And our teachers report that he never interfered with their education.
This line is somewhat creepy: the speaker implies that the UC was a good parent because he didn’t "interfere" with the education of his kids.
In other words, their education was left up to the control of the State. (Notice that the speaker calls them "our" teachers and not "their" teachers.)
But shouldn’t it be the other way around?
Was he free? Was he happy? The question is absurd: Had anything been wrong, we should certainly have heard.
The poem ends on a final, rhyming couplet that takes a big detour from the conventional topics that have occupied the speaker so far.
Now he asks two questions – "Was he free? Was he happy?" – that really do seem interesting.
These questions are not interesting to the speaker, though, who calls it "absurd."
It’s interesting that these two questions are referred to in the singular, as "the question," as if being free and being happy were the same thing.
In the final line, the speaker explains why the question is absurd: if things had been going badly for the UC, the State ("we") would have known about it, seeing as they know everything.
The speaker’s confidence in this line – "we certainly should have" – is downright chilling. But, of course, the big joke here is that the speaker defines happiness in the negative, as things not going wrong, instead of as things going right.
From the perspective of the State, it is much more important that people are not desperately unhappy – so they don’t rock the boat and stop buying things – than it is that they experience personal fulfillment.