3.2.2 Governing Board Control

Comprehensive Standard: The legal authority and operating control of the institution are clearly defined for the following areas within the institution’s governance structure: institution’s mission; fiscal stability of the institution; institutional policy, including policies concerning related and affiliated corporate entities and all auxiliary services; and related foundations (athletic, research, etc.) and other corporate entities whose primary purpose is to support the institution and/or its programs.

X  Compliance
     Partial Compliance
     Non-Compliance

Narrative:

Part 3.2.2.1: “institution’s mission”

Legal authority for the Board of Regents to set the mission of Georgia State University is set by two primary state governance documents. First, the Constitution of the State of Georgia (Article VIII, Section IV, Paragraph I) specifies that:[1] “The board of regents shall have the exclusive authority to create new public colleges, junior colleges, and universities in the State of Georgia…The government, control, and management of the University System of Georgia and all of the institutions in said system shall be vested in the Board of Regents of the University System.”

Second, the Code of the State of Georgia (Section 20-3-31 [2] and 20-3-32 [3]) specifies that

“The board of regents shall have power… to establish all such schools of learning or art as may be useful to the state and to organize them in the way most likely to attain the ends desired…The board of regents is authorized to consolidate, suspend, or discontinue institutions; merge departments; inaugurate or discontinue courses; and abolish or add degrees.”

Taken together, these documents give the Board of Regents legal authority to set, maintain, and/or alter the mission of Georgia State University.

Part 3.2.2.2: “fiscal stability of the institution”

The above quote from the Constitution of the State of Georgia (Article VIII, Section IV, Paragraph I) indicates that the Board of Regents is given legal authority for the fiscal stability of Georgia State University.

The Board of Regents Policy Manual (Section 700) [4] specifies Board of Regents policies and oversight regarding the following:

1. Private donations
2. Education and general budget
3. Operating budget
4. Auxiliary enterprises and their budgets
5. Financial reporting
6. Tuition and fees
7. Fund management
8. Travel expenses
9. Purchasing
10. Insurance
11. Contracts
12. Audits

The Board of Regents By-Laws (Section V, paragraph 3) designates the Audit Committee as a Standing Committee of the Board. [5] Board of Regents Policy Manual (Section 700) specifies that the Assistant Vice-Chancellor for Internal Audit “shall provide a systemwide annual report to the Audit Committee of the Board.”

Part 3.2.2.3: “institutional policy, including policies concerning … all auxiliary services;”

The Board of Regents Policy Manual (Section 700, paragraph 702.0102) specifies that all auxiliary enterprises must operate on a self-supporting basis. [6] The Board of Regents will not make appropriations to finance or subsidize their operation.  Accordingly, these operations are required to provide for the repair and replacement of any auxiliary assets without state assistance.  Guidelines for accounting, depreciation, and reserve funds are specified.

Part 3.2.2.4: “institutional policy, including policies concerning related and affiliated corporate entities…and related foundations (athletic, research, etc.) and other corporate entities whose primary purpose is to support the institution and/or its programs.”

The State of Georgia recognizes that universities in the University System of Georgia have the need for relationships with corporate entities whose purpose is to support the university.  For example, the Code of the State of Georgia (Section 20-3-78 and 20-3-79) explicitly states that university athletic associations are to be separate corporate entities. [7] [8]

The Board of Regents Policy Manual (Section 1900) classifies these separate corporate entities as “Cooperative Organizations” and provides guidelines regarding the relationships between University System of Georgia Institutions and Cooperative Organizations.  Section 1900 (paragraph 1905) [9] states:  A relationship, whether formal or informal, between a System institution and a cooperative organization may be maintained only if:          

  • A. the relationship between the cooperative organization and the System institution is in the best interest of the System institution as determined by the Board of Regents and the president of the institution in consultation with the Chancellor (BR Minutes, June 2004); and      
  • B. the financial records of the cooperative organization, including any audits, are available for inspection by the president of the System institution or the president's designee; and      
  • C. any use by the cooperative organization of the name of the System institution, or of a symbol or trademark of the System institution, is approved in advance by the president of the System institution or the president's designee; and
  • D. the cooperative organization annually presents evidence satisfactory to the president of the System institution or the president's designee that the cooperative organization is adequately capitalized for any activities undertaken in the name of, for the benefit of, or in conjunction with the System institution; and 
  • E. the cooperative organization annually presents evidence satisfactory to the president of the System institution or the president's designee of insurance or self-insurance adequate in form and amounts to cover foreseeable liability arising from activities undertaken in the name of, for the benefit of, or in conjunction with the System institution; and
  • F. there is a written general agreement or memorandum of understanding between the System institution and the cooperative organization describing each party's responsibilities so that it is clear to third parties dealing with the cooperative organization that the organization is acting as a legal entity separate from System institution; and
  • G. actions of the System institution's officials, faculty, staff, or employees pursuant to the relationship are consistent with policies established by the Board of Regents and the System institution regarding conflicts of interest, outside activities, and other matters.  

As required by point “F” above, Georgia State University has written memoranda of understanding between the university and all Cooperative Organizations.  These memoranda are a standard format written by the staff of the Chancellor of the University System of Georgia. 

Additional evidence for this standard is provided in sections 3.2.11, 3.2.12, and 3.2.13.

Supporting Documentation:

  1. State of Georgia Constitution (Article VIII, Section IV, See pg 58)
  2. Georgia State Code Section 20-3-31
  3. Georgia State Code Section 20-3-32
  4. BOR Policy Manual Section 700
  5. BOR By-Laws Section 5, Paragraph 3
  6. BOR Policy Manual Section 700
  7. Georgia State Code Section 20-3-78
  8. Georgia State Code Section 20-3-79 
  9. BOR Policy Manual Section 1900