necessary
support are also integral to the accomplishment of institutional purpose.
The principles of institutional effectiveness as outlined
in Section III pertain to the governance, organization, administration
and financial/physical management of the institution. It is expected that
each office, function, or unit will establish goals which derive from and
support the purpose of the institution, evaluate its success in achieving
these goals, and use the evaluation in making appropriate modifications
in resources, programs and services.
It is implicit in every requirement in the Criteria
for Accreditation mandating a policy or procedure that the policy or
procedure be in writing, be approved through appropriate institutional
processes, be published in appropriate institutional documents accessible
to those affected by the policy or procedure, and be implemented and enforced
by the institution.
6.1 Organization and Administration
The administration of an institution of higher education
has the responsibility for bringing together its various resources
and allocating them effectively to accomplish institutional goals. Although
the organizational pattern is important to an institution's development
and affects the morale of its faculty, an identical pattern of organization
for all member institutions is neither required nor expected.
6.1.1 Descriptive Titles and Terms
The name of an institution, the titles of chief administrators,
the designations of administrative and academic divisions, the terms used
to describe academic offerings and programs, and the names of degrees awarded
must be accurate, descriptive and appropriate.
6.1.2 Governing Board
184.108.40.206 Although titles and functions vary, the governing
board is the legal body responsible for the institution and for
policy making. Except under clearly defined circumstances, board action
must result from a decision of the whole, and no individual member
or committee can take official action for the board unless authorized to
220.127.116.11 The duties and responsibilities of the governing
board must be clearly defined in an official document.
18.104.22.168 This document must also specify the following:
the number of members, length of service, rotation policies, organization
and committee structure, and frequency of meetings.
22.214.171.124 There must be appropriate continuity in
the board membership, usually provided by staggered terms of adequate length.
In addition, the document should include provisions governing the
removal of a board member from office.
126.96.36.199 A board member may be dismissed only
for cause and by procedures involving due process.
188.8.131.52 The responsibilities of the governing board must
include the following functions: establishing broad institutional policies,
securing financial resources to support adequately the institutional goals,
and selecting the chief executive officer.
184.108.40.206 In addition, the governing board must have
in place proper procedures to ensure that it is adequately informed about
the financial condition and stability of the institution.
220.127.116.11 The board must not be subject to
undue pressure from political, religious or other external bodies. Furthermore,
it should protect the administration from similar pressures.
18.104.22.168 There must be a clear distinction, in writing
and in practice, between the policy-making functions of the governing board
and the responsibility of the administration and faculty to administer
and implement policy. General institutional policies should originate
within the board or should be approved by the board upon recommendation
of the administration. Once these have become official policies, the administration
should implement them within a broad framework established by the
6.1.3 Advisory Committees
Whenever lay advisory committees are used by institutions,
these committees should be active and their role and function clearly
6.1.4 Official Policies
The institution must publish official documents
which contain, but are not limited to, the following information: the duties
and responsibilities of administrative officers, the patterns of institutional
organization, the role of the faculty in institutional governance, statements
governing tenure or employment security, statements governing due process,
and other institutional policies and procedures that affect the faculty
and other personnel.
6.1.5 Administrative Organization
22.214.171.124 The administrative organization must reflect
the purpose and philosophy of the institution and enable each functional
unit to perform its particular responsibilities as defined by the stated
purpose of the institution.
126.96.36.199 Administrative responsibility and authority for
all educational offerings and functions of the institution must
be clearly identified, and each institution must develop, publish
and make available an organizational chart clearly delineating lines of
responsibility and authority.
188.8.131.52 The duties of the chief executive officer, and
of other administrative officials directly responsible to the chief executive,
must be clearly defined and made known to faculty and staff.
184.108.40.206 Administrative officers must possess
credentials, experience and/or demonstrated competence appropriate to their
areas of responsibility.
220.127.116.11 The effectiveness of all administrators,
including the chief executive officer, must be evaluated periodically.
6.2 Institutional Advancement
Each institution should have a program of
institutional advancement, which may include development and fund raising,
institutional relations and alumni affairs.
18.104.22.168 If there is an advancement program, it must
be directly related to the purpose of the institution.
22.214.171.124 Qualified persons should be responsible
for administration of the program.
6.2.1 Alumni Affairs
126.96.36.199 The relationship between the institution
and its alumni should be one that encourages former students to
continue to participate in the development of the institution.
188.8.131.52 It should also assist in the evaluation
of institutional effectiveness.
184.108.40.206 Institutions are encouraged to maintain
up-to-date records on the location of former students and to employ periodic
6.2.2 Fund Raising
220.127.116.11 All fund raising must be related
to the purpose of the institution.
18.104.22.168 All aspects of fund raising must
be incorporated into the planning process and evaluated regularly.
22.214.171.124 An institution must develop policies
and procedures to fund raising and ensure that such policies are appropriately
disseminated and followed.
6.3 Financial Resources
6.3.1 Financial Resources
126.96.36.199 Because the financial resources of an institution
influence the quality of its educational program each institution must
possess sufficient financial resources to support all of its programs.
188.8.131.52 The recent financial history of the institution
must also demonstrate the financial stability essential to its successful
operation. The adequacy of financial resources will be judged in relation
to the basic purpose of the institution the scope of its programs and its
number of students.
6.3.2 Organization for the Administration of Financial
184.108.40.206 All business and financial functions of
the institution should be centralized under a chief business officer
reporting to the chief executive officer. The organization of the business
office must be consistent with the purpose of the institution the
size of the institution and the volume of transactions of a business or
financial nature. The most important functions typically performed by the
business office include assistance to the chief executive officer in preparation
and control of the institutional budget; establishment and operation of
an appropriate system of accounting and financial reporting; supervision
of the operation and maintenance of the physical plant; procurement of
supplies and equipment; control of inventories; financial oversight of
auxiliary enterprises; receipt custody and disbursement of institutional
funds; maintenance of personnel records; and administration of personnel
policies governing the staff.
220.127.116.11 The chief executive officer must
report regularly to the governing board on the financial and business operations
of the institution.
18.104.22.168 The chief business officer should
have experience or training in handling educational business affairs sufficient
to enable the business office to serve the educational goals of the institution
and assist in furthering its stated purpose.
6.3.3 Budget Planning
22.214.171.124 The budget is a statement of estimated income
and expenditures for a fixed period of time, usually the fiscal year of
the institution. An institution must prepare an appropriately detailed
126.96.36.199 Its preparation and execution must
be preceded by sound educational planning. It follows that the instructional
budget should be substantively developed by academic officers or
deans, working cooperatively with department heads, appropriate members
of the faculty and administration, and representatives of the business
188.8.131.52 Procedures for budget planning must
be evaluated regularly.
184.108.40.206 Similarly, budgets for other areas should
be developed after consultation with appropriate officers of the institution.
The business officer may assist in assembling and compiling the budget
requests, preparing income estimates, and advising the chief executive
officer in the determination of budgetary allocations. The budget is
presented by the chief executive officer through proper channels to
the governing board for final approval. In reviewing the budget, the governing
board should focus on matters of broad policy and normally should
not concern itself with details.
6.3.4 Budget Control
After the budget has been approved by the chief executive
officer and adopted by the governing board, a system of control must
be established. This ensures that the budgetary plans of the governing
board and the chief executive officer will be implemented.
220.127.116.11 The business officer must render
interim budget statements on a periodic basis to department heads for their
guidance in staying within budgetary allocations. Budgetary control is
an administrative function, not a board function.
18.104.22.168 Necessary budget revisions must be
made when actual conditions require such change and must be communicated
to those affected within the institution.
6.3.5 The Relation of an Institution to External
No outside or superimposed agency should exercise
specific and detailed control over the financial affairs of an institution.
Once funds have been appropriated, creating a budget, establishing priorities,
and controlling expenditures become the responsibility of the institution--operating
under the jurisdiction of the governing board and subject to its policies.
22.214.171.124 Enforcement of budgetary law is imperative;
however, the educational function of an institution must not
be controlled through the use of budgetary techniques or controls by financial
officials outside the institution.
6.3.6 Accounting, Reporting and Auditing
126.96.36.199 An institution must adopt an accounting
system that follows generally accepted principles of institutional accounting
as they appear in College and University Business Administration,
published by the National Association of College and University Business
Officers Proprietary institutions and certain public institutions mandated
by law to follow a different system are exceptions to the requirement.
Institutions exempted from use of the required accounting system must
arrange to provide comparable information. All proprietary institutions
must provide revenue/expenditure reports consistent with NACUBO/AICPA
publications, either independently certified in the audit report or included
as supplemental data in the audit report. Balance sheets may continue to
follow the conventional for-profit format, if desired.
188.8.131.52 The chief business officer is responsible
for preparing financial reports for appropriate institutional officials,
board officers and outside agencies.
184.108.40.206 Periodic written reports to the chief executive
officer of the institution are essential.
220.127.116.11 An annual fiscal year audit must be made
by independent certified public accountants, or an appropriate government
auditing agency, employing as a guide for institutions under the jurisdiction
of the Financial Accounting Standards Board (FASB). Audits of Not-For-Profit
Organizations, published by the American Institute of Certified Public
Accountants (AICPA), or, for institutions under the jurisdiction of the
Government Accounting Standards Board (GASB), Audits of Colleges and
Universities, also published by the American Institute of Certified
Public Accountants (AICPA), or, in the case of for-profit institutions.
conducted in accordance with generally accepted accounting principles.
18.104.22.168 If an institution is subject to Statement of Financial
Accounting Standard (SFAS) No. 117 and elects to use the single column
"Corporate" Statement of Financial Position in its report. it must
provide an additional Statement of Financial Position using one of the
four highest levels of disaggregation illustrated in F.A.R.M. These levels
are the Financial Accounting Standards Board (FASB) Net Asset Class Disaggregation.
Operating/Capital Disaggregation. Managed Asset Group Disaggregation. and
AICPA Audit Guide Funds Group Disaggregation. The additional statement
must be included either in the audit report as an audited supplemental
schedule or independently certified if not included in the audit report.
22.214.171.124 A for-profit institution and its corporate parent,
if any, must add to their audit report a separate schedule indicating
the disposition of profits, including detailed information on corporate
income taxes paid, both state and federal, and on dividends distributed
126.96.36.199 A public institution included in a statewide or
system wide audited financial report, for which a separate institutional
audit report is not available for the fiscal year ending immediately prior
to the committee visit, must have available, in lieu of audited
financial statements, a Standard Review Report in accordance with AICPA
Professional Standards AR 100.35 to include current funds expenditure classifications
and amounts in accordance with generally accepted principles of institutional
accounting, and the institution=s
current fund balance sheet. Institutions in this category must provide
either a separate or a consolidated balance sheet.
188.8.131.52 The auditors must not be directly
connected with the institution either personally or professionally.
184.108.40.206 An effective program of internal auditing and
financial control must be maintained to complement the accounting
system and the annual external audit.
220.127.116.11 However, in those cases in which a public institution's
financial report is included as part of a comprehensive certified state
or system financial report and a separate annual audited report is not
available, the institution must have an established procedure to
ensure the effectiveness of internal controls.
6.3.7 Purchasing and Inventory Control
An institution must maintain proper control over
purchasing and inventory management. The administration and governing board
should protect responsible purchasing officials from the improper
pressures of external political or business interests. A logical adjunct
of the purchasing function is a system of well-organized storerooms such
as those for physical plant, library and office and laboratory supplies,
as well as an inventory system appropriate to safeguard the institution
from loss of equipment.
6.3.8 Refund Policy
18.104.22.168 The institution must adhere to a
published policy and procedure for refunding fees and charges to students
who withdraw from enrollment.
22.214.171.124 The policy and procedure must be
in keeping with generally accepted refund practices in the higher education
community, applicable to all students, and clearly stated in appropriate
126.96.36.199 There must be a suitable organization
and adequate procedures for the management of all funds belonging to the
188.8.131.52 The cashiering function should be
centralized in the business office, and there must be a carefully
developed system for the receipt, deposit and safeguarding of institutional
184.108.40.206 All persons handling institutional funds
must be adequately bonded.
6.3.10 Investment Management
220.127.116.11 The institution must have a written
statement of its investment policies and guidelines approved by the board.
The policies and guidelines should set forth the investment goals
of the institution, conditions governing the granting or withholding of
investment discretion, a description of authorized and prohibited transactions,
and the criteria to be used for performance measurement of both short-
and long-term investments.
18.104.22.168 Members of the governing board should
be aware of their fiduciary responsibility for the institution and their
responsibility for securing maximum investment returns consistent with
the approved investment policy. They should avoid involvement in
conflict of interest situations.
22.214.171.124 Investment policies and guidelines must
be evaluated regularly.
6.3.11 Risk Management and Insurance
126.96.36.199 The institution should have a comprehensive
risk management program which includes risk evaluation, risk avoidance
Adequate replacement protection for all physical facilities
should be covered by appropriate levels of insurance or appropriate
provisions for obtaining funds.
6.3.12 Auxiliary Enterprises
The institution may operate, or have contracted for operation,
activities that may have a significant impact on the operation of the institution.
These activities may include, but are not limited to, the following: bookstores,
residence halls, food service operations, printing/duplicating services,
child care and transportation services. These activities, when operated
by or for the institution, must be documented and operated in a
fiscally responsible manner.
6.4 Physical Resources
Physical resources, including buildings and equipment
both on and off campus, must be adequate to serve the needs of the
institution in relation to its stated purpose, programs and activities.
The physical environment of the institution should contribute to
an atmosphere for effective learning.
6.4.1 Space Management
Space allocated to any institutional function must
be adequate for the effective conduct of that function.
6.4.2 Buildings, Grounds and Equipment Maintenance
188.8.131.52 An institution must have a plan for
the upkeep of its property.
184.108.40.206 At a minimum, the plan must address
routine, preventative and deferred maintenance of buildings, equipment
and grounds. Where appropriate, it should verify the estimated costs
of maintenance as well as when and how it is to be performed. There should
be a written schedule for regular maintenance activities and a written
record of projects completed.
220.127.116.11 The plan must be operational and
6.4.3 Safety and Security
18.104.22.168 The institution must take reasonable
steps to provide a healthful, safe and secure environment for all members
of the campus community.
22.214.171.124 Administrative responsibility for environmental
health and safety programs must be assigned.
126.96.36.199 A comprehensive safety plan must
be developed, implemented and evaluated regularly. The plan should
give special attention to the adequate provision and use of safety equipment
in laboratories and other hazardous areas; to the modification of buildings,
if necessary, for easy egress in the event of fire or other emergency;
and to familiarizing all building occupants with emergency evacuation procedures.
6.4.4 Facilities Master Plan
The institution must maintain a current written
physical facilities master plan that provides for orderly development of
the institution and relates it to other institutional planning efforts.
6.5 Externally Funded Grants and Contracts
6.5.1 Externally funded grants and contracts must
be related to the stated purpose of the institution.
6.5.2 The institution's policy on such grants and
contracts must provide for an appropriate balance between grant
and contract activity and instruction, and guarantee institutional control
over the administration of research projects.
6.5.3 The researcher's freedom to investigate and
report results must be preserved. Research support from outside
agencies should not undermine these basic research principles.
6.5.4 The institution must establish a clear
policy concerning a faculty member's division of obligations between research
and other academic activities.
6.5.5 It must ensure that this policy is
published in such documents as the faculty handbook and made known to all
6.5.6 Where applicable, the institution must
develop policies regarding summer salaries paid from grant and contract
funds, salary supplements paid from grants during the regular academic
year, and fees for consultative services provided by faculty members.
6.5.7 These policies must also be published
and made known to the faculty.
6.5.8 In accepting funds from outside agencies,
the institution must ensure that it maintains control over research
6.5.9 Because many agencies attach stringent regulations
directing and limiting the activities for which they provide funding, the
institution must safeguard control over its own activities.
6.5.10 Continuity of support for general institutional
activities must not be endangered by acquisition of research
grants and contracts.
6.5.11 Grants must be awarded and contracts
must be made for specified periods of time.
6.5.12 When the institution becomes even partially
dependent upon such funds for faculty salaries and/or graduate student
stipends, termination of grants and contracts can jeopardize an entire
educational program. It is also important that an institution not
become dependent upon indirect cost allowances from grants and contracts
to support its regular operating budget.
6.6 Related Corporate Entities
6.6.1 Institutions are often associated with related
separately-incorporated units, such as radio or television stations, athletic
foundations, research foundations, scholarship foundations, hospitals,
for-profit enterprises, press operations and publications, and insurance
trusts. When an institution is reliant upon such an entity, or when a separately-incorporated
or related entity is reliant upon the institution, documentation outlining
the mutual relationship and benefits must be maintained by the institution.
6.6.2 This documentation must include the
following: a description of the separately-incorporated unit's activities;
a statement demonstrating the manner in which the activities relate to
the purpose of the institution; a current roster of board members of the
unit, including institutional personnel and board members who have responsibilities
with both the institution and the incorporated entity, whether they are
additionally compensated by the entity or not; a copy of the separately
incorporated unit's annual financial audit report for the most recently
completed year; and copies of the charter and bylaws of the unit.
6.6.3 If such entities are reliant upon the institution
for fulfillment of their purposes, the institution should ensure
that they complement, rather than detract from, the institution's purpose,
and that they are subject to proper operating controls and risk-liability
containment. The institution should demonstrate the manner in which
each related entity contributes to its effectiveness.