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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
2 Total State Budget R 333 965 million
= 27,5% of GDP
3 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
Provisional distribution of MTEF budgets
2004/05
(R’million)
2005/06
(R’million)
2006/07
(R’million)
1 Block grants 8 568 86,7% 9 144 86,7% 9 716 86,6%
1.1 Teaching inputs 5 496 55,6% 5 866 55,6% 6 233 55,5%
1.2 Teaching outputs 1 374 13,9% 1 466 13,9% 1 558 13,9%
1.3 Research outputs 1 125 11,4% 1 200 11,4% 1 276 11,4%
1.4 Institutional factors 573 5,8% 611 5,8% 649 5,8%
2 Earmarked grants 809 8,2% 860 8,1% 938 8,4%
2.1 NSFAS 578 5,8% 638 6,0% 726 6,5%
2.2 Interest & redemption on loans 146 1,5% 131 1,2% 115 1,0%
2.3 Teaching development
Foundation programms 85 0,8% 91 0,86% 97 0,86%
2.6 New capital projects 0 0% 0 0% 0%
TOTAL: BLOCK & EARMARKED 9 879 100% 10 554 100% 11 222 100%
3 Special allocation for institutional restructuring
502 5,1% 550 5,2% 568 5,1%
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)
National budget for higher education
institutions
100% [R10 554m]
Earmarked
13,3% [R1 410m]
NSFAS
6% [R638m]
Institutional restructuring
5,2% [R550m]
Foundation Year Interest & Redemption
2% [R231m]
Block grants
86,6% [R9 144m]
TeachingInput grants
55,6% [R5 866m]
Approved FTEstudent places
Non-research graduates &
diplomates
Research masters & doctorates & publications
(a) Enrolment size (b) Disadvantaged
students
Teaching output grants13,9% [R1 466m]
Research outputgrants
11,4% [R1200m]
Institutional factor grants
5,8% [R611m]
generated by generated by generated by generated by
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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:
(a) Four funding groups
(b) Four study levels
(c) Weighted according to funding group and study level
Previously this was only two groups/levels
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Four Funding GroupsFunding group CESM categories included in funding group
1
07 education
13 law
14 librarianship
20 psychology
21 social services/public administration
2
04 business/commerce
05 communication
06 computer science
12 languages
18 philosophy/religion
22 social sciences
3
02 architecture/planning
08 engineering
10 home economics
11 industrial arts
16 mathematical sciences
19 physical education
4
01 argriculture
03 fine and performing arts
09 health sciences
15 life and physical sciences
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Weightings according to Funding Group and Study Level
Level
Funding groupUndergraduate
& equivalentHonours & equivalent
Masters & equivalent
Doctoral & equivalent
1 1.0 (0.5) 2.0 (1.0) 3.0 (3.0) 4.0 (4.0)
2 1.5 (0.75) 3.0 (1.5) 4.5 (4.5) 6.0 (6.0)
3 2.5 (1.25) 5.0 (2.5) 7.5 (7.5) 10.0 (10.0)
4 3.5 (1.75) 7.0 (3.5) 10.5(10.5) 14.0 (14.0)
(i) Contact Students (Distance Students)
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Determining Teaching Input ‘price’
• Passing institution’s adjusted FTE enrolled student total through funding grid weighted teaching input
• Equivalent figure for sector
• Available funds for teaching input
• Institution’s portions
• Proportionate allocation; not ‘price’ in the economic sense.
Estimated TI Unit “price” ±R6 600
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Example of Teaching Input Grid
University of PretoriaLevel
TotalWeighted
TotalFunding group 1 2 3 4
1 4 826 810 323 178 6 138 8 129
2 7 520 1 403 410 194 9 526 18 498
3 3 219 1 063 243 63 4 587 15 813
4 3 713 1 268 580 178 5 740 30 465
Total 19 278 4 544 1 556 613 25 991 72 905
Weighted Total
37 150 20 008 10 741 5 006 72 905
(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)
(a) Weighting factors for teaching outputs: universities & technikons
1st certificates and diplomas of 2 years or less 0.5
1st diplomas and bachelors degrees: 3 years 1.0
Professional 1st bachelors degrees: 4 years and more 1.5
Postgraduate and postdiploma diplomas 0.5
Postgraduate bachelors degrees 1.0
Honours degrees/higher diplomas 0.5
Non-research masters degrees 0.5
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Teaching Output Grant (continued)
Contact Distance
2004/05 2004/05
Undergraduate: up to three years 22.5% 13.5%
Undergraduate: four years and more 18% 9%
Postgraduate: up to honours 54% 27%
Postgraduate: up to masters (non-Research) 30% 22.5%
(b) Graduation benchmarks for contact and distance programmes (Graduates as % of head count enrolments)
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Teaching output allocation
• Calculate institution’s 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
3Doctoral graduates
1Research masters graduates
1Publication units
(a) Weightings for research outputs
0.5Technikons
1.25Universities
(b) Ratios of weighted research output units to permanently appointed instruction/research staff
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Research Output Allocation
• Determine institution’s actual total weighted research output
• Calculate the institution’s normative total weighted research output (applying the benchmarks)
• Normative weighted total research output for system
• Available funds for research output
• Proportional Institution’s research output allocation,
Estimated RO Unit “price” ±R77 000
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Institutional Factor Grants2.1 Measured by the proportion of disadvantaged students [Contact
African & Coloured students who are SA citizens]
IFG (DS) = % X TIG
0.00%
2.50%
5.00%
7.50%
10.00%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
% OF DISADVANTAGED CONTACT FTE STUDENTS
PE
RC
EN
TA
GE
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Institutional Factor Grants3.2 Size of the institution
IFG (Size) = % X TIG
0.00%
2.50%
5.00%
7.50%
10.00%
12.50%
15.00%
40
00
80
00
12
000
16
000
20
000
25
000
NUMBER OF FTE CONTACT AND DISTANCE STUDENTS
PE
RC
EN
TA
GE
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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 CappingInstitution Actual 2003 Capped for 2005/06 Capped for 2006 – 2009
Cape Peninsula 4.52% 4.49% 4.49%
Cape Town 5.07% 5.24% 5.24%
Central 1.67% 1.64% 1.64%
Durban Institute 3.71% 3.83% 3.83%
Fort Hare 1.19% 1.15% 1.15%
Free State 4.38% 4.45% 4.45%
Johannesburg 7.03% 6.91% 6.91%
Kwazulu Natal 7.88% 7.70% 7.70%
Limpopo 3.47% 3.41% 3.41%
Mangosuthu 1.34% 1.17% 1.17%
Nelson Mandela 3.67% 3.80% 3.80%
North West 5.28% 5.01% 5.01%
Pretoria 8.89% 9.19% 9.19%
Rhodes 1.14% 1.18% 1.18%
South Africa 9.63% 9.96% 9.96%
Stellenbosch 4.93% 5.09% 5.09%
Tshwane 8.45% 8.57% 8.57%
Vaal Triangle 2.36% 2.44% 2.44%
Venda 1.55% 1.34% 1.34%
Walter Sisulu 3.38% 3.04% 3.04%
Western Cape 2.87% 2.86% 2.86%
Witwatersrand 6.07% 6.09% 6.09%
Zululand 1.54% 1.45% 1.45%
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Internal wrangles
Protected Species
Star
Dog Cash cow
Low High
FTE/ Staff member
High
Low
Research output per Staff member
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Internal wrangles
Protected Species
Star
Dog Cash cow
Low High
FTE/ resources taken up
High
Low
Research output per resources required
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FINIS