For the last two decades, Western Governors University(WGU) has led the nation in creating and scaling an innovative, high-quality educational model that today helps roughly 90,000 enrolled students make progress in their lives and careers.

Last week, the Department of Education’s Office of the Inspector General spilled cold water on this record of success with a faulty audit that found WGU ineligible to participate in federal student-aid programs. The report said the University should repay Uncle Sam over $700 million.

Even if Education Secretary Betsy DeVos and the Department of Education ignore the audit’s recommendations—as they should—and allow WGU to continue to access federal aid, the report is not an innocent exercise in government oversight. First, it was a waste of time (over five years) and money—both the government’s and WGU’s—which distracted from the real need: making progress in higher education to better serve students, such as low-income ones, of whom only 8 percent graduate four-year college programs in six years. Second, it will further chill innovation across all colleges that can’t afford the scrutiny, cost, and risk of an audit. And third, as students research where to go to college, the audit will create confusion and cause some students to not enroll in WGU, one of the best universities in the world.