This Annual Report of the Commission on Institutions of Higher Education reviews the major policies and procedures through which the commission carries out its function of accreditation of institutions in the North Central Association area. The Commission is Responsible for the establishment of criteria to evaluate higher education institutions, for aiding interested institutions in attaining membership in the Association, for assisting member institutions in the improvement and extension of their programs, for the conduct of workshops for consultants and examiners, and for the study of matters of common concern to colleges and universities. The policies discussed are: (1) correspondent status for nonaccredited institutions; (2) recognized candidate for accreditation status; (3) accredited status; (4) the periodic review of member institutions; (5) the preliminary and full accreditation of member institutions undergoing substantive change; (6) separate accreditation of campuses in multicampus systems; and (7) transfer of accreditation. The official procedures of the Commission are reproduced at the conclusion of the report. (AF)