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Regulation Document 2173 

217Agency Name:          Commission on Higher Education 62
Proposed Date:           19970124
Effective Date:          19980522
Expiration Date:         19980415
Regulation Number:       2173                
Final Issue:             5
Final Volume:            22
Proposed Issue:          1
Proposed Volume:         21
Committee Involved:      Education Committee 04 SED
                         Ways and Means Committee 30 HWM
Status:                  Final
Statutory Authority:     59-103-45(4)(a)-(d)
Subject:                 Performance Funding

History of Regulation Document 2173

BY DATE ACTION DESCRIPTION COM ISS/VOL EXP DATE R. NUM __ ________ _____________________________ _______ ________ __________ ________ - 19970110 Proposed Reg Published in SR 1/21 - 19970422 Received by Lt.Gov. & Speaker 19970820 H 19970423 Referred to Committee HWM 30 S 19970423 Referred to Committee SED 04 - 19970617 Revised Review Period Exp Dat 19980317 S 19980121 Committee Request Withdrawal, SED04 120 Day period tolled - 19980219 Withdrawn and Resubmitted 19980415 - 19980415 Approved by: Expiration Date 5/22

Document No. 2173
COMMISSION ON HIGHER EDUCATION
CHAPTER 62
Statutory Authority: 1976 Code Section 59-103-45 (4)(a)-(d)

Synopsis:

The South Carolina Commission on Higher Education proposes to set standards for determining how well an institution has met or achieved the performance indicators for quality academic success as enumerated in Section 59-103-30, and develop the mechanisms for measuring the standards of achievement of particular institutions.

Instructions:

New regulations to be added to Chapter 62 (700 - 750). Submitted originally on April 16, 1997. Withdrawn and resubmitted at the request of the Senate Education Committee on February 19, 1998.

Text:

62-700 Authority

Pursuant to the authority granted to the Commission on Higher Education by Section 59-103-45 (4)(b), regulations for the development of benchmarks for performance in higher education and a funding mechanism based on an institution's achievement towards those benchmarks are hereby established.

62-710 Definitions

As used in this section:

(1) Educational and General Costs: Expenditures associated with the following activities: Instruction, Research, Public Service, Academic Support, Student Services, Institutional Support, Operation and Maintenance of Plant, and Scholarships and Fellowships. Expenditures not included are those associated with Auxiliary Enterprises, Hospitals and Independent Operations.

(2) Indicators: The indicators found in Section 59-103-30 (B) as approved by the General Assembly to assess the success of a public postsecondary institution in meeting the nine critical areas identified by the General Assembly.

(3) Institutional Benchmark: Annual goal which an individual institution strives to meet or exceed.

(4) MeasuResolution Number: Specific representation of an indicator using quantitative or qualitative characteristics.

(5) Mission Resource Requirement (MRR) model: Mechanism to determine funding needs.

(6) National Data: Data derived from the Integrated Postsecondary Education Data System ( IPEDs) data system.

(7) Performance Funding System: a budgeting system which provides for an annual evaluation of an institution's performance based on previously established standards.

(8) Performance Rating: Score based on the analysis of performance on a particular indicator.

(9) Performance Score: Sum of the individual ratings.

(10) Regional Data: Data derived from the Southern Regional Education Board (SREB) data system.

(11) Sector: As defined in Section 59-103-10 (2), South Carolina's public postsecondary institutions are divided into four groupings based on the primary mission of the institution. These include: 1) research universities, 2) four-year colleges and universities, 3) two-year institutions - branches of the University of South Carolina, and 4) the State Technical and Comprehensive Education System.

(12) Sector Benchmark: Goal(s) which institutions in a particular sector strive to move toward, meet or exceed over a period of years.

62-720 Implementation

A. Performance Funding shall be phased-in over a three year period beginning with Fiscal Year 1997-98.

B. The implementation schedule is as follows:

(1) Twenty-two (22) indicators for 1998-99;

(2) Full implementation of performance funding shall begin in FY 1999-2000

62-730 Performance Indicators

A. The Commission on Higher Education shall measure each institution's performance through the use of the performance indicators as enumerated in Section 59-103-30 (B).

(1) Analysis of a specific indicator will result in a performance rating for each indicator. The rating scale includes the following: 1 - non-compliance, 2 - needs improvement, 3 - satisfactory progress, 4 - meets institutional benchmark, and 5 - exceeds institutional benchmark; at the Commission on Higher Education's discretion, a score of 6 may be awarded for exemplary performance if an institution substantially exceeds institutional and, if applicable, sector benchmarks and represents extraordinary effort, or a 0 for non-compliance after a probationary period.

(2) The sum of the ratings will result in a performance score for each institution. The institution's share of its mission resource needs as defined by the Mission Resource Requirements (MRR) model will be proportional to its performance score.

(3) The Commission on Higher Education shall ensure that funds up to $5,000,000 per year are set aside to assist institutions in improving their performance on one or more indicators where the performance score indicates that substantial imp rovements are needed.

B. The Commission on Higher Education will evaluate each institution's rating comparing the institution's actual performance to its institutional benchmark and sector benchmark previously approved by the Commission on Higher Education.

C. Effective in 1998, Institutional Benchmarks and Sector Benchmarks will be approved by the Commission on Higher Education prior to the beginning of the fiscal year during which the performance will be evaluated.

D. An institution's performance will be displayed showing the data for each indicator including the average performance of institutions in the sector, the sector benchmark, the institution's previous year's performance, the institution's approved benchmark, the institution's actual performance, and the Commission on Higher Education's rating of that performance. A performance score for the institution across all indicators will also be displayed.

E. The indicators and their respective measures shall be applied individually to the public institutions.

F. The Commission on Higher Education shall approve the Performance Rating for each institution in order to insure that the allocation to each institution can be made known within 10 days of adoption of the Appropriation's Bill by the General Assembly.

G. The Commission on Higher Education shall review annually the measures to be used to evaluate the indicators and make modifications as appropriate. This will occur immediately prior to the beginning of the fiscal year for which the performance will be evaluated.

H. The data used to evaluate the institutional performance on a specific indicator shall come from the Commission on Higher Education Management Information System (CHEMIS) and other data received by the Commission on Higher Education.

(1) All data utilized, regardless of source, is subject to approval and audit by the Commission on Higher Education.

62-740 Development of Measures and Benchmarks

A. The Commission on Higher Education shall develop measures and benchmarks of performance for the indicators that will guide the institutions in the State toward nationally and globally competitive performance.

B. Until fully implemented, the Commission on Higher Education shall submit any revisions to the measures for adoption as part of the General Appropriations Act.

62-750 Development of Performance Funding Allocation Plan

A. As required by Section 59-103-45(4)(d), the Commission on Higher Education shall develop a mechanism to determine the funding needs of the State's postsecondary education institutions. This methodology is referred to as the Mission Resource Requirement (MRR) model.

(1) The Mission Resource Requirement model is based on national and regional data sources. National data includes the IPEDS data system and regional data includes the SREB data collection system.

62-760 Review and Reporting to the General Assembly

A. Indicator shall be reviewed, at a minimum, every three years, in order to identify those measures and benchmarks which need to be adjusted to fulfill the mission of higher education in the State, as defined by Section 59-103-15(A).

B. The Commission on Higher Education shall approve the processes for revision ensuring input from those groups listed in Section 59-103-45(4)(a).

C. The Commission on Higher Education shall submit to the General Assembly prior to the beginning of the legislative session, a report on the status of performance funding. This report shall include:

(1) a five year plan to improve performance for higher education in the State, updated annually;

(2) a record of institutional performance on the indicators during the previous year; and

(3) revisions and modifications to the measures and benchmarks to ensure continuous progress toward high performance.

Fiscal Impact Statement:

The Commission on Higher Education has determined that implementing these regulations will cost $440,000 in additional staff time and other costs for FY 1998-1999 and the ensuing years. The fiscal impact on the higher education institutions in the State will be approximately $3,000,000 to $5,000,000 annually due to increased staff time for data collection and reporting.