Gutted officials cover up US university fails (5)
I believe the answer is:
omits
'fails' is the definition.
(to omit to do something is to fail to do it)
'gutted officials cover up us university' is the wordplay.
'gutted' means to remove the middle letters (to gut something is to remove its insides).
'cover up' is an insertion indicator.
'us university' becomes 'MIT' (Massachusetts Institute of Technology).
'officials' with its centre taken out is 'os'.
'os' going around 'mit' is 'OMITS'.
(Other definitions for omits that I've seen before include "Leaves out or neglects" , "misses out" , "overlooks" , "Forgets" , "skips" .)