By Na Jeong-ju
Outside donations to private universities is posing a concern for educational policymakers amid reports that many college owners have bypassed rules to misappropriate the funds.
Schools have attracted billions of dollars from businesses in recent years under the pretext of long-term development plans, but their expenditures and management remain veiled in secrecy.
“The biggest problem about the outside donations is that the money is not being spent for students. Despite the rapid growth of outside donations, tuition fees and other schooling expenses for students has jumped,” said Rep. Ahn Min-seok of the Democratic United Party.
“It’s an irony. It’s time to strengthen monitoring of the spending of the blind money and revise rules to strictly deal with private college owners who are found to have misused the funds.”
The recent dispute at Sookmyung Women’s University over the board’s alleged exploitation of outside donations triggered public interest in the special, secret account.
The school’s President Han Young-sil publicly demanded the resignation of the board’s head Lee Yong-tae, founder of the mid-sized computer manufacturer Trigem Computer, and other board members over what Han called expediency and lack of transparency in managing outside donations.
“The average annual tuition at Sookmyung doubled over the past decade mainly due to the board’s mishandling of outside donations. An audit should be conducted in a fair and thorough manner,” Han’s aide told The Korea Times.
According to school officials, Sookmyung received a total of 68.5 billion won ($61 million) in outside donations between 1995 and 2009.
An education ministry official said there are many other private schools that are under scrutiny regarding the use of such funds.
A recent audit by the government revealed that owners of five private universities misappropriated some 6.3 billion won from 2006 to 2010, without revealing the names of the schools.
“In one case, the school’s foundation collected 7.3 billion won from five enterprises and a number of philanthropists during the period, but used only 1 billion won for school operations. Some of the money was used to give salaries to the foundation’s staff and the rest was being kept at its bank account,” the official said.
The interest on outside donations has become an important source of income for some college foundations.
The Board of Audit and Inspection said the foundations of four private schools in Seoul were found to be keeping 57.9 billion won that they received years ago in their bank accounts. The annual interest on the money amounts to 2.3 billion won given the current rate on savings.
Experts say the use of outside donations should no longer remain as a “blind spot.”
“The education ministry is partly responsible for causing such a problem. Its monitoring of the funds has been lax,” said Ahn, the DUP lawmaker. “It’s urgent to close loopholes by strengthening punishment against those misusing the money and enhancing managerial transparency.”
Vice Education Minister Kim Chang-kyung said the ministry was looking into the case. “If necessary, we will seek measures to address the problem,” Kim said.