A performance audit conducted by the Office of the Legislative Auditor General found that the University of Utah’s off-campus Red Zone stores are competing with private businesses and encroaching into the private sector, thereby violating Board of Regents policy R555 and University of Utah policy 3-150.
The report, which was completed in July of last year, was discussed during the Utah Legislature’s Higher Education Appropriations Subcommittee meeting Tuesday afternoon.
The first Red Zone store opened in Sandy in 2010. They have since expanded to four stores. The report found that they are “violating both policies by providing services that are not incidental to normal operations as well as advertising to the general public.”
The Auditor General recommends that the Legislature and the Board of Regents should clarify state policy concerning higher education competition with the private sector. Presently, Utah statute does not address this issue.
The report also recommends that the Legislature should clarify sales tax policy on sales transactions by colleges and universities. The Auditor General has found that sales tax practices at state institutions of higher education are inconsistent.
Two other performance audits were also presented. One was a study of whether pooling health insurance for all higher education and applied technology institutions as a single entity would lead to cost savings for the state, and further study was recommended. “We believe a compensation study is needed to truly compare the value of the institutions’ health insurance packages, which can then be used to determine if overall savings are possible through pooling. Although it seems logical that smaller institutions could benefit from pooling, without a full compensation study, we cannot prove that the number of benefited employees is the major factor influencing larger premium amounts.”
The other audit was a study of programs and funding at the Utah College of Applied Technology (UCAT). The Auditor General found that most programs at UCAT campuses met accreditation requirements, and that UCAT programs are becoming more effective. Recommendations for improvement include additional policy guidance and oversight with regard to student costs toward fees, books, and supplies, and clarification of UCAT’s role in secondary education.
A thorough overview of UCAT will be given at the Higher Education Appropriations Subcommittee meeting on Thursday.