WASHINGTON, D.C. — The U.S. Department of Education (DOE) recently announced the opening of a formal investigation into the University of Pennsylvania’s (UPenn) foreign funding disclosures. The inquiry follows a review of the university’s reports, which raised concerns over incomplete and inaccurate information. The investigation is grounded in Section 117 of the Higher Education Act of 1965, which requires postsecondary institutions receiving federal financial assistance to disclose substantial foreign gifts and contracts exceeding $250,000 annually.
“UPenn has a troubling Section 117 compliance history, having failed to disclose any foreign funding until February of 2019 despite a decades-long statutory obligation to do so,” said Acting General Counsel Tom Wheeler. He further emphasized the Department’s commitment to enforcing compliance, noting, “OGC will investigate this matter thoroughly, ensuring that universities cannot conceal the infiltration of our nation’s campuses by foreign governments and other foreign interests.”
Records Request and Investigation Scope
To determine UPenn’s compliance and ensure transparency, the DOE has requested extensive records from the university within 30 days. The documents sought include tax records, agreements with foreign entities, administrative procedures for compliance, and details of university personnel involved in international research collaborations. The Department has specifically asked for information covering agreements with foreign governments and organizations, admissions details for international students, oversight of export and import regulations, and itemized lists of gifts and contracts from all foreign sources since January 2017.
Federal officials are also seeking data on partnerships between UPenn and foreign entities, as well as information on compliance with Foreign Government Talent Recruitment Program restrictions. This comprehensive approach reflects the DOE’s determination to uphold the law and safeguard national interests.
Background on Section 117
Section 117 of the Higher Education Act was introduced in 1986 to promote transparency by monitoring foreign involvement in U.S. higher education. It mandates reporting of gifts or contracts exceeding $250,000, as well as any foreign ownership or significant control over institutions. Compliance is critical, as violations risk enforcement by the Department of Justice or disqualification from receiving federal funding.
The provisions aim to protect national security and academic integrity by shining a light on foreign influence within U.S. universities, particularly at institutions engaged in sensitive research. Noncompliance, as alleged in UPenn’s case, undermines these objectives, prompting rigorous scrutiny from federal authorities.
Broader Implications for Higher Education
The Department of Education’s investigation into UPenn is the latest in a series of enforcement actions designed to strengthen oversight of foreign funding in American colleges and universities. Similar inquiries into Harvard University and the University of California, Berkeley have been launched, following evidence of incomplete disclosures.
By intensifying its focus on Section 117, the DOE is sending a clear message about its commitment to enforcing accountability and protecting academic institutions from undue foreign influence. “The American people and Congress have a right to know the impact of foreign funding on our universities, including some of our critically important research universities,” Wheeler noted.
While the investigation seeks to address transparency concerns, it also raises broader issues for higher education institutions, which must now devote additional resources to compliance and risk management. The increased scrutiny underscores the need for robust administrative processes and transparent communication with federal regulators.
Ultimately, the investigation may serve as a turning point in the relationship between the federal government and higher education institutions, compelling universities to prioritize adherence to foreign disclosure requirements and safeguard their campuses from external influences.
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