Ways that higher education institutions can improve their compliance procedures in responding to external requests for reports and information are addressed. Institutional officers must first determine how the data will be used by the external agency. By questioning how the requested information will be used, a determination can be made of what kind of data is actually required. Institutional officers also need to ask whether laws protecting the privacy of individuals whose records are held will not be violated. Each request for data should be analyzed for its probable cost to the institution. The effective collection of institutional data requires at least seven steps, which are listed (including notifying affected departments, preparing appropriate data reporting formats, and incorporating the edited, tabulated data into the institution's information management system, or filing it, or recording it as an "occasional report"). The institution also needs to monitor the analysis of its data by external agencies to assure that the reported information is analyzed adequately and properly. An example of recurring, inadequate agency analysis of institutional data is the tendency of state agencies to ignore the distinction between fixed and variable costs faced by institutions with fluctuating enrollments. By reviewing the agency's use of data in decision-making, the institution can judge whether to provide a minimum of information or more extensive data. Once every three years, college and university administrators should prepare a careful summary tabulation of the number of external data requests that they have received and the ways in which each was processed. (SW)