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Overview of the the New Funding Framework

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 Yahoo Search results in :

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Overview of the the New Funding Framework

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  1. Overview of the the New Funding Framework Presented by Prof Emile Horak Thanks and recognition to Prof Pieter Vermeulen who supplied the information

  2. Latest Initiative of the Government • New acrynom: Asgisa • Yahoo Search results in : • Check your spelling, Try more generic words, Try different words that mean the same Accelerated and shared growth initiative for SA (Asgisa)

  3. Mlambo-Ngcuka to focus on skills shortageBusiness 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

  4. Mlambo-Ngcuka to focus on skills shortageBusiness 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”

  5. GDP, Total State Finance and State Finance on Education for 2003/2004 (estimate) 1 GDP R1 234 600 million • Total State Budget R 333 965 million • = 27,5% of GDP • 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

  6. 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

  7. Distribution of Budget Totals for 2004/05, 2005/06 and 2006/07 This total allocation was about R9 385 million in 2003/4

  8. NSFAS 6% [R638m] Earmarked 13,3% [R1 410m] National budget for higher education institutions 100% [R10 554m] Institutional restructuring 5,2% [R550m] Foundation Year Interest & Redemption 2% [R231m] Block grants 86,6% [R9 144m] Teaching Input grants 55,6% [R5 866m] Teaching output grants 13,9% [R1 466m] Research output grants 11,4% [R1200m] Institutional factor grants 5,8% [R611m] generated by generated by generated by generated by Approved FTE student places Non-research graduates & diplomates Research masters & doctorates & publications (a) Enrolment size (b) Disadvantaged students Example of Division of Government Budget between Grant Categories (2005/06)

  9. 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

  10. Previously this was only two groups/levels Teaching Input Grants Based on approved FTE student places as determined in the Programme and Qualification Mix (PQM) process: • Four funding groups • Four study levels • Weighted according to funding group and study level

  11. Four Funding Groups

  12. Weightings according to Funding Group and Study Level (i) Contact Students (Distance Students)

  13. 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

  14. Example of Teaching Input GridUniversity of Pretoria (Contact)

  15. Teaching Output Grant (a) Non-research output measured by non-research graduates and diplomates and weighted And (b) Measured against output norms (benchmarks)

  16. Teaching Output Grant (continued) (b) Graduation benchmarks for contact and distance programmes (Graduates as % of head count enrolments)

  17. 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

  18. (a) 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 Outputs (a) Research outputs measured by publications in accredited journals, research masters and doctoral graduates (weighted) And (b) Measured against a research output norm benchmark

  19. 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

  20. Institutional Factor Grants 2.1 Measured by the proportion of disadvantaged students [Contact African & Coloured students who are SA citizens] IFG (DS) = % X TIG

  21. Institutional Factor Grants 3.2 Size of the institution IFG (Size) = % X TIG 15.00% 12.50% 10.00% PERCENTAGE 7.50% 5.00% 2.50% 0.00% 4000 8000 12000 16000 20000 25000 NUMBER OF FTE CONTACT AND DISTANCE STUDENTS

  22. Earmarked funding • National Student Financial Aid Scheme (NSFAS) • Interest and redemption on loans approved before 1999 • New capital projects • Institutional restructuring

  23. INTERVENTION • Discussion Document of DoE “Student Enrolment Planning: March 2005” • Ministerial Statement of Higher Education Funding: 2005/06 to 2007/08 (July 2005)

  24. Teaching Input Capping

  25. Internal wrangles High Low Protected Species Star Research output per Staff member Dog Cash cow Low High FTE/ Staff member

  26. Internal wrangles High Low Protected Species Star Research output per resources required Dog Cash cow Low High FTE/ resources taken up

  27. FINIS

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