Bear market: University of Montana has been the victim of a ‘skimming’ scheme

Reductions in the amount of public money allocated to universities are fuelling corruption within higher education systems across the world, it was claimed this week.

A report produced by the anti-corruption agency Transparency International lays bare the extent of fraud and other types of unethical behaviour in the sector, arguing that such practices could be rising because of falling investment.

“The very structure and culture of colleges and universities, as well as the current constraints under which many…operate, can create conditions that facilitate fraud,” the report, published on 1 October, says.

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“As the global economic crisis heated up over the past few years, public money for education declined in many countries, causing some colleges and universities increasingly to depend on the generosity of private donors.”

Global Corruption Report: Education states that universities must ensure that they understand their responsibility regarding sources of donations. It points to the 2011 revelations that the London School of Economics received £1.5 million from the Gaddafi International Charity and Development Foundation, chaired by Saif al-Islam Gaddafi, the son of Libyan dictator Mu’ammer Gaddafi, as one example of where sufficient vetting mechanisms and ethics guidelines were lacking.

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“Many institutions are under pressure to find funds in order to maintain…standards, especially in situations in which government funding is contracting,” it concludes. “Higher education institutions should not assist abusive officials or their families in attempts to launder their images or legitimise their regimes in exchange for funds.”

Recruitment and admission is an area particularly ripe for fraudulent activity, according to the report, which cites examples in a number of countries where students feel they have to pay bribes to get places.

Former Soviet states are persistently susceptible to admissions fraud, the report says, despite the introduction of standardised tests designed to tackle the problem. Ukrainian university administrators have become “inventive in circumventing new admissions rules in order to grant admission to their protégés”, it claims, while in Russia, “paid impersonators of students have been arrested in testing centres”.

The report also gives examples of financial fraud being carried out within universities themselves. Case studies include a former administrative assistant at the University of Vermont who pleaded guilty last year to depositing university cheques worth about $46,000 (£28,300) into her personal account, and a “skimming” scheme at the University of Montana, in which an employee stole more than $300,000 of student rent payments over seven years.

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“Unfortunately, university leadership does not always demonstrate a high commitment to addressing fraud,” the report says.

A 2011 survey of university representatives in the UK revealed that almost 43 per cent of “boards do not discuss efforts to counter fraud and corruption, which may indicate the lack of seriousness with which these organisations regard this problem”.

chris.parr@tsleducation.com