Donations to schools remain ‘blind spot‘
By Na Jeong-ju
Outside donations have long been an important source of income for most private universities here.
As they are heavily dependent on tuition fees from students for revenue, the donations from firms, individuals and government agencies have often been regarded as extra income for them.
But many problems have occurred in managing the funds. Some school foundations were found to have received money through their accounts, not the ones belonging to the schools, and then transferred it to the schools to make the money look as if it came from them.
That’s because the government provides more subsidies and other benefits to schools where owners make more contributions.
“In a sense, we can tell that owners of the schools have long deceived the government to get more state subsidies by adopting such a method,” said an official of the Ministry of Education, Science and Technology.
There are also indications that some school owners pocketed some of the outside donations. The ministry began a wide-ranging probe into private colleges that have allegedly bypassed or violated rules to misuse such funds.
The government’s crackdown and an ongoing tuition-cut drive are a double whammy for private schools. Some have raised concerns that such measures will deal a setback to their financial stability and long-term development plans, ultimately victimizing students.
Hanyang University, a mid-ranking private school in Seoul, recently reduced the number of school weeks per semester from 16 to 15, citing growing costs. The decision triggered protests from students.
Hanyang’s case could just be an extreme example of how students are affected when their schools are put under a tighter budget. Some officials, however, warned that the government’s strengthened monitoring of outside donations, and tuition cuts will ultimately dampen the growth potential of private schools.
“We must tighten our belts to survive. There is no other option,” a Hanyang official said. “The government-initiated measures will erode the competitiveness of local schools at a time when they must spend more on expanding their globalization strategy and developing more quality-oriented academic programs.”
However, their complaints are not heard.
The misuse of outside donations has become a major concern for educational policymakers amid calls that the government must strengthen punishment against those misusing the money and enhance managerial transparency at private schools.
The education ministry says 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 recent dispute at Sookmyung Women’s University over the board’s alleged exploitation of outside donations triggered public interest in the special, secret accounts.
The board of Sookmyung, and the school’s President Han Young-sil have taken legal action against each other regarding the matter. Han has claimed the board’s chairman, Lee Yong-tae, and other board members colluded to misuse the funds.
The ministry stripped Lee and five other board members of their positions last week for misappropriation. Immediately after, the board sacked Han as the school’s president and Han filed a complaint with a court to nullify the decision.
Chang Man-chae, the top educator of South Jeolla Province, is also under scrutiny for allegedly misusing outside donations when he worked as president of Sunchon National University from 2006 to 2010.
According to the ministry, the university violated accounting rules to misuse outside donations under Chang. He received tens of millions of won from the school’s foundation but didn’t present any receipts about how the money was spent.
“The biggest problem about outside donations is that the money is not being spent for students. The use of the money is not transparent at all,” said Rep. Ahn Min-seok of the Democratic United Party, a member of the National Assembly Committee on Education, Science and Technology.
“Despite the rapid growth of outside donations, tuition fees and other schooling expenses for students have jumped. That’s an irony.”
The education ministry says there are many other private schools that are being investigated for misusing outside donations.
A recent audit by the government showed that owners of five private universities misappropriated some 6.3 billion won from 2006 to 2010. It didn’t reveal the names of the schools.
“In one case, a 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 in its bank account,” a ministry official said.
The lawmaker said the use of outside donations should no longer remain a “blind spot.”
“The education ministry is partly responsible for causing such a problem. Its monitoring of the funds has been lax,” Ahn said. “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 these funds.”