Review of Non-Academic Services and Costs at Virginia's ...

JOINT LEGISLATIVE AUDIT

AND REVIEW COMMISSION

REPOR T TO THE

GOVERNOR AND THE GENERAL ASSEMBLY OF VIRGINIA

Review of Non-Academic Services

and Costs at Virginia¡¯s Public Higher

Education Institutions

HOUSE DOCUMENT NO. 10

COMMONWEALTH OF VIRGINIA

RICHMOND

September 2013

Members of the Joint Legislative Audit and

Review Commission

Chair

Delegate John M. O¡¯Bannon III

Vice-Chair

Senator John C. Watkins

Delegate David B. Albo

Senator Charles J. Colgan

Delegate M. Kirkland Cox

Senator Janet D. Howell

Delegate Johnny S. Joannou

Delegate S. Chris Jones

Delegate James P. Massie III

Senator Thomas K. Norment, Jr.

Delegate Robert D. Orrock, Sr.

Delegate Lacey E. Putney

Delegate Lionell Spruill, Sr.

Senator Walter A. Stosch

Martha S. Mavredes, Auditor of Public Accounts

Director

Hal E. Greer

JLARC Staff for This Report

Justin Brown, Division Chief

Walt Smiley, Project Leader

Lauren Axselle

Drew Dickinson

Laura Parker

Greg Rest

Report No. 443

This report is available on the JLARC website at



Copyright 2013, Commonwealth of Virginia

October 25, 2013

The Honorable John M. O'Bannon III

Chair

Joint Legislative Audit and Review Commission

General Assembly Building

Richmond, Virginia 23219

Dear Delegate O¡¯Bannon:

House Joint Resolution 108 (2012) directed the Joint Legislative Audit and

Review Commission (JLARC) to study the cost efficiency of the Commonwealth¡¯s

institutions of higher education and to identify opportunities to reduce the cost of

public higher education in Virginia. This is the second report in a series of reports

under HJR 108 that will be released during 2013 and 2014.

The final report was briefed to the Commission and authorized for printing

on September 9, 2013. On behalf of the Commission staff, I would like to thank the

Secretary of Education and the State Council of Higher Education for Virginia for

their assistance during this review. I would also like to acknowledge the staff at

Virginia¡¯s 15 public higher education institutions, who have been very

accommodating to our research teams.

Sincerely,

Hal E. Greer

Director

HEG/ehs

Table of Contents

JLARC Report Summary

1

2

3

i

Auxiliary Enterprises Include Intercollegiate Athletics,

Recreation, and Student Housing and Dining

1

Auxiliary Enterprises Receive No State General Funds and Are

Largest Driver of Spending Increases

1

Auxiliary Enterprise Revenue Has Increased Substantially and

Often Exceeds Spending

3

Auxiliary Enterprises Have Increased the Price of Higher

Education to Students

5

Auxiliary Enterprise Spending Report is Second in

JLARC Series on Higher Education

9

Institutions Rely Heavily on Student Subsidies to

Operate Athletic Programs

11

Virginia Athletic Programs Vary In Size and Offer an Array of

Sports

11

Athletic Programs Do Not Generate Sufficient Revenue to

Cover Expenses, Requiring Subsidies from Student Fees

12

Intercollegiate Athletics Are Subsidized By 12 Percent of

Tuition and Fees, on Average, and Substantially More at

Several Institutions

17

Athletic Spending Has Increased More Than NCAA Medians,

Driven by Scholarships and Staffing

22

NCAA Regulations and Title IX Affect Athletic Program Spending

27

Intercollegiate Athletics Can Benefit Schools, Students, and

Community

30

Some Students and Schools Express Interest in Lowering Cost

of Athletic Programs

32

Student Fees for Recreation Are Modest, But Other

Revenue Sources Should Be Considered

35

Campus Recreation Is Funded Primarily Through Student Fees

35

Recreation Fee Averages 2.8 Percent of Total Tuition and Fees

38

Per-Student Campus Recreation Spending and Mandatory Fee

Revenues Have Increased

39

Debt Service Increased Recreation Spending, But Most Virginia

Institutions Are Below National Median for Recreation Space

40

4

5

6

Recreation Benefits Students, Staff, and Community, But Certain

Institutions Could Reduce Reliance on Mandatory Student Fees

43

Student Housing Charges Are Generally Consistent

With Local and National Markets

47

Over One-Fourth of Undergraduates Are Required to Live

on Campus in Student Housing, on Average

47

Student Housing is Funded Primarily by Student Charges,

Which Vary by Institution and Facility

49

Student Housing Uses Substantial Institutional and Student

Resources

54

On-Campus Housing Charges in Virginia Are Less Than Rent

in Local and National Markets, Despite Substantial Increases

56

Several Institutions Attempt to Keep Student Housing Affordable,

Citing Benefits

63

Student Dining Charges Are Generally Consistent With

Other Institutions

67

About 45 Percent of Undergraduates Are Required to Purchase

Dining Plans, on Average

67

Student Dining Is Funded Primarily by Student Charges,

Which Vary by Institution and Plan

69

Student Dining Uses Substantial Institutional and Student

Resources

73

Student Dining Charges Are Comparable to Other Public and

Private Institutions, Despite Increases

73

Certain Institutions Have Particularly Low Per-Meal Costs and

High Utilization

78

Several Institutions Make Efforts to Improve Dining Utilization

and Contract Design

83

Students Fund Institutional Debt Service for Auxiliary

Enterprise Projects

85

Auxiliary Enterprise Projects are Funded Mainly with StateIssued Bonds

86

Virginia Institutions Have Borrowed $3.5 Billion to Fund More

Than 200 Auxiliary Enterprise Projects

87

Total Institutional Debt Service has Increased and Is Substantial

88

JLARC Recommendations

95

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