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South Carolina Commission on Higher Education: Mike Raley, FIPSE Grant Project Director Tajuana...
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South Carolina Commission on Higher Education:South Carolina Commission on Higher Education:Mike RaleyMike Raley, FIPSE Grant Project Director , FIPSE Grant Project Director
Tajuana MassieTajuana Massie, FIPSE Coordinator , FIPSE Coordinator Lynn MetcalfLynn Metcalf, Director, Finance, Director, Finance
Accountability & Cost Containment in Higher Education
BEST PRACTICE DEFINITIONBEST PRACTICE DEFINITION
Direct Linkage to Mission, Strategic Plan, and Policy Goals: Direct Linkage to Mission, Strategic Plan, and Policy Goals: The perfect The perfect indicators should incorporate and reinforce institutional missions and strategic plans, indicators should incorporate and reinforce institutional missions and strategic plans, as well as broad state policy goals.as well as broad state policy goals.
Broad Stakeholder Involvement and Consensus: Broad Stakeholder Involvement and Consensus: The performance indicators The performance indicators should be developed through negotiation and consensus among key internal and should be developed through negotiation and consensus among key internal and external stakeholders at all steps in the process.external stakeholders at all steps in the process.
Simplicity in Presentation: Simplicity in Presentation: The performance indicators should be simple to convey The performance indicators should be simple to convey and broadly understood.and broadly understood.
Reliant on Valid, Consistent, and Existing Information: Reliant on Valid, Consistent, and Existing Information: The performance The performance indicators should be based on data that are valid and consistent and that can be indicators should be based on data that are valid and consistent and that can be verified by third parties when necessary. The indicators should also be based on verified by third parties when necessary. The indicators should also be based on established data sources, where possible, in order to maximize credibility and established data sources, where possible, in order to maximize credibility and minimize additional workload.minimize additional workload.
Avoidance of “False Precision” in Measurement: Avoidance of “False Precision” in Measurement: The performance indicators The performance indicators should be established with wide recognition that there are certain unavoidable ranges should be established with wide recognition that there are certain unavoidable ranges of error in any measurement activity; imposing a false sense of “precision” is counter-of error in any measurement activity; imposing a false sense of “precision” is counter-productive.productive.
Adaptable to Special Situations: Adaptable to Special Situations: The system of performance indicators The system of performance indicators should accommodate special circumstances (e.g., unique institutional should accommodate special circumstances (e.g., unique institutional missions) where possible.missions) where possible.
Avoidance of Indicator “Proliferation”: Avoidance of Indicator “Proliferation”: The performance indicators The performance indicators chosen should be kept to the smallest number possible in order to minimize chosen should be kept to the smallest number possible in order to minimize conflicting interactions among the indicators and to maximize the conflicting interactions among the indicators and to maximize the importance of each indicator.importance of each indicator.
Reflects Industry Standards: Reflects Industry Standards: The performance indicators chosen should The performance indicators chosen should reflect “industry” norms and standards, where possible, in order to allow for reflect “industry” norms and standards, where possible, in order to allow for benchmarking and peer comparisons.benchmarking and peer comparisons.
Incorporates Input Process, Output, and Outcomes Measures: Incorporates Input Process, Output, and Outcomes Measures: The The performance indicator system developed should have a balance of performance indicator system developed should have a balance of measures related to inputs, processes, outputs, and outcomes, with some measures related to inputs, processes, outputs, and outcomes, with some emphasis on outputs and outcomes.emphasis on outputs and outcomes.
Incorporates Quantitative and Quality Measures: Incorporates Quantitative and Quality Measures: The performance The performance indicator system developed should incorporate both quantitative and indicator system developed should incorporate both quantitative and qualitative measures in order to present the most complete picture of qualitative measures in order to present the most complete picture of performance possible.performance possible.
ATTRIBUTES OF EFFECTIVE INDICATORSATTRIBUTES OF EFFECTIVE INDICATORS
Appear clear credibleAppear clear credible Exhibit validity and reliabilityExhibit validity and reliability Show internal consistencyShow internal consistency Seem fair and equitable to all institutionsSeem fair and equitable to all institutions Evaluate only performance influenced by institutional effortsEvaluate only performance influenced by institutional efforts Rely more on outcomes and outputs than on inputs or processesRely more on outcomes and outputs than on inputs or processes Produce measurable and auditable data, not subject to Produce measurable and auditable data, not subject to
manipulationmanipulation Use available, or economically collectable, dataUse available, or economically collectable, data Relate to planning goals and strategiesRelate to planning goals and strategies Allow differences in institutional missions and typesAllow differences in institutional missions and types Remain stable long enough to give institutions time to respondRemain stable long enough to give institutions time to respond
**Joseph C. Burke and Associates (2002). Joseph C. Burke and Associates (2002). Funding Public Colleges and Universities for Performance: Funding Public Colleges and Universities for Performance: Popularity, Problems, and ProspectsPopularity, Problems, and Prospects. The Rockefeller Institute Press: Albany, New York: 40-. The Rockefeller Institute Press: Albany, New York: 40-41.41.
COST CONTAINMENT DEFINITIONCOST CONTAINMENT DEFINITION
Cost containment is the systematic process of continuously Cost containment is the systematic process of continuously exploring and implementing opportunities to efficiently exploring and implementing opportunities to efficiently manage the cost of institutional operations within the manage the cost of institutional operations within the context of the institutional mission. It is not a “cutting context of the institutional mission. It is not a “cutting back management” (e.g., any strategy intended by back management” (e.g., any strategy intended by officials to freeze hiring or reduce the frequency or officials to freeze hiring or reduce the frequency or quality of services simply to save money during a budget quality of services simply to save money during a budget crisis). Cost containment strives to maintain and crisis). Cost containment strives to maintain and increase the quality of academic programs, student increase the quality of academic programs, student outcomes, and services provided while eliminating outcomes, and services provided while eliminating unnecessary or avoidable costs. unnecessary or avoidable costs.
PROJECT STRATEGIESPROJECT STRATEGIES
Document analysis of policy and practicesDocument analysis of policy and practices
Ethnographic analysis of focus groups and Ethnographic analysis of focus groups and interviewsinterviews
Data analysis of state level information to Data analysis of state level information to determine data most vital to monitor for a determine data most vital to monitor for a particular best practiceparticular best practice
Survey analysisSurvey analysis
DOCUMENT ANALYSISDOCUMENT ANALYSIS
Accountability reports developed by state Accountability reports developed by state agencies and institutions of higher learningagencies and institutions of higher learning
Reports and studies developed by other Reports and studies developed by other national organizations national organizations
Scholarly publications pertaining to the Scholarly publications pertaining to the issues of cost containment and issues of cost containment and accountability in higher education accountability in higher education
FOCUS GROUPSFOCUS GROUPS
Participants (Five Groups)Participants (Five Groups) Three: Institutional EffectivenessThree: Institutional Effectiveness One: Financial Officers One: Financial Officers One: Public Affairs One: Public Affairs
RESULTS OF FOCUS GROUPSRESULTS OF FOCUS GROUPS
Cost Containment Strategies:Cost Containment Strategies: Deploying technology to reduce paper Deploying technology to reduce paper Reviewing the curriculum for relevance and Reviewing the curriculum for relevance and efficiency, leading to elimination of efficiency, leading to elimination of
nonessential programs nonessential programs
Improvement Opportunities for Cost Containment:Improvement Opportunities for Cost Containment: Enhanced institutional cooperation and Enhanced institutional cooperation and
collaboration collaboration Deregulation of operations Deregulation of operations
INTERVIEWSINTERVIEWS
Respondents:Respondents: Four sectors of higher education Four sectors of higher education
State government (legislators and administrators)State government (legislators and administrators)
Private sector (represented by the South Carolina Private sector (represented by the South Carolina Chamber of Commerce)Chamber of Commerce)
Lobbyists responsible for liaison with elements of the Lobbyists responsible for liaison with elements of the higher education systemhigher education system
Institutional presidents who are participating in the Institutional presidents who are participating in the revision of the state’s higher education accountability revision of the state’s higher education accountability system system
INTERVIEW DEMOGRAPHICSINTERVIEW DEMOGRAPHICS
GroupGroup PotentialPotential CompletedCompleted
Research UniversitiesResearch Universities 10 10 10 10
Teaching UniversitiesTeaching Universities 9 9 8 8
USC Regional Campuses USC Regional Campuses 3 3 3 3
Technical CollegesTechnical Colleges 11 11 11 11
State GovernmentState Government 9 9 9 9
Private SectorPrivate Sector 2 2 2 2
LiaisonLiaison 55 44
TotalsTotals 49 49 47 47
RESULTS OF INTERVIEWSRESULTS OF INTERVIEWS
Single “system-wide” model vs. “Sector-Single “system-wide” model vs. “Sector-specific” modelspecific” model
Return on InvestmentReturn on Investment
Cost Effectiveness/Cost Containment/Cost Cost Effectiveness/Cost Containment/Cost ReductionReduction
NATIONAL SURVEYNATIONAL SURVEY
RespondentsRespondents: : SHEEOs SHEEOs SHEFOs SHEFOs
Sample: Sample: Fifty State sampleFifty State sample Forty states respondedForty states responded
Methods:Methods: Mailed survey with return envelopeMailed survey with return envelope E-mail and telephone follow-upE-mail and telephone follow-up
*Administered by The University of South Carolina Institute for Public *Administered by The University of South Carolina Institute for Public Service and Policy Research, (Director: Dr. Robert Oldendick).Service and Policy Research, (Director: Dr. Robert Oldendick).
CATEGORIES OF COSTCATEGORIES OF COST
AffordabilityAffordability
Cost MeasuresCost Measures
Resource UtilizationResource Utilization
OutputsOutputs
Return on InvestmentReturn on Investment
AFFORDABILITYAFFORDABILITY
Tuition and fees per undergraduate credit hour Tuition and fees per undergraduate credit hour
Average loan amount undergraduate students borrow Average loan amount undergraduate students borrow each year each year
Average loan amount graduate students borrow each Average loan amount graduate students borrow each year year
Percent of income needed to pay for college expenses Percent of income needed to pay for college expenses minus financial aid at community (2-year) colleges minus financial aid at community (2-year) colleges
Percent of income needed to pay for undergraduate Percent of income needed to pay for undergraduate college expenses minus financial aid at public 4-year college expenses minus financial aid at public 4-year colleges/universities colleges/universities
AFFORDABILITY (Cont.)AFFORDABILITY (Cont.)
State grant aid targeted to low-income families State grant aid targeted to low-income families as a percent of federal Pell Grant aid to low-as a percent of federal Pell Grant aid to low-income families income families
Share of income the families in the lowest Share of income the families in the lowest income quartile need to pay for undergraduate income quartile need to pay for undergraduate tuition at lowest priced colleges tuition at lowest priced colleges
State average tuition and fees compared to the State average tuition and fees compared to the average of regional peer institutions average of regional peer institutions
COST MEASURESCOST MEASURES
Administrative expenditures (not including capital Administrative expenditures (not including capital expenditures) per credit hour expenditures) per credit hour
Expenditures on sponsored research as a percent of Expenditures on sponsored research as a percent of total budget total budget
Percent of state appropriations for higher education Percent of state appropriations for higher education
State appropriation per credit hour State appropriation per credit hour
Percentage of budget for capital expenditures Percentage of budget for capital expenditures
COST MEASURES (Cont.)COST MEASURES (Cont.)
Deferred maintenance liability as a percentage Deferred maintenance liability as a percentage of budget of budget
Energy per cost per square foot Energy per cost per square foot
Ratio of institutional capital expenditures to Ratio of institutional capital expenditures to deferred maintenance liability (annual basis) deferred maintenance liability (annual basis)
Instructional cost per undergraduate credit hour Instructional cost per undergraduate credit hour
RESOURCE UTILIZATIONRESOURCE UTILIZATION
Average number of hours per week classroom is Average number of hours per week classroom is used for instruction used for instruction
Percent of classroom stations occupied per Percent of classroom stations occupied per weekweek
Number or percent of total of undergraduate Number or percent of total of undergraduate students enrolled per major students enrolled per major
Number of academic programs terminated in Number of academic programs terminated in
past three years past three years
RESOURCE UTILIZATION (Cont.)RESOURCE UTILIZATION (Cont.)
Number of new academic programs implemented in past Number of new academic programs implemented in past three years three years
Ratio of newly implemented academic programs to Ratio of newly implemented academic programs to terminated academic programs within the past three terminated academic programs within the past three yearsyears
Energy cost per credit hour Energy cost per credit hour
Cost per undergraduate degree (by major)Cost per undergraduate degree (by major) Cost per graduate degree (by major) Cost per graduate degree (by major)
OUTPUT MEASURESOUTPUT MEASURES
College graduation rates (GRS) College graduation rates (GRS)
Mission specific indicators Mission specific indicators
RETURN ON INVESTMENT (ROI)RETURN ON INVESTMENT (ROI)
Percent of students who remain in state Percent of students who remain in state after graduation after graduation
Percent of budget appropriated by state Percent of budget appropriated by state
Percent of graduates employed or Percent of graduates employed or pursuing further education in state within pursuing further education in state within one year of graduation one year of graduation
RETURN ON INVESTMENT (Cont.)RETURN ON INVESTMENT (Cont.)
Percent of graduates employed in the Percent of graduates employed in the state in state-defined critical needs areas state in state-defined critical needs areas within one year of graduationwithin one year of graduation
Economic impact Economic impact
Quality of life Quality of life
AFFORDABILITY (Essential)AFFORDABILITY (Essential)
Tuition and fees per undergrad credit hrTuition and fees per undergrad credit hr
Percent of income needed minus aid (4 yr)Percent of income needed minus aid (4 yr)
Percent of income needed minus aid (2 yr) Percent of income needed minus aid (2 yr) Share of income needed Share of income needed
State average of tuition and feesState average of tuition and fees
Average loan amount-UndergradAverage loan amount-Undergrad
COST MEASURES (Essential)COST MEASURES (Essential)
Percent of state appropriationsPercent of state appropriations
Instructional cost – Undergraduate Instructional cost – Undergraduate
RESOURCE UTILIZATION (Essential)RESOURCE UTILIZATION (Essential)
Cost per undergrad degree Cost per undergrad degree
OUTPUT MEASURES (Essential)OUTPUT MEASURES (Essential)
College graduation ratesCollege graduation rates
Mission specific indicators Mission specific indicators
RETURN ON INVESTMENT (Essential)RETURN ON INVESTMENT (Essential)
Percent budget appropriated by state Percent budget appropriated by state
Percent students who remain in statePercent students who remain in state
Economic impactEconomic impact
Percent graduates employed Percent graduates employed
Percent graduates employed-critical needPercent graduates employed-critical need
INDICATORS IN RANK ORDER INDICATORS IN RANK ORDER OF IMPORTANCE OF IMPORTANCE
Tuition and fees per undergrad credit hrTuition and fees per undergrad credit hr College graduation ratesCollege graduation rates Percent of income needed minus aid (4 yr)Percent of income needed minus aid (4 yr) Percent budget appropriated by statePercent budget appropriated by state Mission specific indicatorsMission specific indicators Percent of income needed minus aid (2 yr)Percent of income needed minus aid (2 yr) Percent of state appropriationsPercent of state appropriations Instructional cost – UndergradInstructional cost – Undergrad
INDICATORS IN RANK ORDER INDICATORS IN RANK ORDER OF IMPORTANCE (Cont.)OF IMPORTANCE (Cont.)
Percent students who remain in statePercent students who remain in state Share of income needed Share of income needed Economic impactEconomic impact Percent graduates employed Percent graduates employed Percent graduates employed-critical needPercent graduates employed-critical need Cost per undergrad degreeCost per undergrad degree State average of tuition and feesState average of tuition and fees Average loan amount-UndergradAverage loan amount-Undergrad
OTHER ESSENTIAL MEASURESOTHER ESSENTIAL MEASURES(AFFORDABILITY)(AFFORDABILITY)
Net price paid after all forms of aid, separated by Net price paid after all forms of aid, separated by
income levels income levels
Proportion of undergraduates receiving aid Proportion of undergraduates receiving aid and and proportion of state grant aid targeted to proportion of state grant aid targeted to lowlow income families income families
Indebtedness of graduates Indebtedness of graduates
Affordability by race (Access)Affordability by race (Access)
OTHERS – COST MEASURESOTHERS – COST MEASURES
Degree production as percent of total public Degree production as percent of total public funds, compared to benchmark peer funds, compared to benchmark peer institutions in U.S institutions in U.S
Educational cost per FTE student (compared to Educational cost per FTE student (compared to peers)peers)
Growth in educational cost per FTE compared to Growth in educational cost per FTE compared to inflationary index inflationary index
Student service cost per FTE Student service cost per FTE
OTHERS –OTHERS – RESOURCE UTILIZATIONRESOURCE UTILIZATION
Faculty Production: Faculty Production: Percent tenure or tenure track over time Percent tenure or tenure track over time Student-faculty ratio Student-faculty ratio Hours faculty spend in classroomHours faculty spend in classroom Credit hour production per full and FTE facultyCredit hour production per full and FTE faculty Research funds per faculty memberResearch funds per faculty member
Average class sizeAverage class size
Administrative (institutional support) expenditures as Administrative (institutional support) expenditures as percent of total expenditures, compared to peerspercent of total expenditures, compared to peers
OTHERS –OTHERS – RESOURCE UTILIZATION (Cont.)RESOURCE UTILIZATION (Cont.)
Average credit hours taken to degreeAverage credit hours taken to degree
Average classes taught per professor per yearAverage classes taught per professor per year
Percent of remedial hours to total undergraduate credit Percent of remedial hours to total undergraduate credit hourshours
Net square feet to gross square feet ratioNet square feet to gross square feet ratio
Pattern of use of classrooms (e.g., evening versus day, Pattern of use of classrooms (e.g., evening versus day, weekday versus weekend, summer versus weekday versus weekend, summer versus fall/winter/spring)fall/winter/spring)
OTHERS- OUTPUT MEASURESOTHERS- OUTPUT MEASURES
Degree production as percent of FTE Degree production as percent of FTE Degree production compared to benchmark peers per Degree production compared to benchmark peers per
funding levelsfunding levels Credit hour production Credit hour production Sponsored research Sponsored research Expenditures in sponsored research Expenditures in sponsored research Pass rates on professional exams Pass rates on professional exams Total cost per credit hour producedTotal cost per credit hour produced License and certification exam performanceLicense and certification exam performance Employment rate of graduates Employment rate of graduates Employer satisfaction rates Employer satisfaction rates Retention rates.Retention rates.
OTHERS- OUTPUT MEASURES (Cont.)OTHERS- OUTPUT MEASURES (Cont.)
Retention (persistence) rates Retention (persistence) rates
Transfer rates for 2-year schools with a transfer missionTransfer rates for 2-year schools with a transfer mission
Retention rates and number of graduates in fields Retention rates and number of graduates in fields addressing the state’s needsaddressing the state’s needs
Persistence and graduation rates by ethnicityPersistence and graduation rates by ethnicity Time to degreeTime to degree
Graduation rates for transfer studentsGraduation rates for transfer students
OTHERS- RETURN ON INVESTMENTOTHERS- RETURN ON INVESTMENT
Contracts for applied research Contracts for applied research Business startupsBusiness startups Graduate satisfaction Graduate satisfaction Sponsored research Sponsored research Sponsored research per capita.Sponsored research per capita. Income of college graduates vs. high Income of college graduates vs. high
school graduates.school graduates.
METHODS OF COMMUNICATING METHODS OF COMMUNICATING PERFORMANCEPERFORMANCE
Audiences:Audiences: Governor/Legislature Governor/Legislature EducatorsEducators General Public General Public
METHODS OF COMMUNICATING PERFORMANCEMETHODS OF COMMUNICATING PERFORMANCE
Strategies:Strategies:1.1. Including in agency reportsIncluding in agency reports
2.2. Posting information on the agency’s websitePosting information on the agency’s website
3.3. Including information in the agency’s budget requestIncluding information in the agency’s budget request
4.4. Including information in oral presentationsIncluding information in oral presentations
5.5. Providing information in a press releaseProviding information in a press release
6.6. Providing information in a separate brochureProviding information in a separate brochure
NEXT STEPSNEXT STEPS
Selection and/or Definition of IndicatorsSelection and/or Definition of Indicators
Pilot-TestPilot-Test
Electronic Survey of Usefulness and Long-Electronic Survey of Usefulness and Long-term Effectsterm Effects
Publication of ResultsPublication of Results