Reviewing Diversity, Equity, and Inclusion Spending and Foreign Income at State Universities

Introduction

Representative Steven Howe requested this audit, which was authorized by the Legislative Post Audit Committee at its April 25, 2023 meeting.

Objectives, Scope, & Methodology

Our audit objective was to answer the following questions:

1. How much state funding did each state university report spending on diversity related departments and staffing in the most recent year?
2. How much in financial contributions and contracts from foreign countries did each state university report receiving in the most recent year?

To answer the audit objectives, we collected expenditure and revenue data from each of the state’s 6 universities for the 2022-23 school year. We asked each university to report diversity, equity, and inclusion (DEI) related expenditures for staffing, training, and other activities. We also asked them to report any money they received from foreign sources in the 2022-23 school year. We reviewed state and federal law and guidance related to DEI and foreign contributions. Lastly, we interviewed officials from each university about the DEI-related activities and goals at their university.

To assess the reliability of the information the universities reported, we took several steps. We requested additional documentation to confirm certain foreign contracts and gifts. We compared the universities to each other to look for reasonableness. Additionally, we looked for internal inconsistencies. Other actions are described in more detail in the report. However, these datasets do not exist anywhere else so our ability to determine whether the universities reported accurately and completely is limited.

More specific details about the scope of our work and the methods we used are included throughout the report as appropriate.

We communicated a concern to the Kansas Board of Regents about how the universities report foreign contributions to the federal government.

Important Disclosures

We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. Overall, we believe the evidence obtained provides a reasonable basis for our findings and conclusions based on those audit objectives.

Our audit reports and podcasts are available on our website (www.kslpa.org).

In the 2022-23 school year, the 6 state universities reported spending a total of about $9 million in state funding for DEI-related staffing, training, and other services.

The 6 state universities did not have a shared definition of what diversity, equity, and inclusion activities are, but there were some common themes

• In the last few years, many organizations have placed more focus on diversity, equity, and inclusion (DEI). This focus has led many organizations to take a number of actions related to hiring, training, and other policies to make these concepts a priority. Universities especially have increased their efforts to create an environment that values these ideals.

• Neither state law nor the Kansas Board of Regents provide a definition of what activities should be considered DEI related. Additionally, neither one requires nor prohibits any specific type of DEI activity or spending.

• We interviewed officials at the state’s 6 public universities to understand what activities they consider to be related to DEI. Those universities included:
  • Emporia State University (ESU)
  • Fort Hays State University (FHSU)
  • Kansas State University (KSU)
  • Pittsburg State University (PSU)
  • University of Kansas (KU)
  • Wichita State University (WSU)

• We excluded KU Medical Center because its purpose is significantly different than a university. We also excluded Washburn University because it is a municipal, rather than a state, university.

• The 6 state universities did not have a single, shared definition of what DEI activities are. However, their various views did have some common themes. Some university officials told us that DEI activities are activities that improve access to higher education for all students. Additionally, others told us DEI activities create a university culture that values differences and belonging. A couple told us that DEI activities help students live and work in a diverse world.

The universities provide a variety of DEI-related services and activities such as food pantries, support groups, and tutoring services to a wide range of students.

• We talked to officials from each university about the types of DEI-related services they provide. As mentioned before, universities do not share a consistent view of what DEI-related services are. As such, we asked them to report the services they thought were DEI-related at their university. Officials reported a wide variety of services that reached many different types of students. Some services they reported included:
  • Food pantries to provide basic needs to disadvantaged students.
  • Support groups so that students can meet other students with similar backgrounds or challenges. For example, one university reported therapy groups for neurodivergent students.
  • Outreach programs that connect university leaders to traditionally underrepresented student groups. For example, one university reported a summer program that brought Hispanic students to campus to connect with Hispanic leaders.
  • Tutoring or other educational resources to improve a student’s chances of academic success

• Many DEI services and activities the universities reported are not targeted to a specific group of students. Most of the universities told us that many services are open to all students. However, some noted that specific groups of students may use certain services more often due to their needs. For example, students from disadvantaged backgrounds may be more likely to use the food pantry than other students.

• However, universities did report some programs that serve specific student groups. For example, many universities reported providing services related to military and veteran students, first generation college students, and students with disabilities.  

To determine how much universities spent on DEI-related activities, we asked the universities to report expenditures related to common DEI themes shared across the universities.

• To collect consistent data across all 6 universities, we asked the universities to provide expenditures related to any activity or service the university provides to support students who may not have the same opportunities to succeed as other students. This definition includes some of the main themes we heard from universities about what DEI activities are. For example, most of the universities told us that DEI removes barriers to improve student success.

• We asked the universities to report the personnel, training, and other expenditures they thought met that definition for the 2022-23 school year. The expenditures we requested included:
  • Salary and benefits: This included both staff whose responsibilities are related entirely to DEI, and those who spend only a portion of their time on DEI-related activities. We excluded faculty whose only DEI-related activities were teaching. For example, if an associate professor’s only DEI-related activity was teaching a Culture Diversity course, we did not include their salary. However, if a faculty member had extra duties, such as sitting on a DEI-related committee, we calculated and included any costs related to that committee.
  • All training costs: This included all expenditures related to DEI training such as materials, room rentals, or payments to speakers.
  • Other non-personnel expenditures: This included any other DEI-related expenditures not related to personnel or training. For example, expenditures such as materials related to tutoring or software to improve web accessibility. This category does not include classroom materials or other expenditures related to teaching or coursework.

• We also asked the universities to report additional information for each expenditure. This included what percentage of the expenditure was paid for with state funding. Additionally, for personnel, the universities reported the percentage of each person’s time spent on DEI-related activities. Based on the data provided, we determined the total amount the universities spent on DEI-related activities and how much was paid for with state funding. We also calculated other metrics such as DEI-related spending per student and the total number of staff who are engaged in DEI-related activities.

The universities’ DEI-related expenditures are self-reported, and we have a limited ability to determine if they are accurate and complete.

• Because there is no standard definition of DEI, and no reporting or accounting requirements related to it, our ability to detect incorrect or missing information is limited. We did conduct basic data reliability checks such as comparing the universities to each other and looking for logical inconsistencies. Nevertheless, the reader should be aware that the accuracy of this information is dependent on whether the universities reported completely and accurately.  

• Additionally, we cannot ensure complete consistency across the universities because they do not all think of DEI in exactly the same way. 
  • We provided the universities with the same definition of DEI. We also provided the same guidance to each university regarding how to report expenditures. For example, we told each university that they should not include salaries and benefits of professors whose only DEI-related activities were teaching. Nevertheless, what activities or personnel each university considers to meet the definition may vary from university to university.
  • We did not direct the universities to include or exclude activities related to any particular group of students. If a university thought activities related to a certain group met the definition, they included them. For example, if a university thought services for students who have served in the military met the definition for DEI-related activities, they included them. However, a different university may not have considered those services as meeting the definition

In the 2022-23 school year, universities reported spending about $45 million in DEI-related activities, of which, about $9 million was paid for with state funding.

• In the 2022-23 school year, the 6 universities reported spending a total of about $45 million on DEI-related activities. Figure 1 shows the total amount of DEI-related expenditures each university reported. As the figure shows, expenditures varied from about $700,000 at PSU to $18.1 million at KU.

• Overall, universities spent $457 per student on DEI-related activities.  However, it ranged from about $44 per student at FHSU to $689 at KU.

• Total reported expenditures included salaries and benefits for personnel, training costs, and costs for other activities. Personnel costs included salary and benefits for 510 full-time-equivalent (FTE) positions. This included personnel such as administrators, professors, and student employees. It also included costs related to 202 DEI-related trainings for topics such as sexual harassment, anti-bias, and disability inclusion. Last, it included other costs related to scholarships, workshops, and events for high school students.

• Overall, total reported DEI spending ($45 million) accounted for about 2% of the universities’ total expenditures ($2.8 billion) in 2022-23. However, this ranged from 0.5% at FHSU to about 3% at ESU. Additional information for each university is included in Appendix A.

• Out of the $45 million the universities spent on DEI-related activities, they reported spending about $9 million (20%) with state funds. The remainder was paid for with other funds such as federal funds, tuition and fees, and donations. Expenditures from state funds ranged from about $360,000 at PSU to $2.6 million at KU.

Nearly all of the $9 million universities reported spending in state funding was spent on salary and benefits for faculty and staff who engaged in DEI-related activities.

• We asked the universities to report what percentage of each expenditure was paid for with state funding. We used that information to determine how much of the universities’ total DEI-related expenditures was paid for using state funds.

• Overall, universities reported spending about 1% ($9 million) of their total 2022-23 state appropriation ($742 million) on DEI-related activities. However, this ranged from 0.8% at PSU to 2.2% at WSU. Additional information for each university is included in Appendix A.

• Salary and benefits accounted for 97% ($8.7 million) of state-funded DEI expenditures the universities reported.  Reported staff included:
  • Administrative staff such as administrative assistants in disability services, directors of international student services, and directors of belonging and inclusion offices.
  • Teaching staff such as English language instructors and lecturers. For these staff, DEI-related activities were often only a portion of their time. We did not include DEI-related activities associated with teaching responsibilities.
  • Support staff such as mental health counselors, web developers, and international student advisors.
  • Student employees such as graduate teaching assistants, interns, and office staff.

• Not all DEI-related staff are paid 100% with state funds. In many cases, only a portion of the total salary and benefit amount is paid for with state funds. For example, the salary and benefits of a director of international student services may be paid for with both state and federal funds. However, a director of recruitment may be paid entirely with state funds. Conversely, some staff are not paid at all with state funding.

• Further, not all DEI-related staff spend 100% of their time on DEI-related activities. In many cases, only a portion of a person’s time is related to DEI. For example, a Dean of arts and sciences may spend some time on DEI-related activities but also has many other responsibilities. For other staff, their only DEI-related responsibilities are in addition to their regular responsibilities. For example, a professor who volunteers to sit on a DEI committee. Conversely, some staff spend 100% of their time on DEI-related activities. For example, a diversity officer in an office of diversity, equity, and inclusion likely spends all of their time on DEI-related activities.

Universities reported spending a small amount of state funding on DEI-related training and other non-personnel expenses like travel, software, and outreach programs.

• Other DEI services accounted for about 2.5% ($221,000) of state-funded DEI expenditures the universities reported. This category of expenditures included a wide range of activities such as outreach programs to high school students, transportation services, and software to improve accessibility for students with disabilities.  
  • Some of these expenditures were paid for entirely with state funds. For example, one university reported it paid for travel costs related to recruiting underrepresented students entirely with state funds.
  • Other expenditures were only partially paid for with state funds. For example, one university reported using state funds to pay 1% of the costs of a program that provides English language skills.

• Universities reported spending the remaining 0.6% ($55,000) of state-funded DEI expenditures on DEI-related training. Training paid with state funding included diversity seminars, cultural competency training, and social justice training for advisors. Training was offered to students, teaching faculty, and other staff. 
  • Universities reported holding 19 different types of DEI-related trainings in the 2022-23 school year that were paid, at least in part, with state funding. Universities may have offered these training sessions more than once. For example, if a university provided sexual harassment training 5 different times through the year, we only counted it once. However, we counted all the costs associated with providing the training.
  • 5 of the 19 DEI-related trainings were mandatory for at least some students, faculty, or staff. This included trainings on sexual harassment prevention and federally required Title IX training. In some cases, the training was only mandatory for staff but not for students. Other times, training was mandatory for certain students (e.g. student officers) but not for others.

The universities do not have consistent measures for determining whether DEI-related activities are effective for achieving their DEI goals.

• We talked to university officials about their goals for DEI-related activities and how they monitor whether those goals are being met.

• Most universities told us their goals for DEI-related activities were to recruit and retain students. Some officials told us that when students feel included on campus and have resources that support their success, they are more likely to finish their degrees. Other goals the universities reported were to increase economic prosperity in the state and to prepare students to work in a diverse world.

• All of the universities reported collecting various types of data. This included data such as retention data, enrollment demographics, and course level data. Some also reported surveying students and staff. However, this data is not currently connected to specific DEI-related activities or spending.

• The universities report information such as enrollment and demographics to the Kansas Board of Regents. This allows universities to compare various metrics over time and to other universities. However, currently the universities cannot directly connect those results to any specific DEI-related activity or spending.

In the 2022-23 school year, the 6 state universities reported receiving about $116 million from foreign sources such as foreign citizens and universities.

Universities receive money from foreign sources for a few reasons including tuition and fees, gifts, and contractual services.

• Federal and state laws allow universities to receive money from foreign sources. Federal law defines a foreign source as:
  • a foreign government,
  • an individual who is not a U.S. citizen or a U.S. national,
  • a legal entity (such as a business or university) created under the laws of a foreign country,
  • an agent acting on behalf of a foreign source.

• Universities receive money from foreign sources for many reasons. The most common is for tuition and fees related to foreign students attending Kansas universities. Foreign companies may also contract with state universities to conduct research or provide training. Additionally, a foreign source can give a university a monetary gift. In some cases, a gift can be used at the university’s discretion. Other times it must be used for a specific activity such as establishing a scholarship.

• Federal law requires universities to report money from foreign sources to the U.S. government in certain circumstances. Universities must report gifts or contracts that total $250,000 or more annually from a single source. The federal government considers tuition and fees to be a form of a contract. Those reports are part of a searchable database that is publicly available online at https://sites.ed.gov/foreigngifts/.

The universities’ foreign contributions are self-reported and we have a limited ability to determine if they are accurate and complete.

• We asked all 6 state universities to report to us any contributions they received from a foreign source in the 2022-23 school year. We mostly defined foreign sources in the same way the federal government does. Although the federal government only requires universities to report contributions over $250,000, we asked the universities to report all foreign contributions. This included:
  • All tuition and fees paid for by individual foreign students or foreign organizations (such as a government or university) for the 2022-23 school year. Students who are permanent residents (“green card holders”) of the United States are not included. This is because they are authorized to live and work in the United States on a permanent basis. As such, their tuition and fee source may not be foreign.
  • All contracts the university entered into in the 2022-23 school year. These are contracts where a foreign source pays the university for a purchase, lease, or barter for property or services.
  • All gifts received from a foreign source in the 2022-23 school year. This includes gifts of money or property (such as land or equipment).

• We performed basic reliability checks on the data the universities reported to look for accuracy and completeness. For example, for a sample of contracts and gifts, we requested additional documentation to check the accuracy of the reported dollar values. Additionally, for those universities that reported to the federal foreign contribution database, we compared what they submitted to us with what they reported to the federal government. We did not find any specific problems with the data. Nevertheless, we are reliant on what the universities reported to us. If a university did not report completely we have limited ability to detect it.

In 2022-23, state universities reported receiving about $116 million in foreign contributions, but most ($111 million) was for tuition and fees.

• The total amount of money universities reported receiving from foreign sources in the 2022-23 school year was about $116 million but it ranged significantly across the universities. Figure 2 shows the total amount of money each university reported receiving from foreign sources. As the figure shows, the total amounts ranged from about $42 million at KU to about $3 million at ESU. 

• Nearly all of the money universities reported receiving from foreign sources was for tuition and fees. In total:
  • 96% ($111 million) was from tuition and fees. This included the tuition paid for by individual foreign students. It also included foreign universities or governments that paid on behalf of individual students.
  • 4% ($5 million) was from contracts. This included contracts for Kansas universities to perform activities such as aircraft safety assessments, medical research, and animal vaccine research.
  • 0.1% ($113,000) was from gifts. This included gifts for the university to use for research, scholarships, or to assist students who may not have access to financial aid.

• The $116 million in contributions from foreign sources made up about 4% of the universities’ $2.9 billion in total revenues in the 2022-23 school year. However, this ranged from 2% at KSU to 10% at FHSU. Appendix B provides more information by university.

In the 2022-23 school year, universities reported receiving contributions from 170 countries but about half was from India and China.

• Universities reported receiving money from 170 foreign countries. This included money from governments, businesses, universities, and individuals.

• In total, half of the $116 million was from just 2 countries. Figure 3 shows the total amount the universities reported receiving by the top 5 countries. As the figure shows,about $36 million (31%) was from India. The majority of this was related to tuition and fees for a large number of students from India who are enrolled at WSU. About $23 million (20%) was from China.  About half of that is related to long-standing agreements FHSU has with several Chinese universities. Appendix C provides more information about the contributions that universities reported by country.

• We also looked at which countries contributed the most money by contribution type:
  • India ($36 million) and China ($22 million) contributed the most tuition and fees. These 2 countries alone represented 53% of all the tuition and fees. The remainder came from 166 other countries.
  • The United Kingdom ($850,000) and Switzerland ($733,000) paid the most in terms of contracts. These 2 countries represented about 32% of all the money paid through contracts. The remainder came from 37 other countries.
  • Canada ($55,000) and Sweden ($17,000) contributed the most gifts. These 2 countries represented about 64% of all gifts. The remainder came from 27 other countries.

Conclusion

DEI covers a wide range of services, training, and university staff.  Recently, universities have emphasized DEI in several ways. For example, most universities have established specific diversity and inclusion offices and positions. However, they also reported DEI expenditures related to other, broader longer-standing services. These included providing services to military veterans, international students, or students with disabilities. All six universities reported DEI services that were provided by university staff who were not full-time DEI positions (e.g. financial aid officers, administrative assistants, etc.). As such, DEI expenditures appeared to be a mix of dedicated DEI positions and services, and more established university staff and functions. In total, the six universities reported spending about $9 million (1%) of their $742 million state appropriation on DEI in the 2022-23 school year. Although we did not see any obvious omissions in their data, we were unable to verify whether universities reported complete expenditure data.

We also found that universities received about $116 million in foreign contributions in the 2022-23 school year. That accounted for about 4% of their total revenue ($2.9 billion) that year. Most of those funds (96%) paid for the tuition and fees of foreign students attending Kansas universities.

Recommendations

We did not make any recommendations for this audit.

Agency Response

On February 7, 2024 we provided the draft audit report to the 6 state universities and the Kansas Board of Regents. Because we did not make any recommendations, responses were optional. Most of the universities declined to submit a response. The Board of Regents and the University of Kansas’ responses are below. Agency officials generally agreed with our findings and conclusions. However, the Board of Regents (the Board) noted that they do not agree that individual students’ tuition and fees are the equivalent to contracts from foreign contributions. We reviewed the information agency officials provided but did not change our findings or conclusions.

• The Board noted that we did not find any specific problems with the data the universities submitted to the federal foreign contribution database. This is not accurate. We did not find any specific problems with the foreign contribution information the universities reported to us.  We did not assess whether universities reported accurately to the federal database.

• The Board also noted they do not agree that individual international students’ tuition and fees are the equivalent to contracts. Federal guidance indicates that tuition and fees are a form of a contract. We agree with the Board that universities are not required to report tuition and fees to the federal database until a single foreign source pays $250,000 or more in a year. However, for the purposes of this audit we asked the universities to report to us all tuition and fees, contracts, and gifts from foreign sources regardless of the amount.

Kansas Board of Regents’ Response

Dear Ms. Clarke,

Thank you for the opportunity to review the Legislative Post Audit report entitled Reviewing Diversity, Equity, and Inclusion Spending and Foreign Income at State Universities, completed in February 2024. Although your audit does not make recommendations, we are pleased to present the following response.

The report is correct that there is no statutory nor Board of Regents’ definition for what activities should be considered DEI-related. The Board of Regents has a 172-page policy manual, 98 pages of which relate to the Board’s governance of the state universities. The Board has adopted policy on those areas where it has placed the most focus or seen the greatest potential risks. Currently, the Board has not seen the need to adopt policy about DEI-related activities. Rather, the Board has directed the state universities to improve student retention and graduation rates for every demographic. These efforts include more effective advising strategies, establishing alternative math pathways, adopting common course placement standards and degree maps, as well as making more strategic financial aid awards to students. The success to which the universities can adopt these practices and improve student outcomes will be the basis on which the Board evaluates the institutions in their performance agreements.

The report noted that one service the universities included in their DEI-related activities is tutoring or other educational resources to improve a student’s chance of academic success. At the Board’s request, the National Institute for Student Success at Georgia State University consulted with our system and made specific recommendations to each state university which included improved academic support for more of our students to persist in their academic programs and attain a credential. The Board is intent that all students have the best opportunity to succeed and earn a degree, so we are pleased that the universities are focusing on delivery of student services.

LPA noted that without a standard definition of DEI their ability to detect incorrect or missing information is limited. When the universities gathered data a year ago in response to a legislative data request, as well as for the purpose of this audit, they reported thoroughly and in accordance with the instructions provided by LPA. LPA did provide the universities with the same definition, so we would consider the data to be consistent and accurate in keeping with the LPA definition.

On the foreign income portion of the audit, we were pleased to see the audit report indicated auditors “did not find any specific problems with the data” the universities submitted to the federal database. As we stated in our response to the management letter, the Board is satisfied that the required information has been provided to USDE by the state universities.

We do not agree with LPA that individual international students’ tuition and fees are the equivalent to contracts with or gifts from foreign countries. Student tuition and fees are required to be reported to the federal database only when a single foreign source pays $250,000 or more in one calendar year – a situation unlikely to ever occur for a single student making private payments for individual tuition and fees, given our universities’ costs of attendance.

Where it is noted that amounts from foreign sources vary significantly across the universities, we find such variance expected, as the six universities themselves vary in size and levels of activity. Similarly, the largest amounts of tuition and fees from international students were noted as from India and China. We would expect the two most populous nations to have larger populations of students at our institutions.

We appreciate the work the auditors undertook to collect the varied information needed to conduct this audit. Please let us know if we can provide further assistance.

Sincerely,

Blake Flanders, Ph.D.

President and CEO, Kansas Board of Regents

University of Kansas’ Response

Dear Ms. Clarke:

Thank you for the opportunity to respond to the audit, “Reviewing Diversity, Equity, and Inclusion Spending and Foreign Income at State Universities.” We appreciate the professionalism of the audit team throughout the course of the review.The University of Kansas is a vibrant learning community whose diversity of perspective and thought enriches our conversations, deepens our learning, and fuels innovation and creativity. We have a long history of providing access to high-quality educational experiences to talented students from all backgrounds. Further, KU has a mission and obligation to educate the population of Kansas, no matter how the demographic landscape of our state’s population changes over time.

As you point out in the report, there is a lot of nuance in defining and tracking diversity, equity, and inclusion spending. At KU, we believe in our responsibility to ensure that every single student feels a sense of inclusion and belonging. We know this has a direct effect on student enrollment, retention, and success, which is why we have made the investments shown in the report. These are investments in first generation students, Pell-eligible students, military and veteran students, students with disabilities, students who identify with underrepresented populations, and any student who enrolls at KU and seeks additional support to be successful in their academic career.

Our diversity of people, ideas, and experiences enriches our educational service and research missions. We continue to prioritize efforts to ensure KU is an academic community that prepares students for an increasingly diverse world. We welcome students to our campus from over 100 countries, provide study abroad opportunities to almost 1,400 students, and support educational and research collaboration around the world. The Jayhawk is a far-reaching, international brand, around which our greater KU community comes together.

The revenue KU receives related to international enrollment and global collaboration is an important source of contributions to the university. We take seriously our federally required reporting obligations under Section 117 and submit all data bi-annually in compliance with federal law.

KU has achieved record enrollment and improved rates of retention, in large part due to our commitment to supporting students of all backgrounds, experiences, and identities. As the enrollment cliff approaches, we know that the traditional population higher education historically relied upon will decline, making it all the more important that we continue making investments in supporting all students from the moment they step on campus through when they walk down the hill at graduation and beyond.

Sincerely,

Douglas A. Girod, M.D.

Chancellor

Appendix A – DEI Additional Information

This appendix includes additional information about the DEI-related expenditures the universities reported for the 2022-23 school year.

Appendix B – Foreign Contribution Additional Information

This appendix includes information about the foreign contributions the universities reported receiving in the 2022-23 school year.

Appendix C – Foreign Countries’ Contributions

This appendix includes the total amount the top 25 foreign countries contributed to state universities in the 2022-23 school year. Total amounts for all 170 countries are available from our office upon request.