Why we did this audit

Washington State Auditor’s Office

Troy KelleyI n d e p e n d e n c e • R e s p e c t • I n t e g r i t y

Higher Education Performance-Based Funding

Joint Legislative Audit & Review CommitteeApril 23, 2014

Lou Adams, CPA, Deputy Director of Performance Audit Tom Furgeson, Senior Performance Auditor

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To help inform policy-makers as they consider a performance-based funding system for Washington’s

public four-year schools of higher education

Why we did this audit

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Report on higher education performance funding systems for public four-year schools in other states

Create an inventory of policy goals and measures used in other states

Determine which of these measures are collected by Washington’s four-year schools

Compare Washington data with other states

Audit approach

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Review of other states

We researched 11 states that use performance-based funding

National Conference of State Legislatures (NCSL) list of states with active systems at start of audit

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We developed an inventory of policy goals and performance measures used by other states with performance-based funding systems

Review of other states

Policy goals Increase degrees completed Increase high-demand degrees and

certifications Increase graduation rates Encourage student progress Close access gaps Close achievement gaps Improve education quality Improve institutional efficiency Promote research and development Increase private funding Increase faculty and staff diversity Improve operations and

maintenance

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Washington schools collect data for most metrics used by other states

Around 70% of all data collected by some or all schools

Around 40% of data we identified is already reported in the Public Centralized Higher Education Enrollment System (PCHEES)

All Washington schools have data for the five most common metrics1. Number of degrees completed2. Number of students completing degrees on time3. Student retention rates4. Number of STEM and high demand degrees completed5. Student credit hours completed

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Washington schools collect data for most metrics used by other states

Washington results

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Online materials

http://www.sao.wa.gov/state/Pages/HigherEd.aspx

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Washington schools collect data for most metrics

Washington results – online materials

Goal

Metrics

Data elements

Location of data

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State performance systems vary

Variation between systems in other states

No off-the-shelf system

Tennessee 15 metricsIllinois 5 metricsOhio 2 metrics

Metrics used

Tennessee 100%Ohio 10%Illinois 0.5%

Performance funding

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Metrics

Address education quality

Account for differing institutional missions

Ensure student access and equity

Recognize importance of progress and completion

Identify and address unintended consequences

Leading practices

Pennsylvania uses a core of several mandatory common metrics, schools choose from among optional metrics

Indiana measures enrollment at the end of a semester rather than at the beginning

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Leading Practices

Implementation

Keep the model simple

Be aware of time needed to develop, adjust to model

Phase-in model to account for lack of initial data

Encourage and maintain stakeholder participation

Emphasize shared goals and objectives

Dedicate the right amount of funding

Address and communicate technical details of funding

South Carolina’s attempt at performance-based funding failed

New Mexico developed its model through a task force with members from the state’s public four-year schools as well as state government

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Contacts

Chuck Pfeil, CPADirector of Performance

Audit(360) 902-0366

Chuck.Pfeil@sao.wa.gov

Website: www.sao.wa.gov

Troy KelleyState Auditor(360) 902-0360

Troy.Kelley@sao.wa.gov

Tom FurgesonSenior Performance Auditor

(360) 725-9705Thomas.Furgeson@sao.wa.gov