INDIA: Anti-corruption rules for private institutions

In a bid to encourage transparency and stamp out corruption and fraud in universities, India's education ministry is preparing guidelines that will for the first time force private higher education institutions to make their accounts public.

The guidelines are being issued after the ministry received numerous complaints from parents and students that private providers were engaging in malpractices and fleecing students.

Private higher educational institutions will have to disclose their income and expenditure in a standard format in line with corporate-style accounting and auditing norms being readied by the education ministry, official sources said.

It will become mandatory for university accounts to be made public under the guidelines, which are being drawn up in association with the Institute of Chartered Accountants of India.

"Like private sector publicly listed companies, they have to put their statements in the public domain," the official said. "There should be clarity on the source of income and the various expenditure heads of an educational institutions, whether public or private," the official said. "Parents, students and society should know clearly about all these things."

All state-funded higher educational institutes send their accounts to the government and are audited by the Comptroller and Auditor General of India before being tabled in parliament.

Non-government educational institutes will have the liberty to name their own auditor. Since they do not get grants, their accounts would not go to parliament.

Though all educational institutions need to have their accounts audited, there is scope for manipulation of numbers because of the absence of a standard format, officials explained. The numbers have not been required to be made public.

Private institutes will be encouraged to declare details of their finances through advertisements and on their websites.

"Most institutes declare the course fee. But there are a lot of hidden costs such as hostels, library fee, maintenance fee, annual fee etc," the official said. "With the number of private higher education institutions rising, there is a huge need to bring in some regulation that will ensure transparency."

According to official statistics, India has 504 universities, 22,000 colleges and several thousand technical education institutions. Of the total number of higher education institutes, at least 60% are controlled by the private sector.

Private institutes have welcomed the move, though with some reservations.

There is no harm in making institutions' accounts public said Surjit Singh Pabla (pictured), Vice-chancellor of Sikkim Manipal University. "This will also ensure that fraudulent institutions do not prosper. But the government should not mis-utilise that information by making regulations curbing our autonomy."

Prashant Bhalla, Vice-president of the private sector Manav Rachna International University in Faridabad, Haryana, said broad accounting guidelines could be ideal.

"We can put the accounts in public through newspapers, but we [the private sector] should not be painted as a group only indulging in wrong practices."

Ministry officials also said the 14 proposed innovation universities, which will have private sector participation including collaborations with foreign providers, and will enjoy greater autonomy than existing public universities, will need to adopt the new accounting standards and make public income and expenditure through newspaper ads and website postings.

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