Higher Education and the Public Good

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Higher Education and the Public Good

• Virginias Experience with University
  Restructuring

SHEEO Professional Development Conference August
15, 2007
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Goal of higher education restructuring legislation

• To provide public colleges and universities
  with more operational and administrative autonomy
  in exchange for a renewed commitment to their
  public missions.

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Summary of legislation

• Operational autonomy for all institutions
• Commitment to state ask
• Performance measures and financial incentives
• Opportunity for greater institutional autonomy,
  including management agreement

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History and context

• General fund budget cuts
• Tuition controls
• Heightened political environment
• Lack of effective coordination of higher
  education system
• Some experience with decentralized authority

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The case for change

• Institutional concerns
• Need for reform
• Fortuitous alignment
• Restructuring

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Institutional concerns

• Lack of predictability in funding, inability to
  plan
• Inability to use market strength to meet
  institutional goals
• Perception of undue administrative burdens

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Need for reform

• Global economic change and increased competition
• Profound changes in population and economy
• Regional and socio-economic disparities in
  educational achievement
• Scarcity of resources
• Redefinition of accountability results, not
  inputs

8
Fortuitous alignment

• Businessman governor
• Legislative support
• Stronger boards, including reemerging SCHEV
• Institutional leadership and desire

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Restructuring legislation

• Outlines a public agenda
• Provides institutions with more administrative
  and financial autonomy in exchange for a
  commitment to the public agenda (the contract)
• Establishes an integrated six-year planning
  process
• Ties financial incentives to institutional
  performance
• Establishes process by which institutions can
  gain greater autonomy over time (three levels)
• http//leg1.state.va.us/cgi-bin/legp504.exe?051fu
  lCHAP0945

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The public agenda state ask

• Student access, including underrepresented
  populations
• Affordable education, regardless of family income
• Broad range of academic programs
• High academic standards
• Student retention and progress toward a degree
• Uniform articulation agreements between two-year
  and four-year institutions
• Economic development
• Externally funded research
• K-12 education and student achievement
• Six-Year Plans
• Financial and administrative standards
• Campus Safety

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Operational autonomy

• Dispose of surplus property locally
• Contract with local building officials for
  building code review
• Acquire or convey easements
• Enter into operating lease for academic uses
• Make information technology purchases without
  prior approval of state CIO
• Designate administrative and professional faculty
  locally
• Certify SWAM vendors and authorize sole-source
  procurements locally
• No change in tuition policy

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Whats off the table

• Retirement college and university classified
  employees remain in the state retirement system
  (faculty still have options)
• Health insurance all employees remain in state
  health plan
• Workers compensation all employees remain
  eligible for state program

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Mechanics

• Board commitment to goals and transfer of
  authority for operational functions
• Submission of six-year plans
• Development of performance measures and
  respective institutional benchmarks
• Assessment and certification of progress toward
  state goals and identification of gaps

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Six-year plans

• Enrollment
• Enrollment targets negotiated between the state
  and institution
• Based on statewide enrollment demand estimates
• Academic
• Institutional plans to expand and improve
  instructional programs and student services
• Financial
• Resources needed to meet enrollment targets and
  academic plans
• Derived from state appropriations, tuition
  revenue, and other institutional sources
• Gives policy makers glimpse of anticipated
  tuition increases given enrollment demands and
  academic priorities

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Management agreements

• Highest level of operational autonomy
• Limited to institutions with demonstrated
  operational competence and high credit rating
• With freedom comes greater responsibility for
  state goals (economic development, working with
  public schools, articulation and transfer,
  student financial aid)
• Cannot be done in isolation must be done in
  concert with other institutions and with state
  goals
• http//leg1.state.va.us/cgi-bin/legp504.exe?061fu
  lHB1502ER

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Going forward

• Importance of coordinating function
• Ensure that the new reporting requirements are
  not more onerous than the administrative
  functions from which institutions have been freed
• Periodic review by policy leaders of state goals
  and performance gaps
• Involvement of business community in supporting
  state goals and institutional performance

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Final thought

• Ask not what the state can do for colleges and
  universities, but what colleges and universities
  can do for the state

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Mechanics

• Board commitment to goals and transfer of
  authority for operational functions
• Submission of six-year plans
• Development of performance measures and
  respective institutional benchmarks
• Assessment and certification of progress toward
  state goals and identification of gaps

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Implementation

• Spring 2005 Restructuring Act signed into law
• August 2005 BOVs formally commit to state goals
• September 2005 SCHEV proposes Institutional
  Performance Standards (IPS)
• October 2005 First Six-Year Plans Submitted
• Spring 2006 GA adopts IPS
• November 2006 SCHEV and institutions set
  targets for each IPS
• May 2007 SCHEV completes first certification
• May 2007 SCHEV approves statewide Strategic Plan

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Interrelated Elements of Restructuring Act
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Six-Year Plans

• Institutional Narrative
• Academic Plan
• Financial Plan two scenarios of additional
  General Fund support
• No additional GF
• Full GF based on guidelines
• Enrollment Projections

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Interrelated Elements of Restructuring Act
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Statewide Goals

• Education related
• Student access, including underrepresented
  populations
• Affordable education, regardless of family income
• Broad range of academic programs
• High academic standards
• Student retention and progress toward a degree
• Uniform articulation agreements between two-year
  and four-year institutions
• Economic development
• Externally funded research
• K-12 education and student achievement
• Campus Safety
• Financial and administrative standards

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IPS Examples

• Education related (11 goals - 19 performance
  standards)
• Institution establishes mutually acceptable
  annual targets for need-based borrowing that
  reflect institutional commitment to limit the
  average borrowing of in-state students with
  established financial need, and the percentage of
  those students who borrow, to a level that
  maintains or increases access while not
  compromising affordability.
• Institution maintains acceptable progress towards
  an agreed upon target for the total number and
  percentage of graduates in high-need areas, as
  identified by the State Council of Higher
  Education.
• Institution maintains or improves the average
  annual retention and progression rates of
  degree-seeking undergraduate students.
• Institution increases the number of undergraduate
  programs or schools for which it has established
  a uniform articulation agreement by program or
  school for associate degree graduates
  transferring from all colleges of the Virginia
  Community College System and Richard Bland
  College consistent with a target agreed to by the
  institution, the Virginia Community College
  System, and the State Council of Higher Education
  for Virginia.

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IPS Examples

• Financial/Administrative (1 goal - 11 performance
  standards)
• An unqualified opinion from the APA
• No significant audit deficiencies
• Substantial compliance with all financial
  reporting standards
• Substantial attainment of accounts receivable
  standards
• Substantial attainment of accounts payable
  standards
• Institution complies with a debt management
  policy approved by its governing board
• Achieve the classified staff turnover rate goal
  established by the institution
• Substantially comply with the annual approved
  SWAM plan
• Make no less than 75 of dollar purchases through
  eVA
• Complete capital projects and major IT projects
  (with an individual cost of over 1,000,000)
  within the original budget and schedules.

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Interrelated Elements of Restructuring Act
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Statewide Strategic Plan - Goals

• Section I ACCESS
• Enhance Access Through P-16 Curricular Alignment
• Enhance Access Through Improved Coordination of
  Information
• Enhance Affordability Through Financial Aid
  Advocacy
• Enhance Affordability Through Education and
  Investment Incentives
• Section II ALIGNMENT
• Improve College Readiness Through Strengthened
  P-16 Cooperation and Communication
• Strengthen P-16 Coordination Through Expanded
  Data Collection and Analysis
• Support State Workforce Needs Through
  Strengthened Participation in Post-Secondary
  Education
• Conduct a Comprehensive Economic Impact Study of
  Higher Education
• Improve Alignment Between Higher Education and
  the Commonwealths Workforce Needs
• Strengthen Academic Program Quality and
  Accountability Through Assessment
• Section III INVESTMENT
• Enhance Research Through Investment in Targeted
  Consortia
• Enhance Research Through Investment in
  Infrastructure

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What Does an Institution Get with Certification?

• Interest on the tuition and fees and other
  nongeneral fund EG revenues deposited into the
  State Treasury
• Any unexpended appropriations at the close of the
  fiscal year, which shall be reappropriated and
  allotted for expenditure in the immediately
  following fiscal year
• A pro rata amount of the rebate due to the
  Commonwealth on credit card purchases of 5,000
  or less made during the fiscal year
• A rebate of any transaction fees for sole source
  procurements for using a vendor who is not
  registered with "eVA"

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Levels of operational authority

• Areas CO, IT, HR, Procurement
• Level 3 Management Agreement covering all areas
  (UVA, VT, CWM)
• Skip Level 2 and seek Level 3 authority
• Seek Level 2 authority in one or more areas, but
  not all
• Would just as well not participate

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Next Steps

• Strategic Plan gives direction to development of
  Six-Year Plans
• Work with institutions to develop measures for
  new goals
• Institutions submit Six-Year Plans October 1,
  2007
• SCHEV reviews Six-Year Plans
• 2008-09 certification May 2008

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What will Constitute Success?

• How the six-year plans are utilized by the
  institutions, the governor, and the General
  Assembly
• How strenuously the performance indicators and
  benchmarks are set and enforced
• How SCHEVs recommendations are weighed,
  utilized, and implemented
• Achievement of cost savings through less
  bureaucracy and/or better ability to plan
• Establishment of multi-year business plans for
  public institutions
• Creation of tuition-and-fee predictability for
  students and parents
• Demonstration of additional agility in areas of
  increased autonomy, e.g., human resources,
  capital outlay, procurement
• Development of acceptable balance between
  institutional autonomy and accountability
• Demonstration of measurable success on
  performance indicators and benchmarks related to
  state goals

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• Discussion

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