|Just because a person graduated from a big name university does not automatically mean that he or she is ready for the big time. In fact, job performance and career success are based more on the individual than on his or her alma mater.|
At this point, you should meet with him and walk through his report page by page. Give him clear and specific feedback on the problems, along with suggestions to do a better job in the future.
You may also need to scale back the difficulty level on his next assignment, and consider providing him with more feedback and guidance along the way. With this approach, he can make corrections as needed, and the final draft is not going to hit you as a surprise.
If you apply this approach and the quality is still lacking, he should be given specific feedback regarding some additional steps to upgrade his skills in this area. The next move will be up to him, and ultimately up to you.
In the meantime, it may also be worthwhile to review your hiring and screening standards and procedures. Big name schools are impressive, but your primary focus should be on people who are impressive.