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UNC Enrollment Change Funding 1
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 1
Program Evaluation Division North Carolina General Assembly 2
UNC Enrollment Change Funding Formula Needs Documentation and a
Performance ComponentA presentation to the Joint Legislative
Program Evaluation Oversight Committee
November 17, 2010
Michelle Beck
UNC Enrollment Change Funding 2
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 3
Handouts
• The Report
• Presentation Slides
• SCH Enrollment Change Formula
• Summary of Recommendations
Program Evaluation Division North Carolina General Assembly 4
Evaluation Team
Michelle Beck, Evaluation Lead
Catherine Moga Bryant, Senior Program Evaluator
Carol H. Ripple, Principal Program Evaluator
Pamela Taylor, Program Evaluation Statistician
UNC Enrollment Change Funding 3
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 5
Overview• UNC System funding is based on
inaccurate projections which generates inaccurate funding with minimal consequences
• The formula’s complexity contributes to projection errors
• There is little documentation or justification for processes
• The current formula lacks accountability for campus performance
Program Evaluation Division North Carolina General Assembly 6
Overview
• Modify the existing enrollment change funding formula and standardize the enrollment projection process
• Develop policies for enrollment change funding decisions
• Submit annual performance reports
• Implement performance-based funding
UNC Enrollment Change Funding 4
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 7
Data Sources• 2003-04 through 2008-09 enrollment
data, expenditures, and appropriation requests
• Administrative queries and interviews with campuses and General Administration
• Literature review and interviews with experts
Report p. 2
Program Evaluation Division North Carolina General Assembly 8
Funding Formulas
• 38 states use funding formulas, 26 are enrollment-based including NC
• Require reliable projections
Pro: Provide predictability, stability, and objectivity
Con: May not account for quality or change in needs and may reinforce inequities Report pp 3-4
UNC Enrollment Change Funding 5
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 9
UNC System Enrollment Funding• 1978 - First full-time equivalency (FTE)
funding formula
• 1998-99 - appropriation request from the UNC Board of Governors was based on student credit hours (SCH)
• Semester Credit Hour formula is more granular and calculates faculty positions needed for enrollment change
Report p. 3
Program Evaluation Division North Carolina General Assembly 10
Funding Formula Calculations
A.
B.
Report pp 5-7
Enrollment Projections
Positions Required
UNC Enrollment Change Funding 6
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly
Funding Formula Calculations
C.
D.
11
Instructional Salary Amount
Total Academic Requirements
Program Evaluation Division North Carolina General Assembly
Funding Formula Calculations
E.
F.
12
Total Requirements
Enrollment Change Funding Request
UNC Enrollment Change Funding 7
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly
Cumulative Enrollment Funding from 2003-04 through 2008-09
13
$0
$500
$1,000
$1,500
$2,000
$2,500
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Mill
ions
Current Year Enrollment Change Funding Previous Enrollment Change FundingAll Other Appropriations
Report p. 8
Program Evaluation Division North Carolina General Assembly 14
Findings
UNC Enrollment Change Funding 8
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 15
Finding 1. Funding requests generated by the formula are based on inaccurate
growth estimates
Program Evaluation Division North Carolina General Assembly 16
3 Levels of Projection Accuracy
UNC Enrollment Change Funding 9
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly
Projection Accuracy for UNC System
Within 2% of enrollment
BUT:
Funding is determined by projections developed at each campus
17
Report p. 10
Program Evaluation Division North Carolina General Assembly
Projection Accuracy at Campuses
• Overall campus projections range from 5% under to 12% over actual SCH enrollment– 8 campuses were within 5% each year of the
6-year study period
– 2 campuses were off more than 5% 1year
– 5 campuses were off more than 5% for 2 or more years
18
Report pp 10-11
UNC Enrollment Change Funding 10
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 19Report p. 9
Program Evaluation Division North Carolina General Assembly
Campuses Project in 12-Cell Matrix
20
Program Category
Undergraduate Master’s Doctorate
Category I 4,515 729 -
Category II 6,030 484 8
Category III 2,118 288 -
Category IV - - -
UNC Enrollment Change Funding 11
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly
Projections Not AccurateWithin Formula Cells
• Every campus had large errors in at least one cell
• In 2008-09 5 campuses made errors of 100% or more in 6 of the 12 cells
21
Report p. 10-11
Program Evaluation Division North Carolina General Assembly 22
Finding 2. Inaccurate estimates generate
inaccurate funding with minimal consequences for poor enrollment
change projections
UNC Enrollment Change Funding 12
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly
Total Funding Requirement for Lowest Cost Campus
Program Category
Undergraduate Master’s Doctorate
Category I $ 217 $ 907 $ 1,330
Category II $ 287 $ 506 $ 1,395
Category III $ 378 $ 825 $ 1,399
Category IV $ 662 $ 1,705 $ 1,900
23
Report p. 12
Program Evaluation Division North Carolina General Assembly
Potential Error in Total Requirements for SCH Change
• 2 hypothetical examples of 5,000 SCH over-projected at campus with lowest cost SCH
= $266,000 with largest error in one undergraduate category
= $6,000,000 with largest error in master’s category
24
Report pp. 13-14
UNC Enrollment Change Funding 13
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly
No Guidelines/Consequences for Overprojection Errors
• Hold Harmless allows campuses that overestimate SCH to retain the unrealized enrollment funding
• Funding for anticipated but unrealized growth is added to subsequent base budgets
• NC A&T has been held harmless since 2007-08 (thru 2010-11)
25
Report p. 14-15
Program Evaluation Division North Carolina General Assembly 26
Finding 3. The formula’s complexity
contributes to projection errors, and there is little justification to support
formula elements
UNC Enrollment Change Funding 14
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly
Complexity Begins with Projection Process
• The iterative projection process is time consuming, but still results in error
• Lack of documentation and standardized procedures undermine the empirical basis of the formula
27
Report pp 16-18
Program Evaluation Division North Carolina General Assembly
Formula Elements Not Justified
• UNC Assumption: Undergraduate cost factors increase equity
Evidence: Created in 1995 with “no science” to arrive at percentages
28
Report pp 17-18
UNC Enrollment Change Funding 15
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly
Formula Elements Not Justified
• UNC Assumption: Basis for calculating other academic support, libraries, and general institutional support is sound
Evidence: Funds are not tracked and expenditures are not in line with the formula
29
Report p. 19
Program Evaluation Division North Carolina General Assembly 30
Finding 4. Lack of oversight makes it difficult to evaluate enrollment formula funding
UNC Enrollment Change Funding 16
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly
Challenges to Formula Assumptions
• UNC Assumption: Formula provides appropriate funding for enrollment increases
Evidence: No data analysis to compare actual expenditures to factors in the formula
31
Report p. 21
Program Evaluation Division North Carolina General Assembly
Challenges to Formula Assumptions
• UNC Assumption: Enrollment growth funding allows campuses to hire faculty
Evidence: Campuses have discretion for expenditures and no reporting requirements for hiring of faculty to accommodate growth
32
Report p. 21
UNC Enrollment Change Funding 17
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly
Challenges to Formula Assumptions
• UNC Assumption: SCH formula provides more accurate funding than the FTE formula
Evidence: No data analysis to compare the more granular SCHformula to the straightforward FTE formula
33
Report p. 21
Program Evaluation Division North Carolina General Assembly
Finding 5.The current formula emphasizes
growth and has no component for assuring accountability for campus
performance
34
UNC Enrollment Change Funding 18
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 35
Balancing Performance with Access
• UNC student outcome data is available but not utilized
• National trend of increased accountability
–11 states tie performance to funding
Report p. 22
Program Evaluation Division North Carolina General Assembly
Performance FundingNot a New Idea
• 1995 statute directed study of incentive funding
• 2007 UNC report cites need for accountability and performance measures
• UNC Board of Governors intends to include student retention and graduation rates for 2011-13
36
Report p. 23
UNC Enrollment Change Funding 19
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 37
Recommendations
Copyright ©2009 Barrington Broadcasting
Program Evaluation Division North Carolina General Assembly 38
Recommendation 1. Require the UNC Board of Governors
to modify the existing enrollment funding formula and standardize the
enrollment projection process
UNC Enrollment Change Funding 20
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 39
Recommendation 1.
• Modify the funding formula to retain the granularity but eliminate the large errors
• Simplify and standardize the enrollment projection process
• Re-examine and justify funding formula elements
Report pp 26-30
Program Evaluation Division North Carolina General Assembly
Recommendation 1 (cont.)
• Implement the new model for enrollment change funding beginning with the 2011-13 biennium
• Analyze accuracy of projections and adjust funding to correct errors
40
Report pp 26-30
UNC Enrollment Change Funding 21
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 41
Recommendation 2. Require the UNC Board of Governors
to develop written policies for enrollment change funding decisions
Program Evaluation Division North Carolina General Assembly
Recommendation 2• Establish procedures for
– developing campus enrollment projections
– calculating tuition offset, and
– calculating funding formula elements and cost factors
• Develop criteria for hold harmless status
• Produce a policy and procedures manual by January 1, 2012
42
Report pp 31-32
UNC Enrollment Change Funding 22
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 43
Recommendation 3.Require the UNC Board of Governors
to provide annual reports with performance
Program Evaluation Division North Carolina General Assembly
Recommendation 3
• Determine appropriate campus indicators
• Explain sizeable projection errors
• Report campus indicators annually to the General Assembly beginning no later than June 30, 2012
44
Report p. 32-33
UNC Enrollment Change Funding 23
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 45
Recommendation 4.Begin implementation of
performance-based funding by linking enrollment growth
funding to outcomes
Program Evaluation Division North Carolina General Assembly
Recommendation 4
• Develop appropriate campus-level performance goals and indicators
• Require each campus to meet target outcomes in order to receive enrollment growth funding beginning with 2011-12
• Consider future incentive funding to encourage focus on performance
46
Report p. 33-34
UNC Enrollment Change Funding 24
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 47
Summary of Findings
• UNC system funding is based on inaccurate projections which generate inaccurate funding with minimal consequences
• The formula’s complexity contributes to projection errors
• There is little documentation or justification for processes and error
• The current formula lacks accountability for campus performance
Program Evaluation Division North Carolina General Assembly 48
Summary of Recommendations
• Modify the existing enrollment change funding formula and standardize the enrollment projection process
• Develop policies for enrollment change funding decisions
• Submit annual performance reports
• Implement performance-based funding
UNC Enrollment Change Funding 25
Joint Legislative Program Evaluation Oversight CommitteeNovember 17, 2010
Program Evaluation Division North Carolina General Assembly 49
Report available online atwww.ncleg.net/PED/Reports/reports.html
Michelle Beckmichelle.beck@ncleg.net
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