Accreditation: What Board Members Need to Know

Introduction:
Welcome to the Trusteeship Podcast from AGB, the Association of Governing Boards of Universities and Colleges. We cover everything higher education leaders need to know about the challenges facing our nation’s colleges and universities. More important, we provide the facts and insight you need to solve those challenges and to be the storytellers and advocates higher education needs.

Today, we’re talking about accreditation, which affects everything from financial aid to institutional viability—but many board members don’t realize how directly they’re accountable. In this episode, AGB’s Natalie Boehm talks with John Cavanaugh about what every board should know: why accreditation matters, how it connects to fiduciary duties, and what questions boards should be asking. Let’s get started. Natalie?

Natalie Boehm:
Thank you so much for joining us today. I’m looking forward to this conversation with John Cavanaugh. John is a subject matter specialist with AGB, and is the retired president of the Consortium of Universities of the Washington Metropolitan Area. Thank you John, so much, for joining us today. Before we dive into our topic about accreditation, can you provide an overview of the purposes of accreditation, and specifically the roles of the president and the board in that process?

John Cavanaugh:
Sure. Natalie, thanks for doing this podcast today and thanks for inviting me to participate. The question is a really important one, so let me start with four of the most important reasons or purposes for accreditation.

The first and arguably most important is finding out whether students have good quality outcomes, and holding institutions accountable for that. The second major purpose of accreditation is holding institutions accountable for what their mission says, and whether or not the institution is actually doing what their mission says. Third major purpose of accreditation is holding the board accountable for arguably, their most important obligation, which is its fiduciary responsibility and governance duties. Is the institution financially solvent, and is the institution well run? And finally, a part of accreditation is also related to figuring out whether the institution is meeting federal compliance requirements. There’s about 10 of those that have been sort of devolved to accreditors, to make sure that they’re following very specific requirements as specified in federal law.

So those are the four most important areas of accreditation. There are then other standards that each accreditor has, depending upon whether they credit the institution, or whether they credit specific programs.

So when it comes to the roles of the board and the president, the primary role of the board in relation to accreditation, is that the board sets the mission and the direction of the institution. They ultimately are the ones who make that determination. Through a participative process, but nevertheless, it’s the board that makes that final decision. Secondly, going to their fiduciary responsibility, it’s the board that’s responsible for ensuring that the institution has adequate finances to support the activities related to the mission, to deliver that quality academic program, ensure student good outcomes and so on. And finally, it’s ultimately the board that gives the okay, or approves, the implementation of policies for its operation. That is the governance policies, procedures, to make sure that the institution is well run.

In terms of the president’s primary responsibilities in relation to those four areas of accreditation, obviously, the president is responsible and is directed by the board to implement the mission and direction of the institution. The president is given the responsibility for allocating and the gathering of resources, the allocation of resources, and the overall financial operation on a day-to-day basis of the institution. And finally, and this is really important, with the faculty in a shared governance model, to make sure that the institution has created and has implemented quality academic programs so that students have the best opportunity possible to get those good outcomes that we spoke of earlier.

Certainly over the course of the accreditation process, these roles can shift a little bit in terms of who is in the lead in the conversation, and so on. But ultimately, it’s the board that’s held accountable by the institutional accreditors.

Natalie Boehm:
Thank you, that’s really helpful, and really sets a good ground for this conversation. So along those lines, how does accreditation tie into the institution mission and student success? And do you think that accreditation is important to students?

John Cavanaugh:
Well, that’s a very good question, and one that’s often overlooked. And as we spoke in the previous question, accreditation does in fact involve the evaluation of the degree to which the institution does what it says it does. So in the mission statement, if it says, “We create students that can think critically,” it’s up to the institution to provide the evidence, prove it. So the accreditor is in the, “Okay, we trust you, but we want to verify that what you’re saying is actually what you’re doing.” So that connection between mission and accreditation is very tight, and it also gets to the need for the institution to provide that evidence that I just spoke of. That evidence can include course and program level assessments, it can include licensure exam outcomes. It can include alumni and employer surveys, to look at how well students do a few years after they graduate, and other assessments as appropriate. But the key here is, nobody just takes somebody’s word for it, you have to demonstrate it with hard evidence. And that’s a key aspect of good quality accreditation.

So when it comes to students and why should students care about accreditation, it turns out that students who are heading into careers that involve getting a license from a state, for example, for public school teaching, in many medical fields, in business, for example public accounting, in the legal world and so on. In those state laws around the licensure requirements, many states specifically and categorically state that the student must have graduated from an accredited institution in order to be eligible to sit for the licensure exam. So that is the tightest example between what accreditors do and why accreditation is important, and ultimately, why students should care. Because if they graduate from an institution that does not give them the opportunity to sit for a licensure exam, that has significant impact on that student’s potential career.

Natalie Boehm:
Thank you. That is a really interesting point. Just thinking about school-aged children, and wanting their teachers to certainly be accredited by the state. So a very good point.

So on occasion, accreditors take an action regarding an institution, either citing it for being out of compliance, or placing it on formal sanction such as probation, or a warning. So such actions often focus on finances, governance, academic outcomes. So recently I’ve had several calls from campus presidents, noting that the board did not fully understand the gravity of the accreditor’s actions, nor was the board fully supportive of the president’s plan for addressing the issues. So what might help boards better understand these types of situations, and their role in addressing actions taken by accreditors?

John Cavanaugh:
Sure, that’s a fantastic question, and I’m going to take a little bit longer with this one, to dive a little deeper, to go into the various aspects of it.

First, I want to go back to something I said early on, in terms of the reasons that we have accreditation, having to do with federal compliance. And it’s important to understand, and for boards to understand, that federal law currently requires institutions to be accredited in order to be eligible for federal student financial aid. That Title IV financial aid, that gets a lot of discussion in the media, and in institutions. Part of this determination is in the accreditation process, which comes through a very specific and targeted federal compliance assessment that’s done by the accreditor, and the institution has to provide the evidence for those 10 or so areas of required compliance. If the institution cannot show that compliance, then they might be held as out of compliance by the accreditor, and may be recommended to have their eligibility for Title IV financial aid rescinded.

Now we’re getting a little ahead of ourselves, but I’ll go into a little detail, and explain how that might work. But the issue is, this is a sort of a pre requirement for most accreditors, that they’ll do first before they send a team to the institution and look at the more specific standards that that accreditor might have, to make sure that we can move forward with compliance on all these federal issues, prior to going through all the rest of the process, only to discover that, “Well, we didn’t really pass step one.” So the focus early on in the institutional accreditation process is clearly on these federal requirements that are required for Title IV financial aid eligibility.

Second, and again, these are all things that presidents and boards really do need to think through, in how they react to things that accreditors do. The second area is that accreditors have various levers that they may choose to use if an institution does not meet minimum requirements on one or more of the accreditor’s standards. There are things written into federal law about what happens if you’re out of compliance with the federal thing. So that’s pretty much standard, and pro forma, if you want to look at it that way.

Pertaining to the accreditor’s standards, and the number of standards varies from accreditor to accreditor, there are these levers that accreditors have. These levers include noting in the review that the institution might have barely, I’ll call it squeaked by, so barely met minimum. And the accreditor may encourage the institution, in a case like that, “You sort of barely got by this time, but we wouldn’t recommend trying it again for the mid-cycle review,” and other kinds of things that institutions need to report. So they may point out areas of potential improvement. Much like in a financial audit, you might get suggestions from your audit firm. It’s not a material finding of something really drastically wrong, but it’s a suggestion on how to improve things so that the quality outcomes next time are going to be that much better. So that’s one lever that accreditors have.

The other major lever, broken into a number of different types, is taking actual sanctions against an institution that the accreditor finds to be out of compliance with that accreditor’s, one or more of their standards. Those go by various labels depending on the accreditor, but common labeling are putting an institution on warning, putting an institution on probation, and putting an institution on what’s called show cause. Each of those is an increasing level of severity, and how that is responded to, and the time that an institution has to address those issues, is often set in federal law, in terms of the length of the time the clock can run before if the institution is required to put the evidence on the table. And if the evidence is not sufficient at that point, under the law, the accreditation for that institution may be pulled.

Each level of that lever has different penalties attached to it, depending on the severity, as you might expect. And again, those are somewhat varying across accreditors, but by the time you get to show cause, that generally gives you about six months or so to prove why you should continue to be eligible for things like Title IV aid, and other privileges of being an accredited higher education institution. One of the issues that comes up on a fairly regular basis, and having served as a commissioner in the Southern Association, and in middle states, I’ve seen situations like this. Is that accreditors like to give, if they can, the benefit of the doubt. So if some of the evidence can be interpreted in more than one way, accreditors may lean toward the more favorable interpretation, rather than the more negative. Sometimes that can make the difference in terms of level of sanction, or even having a sanction in the first place.

One of the arguments going on is whether or not that’s a good idea, because in areas like finance, for example, that giving the institution the benefit of the doubt might end up stringing out a final decision well beyond the normal number of years that that institution might’ve had. It may also make more difficult the interpretation of, “So how bad is this, really?” When an institution might’ve been placed on warning, they take a few steps, they might raise some money, and then the accreditor takes them off of the warning and they go, “Well, I guess it wasn’t so bad after all.” And the next time, the board and the institution might not take it as seriously as they need to. By arguing, “Well, it wasn’t a big deal last time, so why should we get excited about it this time?”

So I think one of the things that we should think about, very carefully, is that practice of how to interpret the data. And might it be a better thing to put the institution on a sanction, and get it right as soon as possible? It’s just something to think about, something for AGB to consider, maybe some deeper thought about. But sometimes that leads to a much longer path and discussion for an outcome that, in hindsight, was inevitable. Where the institution just can’t make it financially, to keep that example going.

So I think part of it is one of these things where, past practice can lead to unintended consequences, and we need to do something to get it back on track. So that from the beginning, people know that there are these levers, there are these sanctions, and accreditors are not afraid to use them.

Natalie Boehm:
So it is really important for the boards to understand the different types of levers, and you and I have talked offline then, in terms of how it is important, especially in financial situations, for boards and presidents to understand the long-term viability of where they are. So along those lines, what are questions, or what questions should board and presidents ask their accreditor, so that they can better understand the reports, and specifically those areas of concern that may have come up in a warning or a sanction?

John Cavanaugh:
Sure. I think it’s important for presidents and boards to first take a step back, when they get a letter that may have, let’s say they have some sort of sanction in it. And make sure they understand what is being said, and what is not being said. On the understand what’s being said side, if all that’s stated in the letter is that the accreditor has found the institution out of compliance with standard X, that may not be so helpful to the institution if standard X has a number of pieces to it. So it’s very, very important that the institution maybe follows up that letter with, “Okay, we hear you around standard X, but would you please be more specific about what aspects of standard X we have a difficulty with, and what areas of standard X, by extension, do we need to really focus on to give you the evidence that we need to get back in good standing?”

So one thing the institution can do is to send a request for clarification. Something that the creditor could do, that would be a big help, is to provide that maybe in the beginning to skip this step. Or maybe say to the institution, “Look, there are institutions that we work with and accredit that have had very, very similar issues to what you’re experiencing. Perhaps talking to them may give you some insight into the kinds of evidence that would be very important for you to bring to the table. Now, we’re not guaranteeing that the solution that worked for this other institution is exactly the solution that’s going to work for you, but you might gain some insight if we point you in two or three of these directions, so that you can go out and do additional due diligence in terms of how to fill your evidence gaps with new evidence, how to make a case around evidence, and the kinds of things that we as an accreditor will be looking for.”

That kind of conversation and back and forth is exceedingly important for the institution to get on the right page, and for the accreditor to understand whether or not the institution understands what is being said here. These conversations can be facilitated, if you will, by having the institutional liaison to that accreditor, be the point person on the correspondence. And on the flip side, at the accreditor, that institutional liaison handle the communication from the accreditor, so that you’ve got point-to-point contact, and you don’t have multiple people sending communications and letters and emails, and all that can just make that misunderstanding worse. So working through your institutional liaison to the campus liaison, back to the accreditor, is a great way to help facilitate that kind of conversation.

Natalie Boehm:
In that process, is there a different role in terms of how the board is updated? Is the board updated in that process through the campus liaison, or through the president’s office?

John Cavanaugh:
Yeah, the correspondence typically goes between the two liaisons. Technically, the letter would be addressed to the president, but really the work of the communication is going on between the liaisons. So the board would get, in the most common scenarios the board would get informed through the president, unless there’s something very specific to internal governance, specifically to the board, or something to that effect. But again, a lot of that correspondence might be funneled through the president’s office. So the board and the president need to be on the same page, and having that conversation, even when it’s an issue completely contained within the way the board operates, or some dynamic that’s going on within the board.

Natalie Boehm:
Okay. Thank you. So in the current environment, some states we know are encouraging or even requiring institutions to switch accreditors every cycle. So what do boards need to know about switching accreditors?

John Cavanaugh:
Sure. I’m going to set aside state mandates and all for a second, and come back to that later. But certainly, the option is there now.

But changing accreditors is a great deal of work for everybody. For the institution it means learning and responding to a new set of accreditation standards, from that new accreditor. So the way that you organized your evidence to your old accreditor, may not be the same way you need to organize your evidence to the new accreditor, so that puts an extra work burden on the institution. Sometimes it even requires the collection of new evidence, because the new accreditor has multiple standards around that issue, whereas your old accreditor only had one.

On the accreditor side, accreditors are not required to accept everybody who knocks on the door, they can look and do their due diligence, and make a decision. “No, we don’t think this is a good fit.” So it’s not the case that you’re guaranteed to get accepted by the first new accreditor that you seek. It doesn’t always work like that. That’s particularly true since, what we still I guess call formerly regional institutional accreditors, drop their geographic boundaries. It’s not true that everybody who wants to get in some other institutional accreditor who used to be a regional, is going to be welcomed with open arms. So it’s a bit more complicated all the way around, than I think what people might think. It’s not like changing suppliers for a product. It’s a lot more complicated than that, because of the federal compliance pieces, and the differences in standards and what evidence people look for.

Similarly, it’s not easy to create a new accreditor. There’s conversation these days about a public research university accreditor, perhaps. If one wants to do that, then one has to keep in mind those federal requirements and all. You’ve got to create a process for that compliance check. You have to get a conversation going as to your target market of institutions. “All right, so we want to be an accreditor. What are we going to accredit, and how are we going to do that? What evidence are we going to require of all of our institutions who want to be members of and accredited by this accreditor?”

Coming to that consensus is not as easy as it sounds. We just look at when they have rulemaking sessions, and they get a bunch of constituents around the table, and stakeholders around the table. It’s hard to get consensus. It’s hard to get that kind consensus even inside one institution. So that process may well not be quick, and the federal regulations for accrediting a new accreditor through the Department of Ed, is a defined process that also is not super quick. So this may be a matter of at least a few years before all of that consensus can come together, that new accreditor can put those standards out there for consideration, and ask the department for approval as an accreditor, whose accreditation will carry the opportunity for that institution to be eligible for Title IV, and other kinds of federal things that go along with being accredited.

Natalie Boehm:
Well, John, thank you so much. Really appreciate your time in diving into accreditation, here. If you’re interested in speaking with John Cavanaugh or one of our other subject matter specialists, please reach out to the Governance Advisory Services team. Thank you.