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Business and Policy Areas
Business and Policy Areas

IPEDS Finance Survey Change Announced

August 14, 2008

In an effort to achieve greater comparability between independent and public institutions, NCES has finalized changes to the IPEDS Finance Survey. The revised survey requires public institutions to allocate operation and maintenance of facilities, depreciation, and interest expenses among all other functional expense categories--as independent institutions do.

The proposed changes began with the convening of a Technical Review Panel (TRP) in Washington, DC in January 2007. The panel members included 46 individuals representing institutions, national associations, state governments, the federal government, and others. NACUBO staff and members from over a dozen institutions participated in the two days of meetings. The panel was convened to discuss future enhancements to IPEDS finance forms to increase commonality and comparability of the data collected between public and independent institutions. Although all finance survey questions were discussed, the panel concluded that the potential for the greatest comparative information exists in the functional categories of expenses. Consequently, the proposed changes for public institutions is that operation and maintenance of facilities, depreciation, and interest will no longer be shown as separate function columns. Instead, an allocation of these expenses will be required by adding columns to the survey form that allow for an allocation to the following functional categories:

  • Instruction
  • Research
  • Public service
  • Academic support
  • Student services
  • Institutional support
  • Scholarships and fellowships
  • Auxiliary enterprises
  • Hospitals
  • Independent operations

Changes to the IPEDS Finance forms will be optional for two data collection years (2008-09 and 2009-10) and mandatory in subsequent years. However, institutions are encouraged to make the change to the new forms as soon as possible. Read more about all final changes here.


The functional expense categories are the grouping and aggregation of expenses by institutional purpose. NACUBO establishes the definitions for the categories. The NACUBO definitions are used for external financial reporting by both independent and public institutions--and the IPEDS finance survey requires that institutions use the NACUBO definitions. However, public and independent institutions veered in comparability between the functional categories in 1997. In the late 1990s when FASB changed the not-for-profit reporting model, independent institutions were also required to follow the then new 1997 AICPA not-for-profit audit guide. Before the late 1990’s split the entire industry followed the AICPA College and University Audit Guide. The foundation of the College and University Audit Guide was fund-based reporting; consequently, expense categories such as operation and maintenance of plant, depreciation and interest were considered separate functions for the higher education industry. In 1997 the newer not-for-profit audit guide specified that depreciation, interest, and operation and maintenance of plant are not functions and should be allocated to the other functional expense categories. Consequently, for the past decade independent institutions have been allocating these expenses to the functional categories and public institutions have not.

The announcement of the proposed Finance Survey change requested from the Office of Management and Budget (OMB) will be effective beginning with the 2008-09 IPEDS data collection. Unless otherwise indicated, following IPEDS policy, the changes or additions would be optional in the first year (2008-09), and mandatory in subsequent years; see specific items for exceptions. Please see the January 29 Federal Register posting (Volume 73, Number 19, Page 5179) regarding a 60-day comment period on these changes.

Again, NACUBO staff and members attending the TRP concluded that this change reflected the best possible outcome among many scenarios discussed over the two days of meetings. The proposal carries a 60-day comment period. NACUBO will comment in support of the new definitions but request an additional year to comply with the requirements.

Staff resource: Sue Menditto, director accounting policy
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