A recent report by the California State Auditor has raised significant concerns about the University of California (UC) system's transparency and oversight regarding its relationships with online program management (OPM) firms.

The audit reviewed contracts from multiple UC campuses and highlighted issues such as incomplete information about OPM partnerships, the overstated value of courses, and the undisclosed involvement of OPMs in teaching. In response, the UC system has acknowledged the need for more transparent practices and committed to addressing these issues. This article delves into the audit's findings, the specific problems identified, and the steps the UC system must take to improve transparency and accountability.

Audit Findings: Incomplete and Misleading Information

The California State Auditor's office examined 30 out of 51 contracts that the UC system holds with OPMs. The audit looked into the operations of UC Berkeley, UC Davis, UCLA, UC San Diego, and UC Santa Barbara. The audit revealed that these campuses had provided incomplete or misleading information about their OPM relationships. For instance, the value of certain courses was overstated, and there was a lack of transparency regarding OPMs' involvement in teaching courses. This lack of clarity can mislead prospective students about the quality and value of the programs offered.

The audit's findings are particularly concerning given the significant role that OPMs play in the university's online education offerings. OPMs frequently handle numerous elements of online programs, including course development, student recruitment, and retention. Yet, the audit discovered that five of the contracts examined did not explicitly indicate the level of OPMs' participation. Additionally, at least one program on each of the reviewed campuses misled students about the industry value of the programming offered. This lack of transparency can undermine trust and potentially impact the students' educational and professional outcomes.

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Key Issues Identified

The state audit identified three primary issues that the UC system must address to enhance transparency and accountability in its dealings with OPMs:

1. Contract Loophole on Tuition Revenue Sharing: The audit highlighted a potential loophole involving the lack of specific guidance from the UC system president regarding tuition revenue sharing. While the president had explicitly stated that universities should not engage in tuition revenue sharing for undergraduate students, this guidance did not extend to graduate or continuing education students. The UC system has until June 2025 to clarify this policy and include graduate and continuing education students in the ban on tuition sharing.
2. OPM Involvement in Teaching Non-Degree Programs: The audit revealed that the UC system uses OPMs to teach students in some non-degree programs without being transparent about it. Although OPM services are not used for undergraduate courses, they are employed for continuing education courses typically taken by adults. The audit found that the involvement of OPMs in these programs was not always clearly stated in the contracts. By June 2025, the UC system must explicitly disclose the relationship between OPMs and the campuses, including the OPMs' role in providing instruction, the credentials of instructors, and any nonrefundable fees or deposits.
3. Inconsistent Approval Processes for Courses and Instructors: The audit revealed that UC Berkeley, UCLA, and UC San Diego's continuing education units did not consistently adhere to the necessary procedures for approving courses and instructors.  UC Santa Barbara's professional and continuing education unit also lacked a process to approve instructors for online courses, increasing the risk of unqualified instructors. Moreover, UCLA and UC Santa Barbara did not consistently conduct student evaluations for courses overseen by OPMs. These campuses have until June 2025 to establish and implement policies for student evaluations to ensure the effectiveness of OPM courses and instructors.

Implementing Recommendations

In response to the audit, the UC system has recognized the importance of providing transparent information about its partnerships with OPMs. The system has committed to diligently reviewing and responsibly implementing the audit's recommendations. This includes addressing any misalignments with state and federal best practices and upholding the university's commitment to excellence.

The audit comes at a time when the UC system is grappling with the broader implications of online education. In 2023, the university faced criticism for banning students from earning degrees solely through online courses, a decision that was later reversed. A task force established to assess the effectiveness of online degree programs is anticipated to deliver its recommendations in early fall. The task force's findings could further influence how the UC system navigates its partnerships with OPMs and the future of online education.

The California State Auditor's report has highlighted critical areas where the UC system needs to improve oversight and transparency in its relationships with OPMs. By addressing the identified issues and implementing the recommended changes, the UC system can ensure that its online programs are transparent, effective, and aligned with best practices. As the demand for online education continues to grow, maintaining high standards of transparency and accountability will be essential for the UC system's success and the trust of its students.

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