Richmond, The American International University in London, which has about 1,000 students at its west London campuses, will face extensive checks by its US accreditor, the Middle States Commission on Higher Education, after it ruled that Richmond had submitted insufficient evidence on key areas of governance and management.
Concerns raised include a lack of clear guidelines on appointing independent board members and whether student recruitment officers were offered financial incentives to secure admissions.
The action follows the submission of a monitoring report to the commission last November. Inspectors from the commission recently visited the London campus and will return next year to check that assurances in Richmond's amended report have been put into practice. If successful, its US degree-awarding powers will be renewed until 2016.
The university remains fully accredited by the Middle States Commission during its probationary period. The UK accreditation for its degrees is provided by The Open University.
Richmond currently charges up to £9,500 a year for UK and European Union undergraduates, £18,700 for US students and £16,000 for all other overseas students.
John Annette, president of Richmond, said: "Work is well under way to address these issues which we are confident of resolving this academic year. We do not envisage that this will in any way impact on the quality of instruction that the students receive at Richmond."
He said Richmond was recently praised by the commission's periodic review report, which said it "can be proud of providing excellent academic programs and services through very challenging times".
A spokesman for the Middle States Commission said: "The commission's concerns centre on incentive compensation for student recruiters, the structure and involvement of the board of trustees, shared governance, financial planning and mission and goals."