Audit Says "Red Zone" Stores Violate University Policy

Jul 8, 2013

A legislative audit released today accuses the University of Utah of competing with private businesses by selling U of U merchandise at its off-campus “Red Zone” stores. The audit says the university needs to change the way it does business or state lawmakers should step in.

Republican State Representative Johnny Anderson says he first became concerned about Higher Education competing with the private sector last year when employees of the Dixie State College- run television station were under fire for leasing its broadcast vehicle out for non-university purposes.

“I don’t think that government entities should be going into business and competing with the private sector in order to generate additional revenues for those government entities," Anderson says. 

Anderson says state law has never restricted a university’s ability to compete with the private sector because the Board of Regents has always had such a policy. But, he says some of the University of Utah’s businesses don’t comply with that policy, especially the “Red Zone” stores.  

“If the Board of Regents said these things have been operating in violation with our policy, we believe that we should not be competing with the private sector in these areas, we’re now going to enforce that policy, there would be no reason for the legislature to step in," Anderson says. "But my concern would be if the Board of Regents said well, these have been operating in violation with our own policy, so we’re going to change our policy to allow it.”

Spencer Jenkins is a spokesperson Higher Education Commissioner Dave Bueler.  He says finding new revenue streams without competing with the private sector is a challenging balance, but the Board of Regents plans to update its current policy before the end of this year.

“What it will entail is how institutions are able to publicize their services and two, what populations or communities that includes," Jenkins says. "What does it mean to advertise to alumni or to a fan base or to students, faculty and staff? Hopefully providing some clarity there."

University of Utah officials say they’ll meet with the Board of Regents to discuss the new policy.