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An Innovative Model of Funding Higher Education in KenyaThe Universities Fund

Crispus Kiamba

School of the Built Environment,

College of Architecture and Engineering,

University of Nairobi,

Kenya.

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Table of Contents

• Introduction• Higher education buffer bodies• The new higher education reforms in Kenya

– The national vision– The status and growth of university education

• Brief history of the models of funding of higher education in Kenya– The Background of the new proposed model of funding higher education – Earlier attempts at establishing University Grants Committee– The experience of a competitive Research and Innovation Fund

• The Proposed Universities Fund– The 2012 Taskforce Report recommendation to establish a Universities Fund– The Universties Act, 2012 establishes the Universities Fund– The proposed “Universities Fund” and the University Funding Board– Leadership and management of the Universities Fund/Funding Board

• Challenges, Opportunities and Impacts of the Universities Fund/Funding Board

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Introduction• Innovative resource mobilization for higher education has been

recognized as critical to both: – university education and – high quality national human resource development in the country, – Hence sine qua non to the successful achievement of Kenya’s Vision 2030.

• This study is about the “Universities Fund”– to be managed by a buffer body, “The Universities Funding Board”, – proposed under the Universities Act, 2012– one of the key pillars of the higher education reforms in the country

• Reforms in the funding of university education underpinned by the recognition that financing for higher education in Kenya has been:

a) inadequate and b) lacked effective coordination mechanism, especially in the face of

competing demands for the limited national budget

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Rationale for the Creation of Buffer Bodies

• Created by governments to perform some of its functions– Relatively autonomous– Protection of the academic freedom of universities

• Reduction of the possibility of government undue interference which might compromise academic freedom.

– Enables decisions on development of the university system outside the normal political circle

– Enables informed and expert decisions• Performance of their functions buttressed by their

formal and firm legal status

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Higher Education Reforms in Kenya

• The National Vision: The Context of Reforms in Higher Education– The Kenya Vision 2030 which aimed at transforming Kenya into a

“newly industrializing, middle income, globally competitive and prosperous country providing a high quality of life to all its citizens in a secure and clean environment”.

• The new Constitution of Kenya, 2010 provided the overarching environment of reforms of all sectors in Kenya, including higher education. – freedom of expression (includes academic freedom and freedom of

scientific research); – right to education for everyone as one of the socio-economic rights; – right of access to educational institutions and facilities for persons

with disability; and – right of opportunities for the minority and marginalised groups.

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• Hence new vision for higher education– The Universities Act, 2012 and other related

legislation, including:• Technical and Vocational Education and Training Act• Science, Technology and Innovation Act

– The strategy to “invest in the people of Kenya” • providing a globally competitive and quality education,

training, and research to support that development. • intensified application of science, technology and

innovation in order to raise the productivity and efficiency levels across the economy

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The Status and Growth of University Education

• Categories of public and private universities – Chartered Universities. – Universities with Letter of Interim Authority (LIA).– Registered Private Universities – Foreign universities.

• Kenya has witnessed exponential growth of university education– From one university (The University of Nairobi) in 1970 to:

• 22 fully chartered public universities (15 of which were established in 2012/2013), • 9 public university colleges, • 17 private universities, • 5 private university colleges, • 11 Universities with LIAs and 2 Registered Universities

• Enrolment of university students (public and private) increased from less than 2,000 in 1970 to over 250,000 in 2012

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Brief History of the Models of Funding of Higher Education in Kenya

a) The unsuccessful attempt at establishing the University Grants Committee in early 1980s under the Commission for Higher Education (now Commission for University Education)– Established largely along the same lines as the British University Grants

Committee.– Functions of CHE largely accreditation and quality assurance of

university education, but also given the function of coordination of university budgets, especially:• “to plan and provide for the financial needs of university education and

research, including the recurrent and non-recurrent needs of universities” and

• “to determine and recommend to the Minister the allocation of grants of money for appropriation by Parliament to meet the needs of university education and research and review expenditure by universities of moneys appropriated by Parliament”.

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b) The Experience of a Competitive Research and Innovation Fund

• Set up in 2008 under the then National Council for Science and Technology (now Commission for Science, Technology and Innovation)– to support advancement of scientific research, inventions and innovations and build capacity

in STI sector for national development • The Fund targets funding in priority areas in relation to the development agenda of

the country as provided in Vision 2030, with the following funding categories:-– Thematic research: food security, climate change, renewable energy, engineering, health

water and sanitation.– Innovations,– Women scientists research projects,– Postgraduate research (PhD & MSc), – Bilateral international research collaborations (Kenya/South Africa; Kenya/DAAD/Germany;

Kenya/JSPS),– Research infrastructure/facilities, – Scientific conferences and symposia.

• Since inception, a total of 333 PhD and 294 MSc/MA research projects across all Universities.

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The Proposed Universities Fund

• Against the background of Kenya’s Vision 2030 and the new Constitution of Kenya, 2010, the Minister for Higher Education, Science and Technology established in 2012 a Taskforce on the Alignment of the Higher Education, Science and Technology (TAHEST) Sector with the Constitution of Kenya.

• ,The Task force generated the Report of the Taskforce on the Alignment of the Higher Education, Science and Technology (TAHEST) Sector with the Constitution of Kenya (“the TAHEST Report”).

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TAHEST Report Recommendation

• One of the key recommendations of the TAHEST Report was establishment of the “Universities Fund”.

• In doing this, Report said, inter alia, that the government would:

“Establish an institutional Government funding mechanism, which would be a lever for achieving university education policy objectives and alignment to the Constitution of Kenya 2010. The funding mechanism would be used along with appropriate regulatory frameworks for achieving high quality university education and research”.

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TAHEST recommends strategies to implement the new “funding mechanism”

• Development of a comprehensive University Education Funding policy.

• Establishment of the University Funding Board (UFB) to manage the Universities Fund and therefore to:-– to develop the detailed institutional funding criteria. – disburse all government funding to universities. – monitor the utilization and impact of the funds by the universities. – Undertake fund-raising for university education.– develop incentives for private sector participation in the funding

of university education.– develop public private partnership frameworks for university

education.

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– negotiate tax waivers to foster individual and corporate/institutional support to university education, etc.

– Develop in consultation with County Governments a transparent and equitable institutional funding criterion that would be aligned with Constitution of Kenya 2010 and other national socio-economic development goals.

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In consultation with stakeholders, the University Funding Board would:

• Develop a revised Differentiated Unit Cost (DUC) for all degree programmes offered by Kenyan Universities.

• Adopt DUC as basis for institutional financing public universities.

• Develop and implement automated university financial information systems with interfaces to the National Government Integrated Financial Information System.

• Develop the capacity of Chief Financial officers and senior leadership of universities on efficient and effective financial management practices

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The Universities Act, 2012 Establishes the Universities Fund and Universities Funding Board

• The function of the Board/Trustees is to generally manage the University Fund and more particularly to:– Advise the government, in matters of university education funding and

related policy issues;– develop a transparent and fair criteria for allocation of funds to

universities;– Apportion funds to universities in accordance with criteria established;– Establish the maximum differentiated unit cost for the academic

programmes offered;– Establish the minimum discipline differentiated remuneration for

academic staff of universities, which shall be fair and globally competitive.

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Sources of monies for the Fund

• The Government/Parliament; • Donations • Income generated by investments made by

the Trustees; and • Endowments, grants and gifts from whatever

source to the Fund.

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Leadership and management of the Fund

• The Universities Fund Board to be comprised of Trustees who would manage the fund so established.

• The Board of Trustees to consist of nine members appointed by the Cabinet Secretary for education as follows: – A chairperson who has knowledge and experience in matters

related to finance, investment and fundraising;– The Principal Secretary in the Ministry responsible for finance;– The Principal Secretary in the Ministry for University Education;– Six persons who have proven knowledge and experience in

financial matters of which at least two and not more than three will be of the same gender

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GovernanceAn open and competitive appointment process

• A Selection Panel appointed by the Cabinet Secretary to manage the process.

• Positions publicly advertised• Names of applicants and shortlisted candidates placed for

public scrutiny in at least two daily newspapers with national circulation.

• The Cabinet Secretary from a list submitted by a the Selection Panel following a competitive and transparent recruitment process appoints the chairperson and the members of the Board.

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Nomination criteria for the members of the Board

• To have regard to the objectives of the development of university education,

• To ensure balanced competences, • Gender equity, and • Inclusion of persons with disabilities, the

marginalized and other minority groups.

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Competence and effective participation

• In order to ensure competent and effective participation in and contributing to the affairs of university education, the 2012 law put minimum educational and experience requirements of the members if the Board of Trustees. – The Chairperson to hold a doctorate degree and have ten years’

experience in leadership and management of public or private institutions;– Member to have at least a masters degree, and at least five years’

experience in leadership, management or academia. • Further, a member shall be a person of high moral character and

integrity in accordance with Chapter Six of the Constitution of Kenya.

• Chief executive appointed by the Cabinet Secretary on the recommendation of the Board of Trustees following a competitive recruitment process.

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CONCLUSIONChallenges, Opportunities and Impacts of the Universities Fund

• The key challenges in financing public universities – Inadequate budgetary support; – Inadequate funds for capital development;– Lack a strategic student fee payment policy – Lack of programme differentiated unit cost in

provision of funds from Government; – Inadequate internal income generation by the

universities; and – System inefficiencies, including transparency and

accountability.

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• These challenges will become increasingly more complex given the exponential growth and the attendant questions of quality and relevance of university education in Kenya.

• There are clear indications that quality has suffered in university education in Kenya due to exponential growth in enrolment without matching physical and human resources.

• There an urgent need of an equivalent of a national “marshal” or master plan to counter act this in ensuring not only adequate and quality university staffing level but also requisite modern technology support.

• Its these challenges that the proposed Universities Fund will address.

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• Transparency and fairness of funding of universities. – expected to respond to the long-standing criticism to

the current approach of funding of public universities, which has been seen as lacking transparency and fairness in the way funds are allocated or distributed to public universities

• Public support/funding offered to private universities since they play an important role in the university system and national development in the country. – “conditional grants”, “scholarships,” “bursaries,”

“financial aid. etc.”

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• Governance: Competence, transparency and accountability– The criteria of the appointment of the members

Universities Fund Board (Trustees) is the same criteria and process of the appointment of members of the governing bodies of the several buffer agencies that have been established under the Universities Act.

– Such appointments are largely guided by principles of integrity, competitiveness, transparency, fairness and inclusiveness, which are to guide appointments to all public offices as espoused by the Constitution of Kenya, 2010.

– A clear break from the past

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• Differentiated unit cost as basis for equity in charging tuition to students– Rationalization of fees charged • between type of student (publicly sponsored/ privately

sponsored)– Review the dual track system

• Between degree programmes– Adoption of differentiated unit costs

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Differentiated remuneration for academic staff– To deal with the need to have a realistic manner of

remunerating faculty and staff of public universities. – To establish the minimum discipline differentiated

remuneration for academic staff of universities which:• shall be fair and globally competitive

– Regularization of payment structure– Respond to the problem of staff retention

» especially in most expensive yet competitive academic disciplines like medicine, dentistry, pharmacy, architecture and building and engineering and technology

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• Performance-based budgeting and funding

– Start the important work towards performance-based funding to public universities• develop the methodology that would be used.

– Budgeting of higher education not purely not purely accordance to enrolment, but also to specific performance measures such as:• course completion, • credit attainment, and degree completion, • equity and gender considerations instead of allocating funding

based entirely on enrollment.

– The model provides a fuller picture of how successfully institutions have used their state appropriations to support clearly stated objectives or targets.

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Performance-based budgeting and funding (Contd)

– Creation of incentives sufficiently strong to change institutional behavior.

– Different funding formulas for different types of universities • or use the same formula but weight it differently

depending on the type of institution and characteristics of the student population.

– Frequent monitoring and evaluation to ensure dedicated pursuit of targets and results.

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THE ENDTHANK YOU