NAICU Washington Update

Changes to Foreign Gifts Disclosures on Fast Track

December 20, 2019

Making an unusual emergency request, the Department of Education released a notice of information collection related to new reporting on Section 117 Disclosure of Foreign Gifts and Contracts. The Department is asking for comments by December 27, 2019, for a January 31, 2020 implementation.
The Department’s request for “emergency clearance” for “expedited implementation” from the Office of Management and Budget is being met with concern and skepticism from the higher education community and represents a new round in the sparring that has taken place all fall between the Department and the college community.
The higher education community is writing responses objecting to both the request for emergency clearance and to many of the proposals, themselves.
The first notice was published in September, which reflects the Department’s response to increased pressure regarding foreign influence on college campuses. The draft plan to expand the scope and depth of the information collected from institutions raised concerns for institutions that have been reporting foreign gifts, and for institutions that have never been required to report foreign gifts.
The Department included background information in its “response to public comments” to further explain what changes it proposes to make as a result of feedback from the community.  Those changes include:
  • The expansion of the definition of institution to include all campuses, entities, foundations and separate organizations related to the institution has been removed.
  • It has been clarified that the intended reporting threshold is the $250,000 statutory limit. Reporting of all foreign gifts, contributions or contracts from one foreign source equaling $250,000 must be reported.
  • The questioning of whether or not the financial contribution had any influence on teaching, staffing, educational materials, etc., and whether that influence was positive or negative, has been removed.
  • It remains unclear whether or not institutions will be able to guarantee confidentiality concerning the donation agreements, contracts, and restricted or conditional gift agreements and contracts with foreign sources. It also remains unclear whether or not institutions can maintain confidentiality for gifts or agreements that include proprietary information they are contractually obligated not to disclose.  
  • The prohibition on anonymous gifts remains in place, but the Department states it will not make names and addresses part of the public disclosure report.
  • It is clarified that tuition payments from a foreign source are not intended to be reported unless they meet the $250,000 threshold, which could be reached if a foreign source pays tuition for multiple students.
  • A true copy of contracts still must be submitted, but the Department says it will not make the true copies public and will treat them as “business information.”
  • The enforcement for compliance changed from civil action by the Attorney General to criminal action under federal fraud and false statements law remains.
  • The estimated time to complete the reporting is increased from 10 hours per response to 20 hours.
The notice of a 10-day comment period over the holidays comes at the same time Congress enacted report language as part of the education appropriations bill that calls on the Department to work with institutions on the best way to implement changes to the disclosures. Specifically, the language says:
“Disclosures of Foreign Gifts and Contracts. The agreement notes that section 11 7 of the HEA requires IHEs to disclose certain gifts from or contracts with foreign entities and that the Department makes such information publicly available on its website. Such disclosures are critical to ensure adequate oversight and transparency. The agreement directs the Department to engage with IHEs to ensure requirements under section 117 are clear and to provide guidance to IHEs to ensure they are aware of their responsibilities. As the Department provides guidance on this issue or modifies reporting methods or requirements, IHEs should be given adequate time to ensure proper reporting. The Department should brief the Committees within 45 days of enactment of this Act on efforts to engage with the stakeholder community, efforts to provide greater guidance and clarity on reporting requirements, and any additional information on agency efforts to comply with such section.”
The fast track that the Department has put this updated information collection on will make it difficult for institutions to comply with the January 31 deadline. 

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