CCSF can’t prove it taught 16,000 students, must pay $39 million

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City College of San Francisco, struggling for every dollar it can muster, must repay the state nearly $39 million because it can’t prove that instructors taught thousands of students in hundreds of online classes from 2011 to 2014, an audit revealed.

City College has been unable to verify teaching about 16,000 students in 587 online courses — from Accent Improvement to Cardiorespiratory Emergencies — over the three-year period, according to the state-commissioned audit that ended in September.

No fraud is suspected. State officials say the college simply bungled the way it tracked course participation and will give the college a decade to repay the money. But having to give up $3.9 million a year exacerbates City College’s budget woes, brought on by what the college says has been a severe plunge in enrollment due to its ongoing accreditation troubles.

Claudeen Narnac walks down the steps in front of a City College of San Francisco sign in San Francisco on July 3, 2013. Claudeen Narnac walks down the steps in front of a City College of San Francisco sign in San Francisco on July 3, 2013. Photo: Ian C. Bates, The Chronicle Photo: Ian C. Bates, The Chronicle Image 1 of / 8 Caption Close CCSF can’t prove it taught 16,000 students, must pay $39 million 1 / 8 Back to Gallery

Community colleges receive state money on a per-pupil basis. But to keep the money, instructors of online courses have specific requirements for documenting that they spent the required amount of time interacting with students.

“It’s a pretty black-and-white requirement,” said Mario Rodriguez, vice chancellor for fiscal policy at the California Community College Chancellor’s Office, which requested the audit in 2015 after City College officials themselves discovered and reported the problem.

“They knew they should have been keeping records of communications between students and instructors to prove the course was happening — and they didn’t,” Rodriguez said. “No one can prove that they did, or they would get to keep the money.”

He said it isn’t enough just to show that students received grades in the courses. “We’re asking for some reasonable assurance that the state is getting what it paid for,” he said, noting that of the state’s 113 community colleges, one or two have similar difficulties each year, although none to the extent of the City College problem.

According to the audit, “it was not evident that students both participated and/or knew about the instructional activities and expectations of the courses.”

The audit attributes the problem to instructors’ improper use of the “Learning Management System” designed to keep track of online instruction.

The trouble began in 2011 as the college, like many around the country, began relying more heavily on online courses in hopes of expanding enrollment and course offerings for less money.

But it was also a time when City College had grown lax with its fiscal management and governance — problems that came to the attention of college accreditors in 2012. That’s when the Accrediting Commission for Community and Junior Colleges cracked down on City College for such lapses and spent the next few years trying to revoke its accreditation and shut down the school.

“At the time, we were not keeping ourselves abreast of (state requirements), which is part of why there were accrediting challenges,” said Jeff Hamilton, the college’s spokesman.

The accrediting commission is set to make its final, private determination about whether City College will live or die in January, and will make the ruling public in February.

State officials say the latest revelation should be seen as an example of how City College has improved since the crisis began.

“They discovered the problem themselves, brought it to our attention, fixed the problem and are committed to paying the money back,” said Paul Feist, spokesman for the state’s Interim Chancellor Erik Skinner. “So this would suggest that the college has made a lot of progress, and a demonstration that it’s getting its fiscal house in order.”

Hamilton said the problem was revealed in 2014 by Susan Lamb, just months after she was hired from Contra Costa Community College as vice chancellor for academic affairs at City College. Lamb brought it to the attention of the school’s then-Chancellor Art Tyler, who reported it to the state.

Tyler has since resigned, while Lamb is interim chancellor. She did not respond to a request for comment.

Since its accrediting crisis began in 2012, City College said it has lost roughly 22,000 students, or 26 percent, bringing annual enrollment to less than 62,000. It remains unclear whether the problems with student counts in online courses are related to City College’s overall enrollment decline.

The state has given City College millions of dollars in “stabilization” funding to offset the loss of students, but the law authorizing that cash ends in 2017.

The college got $44 million last year and $25 million this year, and will get nothing next year.

To address the budget problem, college officials have begun reducing their 3,500 course offerings by 5 percent a year, to the dismay of students and faculty.

Last month, San Francisco voters overwhelmingly approved Prop. B, an extension of the city’s parcel tax for City College, which is expected to provide about $19 million a year, up from the current $15 million.

Asked how the $38.9 million loss will affect the college, Hamilton said only that the loss will have to be built into its budget.

“We aren’t falling off a fiscal cliff,” as some have described the school’s finances, he said. “We have a budget plan to prevent us from falling off a fiscal cliff.”

Nanette Asimov is a San Francisco Chronicle staff writer. Email: nasimov@sfchronicle.com Twitter: @NanetteAsimov