Universities “Schooled” on Need for Asset Management Software
Last week, the Associated Press detailed a grand mess at Chicago State University. Worse yet, it was entirely avoidable.
Chicago State University has been unable to locate $3.8 million worth of equipment, including 950 computers that could contain confidential information, according to a state audit.
The review released Thursday by Auditor General William Holland continues a string of reports of poor financial oversight at the university. But the school issued a statement saying the number of problems discovered had dropped because of a new administration's “proactive approach” to correcting them.
The trouble with proactive approaches that follow an auditor's disclosures is that they are in fact reactive. The school has been in the crosshairs of the auditor general for the last five years, going back to a 2007 audit that revealed fiscal improprieties related to junkets to the Caribbean under the guise of "leadership seminars."
Chicago State University's problems prompted University of Tennessee Law Professor Glenn Reynolds to quip, "[T]he higher education bubble meets the Chicago way." Reynolds, also known as the Instapundit, makes frequent references to a potential bubble that looms in the future of higher education. The bubble theory points to the expansion of easily accessible credit that has fueled increases to college costs dramatically out of line with increases to inflation. A similar situation occured with housing prices that precipitated the current economic downturn. The problem with the higher education bubble is it is four times as big as the housing bubble was when it burst.
With student loan debt exceeding $1 trillion and the Department of Education relying on collection agencies to chase down loans in default, the possibility of a burst bubble is rightfully concerning.
Under those circumstances, colleges and universities have come under increased scrutiny for their financial condition. What started with inquiries into how their employees use university-issued procurement cards has blossomed into a push for greater visibility into campus accounting. Next in line to be addressed is the disposition of the equipment that schools buy. Going back to Chicago State, this egregious example highlights the failure:
The university reported 1,840 items purchased over the past four decades were missing. The total purchase price was $3.8 million and hold a current value of $403,000, Holland's report found. There were no records to indicate whether there was confidential information on the 950 computers.
Commercial and governmental organizations are increasingly turning to asset management solutions to handle the allocation of their equipment. The primary cornerstone of asset management is, like real estate, location.
Asset management solutions rely on barcoding and RFID tags that can be read by both passive and active interogators to locate items within an enterprise. These solutions typically include a means of noting the item's chain of custody and even integration with online mapping tools to show where an item is located. Slowly, providers of asset management software are adding further integration with GPS for high-value mobile assets, ensuring they can't be driven off and left.
An added complication for Chicago State is the concern that the 950 missing computers may store confidential information. The privacy implications are worrisome. But not knowing whether there is risk eliminates any opportunity to mitigate that risk. A properly deployed solution would enable administrators and property managers to note what computer equipment required additional security measures, such as encryption or utilization of physical measures to secure the asset.
Providing administrative staff with the necessary tools to effectively handle the responsibilities of properly allocating their institution's resources would reduce the likelihood of such missteps finding their way into newspapers and becoming blog fodder. Without those tools, institutions of higher education unnecessarily put themselves at risk. In a climate of possible heightened scrutiny, such errors can permanently sully an institution's reputation.
Joe Tetreault is Apptricity's Higher Education Liaison. You can reach him at firstname.lastname@example.org or by calling 800.693.2193