Overview of the the New Funding Framework

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

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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

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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
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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

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Distribution of Budget Totals for 2004/05,
2005/06 and 2006/07
This total allocation was about R9 385 million in
2003/4
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Example of Division of Government Budget between
Grant Categories (2005/06)
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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

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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

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Four Funding Groups
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Weightings according to Funding Group and Study
Level
(i) Contact Students (Distance Students)
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Determining Teaching Input price

• Passing institutions adjusted FTE enrolled
  student total through funding grid weighted
  teaching input
• Equivalent figure for sector
• Available funds for teaching input
• Institutions portions
• Proportionate allocation not price in the
  economic sense.

Estimated TI Unit price R6 600
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Example of Teaching Input GridUniversity of
Pretoria
(Contact)
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Teaching Output Grant
(a) Non-research output measured by
non-research graduates and diplomates and
weighted And (b) Measured against output
norms (benchmarks)
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Teaching Output Grant (continued)
(b) Graduation benchmarks for contact and
distance programmes (Graduates as of head count
enrolments)
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Teaching output allocation

• Calculate institutions 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
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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
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Research Output Allocation

• Determine institutions actual total weighted
  research output
• Calculate the institutions normative total
  weighted research output (applying the
  benchmarks)
• Normative weighted total research output for
  system
• Available funds for research output
• Proportional Institutions research output
  allocation,

Estimated RO Unit price R77 000
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Institutional Factor Grants
2.1 Measured by the proportion of
disadvantaged students Contact African
Coloured students who are SA citizens
IFG (DS) X TIG
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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
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Earmarked funding

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

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INTERVENTION

• Discussion Document of DoE Student Enrolment
  Planning March 2005
• Ministerial Statement of Higher Education
  Funding 2005/06 to 2007/08 (July 2005)

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Teaching Input Capping
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Internal wrangles
High Low
Protected Species
Star
Research output per Staff member
Dog
Cash cow
Low
High FTE/ Staff member
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Internal wrangles
High Low
Protected Species
Star
Research output per resources required
Dog
Cash cow
Low
High FTE/ resources taken up
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FINIS