Final answer:
The statement that a board cannot make rules in conflict with formal documents is true, reflecting the principle that formal rules (de jure) take precedence over board decisions. Dillon's Rule does not give local governments inherent freedom for decision-making; rather, it limits them to powers expressly given by state law. An institution's constitution is often considered its most important set of rules.
Step-by-step explanation:
The board cannot make rules that are in conflict with the formal documents. This statement is primarily true.
College campuses have sets of formal and informal rules. The de jure rules are the official, formal rules as they are written, while de facto rules are those that are actually practiced or enforced.
Regarding the rule referred to in Dillon's Rule, it's actually a false statement. Dillon's Rule states that local governments only have the powers that are expressly conferred to them by state law, not an inherent freedom and flexibility to make decisions for themselves.
Finally, the most important set of rules for an institution could arguably be its constitution, as this defines the fundamental principles and established precedents according to which a state or other organization is governed.