Private education overseer is failing public, state audit says

State regulators are failing to protect the public from potentially fraudulent and unqualified nonprofit and for-profit private educators, amassing a backlog of hundreds of licensing applications, inspections and complaints, according to an audit released Tuesday.

The Bureau for Private Postsecondary Education has "consistently failed to meet its responsibility to protect the public's interest" and "failed to appropriately respond to complaints against institutions, even when students' safety was allegedly at risk," state Auditor Elaine M. Howle wrote.


The bureau is overseen by the California Department of Consumer Affairs and since 2010 has been charged with regulating more than 1,000 private nonprofit and for-profit educational institutions and programs, many of which provide career and technical training.

As of June 2013, however, the bureau had a backlog of more than 1,100 license applications, some of them outstanding for more than three years, hindering the ability of many institutions to operate in the state, according to the audit.

The bureau had not established a proactive program to identify unlicensed institutions and as of October 2013 had failed to resolve 160 of the 438 complaints against those institutions, said the report from the California state auditor.

And although it had issued 14 citations to unlicensed institutions, it had collected only $5,000 of fines totaling $700,000, the report said.

Auditors also found that the bureau is failing to prioritize complaints, citing the example of an unapproved flight school that was charging students $30,000 for flight training they didn't receive, which took the bureau 502 days to resolve.

In addition, the bureau is failing students by taking too long to process claims for recovering funds from schools that close or fail to provide services, the audit said.

Russ Heimerich, a spokesman for the Department of Consumer Affairs, disputed findings that the agency has consistently failed in its duties but said the department agreed with recommendations to review and streamline the application process, prioritize and resolve complaint backlogs, and provide better training for inspectors.

Part of the problem, said Heimerich, stems from the bureau's assumption of regulatory duties in 2010. It didn't receive funding until October of that year and already had more than 1,000 pending license applications.

The bureau has recently filled several staff positions and has two people working full time to root out unlicensed institutions.

As for the flight school, Heimerich said the agency began investigating the case but the school closed and couldn't be found in California. The bureau then referred the case to federal aviation officials.

"Everybody would like to see us do more in these areas, but with finite resources, it's a balancing act," Heimerich said.

The bureau is undergoing a sunset review and will stop operating on Jan. 1, 2015, unless renewed by the Legislature.

Among recommendations was that lawmakers consider reducing the bureau's responsibilities or transferring its powers to another state agency.