STATE OF ARIZONA FY 2010 BUDGET REDUCTIONS - ISSUE DESCRIPTIONS ARIZONA STATE BOARD FOR PRIVATE POSTESCONDARY EDUCATION
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1 FY 2010 BUDGET REDUCTIONS - SUMMARY OF ISSUES ARIZONA STATE BOARD FOR PRIVATE POSTSECONDARY EDUCATION ALL NON-GENERAL FUNDS FY 2010 All Non-General Funds Budget (less Federal Funds) 597,200 AGENCY REDUCTION TARGET - ALL NON-GENERAL FUNDS (w/o Federal Funds) $89,580 Fund Reductions Amount Percent Reductions Private Postsecondary Education Fund $50, % Student Tuition Recovery Fund $39, % Issue Total $89,375 All Non-General Funds Total as a Percentage of Agency Non-GF Reduction Target 100%
2 FY 2010 BUDGET REDUCTIONS - SUMMARY OF ISSUES ARIZONA STATE BOARD FOR PRIVATE POSTSECONDARY EDUCATION PRIVATE POSTSECONDARY EDUCATION FUND FY 2010 All Non-General Funds Budget (less Federal Funds) 334,700 AGENCY REDUCTION TARGET - ALL NON-GENERAL FUNDS (w/o Federal Funds) $50,000 Priority Issue Title Reductions Amount 1 Reduction of funds for equipment purchase/repair and maintenance $4,050 2 Elimination of training $1,000 3 Reduction of postage and copying costs $2,000 4 Elimination of all travel $2,000 5 Termination of the Attorney General s Interagency Service Agreement $11,200 6 Elimination of ½ of IT projects thru ISD/ADOA $4,000 7 Reduction in Personal Services/ERE $25,750 Issue Total $50,000 Fund Total as a Percentage of Non-General Fund Reduction Target 100% 1 Please complete the attached Description and Impact Statement for each issue.
3 FY 2010 BUDGET REDUCTIONS - SUMMARY OF ISSUES ARIZONA STATE BOARD FOR PRIVATE POSTSECONDARY EDUCATION STUDENT TUITION RECOVERY FUND Priority FY 2010 All Non-General Funds Budget (less Federal Funds) 262,500 AGENCY REDUCTION TARGET - ALL NON-GENERAL FUNDS (w/o Federal Funds) $39,375 Issue Title 1 Reductions Amount 1 Reduction in the budget projection for the number of claims filed against the fund. $39,375 Issue Total $39,375 Fund Total as a Percentage of Non-General Fund Reduction Target 100% 1 Please complete the attached Description and Impact Statement for each issue.
4 STATE OF ARIZONA FY 2010 BUDGET REDUCTIONS - ISSUE DESCRIPTIONS ARIZONA STATE BOARD FOR PRIVATE POSTESCONDARY EDUCATION Issue Title: Reduction of funds for equipment purchase/repair and maintenance Issue Priority: 1 Reduction Amounts: Private Postsecondary Education Fund: $4,050 Amount: $4, Issue Description and Statement of Effects A.R.S et. seq. establishes the Arizona State Board for Private Postsecondary Education ( Board ). The Mission of the Board is to protect the health, safety and welfare of Arizona citizens by regulating private postsecondary educational institutions and providing services to their students. Goals: To ensure legal operations, ethical practices and quality education in the private postsecondary sector. Maintain effective and efficient regulation of the private postsecondary educational institutions. To assist those injured by private postsecondary educational institutions. To collect or secure monies sufficient to provide for student financial restitution. To provide financial restitution, in a timely manner, to students financially injured as a result of a school closure To provide student educational records in a timely manner. Agency Description: The Board licenses and regulates 232 private postsecondary educational institutions operating vocational and degree programs. These private universities, colleges, career colleges, and vocational schools annually serve approximately 467,893+ students. Formerly, students were only Arizona residents, however, with online programs; Arizona schools now provide training to students across the nation and around the world. The Board has two primary programs: Licensing and Regulation and the Student Tuition Recovery Fund. I. The Board acts on license applications, determines compliance, investigates complaints and violations, and takes disciplinary action. II. Through the administration of the Student Tuition Recovery Fund, a fund of approximately $500,000+, the Board confiscates and retains student educational records from closed institutions, which provides students access to their educational records to continue their education and/or provide educational verification to a potential employer.
5 The fund also provides financial restitution to students injured by private postsecondary institutional closures The 2056 fund of the Board was established pursuant to A.R.S The Board collects licensing fees pursuant to A.R.S and 10% of the fees are deposited in the General Fund. It should be noted that the Board has NOT increased fees since Further, the licensed institutions generated over $2.4 billion in revenue and pay AZ income tax on this revenue. It is the Board s position that proposed reductions will negatively impact the licensing process. This negatively impacts the institutions financially based upon a delay in processing program, location and change of ownership applications, which in turn negatively affects the students attending these institutions. The reductions will also negatively affect the investigative and complaint process, delaying restitution and/or resolution for the students. Priority 1: Reduction of funds for equipment purchase/repair and maintenance. The reliance of working, efficient equipment is crucial to the operations of the Board. The database and all licensing functions are dependent on efficient, operating equipment and directly affects the ability of the Board to carry out its statutory duties. Sufficient funds to purchase new equipment and/or repair existing equipment would be critical in the case of an office outage in order to continue operations.
6 STATE OF ARIZONA FY 2010 BUDGET REDUCTIONS - ISSUE DESCRIPTIONS ARIZONA STATE BOARD FOR PRIVATE POSTESCONDARY EDUCATION Issue Title: Elimination of training Issue Priority: 2 Reduction Amounts: Private Postsecondary Education Fund: $1,000 Amount: $1, Issue Description and Statement of Effects A.R.S et. seq. establishes the Arizona State Board for Private Postsecondary Education ( Board ). The Mission of the Board is to protect the health, safety and welfare of Arizona citizens by regulating private postsecondary educational institutions and providing services to their students. Goals: To ensure legal operations, ethical practices and quality education in the private postsecondary sector. Maintain effective and efficient regulation of the private postsecondary educational institutions. To assist those injured by private postsecondary educational institutions. To collect or secure monies sufficient to provide for student financial restitution. To provide financial restitution, in a timely manner, to students financially injured as a result of a school closure To provide student educational records in a timely manner. Agency Description: The Board licenses and regulates 232 private postsecondary educational institutions operating vocational and degree programs. These private universities, colleges, career colleges, and vocational schools annually serve approximately 467,893+ students. Formerly, students were only Arizona residents, however, with online programs; Arizona schools now provide training to students across the nation and around the world. The Board has two primary programs: Licensing and Regulation and the Student Tuition Recovery Fund. I. The Board acts on license applications, determines compliance, investigates complaints and violations, and takes disciplinary action. II. Through the administration of the Student Tuition Recovery Fund, a fund of approximately $500,000+, the Board confiscates and retains student educational records from closed institutions, which provides students access to their educational records to continue their education and/or provide educational verification to a potential employer.
7 The fund also provides financial restitution to students injured by private postsecondary institutional closures The 2056 fund of the Board was established pursuant to A.R.S The Board collects licensing fees pursuant to A.R.S and 10% of the fees are deposited in the General Fund. It should be noted that the Board has NOT increased fees since Further, the licensed institutions generated over $2.4 billion in revenue and pay AZ income tax on this revenue. It is the Board s position that proposed reductions will negatively impact the licensing process. This negatively impacts the institutions financially based upon a delay in processing program, location and change of ownership applications, which in turn negatively affects the students attending these institutions. The reductions will also negatively affect the investigative and complaint process, delaying restitution and/or resolution for the students. Priority 2: Elimination of training. The elimination of training funds will not have an immediate, negative affect on Board operations. However, the loss of permanent funds will affect the Board s employees ability to obtain training to keep abreast of changing technologies, ever-changing policies/procedures and current issues affecting private postsecondary educational institutions.
8 STATE OF ARIZONA FY 2010 BUDGET REDUCTIONS - ISSUE DESCRIPTIONS ARIZONA STATE BOARD FOR PRIVATE POSTESCONDARY EDUCATION Issue Title: Reduction of postage and copying costs Issue Priority: 3 Reduction Amounts: Private Postsecondary Education Fund: $2,000 Amount: $2, Issue Description and Statement of Effects A.R.S et. seq. establishes the Arizona State Board for Private Postsecondary Education ( Board ). The Mission of the Board is to protect the health, safety and welfare of Arizona citizens by regulating private postsecondary educational institutions and providing services to their students. Goals: To ensure legal operations, ethical practices and quality education in the private postsecondary sector. Maintain effective and efficient regulation of the private postsecondary educational institutions. To assist those injured by private postsecondary educational institutions. To collect or secure monies sufficient to provide for student financial restitution. To provide financial restitution, in a timely manner, to students financially injured as a result of a school closure To provide student educational records in a timely manner. Agency Description: The Board licenses and regulates 232 private postsecondary educational institutions operating vocational and degree programs. These private universities, colleges, career colleges, and vocational schools annually serve approximately 467,893+ students. Formerly, students were only Arizona residents, however, with online programs; Arizona schools now provide training to students across the nation and around the world. The Board has two primary programs: Licensing and Regulation and the Student Tuition Recovery Fund. I. The Board acts on license applications, determines compliance, investigates complaints and violations, and takes disciplinary action. II. Through the administration of the Student Tuition Recovery Fund, a fund of approximately $500,000+, the Board confiscates and retains student educational records from closed institutions, which provides students access to their educational records to continue their education and/or provide educational verification to a potential employer.
9 The fund also provides financial restitution to students injured by private postsecondary institutional closures The 2056 fund of the Board was established pursuant to A.R.S The Board collects licensing fees pursuant to A.R.S and 10% of the fees are deposited in the General Fund. It should be noted that the Board has NOT increased fees since Further, the licensed institutions generated over $2.4 billion in revenue and pay AZ income tax on this revenue. It is the Board s position that proposed reductions will negatively impact the licensing process. This negatively impacts the institutions financially based upon a delay in processing program, location and change of ownership applications, which in turn negatively affects the students attending these institutions. The reductions will also negatively affect the investigative and complaint process, delaying restitution and/or resolution for the students. Priority 3: Reduction of postage and copying costs. License Renewal notifications will be sent to all Licensees electronically which will reduce postage costs. All Board materials will be sent to the Board members electronically which will reduce copying costs.
10 STATE OF ARIZONA FY 2010 BUDGET REDUCTIONS - ISSUE DESCRIPTIONS ARIZONA STATE BOARD FOR PRIVATE POSTESCONDARY EDUCATION Issue Title: Elimination of all travel Issue Priority: 4 Reduction Amounts: Private Postsecondary Education Fund: $2,000 Amount: $2, Issue Description and Statement of Effects A.R.S et. seq. establishes the Arizona State Board for Private Postsecondary Education ( Board ). The Mission of the Board is to protect the health, safety and welfare of Arizona citizens by regulating private postsecondary educational institutions and providing services to their students. Goals: To ensure legal operations, ethical practices and quality education in the private postsecondary sector. Maintain effective and efficient regulation of the private postsecondary educational institutions. To assist those injured by private postsecondary educational institutions. To collect or secure monies sufficient to provide for student financial restitution. To provide financial restitution, in a timely manner, to students financially injured as a result of a school closure To provide student educational records in a timely manner. Agency Description: The Board licenses and regulates 232 private postsecondary educational institutions operating vocational and degree programs. These private universities, colleges, career colleges, and vocational schools annually serve approximately 467,893+ students. Formerly, students were only Arizona residents, however, with online programs; Arizona schools now provide training to students across the nation and around the world. The Board has two primary programs: Licensing and Regulation and the Student Tuition Recovery Fund. I. The Board acts on license applications, determines compliance, investigates complaints and violations, and takes disciplinary action. II. Through the administration of the Student Tuition Recovery Fund, a fund of approximately $500,000+, the Board confiscates and retains student educational records from closed institutions, which provides students access to their educational records to continue their education and/or provide educational verification to a potential employer.
11 The fund also provides financial restitution to students injured by private postsecondary institutional closures The 2056 fund of the Board was established pursuant to A.R.S The Board collects licensing fees pursuant to A.R.S and 10% of the fees are deposited in the General Fund. It should be noted that the Board has NOT increased fees since Further, the licensed institutions generated over $2.4 billion in revenue and pay AZ income tax on this revenue. It is the Board s position that proposed reductions will negatively impact the licensing process. This negatively impacts the institutions financially based upon a delay in processing program, location and change of ownership applications, which in turn negatively affects the students attending these institutions. The reductions will also negatively affect the investigative and complaint process, delaying restitution and/or resolution for the students. Priority 4: Elimination of all travel. The elimination of travel funds will prohibit the Board from conducting the statutory required site visits of institutions. On site visits are necessary to ensure the licensee has the proper facilities, equipment, protection of student records, etc. to ensure quality educational services of the institutions.
12 STATE OF ARIZONA FY 2010 BUDGET REDUCTIONS - ISSUE DESCRIPTIONS ARIZONA STATE BOARD FOR PRIVATE POSTESCONDARY EDUCATION Issue Title: Termination of the Attorney General s Interagency Service Agreement Issue Priority: 5 Reduction Amounts: Private Postsecondary Education Fund: $11,200 Amount: $11, Issue Description and Statement of Effects A.R.S et. seq. establishes the Arizona State Board for Private Postsecondary Education ( Board ). The Mission of the Board is to protect the health, safety and welfare of Arizona citizens by regulating private postsecondary educational institutions and providing services to their students. Goals: To ensure legal operations, ethical practices and quality education in the private postsecondary sector. Maintain effective and efficient regulation of the private postsecondary educational institutions. To assist those injured by private postsecondary educational institutions. To collect or secure monies sufficient to provide for student financial restitution. To provide financial restitution, in a timely manner, to students financially injured as a result of a school closure To provide student educational records in a timely manner. Agency Description: The Board licenses and regulates 232 private postsecondary educational institutions operating vocational and degree programs. These private universities, colleges, career colleges, and vocational schools annually serve approximately 467,893+ students. Formerly, students were only Arizona residents, however, with online programs; Arizona schools now provide training to students across the nation and around the world. The Board has two primary programs: Licensing and Regulation and the Student Tuition Recovery Fund. I. The Board acts on license applications, determines compliance, investigates complaints and violations, and takes disciplinary action. II. Through the administration of the Student Tuition Recovery Fund, a fund of approximately $500,000+, the Board confiscates and retains student educational records from closed institutions, which provides students access to their educational records to continue their education and/or provide educational verification to a potential employer.
13 The fund also provides financial restitution to students injured by private postsecondary institutional closures The 2056 fund of the Board was established pursuant to A.R.S The Board collects licensing fees pursuant to A.R.S and 10% of the fees are deposited in the General Fund. It should be noted that the Board has NOT increased fees since Further, the licensed institutions generated over $2.4 billion in revenue and pay AZ income tax on this revenue. It is the Board s position that proposed reductions will negatively impact the licensing process. This negatively impacts the institutions financially based upon a delay in processing program, location and change of ownership applications, which in turn negatively affects the students attending these institutions. The reductions will also negatively affect the investigative and complaint process, delaying restitution and/or resolution for the students. Priority 5: Termination of the Attorney General s Interagency Service Agreement. Elimination of these funds negatively affects the Attorney General s office and threatens the Board s ability to have legal representation in licensing, taking disciplinary actions against licensees, etc. This directly affects the welfare of the Board and the citizens of Arizona.
14 STATE OF ARIZONA FY 2010 BUDGET REDUCTIONS - ISSUE DESCRIPTIONS ARIZONA STATE BOARD FOR PRIVATE POSTESCONDARY EDUCATION Issue Title: Elimination of ½ of IT projects thru ISD/ADOA Issue Priority: 6 Reduction Amounts: Private Postsecondary Education Fund: $4,000 Amount: $4, Issue Description and Statement of Effects A.R.S et. seq. establishes the Arizona State Board for Private Postsecondary Education ( Board ). The Mission of the Board is to protect the health, safety and welfare of Arizona citizens by regulating private postsecondary educational institutions and providing services to their students. Goals: To ensure legal operations, ethical practices and quality education in the private postsecondary sector. Maintain effective and efficient regulation of the private postsecondary educational institutions. To assist those injured by private postsecondary educational institutions. To collect or secure monies sufficient to provide for student financial restitution. To provide financial restitution, in a timely manner, to students financially injured as a result of a school closure To provide student educational records in a timely manner. Agency Description: The Board licenses and regulates 232 private postsecondary educational institutions operating vocational and degree programs. These private universities, colleges, career colleges, and vocational schools annually serve approximately 467,893+ students. Formerly, students were only Arizona residents, however, with online programs; Arizona schools now provide training to students across the nation and around the world. The Board has two primary programs: Licensing and Regulation and the Student Tuition Recovery Fund. I. The Board acts on license applications, determines compliance, investigates complaints and violations, and takes disciplinary action. II. Through the administration of the Student Tuition Recovery Fund, a fund of approximately $500,000+, the Board confiscates and retains student educational records from closed institutions, which provides students access to their educational records to continue their education and/or provide educational verification to a potential employer.
15 The fund also provides financial restitution to students injured by private postsecondary institutional closures The 2056 fund of the Board was established pursuant to A.R.S The Board collects licensing fees pursuant to A.R.S and 10% of the fees are deposited in the General Fund. It should be noted that the Board has NOT increased fees since Further, the licensed institutions generated over $2.4 billion in revenue and pay AZ income tax on this revenue. It is the Board s position that proposed reductions will negatively impact the licensing process. This negatively impacts the institutions financially based upon a delay in processing program, location and change of ownership applications, which in turn negatively affects the students attending these institutions. The reductions will also negatively affect the investigative and complaint process, delaying restitution and/or resolution for the students. Priority 6: Elimination of ½ of IT projects thru ISD/ADOA. Elimination of these funds will negative impact another state agency and impede the improvement of the Board s database and website, efficient and effective operations.
16 STATE OF ARIZONA FY 2010 BUDGET REDUCTIONS - ISSUE DESCRIPTIONS ARIZONA STATE BOARD FOR PRIVATE POSTESCONDARY EDUCATION Issue Priority: 7 Issue Title: Reduction in Personal Services/ERE Reduction Amounts: Private Postsecondary Education Fund: $25,750 Amount: $25, Issue Description and Statement of Effects A.R.S et. seq. establishes the Arizona State Board for Private Postsecondary Education ( Board ). The Mission of the Board is to protect the health, safety and welfare of Arizona citizens by regulating private postsecondary educational institutions and providing services to their students. Goals: To ensure legal operations, ethical practices and quality education in the private postsecondary sector. Maintain effective and efficient regulation of the private postsecondary educational institutions. To assist those injured by private postsecondary educational institutions. To collect or secure monies sufficient to provide for student financial restitution. To provide financial restitution, in a timely manner, to students financially injured as a result of a school closure To provide student educational records in a timely manner. Agency Description: The Board licenses and regulates 232 private postsecondary educational institutions operating vocational and degree programs. These private universities, colleges, career colleges, and vocational schools annually serve approximately 467,893+ students. Formerly, students were only Arizona residents, however, with online programs; Arizona schools now provide training to students across the nation and around the world. The Board has two primary programs: Licensing and Regulation and the Student Tuition Recovery Fund. I. The Board acts on license applications, determines compliance, investigates complaints and violations, and takes disciplinary action. II. Through the administration of the Student Tuition Recovery Fund, a fund of approximately $500,000+, the Board confiscates and retains student educational records from closed institutions, which provides students access to their educational records to continue their education and/or provide educational verification to a potential employer.
17 The fund also provides financial restitution to students injured by private postsecondary institutional closures The 2056 fund of the Board was established pursuant to A.R.S The Board collects licensing fees pursuant to A.R.S and 10% of the fees are deposited in the General Fund. It should be noted that the Board has NOT increased fees since Further, the licensed institutions generated over $2.4 billion in revenue and pay AZ income tax on this revenue. It is the Board s position that proposed reductions will negatively impact the licensing process. This negatively impacts the institutions financially based upon a delay in processing program, location and change of ownership applications, which in turn negatively affects the students attending these institutions. The reductions will also negatively affect the investigative and complaint process, delaying restitution and/or resolution for the students. Priority 7: Reduction in Personal Services/ERE. Personal Services/ERE reduction may result in the potential loss 17% of the Board s staff. State Board employees work hard and have proven to be dedicated loyal employees. Not only will this affect employee morale, it will definitely negatively affect productivity and time in processing time of licensing and investigating complaints. If an employee is laid off, obviously the employee is negatively affected financially, but may have to seek unemployment benefits, which negatively affects another state agency.
18 STATE OF ARIZONA FY 2010 BUDGET REDUCTIONS - ISSUE DESCRIPTIONS ARIZONA STATE BOARD FOR PRIVATE POSTESCONDARY EDUCATION Issue Title: Reduction in the budget projection for the number of claims filed against the fund Issue Priority: 8 Reduction Amounts: Student Tuition Recovery Fund: $39, Amount: $39, Issue Description and Statement of Effects A.R.S through A.R. S , the Student Tuition Recovery Fund was established and is administered by the Arizona State Board for Private Postsecondary Education ( Board ). The purpose of the Fund is to confiscate and retain student educational records from closed institutions, which provides students access to their educational records in order to continue their education and/or provide educational verification to a potential employer. The Fund also provides financial restitution to students injured by private postsecondary institutional closures. The Student Tuition Recovery Fund is funded through assessments of a Licensee s newly enrolled students. According to A.R.S (A), The assessments and student records request fees received by the Board for the deposit in the fund shall be held in trust to carry out the purposes of the fund. A.R.S (B) states The monies deposited in the fund are continuously appropriated to the board to carry out the purposes of the fund and A.R.S (C) states Any monies expended and unencumbered in the fund at the close of a fiscal year end shall not revert to the state general fund. It is the Board s position that the fund is not subject to reductions for the general fund unless statutory changes are made. The Board administers the fund and costs are limited to the administration of the fund, seizing and processing student records and the payments of claims against the fund from persons injured. However, as required, the Board proposes a reduction the budget projection in the number of claims filed against the Fund. As of this date, no claims have been filed as a result of a school closure.
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