Wednesday, November 9, 2011

U of Illinois Reporting Problems Provide a Broader Message

The Paul Pless, the Dean of Admissions at the University of Illinois Law School manipulated data on academic credentials of entering classes and on acceptance rates for some of those classes.  The consequences of the manipulation - higher ranking for the school in the U.S. News rankings and a significantly higher salary for Pless whose salary doubled over seven years.  There are two messages in this mess, one for law schools and one more generally for nonprofits.  An article in today's Chicago Tribune describes the "intense culture" in which Pless worked and the emphasis the school put on the U.S. News ranking.  "The college's strategic plans and annual reports focused on that ranking.  Pless' salary increases were tied to it.  The law dean and other top officials exchanged emails about the benefits of different cominations of test scores and GPA medians to achieve it."  Those of us in academia complain about the legitimacy of the rankings, but we know about the importance of the rankings to prospective students, alumni, and potential donors.  Pless not only submitted false data, but he also developed a program to admit high-GPA undergrads early, without LSAT scores that might bring down the school's median for reporting purposes.  At least one purpose for the program was a way to manipulate the numbers.  (Law Dean Bruce Smith notes that a purpose of the plan was to encourage high-achieving Illinois students to stay at Illinois, and that he was disappointed to learn about the reasons behind Pless' development of the plan and about Pless' description of the plan.)

The lesson for nonprofits in general is the importance of checks and balances in connection with any kind of reporting.  The importance of a system of checks and balances in connection with financial reporting is well understood, but the Pless case makes clear that having oversight in connection with other reporting is also important.  A report, produced by two firms hired by the school, points out that the law school was at fault for "putting unchecked power with one individual and not having controls to prevent or detect abuses." 

sng

http://lawprofessors.typepad.com/nonprofit/2011/11/u-of-illinois-reporting-problems-provide-a-broader-message.html

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