The College Admissions Scandal: Why Every Elite University Should Apply Root Cause Analysis

Scott Moritz, Managing Director Protiviti Forensic

The arrest of celebrities, high profile executives and prominent attorneys along with corrupt SAT and ACT exam proctors, coaches, athletic directors and, of course, an admissions consultant, has sent shockwaves through the hallways of the nation’s most prestigious universities and brought the relationship between wealthy donors and their college-age children into focus as never before.  

America’s elite universities are at an inflection point and what they do in response to the admissions scandal, whether they were implicated or not, will likely affect these institutions for a generation. 

Academia has certainly had its share of scandals. Penn State, Baylor, Dr. Larry Nassar and USA Gymnastics at Michigan State, the Adidas college basketball scandal and the firing of Ohio State’s assistant football coach all come to mind. What separates these scandals from those affecting corporate America is the response.  Most university systems have very little in the way of compliance headcount and infrastructure. They are siloed as organizations and less accustomed to the need to remediate their ethics and compliance programs on the heels of a scandal than their corporate counterparts. The most recent scandal, however, goes to the heart of what universities are supposed to be about – the students, and the integrity of the admissions process and the leadership of each institution. Every elite university has a mission statement that is emblazoned on the façade of campus buildings and featured on their websites and in recruiting materials – one more noble than the next. For example, USC’s reads in part as follows:

“The central mission of the University of Southern California is the development of human beings and society as a whole through the cultivation and enrichment of the human mind and spirit.”

Yale’s is excerpted here:

“We carry out this mission through the free exchange of ideas in an ethical, interdependent and diverse community of faculty, staff, students and alumni.” 

Stanford’s Vision and Values state in part:

“…Anchor education and research in ethics and human welfare, … Stay true to our values, including integrity, diversity, respect, freedom of inquiry and expression, tenacity and optimism.”

The statements are all eloquent and most certainly well-intended. And yet, they each are ringing hollow at the moment as the universities are having to respond to the admissions scandal. The question before them is this:  Do they want to truly embody these ideals and values by driving ethical culture into every corner of their university or are they willing to simply weather the storm and eventually return to business as usual when it comes to institutional ethics? 

Shortly before compliance consultant Hui Chen left the U.S. Department of Justice (DOJ) Fraud Section, she helped author a document entitled “Evaluation of Corporate Compliance Programs” in an effort to further demystify the process by which the DOJ determines whether a defendant organization had an “effective compliance program” in place at the time of a criminal offense. The publication included over a hundred sample questions that DOJ attorneys may ask to understand about the organization’s overall ethics and compliance program and whether it was robust or simply a paper program with nothing much underlying it. The document references The 10 Hallmarks of an Effective Compliance Program as the benchmark by which DOJ seeks to determine a given program’s efficacy. It also introduces what some compliance pundits have come to refer to as the 11th Hallmark – Root Cause Analysis.  

Root cause analysis is the process by which an organization has rigorously examined not just what happened, but how and why it happened. Root cause analysis done correctly should identify shortcomings in the ethics and compliance program and whether the underlying controls are either missing or deficient, all with the intent of identifying the root causes that allowed the pattern of fraud and corruption to negatively affect the organization. In this instance, the negative effect was on the integrity of the admissions process and the universities themselves.  

Every affected institution should perform a root cause analysis, and not just of the bribery and corruption that negatively affected the university in this most recent scandal. They should also step back and ensure that there is a proper, defensible arm’s length separation between university fundraising and the admissions processes. Having advised numerous organizations with significant fundraising operations regarding their ethics and compliance programs, there seems to be an unwritten rule – “stay away from our donors.” Indeed, a number of organizations have sought to exclude fundraising from the scope of ethics and compliance advisory projects. Doing so undercuts the efficacy of our work and the ethics and compliance program in general. Universities should assess who is involved in approving admissions and whether there are sufficient checks and balances in the process to ensure that the institution’s policies, including those that relate to fundraising, are being followed.

Certain elite colleges and universities were not implicated in the scandal but that does not necessarily mean that their admissions process is incorruptible or above reproach. They should evaluate their process as well.

Many universities have sought to position themselves as thought leaders and think tanks of ethical business practices and social consciousness. A true measure of character is not how organizational leaders behave when everything is going well, it is how they conduct themselves in times of crisis. Higher education is in crisis. What these universities do next will show the measure of their character.  

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