Transcript Funding of Universities and the implication there of on

Overview of the the New
Funding Framework
Presented by Prof Emile Horak
Thanks and recognition to Prof Pieter Vermeulen
who supplied the information
Latest Initiative of the Government
• New acrynom: Asgisa
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Accelerated and shared growth
initiative for SA (Asgisa)
Mlambo-Ngcuka to focus on skills shortage
Business Report 11 May 2006
• MLambo- Ngcuka is the political head of the
government ‘s accelerated and shared growth
initiative for SA (Asgisa)
• To address the critical shortage of skills and
spread wealth more evenly
• Skills , infrastructure and logistics are the key
priorities of Asgisa
• The government is planning to spend R 370
billion on infrastructure development , but the
shortage of key skills to run these projects is
threatening their roll-out.
• Will speed up the issuing of work permits to
foreigners
Mlambo-Ngcuka to focus on skills shortage
Business Report 11 May 2006
• Government has also launched the joint
Initiative on Priority Skills Acquisition (Jipsa) to
attract much needed skills back to the country
to help achieve 6 percent economic growth.
• Mlambo-Ngcuka is worried that companies
could not accommodate new graduates who
were looking for opportunities
• “ We are going to put some of these graduates
in sanitation programmes- to to give them an
opportunity”
GDP, Total State Finance and State Finance
on Education for 2003/2004 (estimate)
1
2
GDP
Total State Budget
R1 234 600 million
R 333 965 million
= 27,5% of GDP
3
Total Education Budget
R
68 781 million
= 20,6% of State Budget
= 5,57% of GDP
3.1
Dept of Education
R 312 million = 0,45% of Educ Budget
3.2
Higher Education Sector
R 8 381 million = 12,2% of Educ Budget
3.3
College/School Sector
R 58 898 million = 85,6% of Educ Budget
3.4
Other Educational functions
R 645 million = 0,94% of Educ Budget
3.5
NSFAS (Higher Education)
R545 million = 0,79% of Educ Budget
National Student Financial Aid Scheme
The MTEF Process
• Medium Term Expenditure Framework – 3 year
rolling estimates
• Department of Education (DoE) interacts with
Higher Education (HE) Institutions (3 year
rolling plans) and educational environment
• DoE interacts with national Treasury
• Treasury make allocation to HE, taking into
account national policy and fiscal conditions
• DoE divides allocation amongst HE institutions
Distribution of Budget Totals for 2004/05,
2005/06 and 2006/07
Provisional distribution of MTEF budgets
2004/05
(R’million)
2005/06
(R’million)
2006/07
(R’million)
1 Block grants
8 568
86,7%
9 144
86,7%
9 716
86,6%
1.1 Teaching inputs
5 496
55,6%
5 866
55,6%
6 233
55,5%
1.2 Teaching outputs
1 374
13,9%
1 466
13,9%
1 558
13,9%
1.3 Research outputs
1 125
11,4%
1 200
11,4%
1 276
11,4%
1.4 Institutional factors
573
5,8%
611
5,8%
649
5,8%
2 Earmarked grants
809
8,2%
860
8,1%
938
8,4%
2.1 NSFAS
578
5,8%
638
6,0%
726
6,5%
2.2 Interest & redemption on loans
146
1,5%
131
1,2%
115
1,0%
85
0,8%
91
0,86%
97
0,86%
0
0%
0
0%
502
5,1%
550
5,2%
568
5,1%
9 879
100%
10 554
100%
11 222
100%
2.3 Teaching development
Foundation programms
2.6 New capital projects
3 Special allocation for institutional
restructuring
TOTAL: BLOCK & EARMARKED
0%
This total allocation was about R9 385 million in 2003/4
Example of Division of Government
Budget between Grant Categories
(2005/06)
NSFAS
Earmarked
6% [R638m]
13,3% [R1 410m]
National budget
for higher
education
institutions
100% [R10 554m]
Institutional
restructuring
5,2% [R550m]
Foundation Year
Interest & Redemption
Block grants
2% [R231m]
86,6% [R9 144m]
Teaching
Input grants
55,6% [R5 866m]
generated by
Approved FTE
student places
Teaching output grants
13,9% [R1 466m]
generated by
Non-research graduates
&
diplomates
Research output
grants
11,4% [R1200m]
generated by
Research masters &
doctorates &
publications
Institutional factor
grants
5,8% [R611m]
generated by
(a) Enrolment size
(b) Disadvantaged
students
Ministerial prerogative
• The division of funds between the grant
categories is determined by the Minister
of Education
• The division may vary between years,
subject to the MTEF three year
projections
Teaching Input Grants
Based on approved FTE student places as
determined in the Programme and Qualification Mix
(PQM) process:
Previously this
was only two
groups/levels
(a)
Four funding groups
(b)
Four study levels
(c)
Weighted according to funding group and study
level
Four Funding Groups
Funding group
1
2
3
4
CESM categories included in funding group
07
education
13
law
14
librarianship
20
psychology
21
social services/public administration
04
business/commerce
05
communication
06
computer science
12
languages
18
philosophy/religion
22
social sciences
02
architecture/planning
08
engineering
10
home economics
11
industrial arts
16
mathematical sciences
19
physical education
01
argriculture
03
fine and performing arts
09
health sciences
15
life and physical sciences
Weightings according to Funding
Group and Study Level
(i) Contact Students (Distance Students)
Level
Funding group
Undergraduate
& equivalent
Honours &
equivalent
Masters &
equivalent
Doctoral &
equivalent
1
1.0 (0.5)
2.0 (1.0)
3.0 (3.0)
4.0 (4.0)
2
1.5 (0.75)
3.0 (1.5)
4.5 (4.5)
6.0 (6.0)
3
2.5 (1.25)
5.0 (2.5)
7.5 (7.5)
10.0 (10.0)
4
3.5 (1.75)
7.0 (3.5)
10.5(10.5)
14.0 (14.0)
Determining Teaching Input ‘price’
• Passing institution’s adjusted FTE enrolled
student total through funding grid weighted
teaching input
• Equivalent figure for sector
• Available funds for teaching input
• Institution’s portions
• Proportionate allocation; not ‘price’ in the
economic sense.
Estimated TI Unit “price” ±R6 600
Example of Teaching Input Grid
University of Pretoria
(Contact)
Level
Total
Weighted
Total
Funding group
1
2
3
4
1
4 826
810
323
178
6 138
8 129
2
7 520
1 403
410
194
9 526
18 498
3
3 219
1 063
243
63
4 587
15 813
4
3 713
1 268
580
178
5 740
30 465
Total
19 278
4 544
1 556
613
25 991
72 905
Weighted Total
37 150
20 008
10 741
5 006
72 905
Teaching Output Grant
(a)
Non-research output measured by non-research graduates and
diplomates and weighted
And
(b)
(a)
Measured against output norms (benchmarks)
Weighting factors for teaching outputs: universities & technikons
1st certificates and diplomas of 2 years or less
0.5
1st diplomas and bachelors degrees: 3 years
1.0
Professional 1st bachelors degrees: 4 years and more
1.5
Postgraduate and postdiploma diplomas
0.5
Postgraduate bachelors degrees
1.0
Honours degrees/higher diplomas
0.5
Non-research masters degrees
0.5
Teaching Output Grant
(continued)
(b)
Graduation benchmarks for contact and distance programmes
(Graduates as % of head count enrolments)
Contact
Distance
2004/05
2004/05
22.5%
13.5%
Undergraduate: four years and more
18%
9%
Postgraduate: up to honours
54%
27%
Postgraduate: up to masters (non-Research)
30%
22.5%
Undergraduate: up to three years
Teaching output allocation
• Calculate institution’s actual weighted total
graduates/diplomates
• Actual weighted total teaching output for system
• Normative total teaching output for the institution
(using benchmarks)
• Normative total teaching output for system
• Available funds for teaching outputs
• Institutional allocation,
Estimated TO Unit “price” ±R11 700
Research Outputs
(a) Research outputs measured by publications in accredited
journals, research masters and doctoral graduates (weighted)
And
(b)
(a)
Measured against a research output norm benchmark
Weightings for research outputs
Publication units
1
Research masters graduates
1
Doctoral graduates
3
(b)
Ratios of weighted research output units to permanently appointed
instruction/research staff
Universities
1.25
Technikons
0.5
Research Output Allocation
• Determine institution’s actual total weighted research
output
• Calculate the institution’s normative total weighted
research output (applying the benchmarks)
• Normative weighted total research output for system
• Available funds for research output
• Proportional Institution’s research output allocation,
Estimated RO Unit “price” ±R77 000
Institutional Factor Grants
2.1
Measured by the proportion of disadvantaged students [Contact
African & Coloured students who are SA citizens]
IFG (DS) = % X TIG
10.00%
PERCENTAGE
7.50%
5.00%
2.50%
0.00%
0%
10%
20%
30%
40%
50%
60%
70%
% OF DISADVANTAGED CONTACT FTE STUDENTS
80%
90%
100%
Institutional Factor Grants
3.2
Size of the institution
IFG (Size) = % X TIG
15.00%
12.50%
7.50%
5.00%
NUMBER OF FTE CONTACT AND DISTANCE STUDENTS
25000
20000
16000
12000
0.00%
8000
2.50%
4000
PERCENTAGE
10.00%
Earmarked funding
• National Student Financial Aid Scheme
(NSFAS)
• Interest and redemption on loans
approved before 1999
• New capital projects
• Institutional restructuring
INTERVENTION
 Discussion Document of DoE
“Student Enrolment Planning:
March 2005”
 Ministerial Statement of Higher
Education Funding: 2005/06 to
2007/08 (July 2005)
Teaching Input Capping
Actual 2003
Capped for 2005/06
Capped for 2006 – 2009
Cape Peninsula
4.52%
4.49%
4.49%
Cape Town
5.07%
5.24%
5.24%
Central
1.67%
1.64%
1.64%
Durban Institute
3.71%
3.83%
3.83%
Fort Hare
1.19%
1.15%
1.15%
Free State
4.38%
4.45%
4.45%
Johannesburg
7.03%
6.91%
6.91%
Kwazulu Natal
7.88%
7.70%
7.70%
Limpopo
3.47%
3.41%
3.41%
Mangosuthu
1.34%
1.17%
1.17%
Nelson Mandela
3.67%
3.80%
3.80%
North West
5.28%
5.01%
5.01%
Pretoria
8.89%
9.19%
9.19%
Rhodes
1.14%
1.18%
1.18%
South Africa
9.63%
9.96%
9.96%
Stellenbosch
4.93%
5.09%
5.09%
Tshwane
8.45%
8.57%
8.57%
Vaal Triangle
2.36%
2.44%
2.44%
Venda
1.55%
1.34%
1.34%
Walter Sisulu
3.38%
3.04%
3.04%
Western Cape
2.87%
2.86%
2.86%
Witwatersrand
6.07%
6.09%
6.09%
Zululand
1.54%
1.45%
1.45%
Institution
Internal wrangles
High
Protected
Species
Star
Research
output per
Staff member
Dog
Cash cow
Low
Low
High
FTE/ Staff member
Internal wrangles
High
Protected
Species
Star
Research
output per
resources
required
Dog
Cash cow
Low
Low
High
FTE/ resources taken up
FINIS