Statement on the IRS Compliance Questionnaire for Colleges and Universities

In late 2008, the IRS sent a compliance questionnaire to approximately 400 colleges and universities, the majority of which were four-year, public or independent, degree-granting institutions. This questionnaire focused on institutional governance practices, endowment management, employee compensation, and activities that generate unrelated business income (UBI) during the tax year ending in 2006.

Upon the announcement of the questionnaire, the Association of Governing Boards of Universities and Colleges (AGB) and the National Association of College and University Business Officers (NACUBO) partnered on a voluntary parallel analysis of the submitted survey data to assess the information collected and offer our own conclusions. The effort was supported by seven additional higher education associations representing all sectors: the American Association of Community Colleges (AACC), the American Association of State Colleges and Universities (AASCU), the American Association of Universities (AAU), the American Council on Education (ACE), the Association of Public and Land- Grant Universities (APLU), the National Association of Independent Colleges and Universities (NAICU), and the National Collegiate Athletic Association (NCAA).

The IRS did not disclose which institutions received the questionnaire or its methodology in selecting institutions. The AGB/NACUBO effort, therefore, required us to ask all higher education institutions to voluntarily submit their completed surveys for analysis by the independent accounting firm Ernst and Young (E&Y). The resulting “2008 Internal Revenue Service Colleges and Universities Compliance Questionnaire Analysis” is enclosed. The report analyzes the submitted responses of 146 surveys, representing over one-third of the institutions responding to the questionnaire.