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Government - intermediary - university : the financial decision-making role of the Universities Council… Southern, Lee 1983

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GOVERNMENT - INTERMEDIARY - UNIVERSITY: THE  FINANCIAL DECISION-MAKING ROLE OF THE  UNIVERSITIES COUNCIL OF BRITISH COLUMBIA By LEE  SOUTHERN  B.A., The U n i v e r s i t y o f Manitoba, 1965 M.A., The U n i v e r s i t y o f Manitoba, 1970 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE  REQUIREMENTS FOR THE DEGREE OF DOCTOR OF EDUCATION in  THE  FACULTY OF GRADUATE STUDIES  Department o f A d m i n i s t r a t i v e , A d u l t and Higher  We accept  t h i s t h e s i s as conforming  to the r e q u i r e d  THE  standard  UNIVERSITY OF BRITISH COLUMBIA A p r i l 1983 © L e e Southern, 1983  Education  In  p r e s e n t i n g  r e q u i r e m e n t s o f  B r i t i s h  i t  f r e e l y  a g r e e f o r  t h i s f o r  an  a v a i l a b l e  t h a t  I f o r  u n d e r s t o o d  t h a t  f i n a n c i a l  by  h i s  o r  a t  the  o f  the  U n i v e r s i t y  the  L i b r a r y  s h a l l  r e f e r e n c e  and  s t u d y .  I  e x t e n s i v e  may  c o p y i n g  g a i n  d e g r e e  f u l f i l m e n t  t h a t  f o r  p u r p o s e s  o r  p a r t i a l  a g r e e  p e r m i s s i o n  s c h o l a r l y  i n  a d v a n c e d  C o l u m b i a ,  d e p a r t m e n t  f o r  t h e s i s  be  h e r o r  s h a l l  c o p y i n g  g r a n t e d  by  t h e  o f  p u b l i c a t i o n  n o t  be  a l l o w e d  o f  f u r t h e r t h i s  h e a d  r e p r e s e n t a t i v e s .  It  t h i s  make  t h e s i s  o f  my  i s t h e s i s  w i t h o u t  my  w r i t t e n  p e r m i s s i o n .  Department  The  U n i v e r s i t y  1956  Main  Date  (3/81)  A d u l t .  o f  C a n a d a  1Y3  4  J u l y ,  A d m i n i s t r a t i v e  B r i t i s h  Mall  V a n c o u v e r , V6T  DE-6  o f  1983  C o l u m b i a  &  Higher  E d u c a t i o n  ABSTRACT  This the in  study examines the  Universities Council  of B r i t i s h  government-university It  sities  focusses Council  on  financial  decision-making r o l e  C o l u m b i a as  period  t a k e n by  t o d e t e r m i n e w h e t h e r any  Universities its  Council  financial  as  task  literature, the  the  representing  and,  purpose for  e n c o u n t e r e d by concerning  the  (i) the  universities'  of  i f problems e x i s t ,  to  the  by  making a r e v i e w o f  already in a  been l e a r n e d  an  and  financial  e l e m e n t a r y mode o f simple,  recounting  the  Universities Council a n n u a l recommendation  about  government-university  analysis  d e s c r i p t i v e models  elements recognized  financial  the  performance  t o be  i n t e r a c t i o n between g o v e r n m e n t s , u n i v e r s i t i e s , by  two  first,  c o n s t r u c t i o n of  third,  is  them.  utilizing  some o f t h e  intermediaries;  the  i n the  nature of u n i v e r s i t y costs  the  Univer-  courses of a c t i o n to address  intermediaries  s e c o n d , by  which i n v o l v e s  the  future  t o e s t a b l i s h what has  and  behaviour;  intermediary  i s attempted,  performance of  setting  problems e x i s t  decision-making role;  recommend a p p r o p r i a t e This  an  the  1974-1982 i n e x e r c i s i n g i t s  s t a t u t o r y mandate f o r u n i v e r s i t y f i n a n c i n g . The fold:  intermediary  relations.  the major d e c i s i o n s  i n the  an  of  present and  difficulties i n recent  actually  decisions  t o government  r e q u i r e m e n t s , and  in  ( i i ) the  about annual  allocations and  to the u n i v e r s i t i e s  f o r g e n e r a l o p e r a t i n g purposes;  f o u r t h , c o n c l u d i n g w i t h some suggestions  C o u n c i l ' s f i n a n c i a l decision-making The  examination  concerning  the  role i n future.  d i s c l o s e s two b a s i c problems a s s o c i a t e d  w i t h the C o u n c i l ' s approaches f o r d i s c h a r g i n g i t s f i n a n c i a l mandate. F i r s t , C o u n c i l has not been a b l e to formulate satisfactory  p e r c e p t i o n of the f i n a n c i a l requirements  universities.  Second, i n absence of such a p e r c e p t i o n  C o u n c i l has not succeeded i n developing an acceptable methodology f o r the a l l o c a t i o n grant f o r u n i v e r s i t i e s .  of the p r o v i n c i a l  a fully of the the long term  operating  In a d d i t i o n , the a n a l y s i s suggests  that  an i n t e r m e d i a r y i n h i g h e r e d u c a t i o n r e q u i r e s the r e t e n t i o n of significant  support  from the other major e n t i t i e s i n the  system. The  study concludes  by suggesting t h a t C o u n c i l e x p l o r e a  more e x p l i c i t p l a n n i n g approach to guide decision-making  role.  i t s financial  TABLE OF CONTENTS  Chapter One  Page INTRODUCTION  1  Purposes Methodology and O r g a n i z a t i o n O r i g i n s o f the Intermediary Background and D e s c r i p t i o n o f the  3 3 4  U n i v e r s i t i e s C o u n c i l o f B r i t i s h Columbia  10  Two  REVIEW OF THE LITERATURE  15 15 26 28  Three  Government-University R e l a t i o n s Summary o f the I m p l i c a t i o n s f o r an Intermediary U n i v e r s i t y Costs and F i n a n c i a l Behaviour Summary o f the I m p l i c a t i o n s f o r an Intermediary CONCEPTS AND ANALYSIS The Emergence o f the U n i v e r s i t i e s C o u n c i l . . . .  51  ANALYSIS OF COUNCIL'S ROLE IN THE DEVELOPMENT OF THE ANNUAL OPERATING FUNDING RECOMMENDATION FOR THE UNIVERSITY SYSTEM  56  The Request f o r Funds The C o u n c i l ' s Approach B a s i c Problems  56 59 61  ANALYSIS OF COUNCIL'S ROLE IN THE ALLOCATION OF THE ANNUAL PROVINCIAL OPERATING GRANT  77  The C o u n c i l ' s Approach B a s i c Problems  78 90  CONCLUSIONS  93  BIBLIOGRAPHY  107  APPENDICES  115  Four  Five  Six  iv  40 43  LIST OF APPENDICES  Appendix A.  Page  U n i v e r s i t y A c t RS Chapter 419 PART 12 S e c t i o n s 63-75 i n c l u s i v e  B.  Description Processes:  C.  B a s i c Formula used f o r D i v i s i o n o f the Annual P r o v i n c i a l O p e r a t i n g Grant 1970-71 t o 1973-74  134  General P r i n c i p l e s U n d e r l y i n g the A l l o c a t i o n of the Annual P r o v i n c i a l O p e r a t i n g Grant and Revised Formula Methodology  13 5  General Purpose O p e r a t i n g Grant 1971-72 t o 1981-82  145  F.  S i m p l i f i e d D e s c r i p t i o n o f the Impact o f the A l l o c a t i o n Formula Components  14 6  G.  UCBC P o l i c y Statement:  147  D.  E.  of University UBC SFU UVic  Budget  Preparation  116  Programs o f D i s t i n c t i o n . . .  v  123 127 131  ACKNOWLEDGMENTS  F i v e people have c o n t r i b u t e d s i g n i f i c a n t l y t o the s u c c e s s f u l completion o f t h i s study i n terms o f c r i t i c a l and  advice  encouragement. They are Dr. John Dennison, Dr. L o m e  Downey, Dr. W.C. Gibson, Dr. M i c h a e l Dr. G.N. P e r r y .  Shaw and, i n p a r t i c u l a r ,  I thank them a l l .  I am g r a t e f u l t o the U n i v e r s i t i e s C o u n c i l f o r making i t p o s s i b l e t o conduct t h i s  study.  My a p p r e c i a t i o n i s a l s o due t o Ms. Sharon P r i c e f o r her skillful  typing.  vi  1  Chapter  One  INTRODUCTION  In  the  education buffer  literature  there or  are  few  environment  instances,  to  be  can  such  as  decision-making level,  the  Committee  be the  has  become  education  to perform was It  the  first  only,  is  design,  a  In  not  In the  at  to  the  non-university  that,  sector  c o u n c i l s as w e l l as the c o l l e g e s and  more  situation disclosed  rudimentary  University  not  of A l b e r t a  a  duties  time,  i t s intermediary to  i t by  in British been  legally  the in  statute.  Columbia  the  established:  i n s t i t u t e s are mandated by they "should  continue  i s i n s t r u c t e d to r e p o r t  should by  Grants  although  from time to  s t a t u t e to r e p o r t at r e g u l a r i n t e r v a l s why i n t u r n , the m i n i s t e r  or  short p e r i o d of s e r v i c e .  been assigned  "about measures t h a t  factor,  somewhat corresponding  review has  for  mal-functioning  institution,  performance of  i n the  f o r Government  a  some  administrative  neighbouring p r o v i n c e  expect  review the  a  in  clear,  specific  Britain,  venerable  Indeed,  the  an  or  r o l e which has  improve  into  structure  of the  Government  introduced  any  respect  to e x i s t " and  why  to  even  higher  learn  attributed  or,  of to  place It  dismantled a f t e r a very  government w i l l  attempt  are  later.  commission w i t h  i s reasonable  precedent  which  success or f a i l u r e of such  element.  without i t s c r i t i c s . higher  in  procedure,  human  administration  agencies  abandoned  i n s t a n c e , whether the instruments  the  studies  intermediary  operational  factors,  on  the  be  taken  report"  to  remedy  (College  to to and  2  I n s t i t u t e A c t , s e c t i o n 66). British the  Columbia's  Universities  experience w i t h  C o u n c i l of  British  i t s own  Columbia,  years o l d and, thus f a r , the performance been  subjected  beginning presently highly  to  effort  external  is  made  known about  this  sensitive  decisions  -  taken  area  with  mobilize  performance  of  to  In  this  and  the  what  specific  questions:  not  study  assess  i n the  financial  respect  i s b a r e l y nine  of the C o u n c i l has  evaluation.  to  intermediary,  as  financing  a is  -  and  in  the  of  the  universities. Pending of  success  or  education uncertain  an  accepted failure  identification  of  such  administrator's what  data  -  of  the  intermediary  standpoint  statistical  or  it  causal  bodies,  is  from  still  otherwise  factors an  somewhat  - would  best  r e p r e s e n t the i s s u e s under d i s c u s s i o n f o r measurement purposes. At some stage s t a t i s t i c a l the  accumulating  which reduces  techniques may  i n f o r m a t i o n . Using  t o a s e r i o u s attempt  be brought  the  to bear  methodology  t o r e c o n s t r u c t and  the events which precede and f o l l o w an observed event not  a  mainly  controlled with  1974-1982. treatment  selected Some  events  leading  f o l l o w e d here  and t e s t s p e c i f i c *See:  experimental that  at  protocol*), transpired  questions  are  this  hand,  analyze  (although  study  deals  d u r i n g the p e r i o d advanced  stops s h o r t of an e f f o r t  hypotheses.  A l l e n Newell and Herbert A. Simon,  on  1972.  but  to set  the forth  3  PURPOSES  This  study  Universities 1974-1982  examines  Council  the major  of  i n exercising  British  decisions Columbia  i t s statutory  taken in  mandate  by the  the  period  for university  f i n a n c i n g . The purpose o f t h i s examination i s two f o l d : i)  t o determine whether sities  Council  any problems  as an intermediary  exist  f o r the Univer-  i n the performance o f  i t s f i n a n c i a l decision-making r o l e ; and ii)  i f problems e x i s t , t o recommend a p p r o p r i a t e  f u t u r e courses  of a c t i o n t o address them.  METHODOLOGY AND ORGANIZATION  Efforts been  t o analyse the performance o f i n t e r m e d i a r i e s  handicapped  theoretical authority, having  a  by  model.  the  Robert  recently  lack  Berdahl  concluded  s a t i s f a c t o r y goals  of  a  generally  (Berdahl,  that: oriented  "We  1971),  are s t i l l  evaluation  have  accepted a  leading  f a r from  process f o r  statewide boards" and, f u r t h e r , t h a t no q u a n t i t a t i v e l i n k s have been  demonstrated  intermediaries also,  with  between  the  and u n i v e r s i t y  respect  intermediaries,  structures  system  t o the s t a t e  and  performance.  powers He  of  notes  o f the a r t o f e v a l u a t i o n o f  that:  One searches the r e l e v a n t l i t e r a t u r e i n v a i n f o r o b j e c t i v e cannons o f proof which would remove the s u b j e c t from controversy and contradictory arguments. (Berdahl, 1971:40) Lacking  a  generally  accepted  model,  a  researcher  4  undertaking formance  t o conduct  an a n a l y s i s  must  endeavour  task  i s attempted  o f an i n t e r m e d i a r y ' s per-  t o c o n s t r u c t an a p p r o p r i a t e mode of  analysis. The review  o f the l i t e r a t u r e ,  i n this  study,  to establish  l e a r n e d about the performance  first,  by making a  what has a l r e a d y been  of i n t e r m e d i a r i e s i n a government-  university  setting  financial  behaviour  elementary  mode o f a n a l y s i s which i n v o l v e s the c o n s t r u c t i o n o f  simple,  descriptive  recognized  and the nature (Chapter  models  t o be p r e s e n t  ments, u n i v e r s i t i e s ,  of u n i v e r s i t y  2 ) ; second,  by  c o s t s and  utilizing  an  r e p r e s e n t i n g some o f the elements i n the i n t e r a c t i o n  between  govern-  and i n t e r m e d i a r i e s (Chapter 3 ) ; t h i r d , by  r e c o u n t i n g the d i f f i c u l t i e s a c t u a l l y encountered  by the U n i v e r -  sities  ( i ) the annual  C o u n c i l i n r e c e n t d e c i s i o n s concerning  recommendation t o government about requirements  (Chapter  the  universities  and  fourth,  the u n i v e r s i t i e s '  4 ) , and ( i i ) the annual  f o r general  concluding  with  a l l o c a t i o n s to  o p e r a t i n g purposes some  suggestions  financial  (Chapter 5 ) ;  concerning the  C o u n c i l ' s f i n a n c i a l decision-making r o l e i n f u t u r e (Chapter 6 ) .  ORIGINS OF THE INTERMEDIARY  N e a r l y t h i r t y years ago a t a conference o f the A s s o c i a t i o n of B r i t i s h U n i v e r s i t i e s o f the Commonwealth, Canadian and P r e s i d e n t o f the U n i v e r s i t y o f B r i t i s h Columbia,  educator  Dr. N.A.M.  MacKenzie prophesied t h a t : Because o f the nature o f our contemporary world and s o c i e t y , the i n e v i t a b l e t r e n d i n most c o u n t r i e s . . . has been  5  towards a g r e a t e r dependence on and p a r t i c i p a t i o n by government i n respect of university finances and revenues... T h i s dependence is likely to continue. (Berdahl, 1959:183) In Canada today, government i s by f a r the predominant patron  o f the u n i v e r s i t y .  constitutes The of  the essence  Indeed,  of  financial  the use o f p u b l i c  government-university  money  relations.  expenditure o f p u b l i c money n e c e s s a r i l y e n t a i l s some degree government  relates  control  and s c r u t i n y  and the c r u c i a l  t o the nature o f t h a t c o n t r o l .  question  In most o f the p u b l i c  s e c t o r the processes of government c o n t r o l over the a p p r o p r i a t i o n and expenditure o f tax money are w e l l e s t a b l i s h e d . case  o f government-university  r e l a t i o n s , however,  t i o n a l nature o f t h a t c o n t r o l i s l e s s c l e a r l y The  intermediary  In the  the opera-  defined.  body i s one o r g a n i z a t i o n a l mechanism with  which many governments have sought t o monitor a p p r o p r i a t e l y the expenditures o f p u b l i c money by the u n i v e r s i t i e s w h i l e  simulta-  neously  autonomy  for  respecting,  the  purpose  t o the extent of  preserving  practicable, their academic  freedom.  Noted  i n t e r n a t i o n a l educator, Lord Robbins o f the U n i t e d Kingdom, has succinctly intermediary  described  the  i n t h i s context  constitutional  invention  of  the  as f o l l o w s :  I f the s t a t e i s w i l l i n g t o e n t r u s t the d i s t r i b u t i o n of p u b l i c money f o r t h i s purpose and the s c r u t i n y o f the way i n which i t has been spent, not d i r e c t l y t o a government department i n e v i t a b l y s u b j e c t t o p o l i t i c a l c o n t r o l and influence, but i n d i r e c t l y to a n o n - p o l i t i c a l expert commission or committee; and i f t h a t body makes i t s grants i n forms which impose a minimum o f p r e c i s e s p e c i f i c a t i o n on the d e t a i l o f e x p e n d i t u r e , then there i s c r e a t e d a p a r t i a l i n s u l a t i o n which should be s u f f i c i e n t t o p r o t e c t academic i n s t i t u t i o n s a g a i n s t the cruder incursions of p o l i t i c s and t o c r e a t e an area i n which freedom t o maint a i n t h e i r own standards and i n i t i a t e t h e i r own development i s reasonably w e l l preserved. (Robbins, 1980:91)  6  In  the United  Kingdom,  U n i v e r s i t y Grants In North America by  Committee  led,  of an i n t e r m e d i a r y ,  much  i n t e r m e d i a r y bodies  f o r , and use of p u b l i c funds  later,  many  i n higher  In the U n i t e d S t a t e s the concept three g e n e r a l forms: and  self-interest funds  with  jurisdictions  to  education. o f the i n t e r m e d i a r y  the v o l u n t a r y agency, the governing  the c o o r d i n a t i n g agency. V o l u n t a r y  the u n i v e r s i t i e s  the  (U.G.C.), was e s t a b l i s h e d i n 1919.  the requirement  universities  establish  the prototype  agencies  took board  are formed by  themselves f o r the promotion of i n s t i t u t i o n a l  i n order minimal  t o o b t a i n the g r e a t e s t amount of p u b l i c bureaucratic  structures  and  reporting  requirements. A governing  board  i s c h a r a c t e r i z e d by i t s l e g a l mandate t o  govern a l l aspects of a l l u n i v e r s i t i e s The membership i s g e n e r a l l y composed  within i t s j u r i s d i c t i o n . in significant  measure of  i n s t i t u t i o n a l representatives. The most  coordinating  closely  resembles  agency  i s a form  the B r i t i s h  of i n t e r m e d i a r y  conception  i n that  which i t has  system-wide r e s p o n s i b i l i t i e s assigned by s t a t u t e but allows the existence the  of governing  internal  boards w i t h  management of the i n d i v i d u a l  major types of c o o r d i n a t i n g agencies Kenyon, 1979:66  e t seq.):  of  of  a  majority  advisory and  legal  powers composed  institutions.  are i d e n t i f i a b l e  those with  institutional  responsibilities for Three  (Hollick-  a d v i s o r y powers composed  representatives,  of a m a j o r i t y  those  with  of l a y p u b l i c members  those w i t h r e g u l a t o r y powers composed of a m a j o r i t y of l a y  p u b l i c members.  7  With  respect  Glenny has to  be  to  the  powers  s t a t e d normatively  effective,  to  be  of  1976).  responsibility agencies A  have  able  to  gather  effects  of  body  programs and review  These  three  been  generally  literature  inter-related assigned  no  budgets  areas  to  would  enable  These  of  coordinating  a  maintains  that  measurements. The  government  it  American  proposes  that  powers  planning  ought to be  of  examines  examinations  guidelines resulting to  the focus  is  assigned  take d e c i s i o n s .  from these  establish  a  studies "proven"  indicate that elaborate a f f e c t l e v e l s of s t a t e percentage of a populai n s t r u c t i o n or i n c r e a s e d (Berdahl, 1971:256)  impractical  conception  budget  of  review,  the  an  to  attempt  such  intermediary  only  program  intermediary  approval  on  the  n e i t h e r the government nor the u n i v e r s i t i e s are the to  conduct  the  examination.  i n t e r m e d i a r y which are c r i t i c a l powers are  of i n d i v i d u a l  Those  and  appropriate  decisions  of  the  to the a p p r o p r i a t e e x e r c i s e of  i n the main only d e f i n a b l e by  jurisdictions.  and  grounds  such matters r e q u i r e examining i n the p u b l i c i n t e r e s t  bodies  and  that:  there have been no s t u d i e s to c o o r d i n a t i o n does or does not expenditure f o r higher e d u c a t i o n , t i o n a t t e n d i n g c o l l e g e , c o s t of p r o d u c t i v i t y of higher e d u c a t i o n . Berdahl  which  to c o n t r o l and  i n t e r m e d i a r y . I t has been observed  these  data,  between the powers of the agency  institutions  specific  exists  agencies.  the balances  the powers of the There are  of  coordinating  g e n e r a l l y on  that  institutional  i n the American model. large  which  agencies,  t h a t such groups ought, i n order  formulate master p l a n s , approve new (Glenny,  coordinating  the  experience  8  In  Canada,  the establishment  of intermediaries  occurred  p r i m a r i l y i n the 1970s when most p r o v i n c e s e f f e c t e d  substantial  changes  government-  in  university  their  legislative  relations.  provincial  studies  arrangements  Michael  on  Oliver,  higher  author  education,  r e t r o s p e c t on these endeavours i n t h i s  of  o f one o f the  has  commented  in  country:  P r a c t i c a l l y a l l o f the Reports d e a l t w i t h the r e l a t i o n s between u n i v e r s i t i e s and government. I t i s hard t o i d e n t i f y any luminous i n s i g h t s . The best t h a t can be s a i d f o r us i s t h a t a l l the Report w r i t e r s were a s k i n g the right question: How t o preserve a reasonable degree of u n i v e r s i t y autonomy a t the same time as making u n i v e r s i t i e s p a r t of a w e l l - a r t i c u l a t e d system r e s p o n s i v e t o and accountable t o the p u b l i c t h a t they s e r v e . . . S a t i s f a c t o r y models f o r u n i v e r s i t y government r e l a t i o n s are s c a r c e . The p r o p o s a l s o f the o t h e r Commissions do not seem t o me to be i n s p i r i n g . (Gregor, , 1979:39) Such commentary  notwithstanding,  provinces  created  secondary  education,  approach.  With  separate  one  Maritime  abandoned  this  and c o o r d i n a t i n g agencies  f o l l o w i n g the  provinces  with  since  f o r post-  a l l provinces  the U n i v e r s i t y  intermediaries  have  responsible  Five  (Newfoundland)  example  Three  two  exception,  advisory  Kingdom.  changes o c c u r r e d .  ministries  although  established of  many  a joint  Grants  i n the  United  (the Maritimes)  replaced  their  higher  commission, the  P r o v i n c e s Higher E d u c a t i o n  The Hurtubise-Rowat Report  Committee  education Commission.  has d e s c r i b e d the e s t a b l i s h m e n t  and e v o l v i n g r o l e o f these p r o v i n c i a l mechanisms thus: the b a s i c problem o f u n i v e r s i t y - p r o v i n c i a l r e l a t i o n s i s the role o f the i n t e r m e d i a r y b o d i e s . . . these bodies o r i g i n a l l y came i n t o e x i s t e n c e t o advise the p r o v i n c i a l governments on the f i n a n c i a l resources t o be a l l o c a t e d t o the u n i v e r s i t i e s and on the d i v i s i o n o f these resources among them. The s i t u a t i o n has changed t o such an extent that i t i s now the responsibility of provincial governments t o ensure e d u c a t i o n and comprehensive p l a n n i n g  9  of t h e i r f u t u r e development... In our view, t h e r e f o r e , because exclusive intervention by government is u n d e s i r a b l e , i n t e r m e d i a r y bodies are needed not only to perform the a d v i s o r y and allocative f u n c t i o n s of the e x i s t i n g u n i v e r s i t y commissions but a l s o to assume these newer functions of coordination and planning. (Hurtubise-Rowat, 1970:108) This  recommendation  function  based  reflects  both  that  upon the  intermediaries  observation  7American  of  accept  the  conception  of  a  planning  Canadian  context  the  of  role  c o o r d i n a t i n g agency and the terms of r e f e r e n c e of the i n t e r m e d i a r y , the U.G.C., which were amended i n 1946  the  prototype to i n c l u d e  the f o l l o w i n g : ...to a s s i s t , i n c o n s u l t a t i o n w i t h the u n i v e r s i t i e s and other bodies concerned, the p r e p a r a t i o n and e x e c u t i o n of such p l a n s f o r the development of the u n i v e r s i t i e s as may from time to time be r e q u i r e d i n order to ensure t h a t they are adequate to n a t i o n a l needs. (Owen, 1980) Underpinning required  a l l p l a n n i n g , however, l i e the f i n a n c i a l  for  therefore,  the  implementation  integrally  related  of  to the  the  plans.  financial  resources  Planning  is,  decision-making  process. In  British  Columbia  government-university Act mainly was  left  the  role  of  the  intermediary  r e l a t i o n s i s p r e s c r i b e d i n the U n i v e r s i t y  i n terms of a s e t powers granted  to C o u n c i l to decide how  to the C o u n c i l . I t  to e x e r c i s e these  powers i n  the f u l f i l l m e n t of i t s f i n a n c i a l mandate. An examination historical  record  in  of  Council's  financial  of the  decision-making  in  r e l a t i o n to i t s r o l e as an i n t e r m e d i a r y i n h i g h e r e d u c a t i o n i s the s u b j e c t of t h i s  study.  10  BACKGROUND AND DESCRIPTION OF THE UNIVERSITIES COUNCIL  In  British  recommendations reported  Columbia  the major  investigative  on the e s t a b l i s h m e n t  work and  of an i n t e r m e d i a r y  t o the M i n i s t e r o f E d u c a t i o n  were  i n 1969 by the A d v i s o r y  Committee on I n t e r - U n i v e r s i t y R e l a t i o n s under the chairmanship of Dr. G.N. P e r r y .  T h i s Report  emphasized the primacy o f the  f i n a n c i a l i s s u e i n government-university  r e l a t i o n s as f o l l o w s :  When the u n i v e r s i t i e s come t o r e l y h e a v i l y on governmental grants f o r o p e r a t i n g and c a p i t a l purposes, the determinat i o n and a l l o c a t i o n o f these grants becomes an important, i f not the c r u c i a l element i n the u n i v e r s i t y budget-making p r o c e s s . (Perry, 1969:15) Accordingly  the Report  included  formula approach f o r determining to u n i v e r s i t i e s its  along w i t h  a  major  discussion  o f the  the p r o v i n c i a l o p e r a t i n g grant  a simplified  h y p o t h e t i c a l model o f  application. The  Perry  Committee  concluded  that  a  new  intermediary  should be e s t a b l i s h e d i n B r i t i s h Columbia and f u r t h e r t h a t : the new i n t e r m e d i a r y should have the r e s p o n s i b i l i t y f o r r e p r e s e n t i n g the system i n i t s budget d i s c u s s i o n s w i t h governmental a u t h o r i t i e s and f o r d i s t r i b u t i n g such grants (both o p e r a t i n g and c a p i t a l ) t o the i n s t i t u t i o n s i n the system. (Perry, 1969:3) In within  1973  a  University-Government  the M i n i s t r y  university  governance  of Education "with the  Committee  t o examine  particular  Universities  was  the forms o f  reference  relationship  between  and  Government".  In 1974 t h i s body r e p o r t e d t h a t :  struck  the  t o the Provincial  an i n t e r m e d i a r y body known as the U n i v e r s i t i e s C o u n c i l i s necessary i n B r i t i s h Columbia f o r the r e c o n c i l i a t i o n of p u b l i c a c c o u n t a b i l i t y w i t h u n i v e r s i t y autonomy and t o ensure a g r e a t e r s e n s i t i v i t y t o s o c i a l needs i n the  11  development of u n i v e r s i t y e d u c a t i o n . The  general  thrust  of  the  (Young, 1974:27)  recommendations  were  that  this  proposed C o u n c i l should be a d v i s o r y and p e r s u a s i v e i n nature opposed did  to e x e c u t i v e  recommend  powers  that  over  in  budgeting  The  1974  The  Universities and  Committee,  Council  capital  have  however,  allocative  financing  of  the  Committee a l s o recommended t h a t the C o u n c i l  financial  planning  by  investigating  multi-year  systems.  When the in  the  regulatory.  operating  universities. engage  and  as  establishment  i t did  have,  as  of an  this  new  intermediary  integral  part  of  occurred  i t s mandate,  a d v i s o r y power f o r the d e t e r m i n a t i o n of the l e v e l of p r o v i n c i a l operating  and  allocation  of the o p e r a t i n g grant t o the u n i v e r s i t i e s .  precisely  these  focuses  in  capital  two  its  grants  statutory  examination  performance i n f i n a n c i a l Although making have  role  of  some view  Council. in  the  The  the of  and  specific  a  powers  of  brief  on  the  focuses  on  Universities the  regulatory  power  which  in  It is  this  Universities  the  study  Council's  decision-making.  study  the U n i v e r s i t y Act  follows,  and  general details  financial  Council,  of these A) . of  An  decision-  i t i s essential  structure  (Appendix account  the  and  powers  matters  are  abridged  i t s emergence  of  to the  described  description i s given  in  Chapter I I I . The  Universities  established  by  duties  liabilities"  and  Council  s t a t u t e i n 1974 which  of with  British defined  for reference  Columbia "rights,  was  powers,  purposes w i l l  be  12  s a i d t o c o n s t i t u t e the formal d e f i n i t i o n o f the C o u n c i l ' s r o l e in  government-university  eleven  persons,  relations.  including  The C o u n c i l  a designated  the L i e u t e n a n t - G o v e r n o r - i n - C o u n c i l .  consists of  chairman,  appointed by  A v i c e chairman i s e l e c t e d  a n n u a l l y by the members t o a c t as chairman d u r i n g any p e r i o d s of i n c a p a c i t y o f the chairman t o d i s c h a r g e h i s d u t i e s . are  appointed  f o r three  chairman's i n i t i a l periods  of  prohibited federal  term  five from  year  terms,  renewable  o f t h r e e years  years.  Certain  and  employees or students  once.  The  i s renewable twice f o r  categories  s e r v i n g as C o u n c i l members:  parliament  Members  the p r o v i n c i a l  of  people  members  legislative  o f the u n i v e r s i t i e s ,  public  are  of the  assembly,  servants i n  the M i n i s t r i e s o f E d u c a t i o n , Finance, o r U n i v e r s i t i e s ,  Science  and Communications, and n o n - r e s i d e n t s o f the p r o v i n c e . A member holds  office  appointment person  [Section  to f i l l  o f the term  Act also  impair  a  i s revoked  appointed  remainder The  until  the  successor  i s appointed,  or  or  death  a vacancy  64(10)].  the  S i x members  chairman holds the d e c i d i n g vote Expenses  incurred  office  only  f o r which the predecessor was  of  the  r e s i g n a t i o n occurs.  holds  d e c l a r e s t h a t a vacancy authority  unless  A  f o r the  appointed.  on the C o u n c i l "does not  remaining  members...to a c t "  constitute  a  i n the event  i n the d i s c h a r g e  quorum  of a t i e d  of Council  reimbursable by C o u n c i l and remuneration  and the vote.  b u s i n e s s are  f o r s e r v i c e s i s s e t by  the L i e u t e n a n t - G o v e r n o r - i n - C o u n c i l . The  U n i v e r s i t i e s C o u n c i l i s a c o r p o r a t i o n and an agent o f  the p r o v i n c i a l crown and s i n c e October  1978 possesses  financial  13  autonomy by  over  statute  i t s operating  upon  the  funds.  I t i s , however, dependent  Lieutenant-Governor-in-Council  appointment of an e x e c u t i v e  f o r the  d i r e c t o r and f o r the d e f i n i t i o n of  the incumbent's p o s i t i o n s , d u t i e s , remuneration and other terms and  c o n d i t i o n s of employment.  alone the  In a l l other matters the C o u n c i l  i s i n a p o s i t i o n to provide conduct  of  its  a system of o r g a n i z a t i o n f o r  activities  in  government-university  relations. The C o u n c i l i s a n n u a l l y r e q u i r e d t o r e p o r t t o the M i n i s t e r for  both i t s i n t e r n a l  operations. required sities' the  In t h i s  f i n a n c e s and the u n i v e r s i t i e s ' l a t t e r regard  t o r e p o r t on e s s e n t i a l l y requests  operating  universities  recommended  i n the next  fiscal  funds turn  to  the u n i v e r s i t i e s ,  provided  by  financial  to  the  reports  submit them t o the p r o v i n c i a l time  matters:  by  the  Council  operating a  grants resume  year,  for  and a statement  the  of the  made by the of  a l l the  government. The m i n i s t e r i n  Legislature and  the u n i v e r -  f o r the next f i s c a l  including  the p r o v i n c i a l  i s accountable  Council's  three  year,  a l l o c a t i o n o f the c u r r e n t year's Council  the C o u n c i l i s s p e c i f i c a l l y  f o r o p e r a t i n g grants grant  financial  i n respect  accordingly  of the  i s required  Legislature within  to  a prescribed  limit. In  autonomy  accordance w i t h  the accepted  i n Canada, the C o u n c i l ' s  convention  of u n i v e r s i t y  powers are c i r c u m s c r i b e d i n  the f o l l o w i n g manner: ...the u n i v e r s i t i e s c o u n c i l s h a l l not i n t e r f e r e i n the e x e r c i s e o f powers c o n f e r r e d on a u n i v e r s i t y , i t s board, senate and other c o n s t i t u e n t bodies by t h i s A c t r e s p e c t i n g (a) the f o r m u l a t i o n and adoption of academic p o l i c i e s and  14  (b)  standards; the e s t a b l i s h m e n t g r a d u a t i o n ; and  (c)  the s e l e c t i o n and appointment of s t a f f .  Various activities:  sundry both staff  performance  of  may  dispose  it  own may  and  and  standards  of  the  closed  for  Act  admission  ( S e c t i o n 70)  address  meetings  are  Council  permitted,  are p r o t e c t e d from p e r s o n a l l i a b i l i t y  their  d u t i e s , with of p r o p e r t y  approval  and  of  and  the  i n the  Cabinet i t  with m i n i s t e r i a l  approval  e n t e r i n t o agreements w i t h a s s o r t e d governments, p u b l i c  agencies, conduct  sections open  members and  of  people  and  a s s o c i a t i o n s and  may  on  i t s own  i n q u i r i e s and examine people under oath.  decision  15  Chapter Two REVIEW OF THE LITERATURE  This  chapter  i s divided  university  relations  behaviour.  Each  implications  and  section  f o r an  into  two  university concludes  r e v e a l e d i n the l i t e r a t u r e  costs  with  intermediary  parts:  in  a  government-  and  financial  summary  higher  o f the  education  as  review.  GOVERNMENT-UNIVERSITY RELATIONS  The q u e s t i o n i s sometimes asked 'Whose s i d e i s the University Grants Committee on?' This question misunderstands, i n our view, the r e a l i t i e s o f our function. We are not on any ' s i d e ' . We a r e concerned t o ensure that a v i g o r o u s and c r e a t i v e U n i v e r s i t y life prospers i n t h i s country without i n t e r f e r e n c e from the Government o f the day and a t the same time t o ensure t h a t the taxpaying community, r e p r e s e n t e d by Parliament and the Government, gets a proper r e t u r n f o r i t s money i n t h i s f i e l d o f c o n s i d e r a b l e p u b l i c expenditure. (U.G.C. Report 1968) In advise it  examining the s t a t e  i s important,  upon  which  the c o n c e p t u a l about  role  o f an i n t e r m e d i a r y t o  the requirements  a t the o u t s e t , t o note  British  and  Canadian  of u n i v e r s i t y the fundamental  parliamentary  operate w i t h r e s p e c t t o p u b l i c f i n a n c e .  funding basis  governments  S i m i l a r l y , the s p e c i a l  view i n which u n i v e r s i t i e s a r e h e l d i n these two c o u n t r i e s must a l s o be b r i e f l y simply  stated:  the  electorate;  the  people  defined.  The nature o f p u b l i c  f i n a n c e can be  governments a c q u i r e income by l e v y i n g subsequently,  assembled  the e l e c t e d  i n Parliament  taxes on  representatives of  approve  the budget  or  16  proposed for  expenditures o f the government o f the day.  this  a p p r o v a l , a measure o f a c c o u n t a b i l i t y  In r e t u r n  i s exacted by  Parliament from the Government m i n i s t r i e s who spend the money. In  terms  of  the  special  view  of  the u n i v e r s i t i e s ,  i tis  g e n e r a l l y accepted t h a t i n order f o r u n i v e r s i t i e s t o c a r r y out their  mission,  the  optimal  environment  requires  u n i v e r s i t y be s e l f - g o v e r n i n g , f r e e t o determine both  teaching  and r e s e a r c h ,  r e s e a r c h e r s and t o develop admission basis  and  graduation  for public  autonomy  relations;  i t s own  students.  establishes  responsibilities  namely,  expenditure  the s u b j e c t s o f t e a c h e r s and  and apply i t s own c r i t e r i a of  each  Thus  the  f o r the  democratic  f i n a n c e coupled w i t h the s p e c i a l view o f the  of u n i v e r s i t i e s  intermediary's  t o appoint  that  t o be  of public  the broad  in  accountable  limits  o f an  government-university t o government  money by the u n i v e r s i t y  f o r the  and t o p r o t e c t  the u n i v e r s i t y ' s autonomous f u n c t i o n s from unwarranted  govern-  ment i n t e r f e r e n c e . That all  a realm o f government-university  i s evidence  interest  of  the f a c t  that  each  i n the a c t i v i t i e s o f the o t h e r .  interested  in  universities,  generally,  c o n t r i b u t i o n t o the enlightenment  r e l a t i o n s e x i s t s at party  maintains  an  Today, government i s because  of s o c i e t y but,  of  their  specifically,  because o f t h e i r t r a i n i n g of h i g h l y q u a l i f i e d manpower, whereas university  interest  financial  support  providing  a  university  in  which  public  education  government government  service.  That  focuses supplies  mainly to  the s t a t e ' s  on  the  institutions interest  in  i s not p r o p e r l y c o n s t r a i n e d t o monetary  17  matters,  has been p o i n t e d out by Berdahl  as f o l l o w s :  The s t a t e has a legitimate interest i n the overall p o l i c i e s of the u n i v e r s i t i e s . . . w h e t h e r or not p u b l i c funds are involved. The universities should form their e d u c a t i o n a l p o l i c i e s with s e n s i t i v i t y f o r n a t i o n a l needs, and, i f s u b s i d i z e d by p u b l i c funds, a f t e r c o n s u l t a t i o n with the a p p r o p r i a t e governmental o f f i c e r s . In case of disagreement over ends or means between the s t a t e and the u n i v e r s i t i e s , the u n i v e r s i t i e s ' judgement should p r e v a i l , with the understanding t h a t they have the r e s p o n s i b i l i t y of demonstrating the wisdom of t h e i r d e c i s i o n s w i t h i n a reasonable time frame, and s u b j e c t always to u l t i m a t e p o l i t i c a l i n t e r v e n t i o n i n the face of a major breakdown i n higher e d u c a t i o n . (Berdahl, 1959:193)) Berdahl  has  which  the  an  which  which  goals.  controls,  r e l a t e s to  He  argues  the safeguarding to  the  pursue,  not  of  generally the  necessary  autonomy  (i)  policies and  techniques  accompany  and  types  extend:  goals,  to  that  normally  marginal  limited  to  two  can  the  chooses  relates  which  money, are  be  interest  institution  autonomy these  distinguished  state's  autonomy, that  further  substantive and  programs  ( i i ) procedural chosen  the  to  to  state's  expenditure  achieve  procedural of  public  for accountability  and  of the p u b l i c i n t e r e s t . Such c o n t r o l s ought to those  demonstrably  required  for  good  budget  practices. Berdahl  further  argues,  c o n t r o l s which are those goals  and  policies  legitimate interest state The  should  the  in  higher  should be  anism?  There  immediately  state are  education,  expressed a  arise  suitably i n what  p a r t i c i p a t e and three  those  substantive  r e l a t e d to d e c i s i o n s about e d u c a t i o n a l  s o v e r e i g n t y . . . through  questions  respecting  as  the  state's  "a conscious  a c t of  s e n s i t i v e mechanism". substantive  through  fundamental  that  points  what to  decisions  s o r t of be  noted  mechfrom  18  Berdahl's work i n legitimate, higher public an  if  relation  vaguely  education  is  to  study.  role  Second,  higher education state's  be  the  charged  extent of  relations  w i t h the  contract"  university  with  each p a r t y  b r o a d l y d e f i n e d by maintenance  of  responsibilities government  and  requirements  and  state's  of  in  the  third, i f decision-  interests. interest  in  o p e r a t i v e nexus  of  be  provi-  viewed as  a and  perform which  are  r e s p o n s i b i l i t i e s for  the  to  In  discharging  performing  must  of  government  roles  s e t s of  thereby  provision  remains the  between  a  the  broad  the  is  in  financial  state's  relationship.  terms  a  that  having  universities  in  the  into  respective the  state  T h i s r e l a t i o n may  entered  there  to i t s r o l e and  universities  f i n a n c i a l resources.  "social  the  state's  with  i t i s recognized  First,  for  c o g n i z a n t of the  Having noted the  of  defined,  policy.  making r o l e i t must be  sion  this  funding i s i n t e g r a l l y r e l a t e d  intermediary  the  to  meet  practice  a  their  roles,  certain  of  their both  number  modern  of  democratic  governance. On  the  to  sustain  of  higher  the  government's p a r t , the  supply of  education  universities  and  a  responsibility  is  undertaken  f i n a n c i a l r e s o u r c e s f o r the  services  which  i n p a r t by  the  are  determined  government.  ments a s s o c i a t e d w i t h t h i s r e s p o n s i b i l i t y  provision largely  The  by  require-  include:  assurances t h a t o p e r a t i n g and c a p i t a l funds p r o v i d e d from the Provincial revenues w i l l be w i s e l y used f o r the b e n e f i t of the P r o v i n c e , and...continued freedom to decide f o r i t s e l f i n the l i g h t of a c t u a l budget circumstances, r a t h e r than by statutory authority, what o p e r a t i n g or c a p i t a l funds should be s u p p l i e d from P r o v i n c i a l revenues to the U n i v e r s i t i e s . (Perry, 1969:5)  19  The for  u n i v e r s i t y on the other  the development  hand, assumes  responsibility  and d e l i v e r y o f i t s s e r v i c e s and i n t u r n  requires: an assured source o f o p e r a t i n g and c a p i t a l funds reasonably matched with enrolment and c o s t i n c r e a s e s . . . an equitable treatment as between u n i v e r s i t i e s , and...an opportunity t o engage i n long range p l a n n i n g . (Perry, 1969:5)  These  conditions  university  relations.  reconciling tures  with  freedom.  lend  a s p e c i a l character  Indeed, they g i v e  parliamentary  accountability  u n i v e r s i t y autonomy Such  a  t o the need f o r  f o r public  f o r the assurance  reconciliation  must  requirements o f each p a r t y and i n doing pointed  rise  t o government-  take  into  expendi-  o f academic account the  so, as Lord Robbins has  o u t , both government and u n i v e r s i t y are not q u a l i f i e d  to perform the task. With r e s p e c t t o government's d i s a b i l i t y , Robbins s t a t e s : The d e c i s i o n t o spend immense sums o f money on higher education i s essentially a p o l i t i c a l d e c i s i o n and no s e n s i b l e person would wish t o deny the r i g h t o f m i n i s t e r s to l a y down broad p r i n c i p l e s o f p o l i c y and a d m i n i s t r a t i o n i n t h i s connection...The e v a l u a t i o n o f the performance o f particular institutions and the a l l o c a t i o n o f funds between them i s a f u n c t i o n which, i f i t i s t o be discharged e f f i c i e n t l y and without danger t o academic freedom, needs t o be done i n an atmosphere from which p o l i t i c a l c o n s i d e r a t i o n s are absent. (Robbins, 1 9 8 0 : 9 0 ) Lord ties  Robbins has a l s o s u c c i n c t l y e x p l a i n e d  individually  directly  on  their  are i l l  s u i t e d from a s s e s s i n g  financial  affairs  to  why u n i v e r s i and r e p o r t i n g  the Government  as  follows: . . . i t i s u n l i k e l y t h a t separate c o n s i d e r a t i o n by independent i n s t i t u t i o n s o f t h e i r own a f f a i r s i n t h e i r own circumstances w i l l always r e s u l t i n a p a t t e r n t h a t i s comprehensive and a p p r o p r i a t e i n r e l a t i o n t o the needs o f s o c i e t y . (Robbins, 1 9 8 0 : 1 3 )  20  I t was both was  i n r e c o g n i t i o n of these d i s a b i l i t i e s on the p a r t of  government and  university  that a c o n s t i t u t i o n a l invention  c r e a t e d i n the U n i t e d Kingdom i n 1919  Grants  Committee  general  purpose  accountability  was was  and  interposed to  effect  in  the  institutional  when the  the  University  relationship.  reconciliation  autonomy,  with  of  the  Its public  specific  i n s t r u c t i o n of i t s founding t r e a s u r y minute r e a d i n g : to enquire i n t o the f i n a n c i a l needs of u n i v e r s i t y educat i o n i n the U n i t e d Kingdom and t o advise the Government as to the a p p l i c a t i o n of any g r a n t s t h a t may be made by Parliament towards meeting them. (Owen, 1980) Consequently, tion  and  i t i s clear  expenditure  of  from  the o u t s e t t h a t the a p p r o p r i a -  public  funds  government-intermediary-university Universities, mentally  political  like  are  seminal  in  relations.  a l l o r g a n i z a t i o n s , operate  environment.  factors  "Politics"  in a  in this  funda-  context i s  d e f i n e d as the r e s o l u t i o n of c o n f l i c t based upon the a u t h o r i t a tive  allocation  relations conflict First,  are  of  resources.  "political"  Hence  because  government-university  they  are  or a d v e r s a r i a l r e l a t i o n s caused  each  university  pursues  goals  c h a r a c t e r i z e d by  by two  basic factors.  c o n s i s t e n t with  its  own  p e r c e p t i o n of i t s s e l f - i n t e r e s t which i s u l t i m a t e l y d e f i n e d as i n s t i t u t i o n a l s u r v i v a l . These s e t s of i n s t i t u t i o n a l p e r c e p t i o n s may  conflict  interests  both  f o r , as  riate...to  with  each  other  Robbins observed,  the needs of s o c i e t y "  d ' e t r e of the  and  with  they  (Robbins,  intermediary i s p r e c i s e l y  second  not  government's be  1980:13).  "appropA  raison  t o make judgements to  a s s i s t i n the r e s o l u t i o n of such p o l i t i c a l The  may  the  conflicts.  f a c t o r which e s t a b l i s h e s p o l i t i c a l r e l a t i o n s i n  21  the u n i v e r s i t y s e c t o r i s the s c a r c i t y of resources support  institutional  activities.  consequences of t h i s s c a r c i t y . determination appropriated decision  of  the  f o r the  made by  competitive  total  claims  In the  amount  universities  the  There  government  of other  are  first  of  public  the  two  resources  day  is a in  create  a  s i t u a t i o n f o r r e s o l u t i o n by the The  implication  intermediary  the  government  of i t s  This  or  the  system  the  and  to  for  to make i t s own  provision  the of  political  for  perception  responsibility  employ  its  to  for  information  in  to  develop i t s  own  analyses  information  in  order  for  d e c i s i o n s i s not e a s i l y  in  a  which  s e r v i c e maintains  virtual  monopoly  resources support  may of  cause its  of  T h i s r e s u l t s from the  exercises a  an  satisfied.  control  monopoly  on  over  much  i n f o r m a t i o n r e q u i r e d f o r the e v a l u a t i o n of t h a t s e r v i c e . competition  the  submissions of e i t h e r  intermediary  relations  bureaucracy a  or  decision-making.  intermediary-university  that  institutional  environment  This  i n f o r m a t i o n i s h e l d by the i n s t i t u t i o n s . fact  subsequent  independent  upon the  universities.  obliges  requirement  intermediary  the  t h i s i s made more d i f f i c u l t because i t cannot  objectivity  information  support  In  political  f o r f e a r of b i a s , s o l e l y  maintain own  this  of  intermediary.  i s t h a t i t must develop an  of the i s s u e s and rely,  of  competitive  be  political  p u b l i c s e c t o r s . In the  second  basic to  light  a l l o c a t i o n of t h i s amount among the u n i v e r s i t i e s , self-interests  political  i n s t a n c e the  collectively of  a v a i l a b l e to  a bureaucracy  objectives,  the  to  of  the the  While release  adversarial  22  nature  o f the c o m p e t i t i o n  information w i l l  does not n e c e s s a r i l y ensure t h a t such  be i n a form capable  of comparative a n a l y s i s  by the i n t e r m e d i a r y . To  a significant  degree  this  presentation  o f the u n i v e r s i t i e s '  where  of  lack  comparability  i s indeed operating  prevents  the case requests  i n the i n B.C.  inter-institutional  a n a l y s i s i n many areas. In such circumstances to  request  section  information,  the i n t e r m e d i a r y  as does  6 9 j ) , but i t i s o f t e n  claims concerning  the C o u n c i l  the d i f f i c u l t y  assume the onus f o r f o r m u l a t i n g detailed  budget  level  o f response  information.  prevailing  Perry  (University Act,  f r u s t r a t e d by the i n s t i t u t i o n s ' i n p r o v i d i n g i t i n comparative  form. A d d i t i o n a l l y , an i n t e r m e d i a r y  a  may have the power  i s handicapped  information  requests  i n the absence has  succinctly  i f i t must requiring  o f comparative described  the  situation:  Is there a way o f o r g a n i z i n g the data about the three u n i v e r s i t i e s . . . i n such a way t h a t important ' d i f f e r e n c e s ' c o u l d be spotted r e a d i l y and judgements made? Take, f o r example, the budget i n f o r m a t i o n . . .Would i t be p o s s i b l e t o transform the 'dollar totals' into recognizable ' p o l i c y - i n d i c a t o r s ' , so t h a t C o u n c i l members c o u l d g a i n t h e i r own p e r s p e c t i v e s o f the way the u n i v e r s i t i e s appear to be managing their financial affairs? And when financial requests are submitted along with new and emergent programs, would i t be p o s s i b l e f o r the C o u n c i l t o assess the reasonableness o f the estimated, a d d i t i o n a l , operating funds? This has been a somewhat inexact decision-making area. ( C o u n c i l Document* 15) To improve the C o u n c i l ' s a b i l i t y t o make b e t t e r use o f the information provided,  Perry has suggested the f o l l o w i n g g e n e r a l  *For any " C o u n c i l Document" r e f e r e n c e see B i b l i o g r a p h y l i s t i n g : U n i v e r s i t i e s C o u n c i l o f B r i t i s h Columbia (UCBC) Documents.  23  approach: By t r a n s f o r m i n g the b a s i c d o l l a r - r e v e n u e equals d o l l a r expenditure relationship into appropriate analytical forms, i t i s p o s s i b l e t o b r i n g p o l i c y d e c i s i o n s i n t o view, whether they affect admission qualifications, tuition f e e s , remuneration o f f a c u l t y and s t a f f , support s e r v i c e s , and so on. The fundamental r e l a t i o n s h i p o f e q u a l i t y between income and outgo remains c o n s t a n t , but a t t e n t i o n is directed towards the s p e c i f i c decisions that are involved i n maintaining that r e l a t i o n s h i p . . . I n s o f a r as f i n a n c i a l data are concerned, i s proposed i s :  s p e c i f i c a l l y what  t h a t a l l aggregate d o l l a r data presented t o the UCBC should be transformed i n t o a compatible u n i t form by 1) p u t t i n g the data i n terms o f a per f u l l - t i m e e q u i v a l e n t (FTE) student, and 2) a l s o showing the data i n terms o f a per f u l l - t i m e (FTE) f a c u l t y member. ( C o u n c i l Document 15) Such t r a n s f o r m a t i o n s  have been undertaken  a t C o u n c i l and  the e x i s t i n g i n f o r m a t i o n i s being brought i n t o compatible Yet  an i n t e r m e d i a r y cannot alone be expected  evaluative  questions  i n f o r m a t i o n system. in  these  how  to  power  operating  allocate  a  better  f o r the i n t e r m e d i a r y  institution  devolves  grants  ("...a allocated  amongst  can best  In B.C., the U n i v e r s i t y A c t indeed  Council  resources  accepts the  internal  or  grants  of  its  o f judgement  governmental operating  development  t h a t an autonomously governed  constituencies. that  the  t o answer a l l i t s  The u n i v e r s i t y has a d e f i n i t e r o l e t o p l a y  judgemental matters  assumption judge  through  form.  t o the u n i v e r s i t i e s interference university  with  by p r o s c r i b i n g general  i s not r e q u i r e d  to a university  purpose t o use  f o r any p a r t i c u l a r  aspect o f i t s o p e r a t i o n s , " S e c t i o n 6 9 f ) . Accordingly  the onus f o r p r o v i d i n g i n f o r m a t i o n about the  f o r m u l a t i o n and r e s u l t s o f those judgements r e s t s a p p r o p r i a t e l y  24  w i t h the i n d i v i d u a l i n s t i t u t i o n s . for  example,  respecting  the  the  University  policies,  which  i t s d e c i s i o n s are  which  i n d i c a t e the  In i t s annual budget r e p o r t ,  of  Toronto  plans,  assumptions  founded.  general  presents and  information  judgements  I t also provides  d i r e c t i o n s of  the  guidelines  budget  ment, t h a t i s , the g e n e r a l p o l i c i e s , procedures and to  be  followed  provides  i n developing  the context  1982:1).  It  requires  as  institutional financial is  formulating besetting  fair an  a  kind  to  and  which  therefore  information  for  conclude  that  independent p e r c e p t i o n  base  priorities  ( U n i v e r s i t y of Toronto, of  basis  and  develop-  its  which  an  evaluation  of  purposes  of  requirements.  universities  information  budget  f o r budget review  i s precisely this  intermediary  It  the  on  an  for of  intermediary  develop  an  the  the  must  internal  financial maintain  capacity  issues its  to  own  analyze  t h i s i n f o r m a t i o n . I t must a l s o persuade the u n i v e r s i t i e s to the extent  possible  financial  disclose relevant  formulation  perception  of  the  by  constrained  by  to  types  about  D o b e l l and of  intermediary  the  decisions  of  financial  limitations  an  their  independent  requirements of  the  is,  available  former i n i t s d e c i s i o n s to  among the p u b l i c s e c t o r s and  government  sector.  about  se. T h i s f a c t o r a f f e c t s both government  i n t e r m e d i a r i e s , the  resources  an  universities'  a n a l y t i c a l methods per and  information  decision-making.  The  however,  to  the  requirements  appropriate  the l a t t e r i n i t s advice of  the  higher  education  Zussman have observed t h a t i n making there  is  an  "unavoidable  these  absence  of  25  definitive (Dobell, services  criteria  for  1981:415). are  resolving  Methods  generally  problems  employed  subject  to  of  to  serious  public  choice"  evaluate  public  l i m i t a t i o n s . Drury  states: e v a l u a t i o n i s s u b j e c t to a n a l y t i c a l l i m i t s a r i s i n g out the l a c k of a n a l y t i c a l c r i t e r i a or r e l e v a n t i n f o r m a t i o n guide the key choices to be faced. ( D o b e l l , 1981:404) In  commenting on  the  i n government D o b e l l not  r e s u l t s of  program e v a l u a t i o n  observes t h a t  argue t h a t e v a l u a t i o n  "even the most d e d i c a t e d  ( D o b e l l , 1981:406).  f a c t o r s have been o f f e r e d i n e x p l a n a t i o n  including,  for  example,  lack  problems of  implementation  information  needs.  A  undertaken do  e f f o r t s have l e d to d e c i s i v e r e s u l t s  or s i g n i f i c a n t government a c t i o n " of  of to  of  and  more  agreed  this situation  theory  m i s d e f i n i t i o n of important  however, i s the f a c t s t a t e d by  of  A number  and the  purpose, nature  contributing  of  factor,  Zussman t h a t :  there has never been any demonstrable link between performance, measured by efficiency and productivity i n d i c a t o r s , and l e v e l s of compensation... at the e x e c u t i v e l e v e l e i t h e r i n the p r i v a t e or p u b l i c s e c t o r . ( D o b e l l , 1981:408) In  the  university  sector  evaluation process i s l i k e l y context  and  designed  undertaking institutions.  it  it  to be  is  than  For, as D o b e l l  to  say  performed i n an  to maximize the  rather  fair  to  cause of analyze  the any  that  any  adversarial institution system  of  notes,  Within such a framework of advocacy the bureaucratic i n c e n t i v e s do not press i n the d i r e c t i o n of c o n t i n u i n g s e a r c h i n g e v a l u a t i o n . ( D o b e l l , 1981:413) It  is  conduct  indeed such  a a  brave process,  university and  a  administration  braver  one  still  that  would  that  would  26  release  the  evaluative  negative r e s u l t s  results  when  the  chances  are  that  i n terms of the i n s t i t u t i o n ' s performance  may  w e l l r e s u l t i n a r e d u c t i o n i n funding. D o b e l l concludes  that:  e v a l u a t i o n to a p p r a i s e the continued v a l i d i t y of program g o a l s , p r o d u c t i v e e f f i c i e n c y and resource c o s t s r e q u i r e s useable knowledge...But useable knowledge i n t h i s context will not, in general, come from the evaluation processes...or indeed, from any e s t a b l i s h e d body of conventional technique based on generally acceptable p r o f e s s i o n a l p r i n c i p l e s . ( D o b e l l , 1981:418) T h i s usable knowledge takes the form of v a l u e s , p e r c e p t i o n s political  judgements, o f t e n supported  determined  by,  arise  an  accommodation made to the  approaches.  for  but  not n e c e s s a r i l y  evaluation information. I t i s clear  there must be analytical  by,  an  Under  intermediary  these  limits  can  known about u n i v e r s i t y f i n a n c i a l decision-making to  which  expected  formal  evaluation  budget  that  imposed  by  questions  reasonably  be  and the degree  information  can  be  to p r o v i d e such knowledge.  SUMMARY OF THE  The  preceding  normative  role  relations  discloses  consideration financial First, mate  of  then  circumstances  r e s p e c t i n g what  and  of  IMPLICATIONS FOR  review an  of  the  following  i n the examination  INTERMEDIARY  literature  intermediary the  AN  in  concerning  the  government-university  three  implications  of the U n i v e r s i t i e s  for  Council's  decision-making. both  interests  government in  higher  and  universities  education  and  maintain  the  legiti-  potential  for  27  conflict  gives  intermediary wholly  rise  to  the  constitutional  an  intermediary's  body. Hence,  c h a r a c t e r i z e d as  one  of  advocacy  role  to both  parties.  must  f o r the  nor of agency f o r the government because an responsibility  invention  of  an  not  be  universities  intermediary  bears  I t must, t h e r e f o r e , develop  an  independent p e r c e p t i o n of the i s s u e s i n i t s decision-making. Second, intermediary  in  order  to  r e q u i r e s an  gain  an  independent  independent  i n c l u d e s knowledge about the  viewpoint  information  interests  i n and  an  system which  policies  f o r the  o p e r a t i o n s of higher e d u c a t i o n which are h e l d by the government and the  universities.  Third,  there  is  a  limitation  a n a l y t i c a l methods on the extent decision-making Summed up,  can be the  posed  about  pursuit  of  them  because  the  i s obliged  their  interests  i n higher  and  education.  dynamics  of  the  to  d e c i s i o n s taken  Persuasion  the  is  environment  of  public  oblige into  an  intermediary  its  confidence  processes  in  the  through  persuasion  in  necessary works  in  limitations  sector  to b r i n g the major p a r t i e s at and  both  and d i s c l o s e t h e i r  analytical  evaluation  financial  persuade  other ways a g a i n s t such d i s c l o s u r e . The formal  available  analysed.  intermediary  political  the  to which u n i v e r s i t y  government and the u n i v e r s i t i e s to formulate perceptions  by  seek  further interest "useful  knowledge" from them. I t i s c l e a r t h a t the i n t e r m e d i a r y ' s u s e f u l n e s s i n a d v i s i n g the  government  universities  about  depends  the upon  financial two  primary  requirements functions:  of  the  (i) i t s  28  success  in  knowledge" into  a  the and  use  of  persuasion  (ii) i t s ability  defensible  to  gain  t o develop  independent  perception  this  "useable  this information of  the  financial  issues.  UNIVERSITY COSTS AND  The  examination  performance  of  of  its  government-university  an  behaviour  approach employed by requirements of the Within  the  relations  places an  institutions  of  requires  an  reason  limitations  i s that  upon  implications  intermediary. used i n t h i s Garvin behaviour this  The  the  role  in of  university  the  analytical the funding  institutions.  relations,  which  higher  environment  are  i t has  for  the  work of two  government-  universities  peculiar  education.  of  This  to  section  evaluative  scholars,  operate  in  roles  as  attempts  to  their  d e f i n e and e x p l a i n t h i s behaviour w i t h p a r t i c u l a r the  in  understanding  i n t e r m e d i a r y t o determine  general p o l i t i c a l  patterns  decisions  decision-making  c o s t s . The  intermediary-university financial  intermediary's  financial  the nature of u n i v e r s i t y financial  FINANCIAL BEHAVIOUR  reference to  function  of  an  G a r v i n and  Bowen, i s  model  university  analysis. has  developed  involving  model, two  the  factors  the u n i v e r s i t y ' s u t i l i t y  an  concept are  economic of  utility  involved  function.  i s d e f i n e d as "goal consensus".  The  i n the  of  maximization.  In  d e t e r m i n a t i o n of  f i r s t underlying factor  For a u n i v e r s i t y which has  two  29  s e t s o f decision-makers, the a d m i n i s t r a t i o n consensus  on goals  function.  i s necessary  The second  activities  which  f o r i n c l u s i o n i n the u t i l i t y  factor follows  enhance  an  and the f a c u l t y , a  logically  organization's  i n that  "those  probability  of  s u r v i v a l are l i k e l y t o be pursued". Having utility  s e t out  function,  including  three  Garvin  pursuit  of p r e s t i g e  i n that  and  individual  requirement  underlying  proceeds  to define  institutional  a that  citing  satisfies  faculty a  f u n c t i o n as  prestige*,  supporting  studies,  the requirement  i t i s a f e a t u r e o f the a c t i v i t i e s  as  university's  student  quantity.  explains,  goal  factors  components:  q u a l i t y and student Garvin  the  members.  means  because  prestigious  attract  more r e s e a r c h  student  fees.  of  It  ensuring  institutions  also  that  o f a consensus o f departments  meets  the  institutional  and f a c u l t y members  and o p e r a t i n g  the  second  survival tend  income through grants  to and  Student q u a l i t y i s a l s o sought as a g o a l o f i n s t i t u t i o n a l prestige.  Students who are more h i g h l y q u a l i f i e d  academically  r a i s e the l e v e l o f graduate and r e s e a r c h work, c o n t r i b u t e t o a more  stimulating  tion's reputation.  teaching  s i t u a t i o n and enhance  Those t h a t become recognized  * The sense o f i n s t i t u t i o n a l p r e s t i g e f o l l o w i n g o b s e r v a t i o n by C h r i s t o p h e r quoted by G a r v i n : The t y p i c a l p r e s i d e n t ' s g r e a t e s t is usually to 'strengthen o p e r a t i o n a l l y t h i s turns out t o of even g r e a t e r competence and p r e s e n t . (Garvin, 1980:22) 1  an  institu-  scholars  i s captured i n the Jencks and David Riesman ambition f o r the f u t u r e his institution, and mean assembling s c h o l a r s r e p u t a t i o n than are now  30  r e f l e c t w e l l on Garvin's  t h e i r teachers'  university  utility  representative  of  service  involves  which  public.  prestige.  function  institutional  Increased  is  greater  also  third  student  commitment  granting  enrolment  The  to  factor in  quantity  a philosophy  accessibility  tends  to  government r e s o u r c e s i n both the o p e r a t i n g  and  to  attract  in  trade-offs  for  example,  in  the  c a p i t a l sectors.  i s noted, however, t h a t expanded student numbers may quality,  of  greater  It  in  as  lowered  result  admission  standards. These quality  three  and  factors,  student  institutional  quantity,  comprise  prestige,  the  utility  student function  which u n i v e r s i t i e s attempt to maximize i n t h i s economic model. Garvin  contends  that  university  resource a l l o c a t i o n s can  be  to  equate  calculations  marginal  costs  which to  financial  behaviour  regarding  the  according  i n t e r p r e t e d by  determine  marginal  the  model  utility  optimal  value  trade-offs  in  and the  f o l l o w i n g manner: In u t i l i t y terms: f o r example, the h i r i n g of an eminent l i t e r a r y s c h o l a r may be deemed more important than t h a t of a p r e s t i g i o u s geographer because of the g r e a t e r c o n t r i b u t i o n to o v e r a l l i n s t i t u t i o n a l p r e s t i g e made by the former, w h i l e i n monetary terms, a p r e s t i g i o u s b i o l o g i s t may be considered more d e s i r a b l e than an e q u a l l y prestigious mathematician because of the former's a b i l i t y to tap a l a r g e r p o o l of o u t s i d e g r a n t s . (Garvin, undated:10) While Garvin's u t i l i t y cally  logical  universities rapidly admits  when that  quality at it  the is  helps  explain  broadest  level,  i t s a t t r a c t i o n diminishes  applied a  joint  to  specific  supplementary way  with  the  a theoreti-  which  i t i s but  some undefined but  maximization model has  real  view  collegial,  to  behaviour  cases. be  of  Garvin  applied  bureaucratic  in and  31  p o l i t i c a l models developed by o t h e r s . The  concept  model's s t r e n g t h s utility  of u t i l i t y  maximization  and weaknesses.  embodies  example, c i t e d  tion  would  hiring item  from d i f f e r i n g be  a  fields.  trade-off  For example, i t  above, t h a t the t r a d e -  o f f s i n f a c u l t y h i r i n g d e c i s i o n s are focused scholars  on two p r e s t i g i o u s  A more r e p r e s e n t a t i v e  c a l c u l a t i o n between  situa-  the c o s t s  the f a c u l t y member and the c o s t s o f reducing  o f expenditure  the  The l a t t e r a r i s e because the  f u n c t i o n i s d e f i n e d too r e s t r i c t i v e l y .  i s u n l i k e l y , i n Garvin's  both  of  some other  i n the department o r f a c u l t y i n which the  appointment i s t o be made.  In t h i s case the u n i v e r s i t y would,  typically,  both  attempt  Alternatively first  option  more  revenue  i t can be a l s o would  Indeed  prestigious  suggested  be t o e x p l o r e  i n order  without having all.  to h i r e  t o take  f a c u l t y members.  that  the u n i v e r s i t y ' s  the p o s s i b i l i t y on  the d e s i r e d  t o make any r e c i p r o c a l expenditure Garvin  in a  footnote  of  implicitly  new  raising faculty  trade-off at  recognizes  the  d e s i r a b i l i t y o f t h i s o p t i o n when he quotes Anthony Downs: Growth tends to reduce internal conflicts i n an o r g a n i z a t i o n by a l l o w i n g some (or a l l ) o f i t s members t o i n c r e a s e t h e i r p e r s o n a l s t a t u s without lowering t h a t o f others. Therefore, organizational leaders encourage expansion t o maximize morale and minimize internal conflicts. Every bureau's environment changes c o n s t a n t l y , thereby s h i f t i n g the r e l a t i v e importance o f the s o c i a l f u n c t i o n s performed by i t s v a r i o u s p a r t s , and resources a p p r o p r i a t e t o each p a r t . Such s h i f t s w i l l be r e s i s t e d by the s e c t i o n l o s i n g r e s o u r c e s . But these d i s s e n s i o n s can be reduced i f some s e c t i o n s are given more resources without any l o s s e s being experienced by o t h e r s , (emphasis added) (Garvin, 1980:47) This function  suggestion should  raises  be expanded  the p o s s i b i l i t y to include  that  a revenue  the u t i l i t y generation  32  factor:  namely, t h a t  institutional  a university  prestige,  to  i n i t s attempts  attract  highly  qualified  and more of them, seeks t o maximize i t s revenues these g o a l s because the c o s t s o f these e f f o r t s by the revenues A  revenue  concept  generation  entitled  "the  to accomplish are  determined  factor  i s advanced  by  revenue theory of c o s t " .  Bowen  in  a  I t means t h a t  of a u n i v e r s i t y the g r e a t e r the c o s t s ,  i n s t i t u t i o n s r a i s e a l l the money they can and spend i t a l l .  Bowen s theory and 1  number and,  students  available.  the g r e a t e r the revenues for  to increase  of  the  i t s underlying p r i n c i p l e s  large-scale theory  cost  s t u d i e s on  t h e r e f o r e , has  the  are based  American  advantage  upon a  universities over  Garvin's  model of an e m p i r i c a l b a s i s . Bowen suggests t h a t there i s a s e t o f laws which e x p l a i n s the f i n a n c i a l behaviour of u n i v e r s i t i e s , namely, t h a t : 1)  the  dominant  goals  of  e x c e l l e n c e , p r e s t i g e and 2)  a  university  are  educational  influence;  i n the quest f o r these g o a l s "there i s v i r t u a l l y to  the  amount  seemingly  of  fruitful  money  an  institution  educational  needs  could (and  no  limit  spend  for  expenditures  once admitted i n t o the budget become long term commitments from which i t i s d i f f i c u l t ever to  withdraw)";  3)  each i n s t i t u t i o n r a i s e s a l l the money i t can;  4)  each i n s t i t u t i o n spends a l l i t r a i s e s  (except f o r p o s s i b l e  accumulation of s m a l l r e s e r v e s and endowments); 5)  the cumulative e f f e c t of the p r e c e d i n g f o u r laws i s toward ever  increasing  expenditure  (with  no  incentives  to  33  parsimony or e f f i c i e n c y ) . These  laws  partially  (Bowen, 1980:19)  illustrate  the  dynamics  of  the  p o l i t i c a l environment of government-university r e l a t i o n s . T h e i r operation  establishes  the  competitive  behaviour  for  financial  resources. The  implication  expenditures  cannot  institutions  but  limits.  As  improved  is  be  constraints  expected  rather  will  Bowen p o i n t s  efficiency  that  out  to  emanate  result  from  better  measures such as energy c o n s e r v a t i o n  university  from  within  externally  with respect  through  in  the  imposed  to the  argument f o r  management  techniques,  actions, etc.  ...might reduce c o s t s , but they would do so only i f revenues were cut commensurately. I f revenues were not so reduced, any saving would simply be expended elsewhere i n the i n s t i t u t i o n and no net saving would occur. U n i t c o s t s are determined not by changes i n e f f i c i e n c y but by changes i n revenues. (Bowen, 1980:17) This  point  British  can  illustrated  Columbia. Under the  accordance w i t h tion  be  in  University  of  British  of  has  and  university  a duty  knowledge"  Columbia*  i t s statement of m i s s i o n  the  U n i v e r s i t y Act  i t s resources  a l l branches  in  has  has  system  of  each u n i v e r s i t y i n  "to p r o v i d e  [Section  instruc-  46(b)].  acknowledged t h i s  duty  observed l e g i t i m a t e l y t h a t  The in the  f u l f i l l m e n t of such a r e s p o n s i b i l i t y r e q u i r e s the u n i v e r s i t y to ensure among other and  develop  things  faculty  of  " t h a t every e f f o r t i s made to the  highest  quality"  (UBC,  recruit  1979:25).  T h i s view accords w i t h Garvin's p r o p o s i t i o n t h a t the p u r s u i t of *UBC i s s e l e c t e d f o r i l l u s t r a t i v e purposes only; e i t h e r the U n i v e r s i t y of V i c t o r i a or Simon F r a s e r U n i v e r s i t y c o u l d be s u b s t i t u t e d to make the p o i n t e q u a l l y w e l l .  34  prestige, part law  i n t h i s case " f a c u l t y  o f UBC s  utility  1  that  function.  the amount o f money  legitimate  academic  highest q u a l i t y virtually  o f the h i g h e s t q u a l i t y , "  i l l u s t r a t e s Bowen s 1  an i n s t i t u t i o n c o u l d  purposes,  faculty  I t also  i n this  forms  case  to  spend f o r secure  the  t o teach a l l branches o f knowledge, i s  l i m i t l e s s . Under  such  conditions  one would  have t o  look elsewhere f o r grounds on which t o expect UBC t o acquiesce i n , much l e s s  t o propose, any a c t i o n  whose e f f e c t would be t o  reduce i t s a b i l i t y t o o f f e r new and e n r i c h e d programs taught by highly be  qualified  fairly  faculty.  circumstances university  for "half  the  I t follows  i n which  from t h i s p o s i t i o n  one  action  could  could  expect  that  the only  voluntary  inter-  academic c o o p e r a t i o n a t the i n s t i t u t i o n a l l e v e l are  i n which an i n d i v i d u a l  count  such v o l u n t a r y  argued t o be tantamount t o a b d i c a t i o n by UBC of i t s  duty and m i s s i o n .  those  In f a c t  a loaf".  In such a s i t u a t i o n  on the u n i v e r s i t i e s  well-being  university  of  the  has decided  an i n t e r m e d i a r y  t o promote a c t i o n s  system  of  to s e t t l e cannot  on the b a s i s o f  universities  because  such  d e c i s i o n s may have an adverse e f f e c t on the s e l f - i n t e r e s t o f an individual on  i n s t i t u t i o n . Hence the onus i s l i k e l y t o f a l l mainly  the i n t e r m e d i a r y t o make judgements on b e h a l f o f the u n i v e r -  sities collectively. Under  these  respecting First,  conditions  the f i n a n c i a l  i t  is  there  are  decision-making  unrealistic  to  two  implications  o f an  intermediary.  the  universities  expect  i n d i v i d u a l l y t o develop budget requests based upon reduced  overall  expenditures  (inflation  voluntarily  aside).  Such  35  reductions, only  i f sought,  when the p r o v i n c e  operating  grant,  mediary p r o v i d e s Second, revenues that  will  come  about  appropriates  for a l l universities  a reduced  general  purpose  o r a t an i n d i v i d u a l u n i v e r s i t y when an i n t e r a reduced a l l o c a t i o n o f funds.  i f a  i t must  university  assume  requests  additional  operating  the r e s p o n s i b i l i t y f o r demonstrating  the r e s u l t i n g i n c r e a s e d  unit  cost  will  affect  favorably  the performance o f the i n s t i t u t i o n . There  are s e v e r a l  intermediary  that  flow  other  implications  from  Bowen s b a s i c  f o r the r o l e o f an findings  1  about  how  much u n i v e r s i t i e s c o s t and how much they should  c o s t . The four  findings  the  following  their  internal  relevant  to  this  study  relate  to  matters: 1)  the d i v e r s i t y  of  university  costs  and  institutional allocations; 2)  the b a s i s o f "need" i n u n i v e r s i t y c o s t s ;  3)  the r e l a t i o n between e d u c a t i o n a l  4)  the g u i d e l i n e s f o r what higher  These f i n d i n g s w i l l now be d e s c r i b e d  c o s t and outcomes; and  education  should  cost.  in detail.  D i v e r s i t y of Cost In  attempting  t o answer the q u e s t i o n  concerning  how much  36  universities  spend  i n terms  of educational  cost*  Bowen  t h a t "amazing" and s u b s t a n t i a l c o s t d i f f e r e n c e s p e r s i s t t o t a l per student  c o s t o f u n i v e r s i t y education  found i n the  and t h a t  differences i n expenditures remain even when only e d u c a t i o n a l c o s t s are c o n s i d e r e d and when the i n s t i t u t i o n s being compared seem t o have s i m i l a r m i s s i o n s , l o c a t i o n and s i z e and t o be r e n d e r i n g s e r v i c e s o f s i m i l a r q u a l i t y . (Bowen, 1980:114) He concludes  t h a t such d i v e r s i t y  i n u n i t c o s t s , t h a t i s i n the  expenditures  o f u n i v e r s i t i e s per student  can only be e x p l a i n e d  i n terms o f the revenue theory o f c o s t . Bowen a l s o f i n d s t h a t among comparable  institutions  the d i f f e r e n c e s among institutions i n the way they a l l o c a t e t h e i r resources i n t e r n a l l y are a l s o remarkable. On the b a s i s o f the data, one i s hard put t o i d e n t i f y a pattern of a l l o c a t i o n that could be c a l l e d normal. (Carnegie C o u n c i l , 1980:414)) This  great  diversity  i n educational  expenditures  both i n  terms o f the amounts spent and the a l l o c a t i o n o f the amounts suggests determine  that what  there  i s no e m p i r i c a l l y based  particular  universities  general  cost.  model t o  Bowen's  basic  t h e s i s i s t h a t the c o s t s are i n e x t r i c a b l y r e l a t e d t o what the * Bowen d e f i n e s e d u c a t i o n a l c o s t : E d u c a t i o n a l c o s t r e f e r s t o c u r r e n t expenditures after excluding outlays f o r organized research and p u b l i c s e r v i c e , a p r o r a t e d share o f overhead c o s t a t t r i b u t a b l e t o r e s e a r c h and p u b l i c s e r v i c e , and o u t l a y s f o r the operat i o n s o f a u x i l i a r y e n t e r p r i s e s such as r e s i d e n c e h a l l s , d i n i n g f a c i l i t i e s , student unions and t e a c h i n g h o s p i t a l s . What remains a f t e r these e x c l u s i o n s i s c u r r e n t expenditures f o r the education o f students. These include o u t l a y s f o r i n s t r u c t i o n and departmental r e s e a r c h , student s e r v i c e s , student f i n a n c i a l a i d p a i d from i n s t i t u t i o n a l funds, and a p r o r a t e d p o r t i o n o f expenditures f o r academic support f a c i l i t i e s such as l i b r a r i e s , computers, administration and p l a n t operation and maintenance. This remainder i s c a l l e d e d u c a t i o n a l c o s t . (Bowen, 1980:115)  37 universities  decide to  spend  the amount a v a i l a b l e f o r  (which, i n t u r n  i s determined  by  expenditure).  Need The  determination  based on  of  u n i t costs  a rather i l l - d e f i n e d  in universities is  concept of  "need".  But  often  as Bowen  observes on the need argument: To conduct education of a s a t i s f a c t o r y q u a l i t y . . . a c e r t a i n r a t i o of f a c u l t y to student, or an a p p r o p r i a t e salary scale...etc. are needed...Because higher education is conducted at so many d i f f e r e n t l e v e l s of expenditure and w i t h so many d i f f e r e n t a l l o c a t i o n s of r e s o u r c e s , however, there i s no p r e c i s e need t h a t can be o b j e c t i v e l y d e f i n e d and defended. (Bowen, 1980:16) This  finding  suggests  b a s i s f o r a request to  demonstrate  financial position rather  f o r funding  that  a benefit  resources. to  make  that  An  to  argue  need  as  a  the onus i s upon the u n i v e r s i t y can  be  a t t r i b u t e d to  intermediary  decisions  than upon the  i n order  based  ill-defined  would  upon  then  comparative  concept of  need. An  increased be  in  a  benefits alterna-  t i v e approach to d i s c e r n i n g a more o b j e c t i v e e v a l u a t i o n of need would a l s o p l a c e tions.  This  would  "needs" which can potentially  the  onus f o r demonstration upon the involve  be  the  pursued by  a v a i l a b l e resources  determine the  priority  notion  of  institu-  trade-offs  establishing constraints and  asking  of t h e i r needs - and  the  among upon  u n i v e r s i t i e s to  hence to d e f i n e  a  degree of need.  Outcomes Bowen observed t h a t the  r e l a t i o n between e d u c a t i o n a l  cost  38  and outcomes i s tenuous: so l i t t l e i s known about the r e l a t i o n s h i p between the amount of resources and e d u c a t i o n a l outcomes. The depth of t h i s ignorance i s i n d i c a t e d by the almost u n i v e r s a l tendency to judge i n s t i t u t i o n a l r e s u l t s or q u a l i t y i n terms of i n p u t s r a t h e r than outputs and to assume without evidence (emphasis added) t h a t more i n p u t s somehow w i l l inevitably produce commensurately greater or better r e s u l t s . (Bowen, 1980:121) The  i n d i c a t i o n s , however,  relatively  are  that  increments  of  money  yield  small i n c r e a s e s i n outcomes f o r  . . . i n s t i t u t i o n s w i t h about the same f i n a n c i a l resources apparently produce q u i t e d i f f e r e n t e d u c a t i o n a l r e s u l t s . So i t must be e v i d e n t t h a t there i s more to e x c e l l e n c e i n education than money and t h a t i t behooves i n s t i t u t i o n s to l e a r n to be more e f f i c i e n t i n c o n v e r t i n g resources i n t o e d u c a t i o n a l b e n e f i t s . (Carnegie C o u n c i l , 1980:416) i n s t i t u t i o n s know l i t t l e about the r e l a t i o n s h i p between t h e i r expenditures and t h e i r e d u c a t i o n a l outcomes, and i t is easy to drift i n t o the comfortable belief that increased expenditures will automatically produce commensurately g r e a t e r outcomes. Under these c o n d i t i o n s , the u n i t c o s t s of o p e r a t i n g . . . u n i v e r s i t i e s are s e t more l a r g e l y by the amount of money i n s t i t u t i o n s are able to r a i s e per u n i t of s e r v i c e rendered than by the i n h e r e n t t e c h n i c a l requirements of conducting t h e i r work. (Bowen, 1980:15) and The c o n c l u s i o n s from the s e v e r a l attempts to c o r r e l a t e i n s t i t u t i o n a l expenditures w i t h e d u c a t i o n a l performances are h i g h l y t e n t a t i v e . . . n e v e r t h e l e s s some modest r e f e r e n c e s are s u f f i c i e n t l y p l a u s i b l e to put the burden of proof on those who would d i s p u t e them. (Bowen, 1980:166) Bowen's  findings  about  the  relation  between  educational  c o s t and outcomes i n c l u d e the f o l l o w i n g : 1)  i n s t i t u t i o n a l a f f l u e n c e i s probably c o r r e l a t e d w i t h e d u c a t i o n a l outcomes i n the sense t h a t , w i t h many e x c e p t i o n s , a f f l u e n t i n s t i t u t i o n s appear to generate g r e a t e r outcomes than impecunious i n s t i t u t i o n s ;  2)  the c o e f f i c i e n t s of c o r r e l a t i o n between u n i t c o s t and outcomes are not very i m p r e s s i v e . The v a r i a n c e among institutions is substantial. Clearly some i n s t i t u t i o n s of lower c o s t perform as w e l l as or  39  b e t t e r than other i n s t i t u t i o n s o f higher c o s t and these c o s t d i f f e r e n c e s are i n many cases s u b s t a n t i a l ; 3)  His  i t seems l i k e l y (though not proven) t h a t i n c r e a s e i n expenditures per student u n i t are c o s t - e f f i c i e n t though seemingly s m a l l , when the b e n e f i t s are c o n s i d ered as a c c r u i n g over the l i f e t i m e o f the students. Small percentage increases i n b e n e f i t s may well j u s t i f y s u b s t a n t i a l expenditures. (Bowen, 1980:116)  conclusions  intermediary's  on  these  evaluative  findings  are  important  f o r an  function:  These c o n c l u s i o n s , even though t e n t a t i v e , a r e of the utmost significance. They imply that many affluent i n s t i t u t i o n s c o u l d perform as w e l l , o r n e a r l y as w e l l , w i t h l e s s money o r t h a t many i n s t i t u t i o n s c o u l d achieve g r e a t e r r e s u l t s w i t h the same money. They imply a l s o t h a t increases i n a f f l u e n c e do not a u t o m a t i c a l l y result i n improvements i n performance, as i s so o f t e n claimed. Yet, they do suggest t h a t on the average, but w i t h many e x c e p t i o n s , money does make a d i f f e r e n c e . As the Carnegie Commission concluded... "To suggest t h a t d i f f e r e n c e s i n expenditures per student are l a r g e l y e x p l a i n e d by v a r i a t i o n s i n the r e l a t i v e c a p a c i t i e s o f c o l l e g e s and u n i v e r s i t i e s t o a t t r a c t income i s not t o deny t h a t r e l a t i v e l y high expenditures f o r students are l i k e l y t o be a s s o c i a t e d w i t h comparatively high q u a l i t y . . .But t h i s does not necessarily mean that cost differences among i n s t i t u t i o n s - or among p a r t i c u l a r programs w i t h i n institutions - invariably reflect differences i n q u a l i t y . " (Bowen, 1980:167) There are o b l i g a t i o n s on the p a r t o f the u n i v e r s i t y and of the intermediary  to  relate  outcomes  to  cost.  management i s r e s p o n s i b l e  f o r the d e c i s i o n s  in  outcomes  the  producing costs.  quality  the optimal  The i n t e r m e d i a r y ' s  task  that  university's  which w i l l  result  are commensurate  with  i s t o examine the o v e r a l l  o f these management d e c i s i o n s  of the f i n a n c i a l resources  The  i n making i t s e v a l u a t i o n  r e q u i r e d t o implement the d e c i s i o n s .  Information about outcomes "expressed i n terms o f more or l e s s " are  e s s e n t i a l f o r an independent examination o f the f i n a n c i a l  40  issues.  Unfortunately  conclusion  about  for  intermediaries,  e d u c a t i o n a l outcomes  o b t a i n i n g such i n f o r m a t i o n .  He  Bowen's  does not  general  bode w e l l  for  states:  At p r e s e n t i n s t i t u t i o n s know very l i t t l e about their r e s u l t s and next to nothing about the e f f e c t s of changes i n t h e i r procedures and methods on the r e s u l t s . (Bowen, 1980:169) Guidelines In cost?"  answer Bowen s 1  to  the  f i n d i n g s are  between expenditure so  large  and  question  and  "what  higher  i n c o n c l u s i v e . The  resource  relations  should  allocation  between  and  in  i f any, terms  raises  a  advising  public  serious  problem  government  university  interest  on  system.  observations,  (Bowen,  for the  Bowen's  discussed  c h o i c e . On  t h i s p o i n t , however, the  primary  responsibility  of  criteria  charged  and  of  the  implication integrity  financial  here  and  i s that  requirements  of  the  intermediary  Zussman public  competence of the u n i v e r s i t y  c i o u s l y examine the g e n e r a l q u a l i t y of t h e i r  bear  belongs  to  specific  universities must  a the  i n t e r m e d i a r y does not  to a c t - f o r t h a t duty  the  of  determining  government. In order to a d v i s e government on the more matter  with  reinforce  Dobell  for  are  finding  requirements  conclusions  the  so  and b e n e f i t s This  intermediary  earlier, of  1980:20).  financial  regarding  the  absence  any  outcomes  system t h e r e  i n d i c a t o r s which r e l a t e expenditures  of  variance  o f f e r e d by Bowen's work  on t h i s q u e s t i o n . W i t h i n the higher e d u c a t i o n few,  great  in universities is  expenditure  tenuous t h a t there i s not much guidance  education  rely  managers and  on  the the judi-  decision-making.  41  SUMMARY OF  University the way of  of  and  AN  INTERMEDIARY  operates i n a manner which determines  u n i v e r s i t i e s perform t h e i r r o l e . The  Bowen  individual  revenue  IMPLICATIONS FOR  financing  i n which the  Garvin  their  THE  demonstrate  utility  that  functions  supported  operation  i n s t i t u t i o n being o b l i g e d  to make f i n a n c i a l d e c i s i o n s i n  light  of the b e n e f i t s  accrue to i t as an  a  discrete  which may  member  units,  of  a  system  universities  of  raise  This  the  each  as  activities.  by  maximize  in  than  generation  universities  works  results  i n s t i t u t i o n rather  universities. a l l the  Operating  money they can  as and  spend a l l they r a i s e . Two  implications  constraints  for  on u n i v e r s i t y  an  intermediary  expenditure can  follow.  only be  First,  realistically  expected to emanate from d e c i s i o n s made e x t e r n a l to the tutions,  namely by  Second, the  the  government or  onus i s on  the  universities  f o r i n c r e a s e d revenues and terms  of  demonstrably  the  i n t e r m e d i a r y or to  substantiate  these requests ought to be  favourable  insti-  effects  on  both. claims  based  in  institutional  performance. The  foregoing  have d i s c l o s e d for  studies  five points:  universities  and  pattern  exists;  ( i i i ) no p r e c i s e  the  effects  be  made; of  university (i) no  great d i v e r s i t y  normal  "need" can  of  on  funding  (iv)  resource  and no  apparent  cost  behaviour  norms  i n costs exists;  allocations objective  financial  within  ( i i ) no  universities  d e f i n i t i o n of  university  d e f i n i t i v e knowledge e x i s t s  allocation  decisions  on  exist  about  educational  42  outcomes;  (v)  no  guidelines  d e t e r m i n e what u n i v e r s i t i e s Three rely  are  ought t o  implications follow.  upon  any  determining  the  Second,  intermediary  an  generally financial  than  requests  of  universities.  on  intermediary decision-making  asserted  educational should  an  consider  about r e s o u r c e  of  focus  when  Third,  in  the  and  the  on  needs  outcomes  intermediary  empirical  requirements  rather  information  First,  should  available  to  cost.  accepted  benefits  the  currently  models  analysis  assessing absence  allocation.  of  of  financial  g u i d e l i n e s on quality  for  universities.  the  the  cannot  of  solid  cost,  an  university  43  Chapter  Three  CONCEPTS AND ANALYSIS  Having experiences the  reviewed  the p e r t i n e n t l i t e r a t u r e  on the r o l e and  o f i n t e r m e d i a r i e s i n g e n e r a l , and b e f o r e  a c t u a l experiences  of the i n t e r m e d i a r y  examining  (the U n i v e r s i t i e s  C o u n c i l ) , the focus o f a t t e n t i o n s h i f t s t o a p r e p a r a t o r y namely,  the task  of constructing  which may h e l p t o i d e n t i f y  simple,  step:  descriptive  models  some o f the elements r e c o g n i z e d t o  be present i n the i n t e r a c t i o n between government, u n i v e r s i t i e s , and  intermediary i n t h i s Province. Put  general  i n abstract enquiry  between  the  into  major  terms,  this  study  the q u e s t i o n : entities  in  a  How  i s part  of  a more  are the i n t e r a c t i o n s  small  university  a f f e c t e d when an i n t e r m e d i a r y body i s interposed?  system  In order t o  establish  reasonable  boundaries  necessary  to outline  a p o s s i b l e r e p r e s e n t a t i o n o f the network  of  i n t e r a c t i o n s i n the u n i v e r s i t y system From an h i e r a r c h i c a l  system  can be seen  t o occur  upper case l e t t e r s below). The Government  i t is  at various  first  itself.  p e r s p e c t i v e the i n t e r a c t i o n s  l e v e l are the major p a r t i c i p a n t s  1.  f o r the study,  levels.  i n the  A t the f i r s t  (the c o l l e c t i v e s , d e s c r i b e d by  Broadly d e f i n e d these i n c l u d e :  of B r i t i s h  Columbia  [the G]  -  itself  a  member o f a f e d e r a l system o f government - which i s represented by the p o l i t i c a l p a r t y , or c o a l i t i o n , c o n t r o l l i n g a t the time a majority  o f members  convenience,  i n the e l e c t e d L e g i s l a t i v e  the l a t e  Mr. W.A.C. Bennett's  Assembly. For  administration i s  44  identified  as  the present  G-^,  Mr.  Within  Mr.  D.  Barrett's  administration  as  W i l l i a m Bennett's a d m i n i s t r a t i o n as  each  government  (as  a  collective)  G, 2  and  can  also  G^.  one  d i s t i n g u i s h i n t e r a c t i o n s o c c u r r i n g at the l e v e l of the of  the  Cabinet,  of  the  involved  affairs,  Similarly,  the n o t i o n of l e v e l s of i n t e r a c t i o n can be  include  the  with  directly  university  to  and  Ministers  officials  convenience, these v a r i o u s stipulated  Premier,  Ministries indirectly  according other  to  levels  i n lower case l e t t e r s ,  affected.  their  of  with  extended  rank.  For  i n t e r a c t i o n may  such as g^ and  g .  Simply  2  be to  i l l u s t r a t e the concept, i n the sketches below the Government of B r i t i s h Columbia i s denoted as: 2.  The  G, g^,  n  2  next major e n t i t i e s are the three p u b l i c u n i v e r s i t i e s :  the U n i v e r s i t y o f B r i t i s h Columbia [S],  9"3'*'9" *  g ,  and  the  institutions enacted by  University derives  the  of  its  [U], Simon F r a s e r U n i v e r s i t y  Victoria  powers  to  [V]. function  L e g i s l a t i v e Assembly, and  collective  - to be  at  the  i n t e r a c t i o n s o c c u r r i n g at the the Senate, the P r e s i d e n t , all  be  appropriately  first  level  symbiotic  the u n i v e r s i t y - as (uppercase  the F a c u l t y , and in  lower  these statute  a  l e v e l of the Board of  designated  of  from  each has  r e l a t i o n s h i p with the Assembly. C o n s i d e r i n g a  Each  letters), Governors,  the Students case  could  letters.  U n i v e r s i t y of B r i t i s h Columbia might then be denoted as: U, ,  . . -  u n  f Simon F r a s e r U n i v e r s i t y as S,  the U n i v e r s i t y of V i c t o r i a as, V,v^, 3. the  The  f i f t h major e n t i t y i n the  U n i v e r s i t i e s Council  of B r i t i s h  s^, s , 2  s  3 *  ,  ,  s n  '  The u^, a n c i  v ,v ...v . 2  3  n  system i s the Columbia  [C] .  intermediary, Created  on  45  the  initiative  of the government  powers from s t a t u t e enacted  by  ( G ) , the C o u n c i l d e r i v e s i t s 2  the  L e g i s l a t i v e Assembly,  and,  l i k e the u n i v e r s i t i e s , i t too has a symbiotic r e l a t i o n s h i p with the Assembly. denoted by the  other  I f the C o u n c i l as a c o l l e c t i v e  C,  then  Members  the Chairman might be  identified  as  as  c ,  and  2  might then be denoted as: The  full  officials  C, c-^, c ,  interactive  designs  essential  network of the  direct  or Sketch  lines  the three u n i v e r s i t i e s ,  open  One,  Sketch  Two—Where  but  designated  Sketch  exchange  One of  each ideas  closed  communications  the i n t e r m e d i a r y C. The in  are  has  custody  there  i s only  universities, apply  of  the  one  elements  of  official  line  s u b j e c t matter  the domain of the  two  (or  are  be  administrative  S,  and  muted)  routed  intermediary.  of  the has  avenues  the  be,  intermediary).  namely, through  when the  Council  Two.  U,  two  (even though the s u b j e c t matter may the  The  c^,  V are in  only  the kept  Sketch through  s i g n i f i c a n c e of t h i s d i f f e r e n c e i s t h a t  university with  as at  of communication between  government G and in  is  system might then  d i f f e r e n c e between these  i s t h a t the  c^.  one  c^.'. .c .  2  d i s p l a y e d e i t h e r as i n Sketch One The  at l e v e l  open  for  governmental  nominally,  However,  in  communication  intermediary  C:  been nominally  the  entity  assigned  to  Sketch  Two,  open to  the  this  would  assigned  to  46  Intermediary - UCBC [C,  [U, u Government [G, g g , g lt  2  3  — g  R  ^ 2 ' ^3"**^n^  l f  ]  UBC u , u ...u ] 2  3  n  SFU [ S,  ^ ^ 2 ' ^3"**^n^  UVIC [V, v , v , v . . . v ] x  2  3  n  SKETCH ONE  Intermediary - UCBC [Cf ' " ' i ' ^" 2 ' ^"3***^n^  [U, u  Government [G, g , g / g «•.g ] x  2  3  1 #  UBC u , u 2  3  .u ] n  n  [S t  i  SFU s , ^3 2  UVIC [V, v , v , v x  SKETCH TWO  2  3  s ] n  ,v ] n  47  Using possible  Sketch  One  interactive  question:  as a  descriptive  effects,  model  to  i t i s instructive  illustrate  t o pose the  How would the i n t e r a c t i o n s between G and the t h r e e  e n t i t i t e s U, S, and V, be a f f e c t e d by the i n t e r p o s i t i o n o f C? In  the absence  directly  and b i l a t e r a l l y  G encouraged mental and  o f C,  (or t r i - l a t e r a l l y )  negotiations  channels  the u n i v e r s i t i e s  t o proceed  negotiate  w i t h G. I n s o f a r as  through  (the g ' s ) , each u n i v e r s i t y  lower case l e t t e r s '  would  various  govern-  - a t both the upper  l e v e l s - would presumably  endeavour t o  f i n d means t o persuade the government t o respond t o a l l o r most of the u n i v e r s i t y ' s e x p e c t a t i o n s . I f the governmental were judged might  outcomes  intermediary universities to  interact  ible  t o be inadequate, the a d d i t i o n o f an i n t e r m e d i a r y  p r o v i d e a forum  better  responses  i n which  from  failed could  their  the u n i v e r s i t i e s  representations:  t o perform revert  directly  to  to their  their  earlier  could  insofar  expect as the  e x p e c t a t i o n s , the practices  w i t h the government through  and seek  some a c c e s s -  level. Having  spending  no s t a t u t o r y  policies  of  authority  the  w i t h which  self-governing  i n the absence  t o c o n t r o l the  universities,  the  o f an i n t e r m e d i a r y c o u l d  only  government,  G,  exercise  a  controlling  supplied  f o r o p e r a t i n g and c a p i t a l  influence  through  the annual  purposes.  grants  By the c r e a t i o n  of an i n t e r m e d i a r y w i t h s t a t u t o r y powers t o i n f l u e n c e the s i z e and d i r e c t i o n o f u n i v e r s i t y disbursements, the government might expect heeded.  t o have And,  a of  forum  i n which  course,  i t s reflections  should  the  might  be  intermediary  be  48  unresponsive  to  i t s wishes,  i n t e r a c t i o n s through other  the  government  could  resume  channels.  A f t e r the c r e a t i o n o f the i n t e r m e d i a r y ,  C, the new e n t i t y  would f i n d i t s e l f charged with c e r t a i n r e g u l a t o r y ,  synthesizing,  and mediating tasks t o perform but always s u b j e c t t o a s t a t e of u n c e r t a i n t y t h a t c o u l d a r i s e from s e v e r a l e v e n t u a l i t i e s . Firstly, chose  i f a  t o adopt  well-entrenched,  a quasi-judicial  competent  intermediary  r o l e i n the system,  i t could  attempt t o do so by e x e r c i s i n g i t s l i m i t e d  s t a t u t o r y powers i n  a  mean,  heavy-handed  withdrawing  fashion.  This  a proportionate  from the u n i v e r s i t i e s .  would  degree  Although  of  in  effect,  independence-of-action  such a posture  might f i t the  t a s t e o f one government, s u c c e s s i v e governments might p r e f e r t o have  an  intermediary  (light-handed a  quasi-judicial  c o n t r o l some aspects direct  relied  administration).  perspective,  to  that  the  more  From body,  on  the  which  persuasion  universities'  could  evidently  o f t h e i r performance but had no a u t h o r i t y  actions  (particularly  financial)  of  the  government, c o u l d w e l l appear t o be a one-sided i n t r u s i o n i n t o the u n i v e r s i t y system. Secondly,  perceptions  and expections  change  over  time;  governments and the occupants o f p i v o t a l p o s i t i o n s change. may be assumed, t h e r e f o r e , some  wavering  continue  support  as time passes there  i n the w i l l i n g n e s s  t o accept  e a r l i e r date,  that  formal  or to p e r s i s t  was l a g g i n g .  o f the major  understandings  would be  entities  consummated  i n c a r r y i n g out p o l i c i e s  It  to  a t an  f o r which  49  Thirdly, with  the  i f any  of  the  major  entities  d e c i s i o n s , or responses of C,  (or p a r t i e s ) might  seek to circumvent  V  or modify the  l i n e s of communication i n Sketch One remain  open,  even  though  C  cause  of  dissatisfied  the d i s s a f f e c t e d  outcomes by r e t u r n i n g to p r e - i n t e r m e d i a r y The  was  forms of  party  offending  interaction.  between G and U, S and  has  been  inserted  as  an  intermediary. Fourthly,  another  uncertainty  could  p e r c e i v e d c a p a b i l i t y of the i n t e r m e d i a r y to process and  to perform  be  the  information  evaluative/adjudicatory functions.  Should  the  i n t e r m e d i a r y be judged by any of the other major e n t i t i e s to be weak  in  these  important  decision-making  areas,  a  further  i n c e n t i v e to d i s c o u n t the judgements of C would e x i s t . Uncertainties could  compound the  perform (which  a lasting largely  intermediary other  arising  major  re-evaluated  from  these  and  difficulties  of an  intermediary  catalytic  represents  i s an  the  expendable  entities i n the  a decision-making  role.  As  seeking  to  d i s p l a y e d i n Sketch  One  state  the  actual entity  other e v e n t u a l i t i e s  of  affairs) ,  whose u s e f u l n e s s  ( i t s r a i s o n d'etre)  to  the  i s constantly  being  l i g h t of t h e i r c u r r e n t e x p e c t a t i o n s .  From  viewpoint,  the  survival  of  the  intermediary  would depend upon i t s a b i l i t y to d e v i s e s t r a t e g i e s which would, f o r the most p a r t , ensure the g e n e r a l acceptance of C's role  and  entities  d e c i s i o n s by i n the  intermediary events,  a  system.  might,  then,  significant The be  proportion  life-term long  or  of  expectancy short  chosen  the of  major  such  depending  some of which would be w e l l beyond i t s own  control.  an  upon  As  a  way  of  reifying  the  notion  p r o p o r t i o n , Dr. P e r r y has suggested the degree  o f support  intermediary's  (C's) r o l e  using  weighted vote  a simple  a  1  significant  t h a t rudimentary  1  representing  of  (or acceptance)  and d e c i s i o n s might procedure.  indicator f o r the  be c r e a t e d  L e t G have  by  3 votes,  and the t h r e e u n i v e r s i t i e s , U, S, and V, have 1 vote each.  The  f o l l o w i n g combinations then c l e a r l y r e v e a l the v u l n e r a b i l i t y of the  intermediary.  Votes Supporting  Situation I II " III " IV " V VI VII " VIII This  decisions  one,  G  U  s  V  TOTAL  3 3 3 3 0 0 0 0  1 1 1 0 0 0 0 1  1. 1 0 0 0 0 1 1  1 0 0 0 0 1 1 1  6 5 4 3 0 1 2 3  Votes Opposing C G  U  s  V  0 0 0 0 -3 -3 -3 -3  0 0 0 -1 -1 -1 -1 0  0 0 -1 -1 -1 -1 0 0  0 -1 -1 -1 -1 0 0 0  TOTAL  NET SUPPORT  0 -1 -2 -3 -6 -5 -4 -3  +6 +4 +2 0 -6 -4 -2 0  rough t a b u l a t i o n shows t h a t , t o have a ' s i g n i f i c a n t  proportion'  support  C  of  the major  and r o l e s ,  entities  constantly  the i n t e r m e d i a r y  o f the government-in-power,  must  accepting i t s  always  have the  [the G] , and o f a t l e a s t  and p r e f e r a b l y two of the u n i v e r s i t i e s . The  intermediary,  i n such  circumstances,  would  not have  much room t o manoeuvre, and i t would be p a r t i c u l a r l y v u l n e r a b l e to  abrupt,  or i n c o n s i s t e n t , changes i n i t i a t e d  voting entity G,  an  (the G) . Unless  individual  intermediary's  university  relative  supported would  situation.  But  by the h e a v i e s t  i n i t s d i s s e n t by the not  destabilize  the p o s i t i o n  the  o f the  51  intermediary  would become troublesome i f two,  the u n i v e r s i t i e s are The  or  a l l three  of  dissatisfied.  intermediary  is  shown  presumably v u l n e r a b l e p o s i t i o n ,  to  be  in  an  awkward,  and  i n the h y p o t h e t i c a l s i t u a t i o n s  numbers VI and V I I . I r r e s p e c t i v e of whether i t i s the G or  any  one  the  of  U,  S,  or V which  takes  combinations shown i n these C o u n c i l i s reduced the  Council  to  the  initiative  to produce  s i t u a t i o n s , the net m a j o r i t y of the  to a n e g a t i v e . I t would be i m p r a c t i c a b l e f o r  proceed  along  i t s originally-intended line  of  a c t i o n i n such s i t u a t i o n s . Finally, more r i g i d  C,  would  i t s domain)  universities. practical  this  s e c t i o n , Sketch  Two  portrays  While  matter,  stand  passing  a s t r i d e the between  probably  the  difficult  a l l substantive  flow  of  information  government to  interaction  to  represent  California's  a  small  university  step  system,  towards  with  its  C a l i f o r n i a Board of Regents. Because the Sketch not it  describe  the  prevailing  circumstances  and  enforce would  i n v o l v e the i n t e r m e d i a r y . In some r e s p e c t s , Sketch Two said  a  form of a d m i n i s t r a t i v e d e s i g n . Once c r e a t e d , such an  intermediary, (under  to conclude  the  the  as  a  have  to  c o u l d be State  of  University  of  Two  model does  in British  Columbia  i s not d i s c u s s e d f u r t h e r .  THE THE  EMERGENCE OF  UNIVERSITIES COUNCIL OF BRITISH COLUMBIA  With the t r a n s f o r m a t i o n of V i c t o r i a C o l l e g e i n t o a  fully-  52  fledged  university  p r o v i n c e reached sities.  During  i n 1963, the u n i v e r s i t y  i t s present  system  i n this  s t a t u r e w i t h three p u b l i c u n i v e r -  the ' s i x t i e s communications between the u n i v e r -  s i t i e s and the P r o v i n c i a l Government [G^] flowed back and f o r t h with  the  affected  Department  ministries  of Education  and, p a r t i c u l a r l y ,  (later  t o be c a l l e d  the  then  the M i n i s t r y of  Education). What  might  Universities  be c o n s i d e r e d  Council  Financial  Advisory  dividing  the  nominal  role  information  existed  Board.  annual  universities.  A  to play  i n the  This  body,  of  grant  among  the Academic  standards  o f the  an  ad hoc  had the s o l e  i n the c o l l e c t i o n  academic  forerunner  shape  Board  provincial  separate  about  a miniature  task o f  the  Board,  three had a  and d i s s e m i n a t i o n o f  and t o a d v i s e  on the  o r d e r l y development o f u n i v e r s i t i e s . With the passage o f time, the Academic Board became completely  absorbed  with  the newly-  emerging r e g i o n a l c o l l e g e s . Although tion  the u n i v e r s i t i e s made an annual  through  the Department  concerning  the l e v e l  university  purposes  usually  were  government. While funds continued  to increase  sities  also  inadequately requirements.  made  support  by  o f broader granted during  experiencing  presenta-  basic  decisions  t o be s u p p l i e d f o r  the M i n i s t e r considerations  of  Finance;  before  the  f o r g e n e r a l o p e r a t i n g purposes the l a t e  growth  financed, e s p e c i a l l y From  Education,  of f i n a n c i a l  i n the l i g h t  -  of  budget  -  'sixties, considered  the u n i v e r themselves  i n r e s p e c t of t h e i r  the p e r s p e c t i v e o f a c o o r d i n a t e d  capital academic  53  development,  the  prevailing  mode  of  decision-making  i n c r e a s i n g l y came under c r i t i c i s m from the u n i v e r s i t i e s c u l a r l y the U n i v e r s i t y of B r i t i s h Columbia). And one p r e s i d e n t admitted  " a f t e r an i n i t i a l f e e b l e e f f o r t  (parti-  university at  coopera-  t i o n , the u n i v e r s i t i e s have r e a l l y ignored the Academic  Board."  (McTaggart-Cowan; 1969:4) By  1968,  the  Provincial  Government  (G^)  was  prepared  to  have the s u b j e c t of government-university r e l a t i o n s examined by an independent  t r i b u n a l . Created by the M i n i s t e r of E d u c a t i o n ,  the A d v i s o r y Committee on I n t e r - U n i v e r s i t y R e l a t i o n s f i l e d i t s recommendations  (the  E d u c a t i o n i n 1969. pressure taken  permit  thoughtfully publish  Report)  Apparently  f o r reform  to  Perry  had  been  their  evaluated,  satisfied largely  the  -  which  the  appeased for  Government  (G^)  r e p o r t , nor  favoured  Minister  t h a t the  representations  the A d v i s o r y Committee's  recommendations  with  the  of  universities' by  the  action  changes decided  to  be  not  to  to implement i t s  innovation  of  an  a p p r o p r i a t e i n t e r m e d i a r y body. T h i s move p e r m i t t e d the  Government  (G-^)  and  particularly  the Premier - who  a l s o h e l d the p o r t f o l i o of Finance M i n i s t e r -  to  before  carry  on  as  with  the  decision-making  procedures  affecting university finances. The New took  the  Democratic  view  Government  that  Perry  critical  became  the  would  of  the  1972,  Party  Report  be  p u b l i s h e d . S e v e r a l years passed, then, i n the e l e c t i o n of Democratic  the  must  been  New  otherwise  Report  Loyal Opposition,  have  the  (G^);  the  P a r t y , Her Majesty's  Government  (G„).  The  54  newly-elected  M i n i s t e r of Education promptly r e l e a s e d the Perry  Report  over  and,  conducted  succeeding  i t s own  universities. incorporated  review  In  of  1974,  the  months, the  a  revised  establishment  seeking  intermediary,  to  understand  information  of  the  was  an  the  drafting  receive  of  explicit  the  directives  the  the  statute the  (C).  solicited  from  2  intermediary:  intended  legislation.  (G )  governing  university  role  (by  M i n i s t r y o f f i c i a l s and other i n d i v i d u a l s who with  Government  legislation  U n i v e r s i t i e s C o u n c i l of B r i t i s h Columbia In  the  of  this  new  interviews)  from  had been e n t r u s t e d  The  drafters did  new  government  Instead, the d r a f t e r s took f o r t h e i r main o b j e c t i v e the  not (G )• 2  concept  of a b u f f e r between the government and the u n i v e r s i t i e s . Such a buffer  would  university  be  expected  development  to  and,  were  vying  themselves  competitive  as  little part  institutional  coordination  the  prevention  d r a f t e r s ' p e r c e p t i o n was  competitively  academic areas. There was conceived  the  in particular,  unnecessary d u p l i c a t i o n . The universities  accomplish  evidence  of  a  views.  to  t h a t the  system.  The  enter  that  of of the  into  new  universities  Indeed,  there  were  oldest, well-established  u n i v e r s i t y sought to shoulder a preponderance of the mandate to respond to the advancing Recalling design, possible expected The  Sketch  the  needs of higher  earlier  Three  discussion  i s included  representation  of  at  what  education. about  this  the  administrative  point  drafters  to  suggest  might  a  have  such a sketch to look l i k e i n 1972/73. dotted  lines  between  the  government  (G),  and  the  55  universities  (U) , (S) , and  of  communication remain  in  the  specific  concerned, lines  areas  the proper  linking  the  (V) , s i g n i f y  that  open, but i n s o f a r assigned  to the  interactive  government  the  lines  as b i n d i n g d e c i s i o n s  intermediary,  channels  and  the d i r e c t  are  the  (C) , are  continuous  universities  with  the  intermediary.  [C]  [U] r i G  — n  i 1  [S]  [V] SKETCH THREE  The operative returned of  higher  Universities in  1974.  Council  Soon  to power and education.  p e r i o d , the years 1974  of  afterwards,  a new  British the  government,  I t i s to t o 1982,  selective  Columbia  Social  Credit  (G^) , assumed events  t h a t the study now  became Party control  i n the turns.  later  56  Chapter Four ANALYSIS OF COUNCIL'S ROLE IN THE DEVELOPMENT OF THE ANNUAL OPERATING FUNDING RECOMMENDATION FOR THE UNIVERSITY SYSTEM  THE  As an i n t e r m e d i a r y Universities respecting  Council  REQUEST FOR FUNDS  i n government-university has  certain  statutory  the f i n a n c i n g o f u n i v e r s i t i e s .  r e l a t i o n s , the responsibilities  In g e n e r a l  terms,  the U n i v e r s i t y A c t empowers C o u n c i l ...to inquire into the financial requirements of u n i v e r s i t i e s and advise the m i n i s t e r o f the sums o f money required f o r the support and development of each u n i v e r s i t y and u n i v e r s i t i e s g e n e r a l l y , ( s e c t i o n 69r) This  power  of  specifically capital  other  defined  aspects  relating  inquiry  (Section  t o the o p e r a t i n g  The C o u n c i l  69p) .  stipulated  Finance and  finances both  The C o u n c i l  also  t h a t the crown may designate  within  funding  the  Educational  of c a p i t a l  The  focus  Council's B.C.'s  from t h i s  activities  three  Columbia,  of  public  the  (Section  f o r making  of u n i v e r s i t y i n s t i t u t i o n s  finance  Institution  Capital  for a l l institutions  the o p e r a t i n g f i n a n c e f o r s p e c i a l l y designated  are excluded  has powers institutions  has a d d i t i o n a l r e s p o n s i b i l i t y  A c t . Matters  i s more  o p e r a t i n g and  finances of educational  recommendations f o r c a p i t a l as  university  i n the A c t t o cover  than u n i v e r s i t i e s  69t).  into  institutions  study.  this with  section  i s an  respect  t o the o p e r a t i n g  universities:  University  of  examination  o f the  funding o f  the U n i v e r s i t y o f B r i t i s h  Victoria  and  Simon  Fraser  57  University the  i n the  methods  by  p e r i o d 1974  which  the  to  1982.  Council  This  section  discharges  analyses  i t s statutory  responsibility: to r e c e i v e , review and c o o r d i n a t e the budget requests presented t o i t a n n u a l l y by the u n i v e r s i t i e s or presented at any other time a t the request of the U n i v e r s i t i e s C o u n c i l ; t o t r a n s m i t i t s recommendations, together w i t h the o r i g i n a l proposals from the u n i v e r s i t i e s to the M i n i s t e r . ( S e c t i o n 69f) By  examining  annual  the  funding  purpose  way(s)  in  which  recommendations  operating  grant  of  the  with  the  Council  respect  develops  to  universities,  its  the  general  this  chapter  i d e n t i f i e s C o u n c i l ' s problems i n t a k i n g these d e c i s i o n s . P r i o r to 1964 the  only  when the U n i v e r s i t y of B r i t i s h Columbia  publicly  procedure  for  relatively  simple  supported  determining and  has  university the  annual  in  the  Province  operating  been d e s c r i b e d as  the  grant  involving  was  was  "direct  d i s c u s s i o n about g r a n t s between the u n i v e r s i t y and a government ministry, grant and, even  with  and  this  n e g o t i a t i o n s e t t l e s both  of course, the a l l o c a t i o n " the  subsequent  the amount of  (Perry, 1969:16). Indeed  establishment  of  two  additional  u n i v e r s i t i e s , V i c t o r i a and Simon F r a s e r , the procedure to l i t t l e Presidents  more than and  i n f o r m a l d i s c u s s i o n between the  the M i n i s t r y  of  the  Education  or  amounted  university  Premier  or  both,  w i t h no e x t e n s i v e budget submission being r e q u i r e d of the universities. Perry  has  pointed  government-university  out  some  relations  important  prior  to  the  features  of  interposition  the i n t e r m e d i a r y which are r e l e v a n t to t h i s examination  the of  of the  58  Council's  development  of  funding  recommendations.  He  notes  that: One of the main causes of d i s s e n s i o n between ( s i c ) the three p u b l i c u n i v e r s i t i e s has been due, i n p a r t , to a l a c k of agreement as to what the ground r u l e s were, or ought to be, governing f i n a n c i a l support from the p u b l i c s e c t o r . (Perry, 1969:45) In  so  far  as  government support extent  the  in  for  intermediary  the  criteria  determination  universities, i t  practicable  plays  within  a  of  too  role  the  has  level  an  i t s statutory  i n a s s i s t i n g the of  financial  obligation  mandate  to  to  the  make i t s  i n these matters c l e a r l y understood.  Perry  states further that:  i t i s obvious t h a t on one c r i t i c a l p o i n t - t h a t i n which the P r o v i n c i a l Government u n i l a t e r a l l y decides the l e v e l of f i n a n c i a l support - the u n i v e r s i t i e s and the P r o v i n c i a l Government are, and may well remain, in conflict... (Perry, 1969:5) He  adds, however, t h a t : t h i s area of disagreement might be narrowed i f c e r t a i n p r i n c i p l e s f o r budgeting, a l l o c a t i n g and d i s p e n s i n g funds were accepted. (Perry, 1969:6)  On for  this  matter  financial  of  devising  decision  examined l a t e r .  The  acceptable  making,  criteria  Council's  or p r i n c i p l e s  performance  will  be  j u s t i f i c a t i o n f o r imposing t h i s o b l i g a t i o n  to a c t on p r i n c i p l e i s a l s o l a i d out by P e r r y , who  states:  Prudent management i s . . . d i f f i c u l t i f the u n i v e r s i t i e s do not have some financial basis for planning their operations. I t i s important, then, t h a t the extent to which the u n i v e r s i t i e s may r e l y on government grants should be l a r g e l y understood. (Perry, 1969:7) This  point  intermediary  but  has  obvious  implications  a l s o f o r government.  Perry  not  only  for  an  concludes t h a t  the P r o v i n c i a l Government should s t r i v e t o g i v e e f f e c t i v e assurances t h a t at l e a s t a minimal l e v e l of support f o r  59  operating purposes of the forthcoming. (Perry, 1969:51) The  record  of  the  intermediary  universities  and  would  the government  be  in  this  regard i s examined i n the f o l l o w i n g s e c t i o n s .  THE COUNCIL'S APPROACH In  the development o f i t s annual  to government concerning Council  wrestles  institutions  with  the pre-eminent  recommendations  o p e r a t i n g grant the  question  financed i n current  whether  these  circumstances.  t o t h i s q u e s t i o n C o u n c i l has attempted t o d e s i g n  methods o f v a l i d a t i n g T h i s quest  the u n i v e r s i t i e s '  are reasonably  In responding  funding  the expenditure  base of each u n i v e r s i t y .  has vexed C o u n c i l throughout i t s e x i s t e n c e .  Indeed  i t s i n a b i l i t y t o r e s o l v e t h i s matter t o i t s own s a t i s f a c t i o n i s also  a  serious  Treasury  concern  Board  t o government  t o whom C o u n c i l ' s  and, i n p a r t i c u l a r ,  advice  i s transmitted,  to  with  e l a b o r a t i o n , by the M i n i s t r y . C o u n c i l has acknowledged and d e s c r i b e d i t s d i f f i c u l t i e s i n this  area  in  recommendation. universities'  its  statements  Council perceived  submissions  of  submissions  Council's  much time t o prepare grant. detailed Council  funding  i n a n a l y z i n g the  Because o f the c o i n c i d e n c e of the  start-up  t o government  a problem  each  r i g h t a t the s t a r t o f i t s o p e r a t i o n s  i n l a t e 1974 and e a r l y 1975. timing  accompanying  i n late  and  the  university  1974, C o u n c i l  budget  d i d not have  a recommendation f o r the 1975-76 o p e r a t i n g  Consequently i t r e l i e d on the u n i v e r s i t i e s t o p r o v i d e a a n a l y s i s of s p e c i f i c even  from  budget  its initial,  areas.  I t was  understandably  clear to  superficial,  60  review t h a t a problem e x i s t e d i n r e l a t i o n to the base l e v e l university  of  funding:  C o u n c i l r e a l i z e s t h a t open-ended e s c a l a t i o n of c o s t s of the u n i v e r s i t y system must be understood and brought under control. C o u n c i l expects to c a r r y out a s e r i e s of s t u d i e s arising from i t s need f o r f u l l understanding of the problems and o p p o r t u n i t i e s f a c i n g u n i v e r s i t i e s i n B.C. which w i l l provide a b a s i s f o r b e t t e r a n a l y s i s and c o n t r o l of these c o s t s . ( C o u n c i l document 1) Council's  early  ideas  the  r a t i o n a l i z a t i o n of  and  the  u n i v e r s i t y budget  In  the  initial  approach  for  the  recommendations by each  university  requirements. additions budget  p u r s u i t of  these goals reporting  included  procedures  t e n t a t i v e p r o p o s i t i o n of a three year o p e r a t i n g  framework. basic  f o r the  years,  development  accepting  as  the  the  selected  bases  submitted  of  focused  the  a  funding  c u r r e n t year's base budget of for  assessing  principally  categories by  adopted  i t s subsequent  s t a r t i n g point  Adjudication  to  however, C o u n c i l  budget  of  on  incremental  expenditure  universities.  future  in  Examples  of  the the  s e l e c t e d c a t e g o r i e s which r e c e i v e d r e c u r r i n g c o s t increments i n Council's  recommendations  included:  s e r v i c e s , enrolment i n c r e a s e s  and  new  w i t h s l i g h t v a r i a t i o n s , continued the  recommendations  i n the  salaries, programs.  relatively  period  under  in  formulating  its  1981-82  Council  attempted  earlier  u n i v e r s i t y submissions by  actual  levels  reference  and  points  to v a l i d a t e the  used  these  from which  to  and  T h i s approach,  unchanged f o r a l l  review,  f i s c a l years 1975-76 to 1981-82 i n c l u s i v e . exercise  supplies  As  funding  that  i s , for  a supplementary recommendation,  expenditure budget bases i n comparing  "validated" identify  them w i t h expense  incremental  audited  bases  as  require-  61  ments.  In a d j u d i c a t i n g the  budget  as  submitted  refers  to  independent  price  level  in  the  of  services.  However,  relatively  simple  i t s funding  faculty  a d d i t i o n s to  universities'  sources  inflationary  categories  incremental  of  salaries  and  i t i s clear  incremental  requests,  information,  r a t e adjustments,  Council  f o r example i n  Council  approach  base  particularly  university  that  the  the  supplies has  i n the  and  employed  development  a of  recommendations.  BASIC PROBLEMS ASSOCIATED WITH COUNCIL'S APPROACH TO THE The  DEVELOPMENT OF  single  which C o u n c i l mendations requests earlier,  major  draws  i s the  source  i n the  formal  operating prior  ITS FUNDING RECOMMENDATIONS financial  development  submission  funds  to  of  f o r the  the  of  information i t s funding  i n which  next  fiscal  establishment  of  each  i t s universities  s i o n s by its  the  did  universities.  mandate to a c t as  requirements  of  the  and  funding  the  universities  systems  government  budget  for Council  submis-  the m i n i s t e r ' s a d v i s o r on  the  financial  universities  necessary  it  Indeed C o u n c i l provide  that  f o r the proper  became  examination of u n i v e r s i t y  i t with  "require a university  information necessary  In order  detailed  the  discharge  requests. to  involve  noted  to  commence a more d e t a i l e d  a l s o may  not  As  Council,  d i s c u s s i o n s which took p l a c e between the p r o v i n c i a l and  recom-  university  year.  the  upon  the  expenditures  i s empowered to information.  to e s t a b l i s h Universities  The  require Council  the accounting Council  conduct of the business  to  and  considers  a f f a i r s of  the  62  university" properly  (University Act, section  , these  69k).  In the e a r l y years detailed  provided  financial  analysis  of  specific  areas  of  f o r the purpose  of applying  models t o such a comparable  Price  requests  operations.  information  o f the u n i v e r s i t i e s ,  Waterhouse,  retained  financial  data  more r e c e n t l y , i t has attempted  to develop a common format f o r the submission  budget  frame-  of i t s a c t i v i t i e s , C o u n c i l began by r e l y i n g  by the u n i v e r s i t i e s ;  information  exercised  powers must be based on an a n a l y t i c a l  work t o be- a p p l i e d t o the u n i v e r s i t i e s '  on  To be  to assist  of budget  i t s own  base.  request  analytical  Respecting the  Council's  consultants,  i n financial  analysis,  noted i n 1975 t h a t : The requests f o r o p e r a t i n g funds which the three u n i v e r sities have submitted t o C o u n c i l have been presented p r i m a r i l y on an incremental b a s i s . That i s , the submiss i o n s s t a r t w i t h the approved budgets f o r the base year 1975/76 and concentrate on p r e s e n t i n g and e x p l a i n i n g the a d d i t i o n a l funds t h a t w i l l be r e q u i r e d f o r o p e r a t i o n s t o be i n c l u d e d i n the budget were developed d i f f e r e d among the three u n i v e r s i t i e s . ( C o u n c i l document 2) The  Consultant  added t h a t :  further improvements can be made i n the methods o f p r e p a r a t i o n and p r e s e n t a t i o n o f the budgets f o r the three universities which would a s s i s t both the c o n t r o l of o p e r a t i o n s by the a d m i n i s t r a t i o n w i t h i n the u n i v e r s i t i e s and the assessment o f t h e i r budget submissions by the Council. In p a r t i c u l a r , we b e l i e v e t h a t a more complete format f o r the p r e p a r a t i o n o f the submissions should be developed which would be compatible w i t h the budgeting processes o f the u n i v e r s i t i e s , with the o b j e c t of f a c i l i t a t i n g t h e i r assessment by the U n i v e r s i t i e s C o u n c i l . ( C o u n c i l document 2) With  the budget  comparable criteria Despite  format  submissions the C o u n c i l  o f the u n i v e r s i t i e s was unable  and a common methodology  lacking  to identify  t o assess  the  a  common  submissions.  ongoing c o n s u l t a t i o n w i t h the u n i v e r s i t i e s t o develop a  63  mutually s a t i s f a c t o r y tion  and  assessment  consultant were  on  in  identified, programs  remained  again commented  "based  approach  format, the r e l a t e d problems of p r e s e n t a -  an  that  are".  presented  that  new  He  "without  the  incomplete  savings  though  unresolved.  any  the  programs as  clear  universities'  'model'  from  noted  base  and  well  that  budget to  their  part,  submissions incremental  are  not  necessarily to  existing  submissions  for their  are  review  and  12) have developed  p r e p a r a t i o n processes as a b a s i s  for their  detailed  submissions  the C o u n c i l (these processes are d e s c r i b e d i n Appendix B) .  Council's  concern, however, i s not  each  university  its  request.  understanding  the  the  their  requests.  standing the  develop  has  developed  Rather  which  of  the u n i v e r s i t i e s  the  the  the  methodology  1979  of  enhancements  a p p r a i s a l by UCBC". ( C o u n c i l document For  In January  i s not  assumptions,  The  have  paramount  readily  apparent  upon  analytical  date  means  from  lies  in  the o p t i o n s  derivation  i s that  the  reach  and d e r i v e  and  i n the  this  of  under-  c u r r e n t submissions  C o u n c i l has to  procedures  interest  the p r i o r i t i e s  acted  the  i t s budget  crux of the problem  u n i v e r s i t i e s . . To the  to s t r i k e  Council's  universities  focussed on  the  not  been  degree  able  of  under-  s t a n d i n g of these matters t o f e e l c o n f i d e n t of the v a l i d i t y the budget  base of the u n i v e r s i t i e s .  satisfactory  independent  perception  requirements  based  any  functions. Council  upon  general  adopted  an  of  C o u n c i l does not have a of  university  set  of  Because i t c o u l d not s a t i s f y i t s e l f  i n 1977-78  to  arbitrary  financial  benchmark on t h i s  measure  cost point,  designed  to  64  have  the u n i v e r s i t i e s  re-examine  their  purpose o f e f f e c t i n g b e t t e r u t i l i z a t i o n  budget  base  for  of resources.  the  Council  d e s c r i b e d i t s dilemma i n these words: The C o u n c i l has not been i n a p o s i t i o n t o analyze thoroughly the expenditure base on which the u n i v e r s i t i e s ' budget requests were b u i l t . The u n i v e r s i t i e s themselves, as w e l l as the C o u n c i l , have g e n e r a l l y assumed t h a t t h i s base r e f l e c t e d the e f f i c i e n t u t i l i z a t i o n o f funds made a v a i l a b l e i n p a s t y e a r s . I t i s probable, however, t h a t i n t h i s i n s t a n c e , as i n the case o f any e n t e r p r i s e , a c a r e f u l study o f p r e s e n t methods and p r a c t i s e s would i d e n t i f y o p p o r t u n i t i e s f o r the improvement i n the e f f e c t i v e n e s s with which resources are a p p l i e d . Consequently the C o u n c i l has concluded t h a t i t s funding p r o p o s a l should r e f l e c t a decrease o f 1% i n the l e v e l o f expenditures of the c u r r e n t year t o p r o v i d e a t a r g e t f o r improvement...The means by which t h i s o b j e c t i v e i s achieved c l e a r l y must be determined by each university i n light o f i t s own situation. N e v e r t h e l e s s , the C o u n c i l i s concerned t h a t there are o p p o r t u n i t i e s t h a t should be e v a l u a t e d . ( C o u n c i l document 5) T h i s measure was taken again i n subsequent years but i s c l e a r l y only an i n t e r i m and piece-meal  answer because a r b i t r a r y  t i o n s cannot be reasonably defended In  the f o l l o w i n g year's  enunciated  "the terms  that  1978/79, C o u n c i l  o f the c r i t e r i a  C o u n c i l s a i d i t sought  f o r the u n i v e r s i t i e s they  indefinitely.  i t was  and t o apply t o i t s review o f the u n i v e r s i -  submissions. need  recommendation,  i n g e n e r a l terms the nature  seeking t o develop ties'  i f extended  reduc-  are operating  t o take i n t o  t o demonstrate i n the most  account  i n quantitative  effective  manner,  w i t h the funds a l r e a d y a v a i l a b l e t o them" ( C o u n c i l document 6 ) . Council  i n d i c a t e d , however, t h a t i n terms o f the improved use  of r e s o u r c e s which i t b e l i e v e d was o b t a i n a b l e , the u n i v e r s i t i e s had  not demonstrated  i n qualitative  taken t o reach t h i s o b j e c t i v e . made  in  Council's  view,  to  terms  suitable  measures  Hence, l i t t l e progress had been enable  i t to  analyze  the  65  u n i v e r s i t i e s ' budgets i n a way which would serve as a base f o r a  funding  recommendation  approach.  other  than  using  an  incremental  In 1978/79 C o u n c i l " r e g r e t s t h a t i t was s t i l l  f o r t h i s budget submission an i n c r e m e n t a l base".  unable  t o make i t s estimates other than on  I t s p o s i t i o n remains unchanged:  The C o u n c i l i s f i r m l y o f the o p i n i o n t h a t a b e t t e r approach t o measurement must be found, not o n l y t o ensure t h a t our u n i v e r s i t i e s are r e c e i v i n g adequate p r o v i n c i a l support, but t o ensure t h a t each one o f our u n i v e r s i t i e s r e c e i v e s i t s a p p r o p r i a t e share o f the t o t a l p r o v i n c i a l support. ( C o u n c i l document 6) T h i s l a s t p o i n t c a r r i e s w i t h i t an i m p l i e d r e l a t i o n between the assessment o f the u n i v e r s i t i e s ' allocation Council  o f the o p e r a t i n g  i n this  connection  submissions  grant. will  and the subsequent  The problem  which  discussed  i n the  be  faces next  chapter on a l l o c a t i o n d e c i s i o n s but can be s u c c i n c t l y d e s c r i b e d as  follows:  complete  because the C o u n c i l i s unable  satisfaction  each  university's  to v a l i d a t e budget  to i t s  base, i t s  recommendation f o r the g l o b a l t o t a l o f o p e r a t i n g funds  f o r the  three  i n t o an  universities  can not be d i r e c t l y  appropriate  allocation  circumstance  results  literally  divorced  t o each i n an  from  disaggregated  individual  allocation  the  budget  university.  methodology review  This  which i s  underlying  the  o r i g i n a l funding recommendation. Council's  difficulty  i n validating  the expenditure  bases  of the u n i v e r s i t i e s i s a l s o a source o f concern t o the M i n i s t r y and  the Government,  particularly  during  periods  of  financial  stress. In years p a s t when government f i n a n c i a l r e s t r a i n t was l e s s generally  apparent,  particularly  i n the halcyon  days  o f the  66  'sixties were  and  r o b u s t but  taken  'seventies when u n i v e r s i t y  acceded  f o r granted  discharged this  early  their  t o by  that  the  mandate  government,  Boards  of  budget requests  i t was  presumably  Governors  effectively  t o oversee e x p e n d i t u r e s .  p r o v i n c e the Boards' powers i n t h i s  regard  Indeed  in  are broad and  explicit: Subject t o the powers of the U n i v e r s i t i e s C o u n c i l , the management, a d m i n i s t r a t i o n and c o n t r o l of the p r o p e r t y , revenue, b u s i n e s s and a f f a i r s of the u n i v e r s i t y are v e s t e d i n the board, and without l i m i t i n g the f o r e g o i n g or the g e n e r a l powers c o n f e r r e d on or v e s t e d i n the board by t h i s A c t , the board has power...to r e c e i v e from the p r e s i d e n t and a n a l y s e and adopt w i t h or without m o d i f i c a t i o n s , the budgets f o r o p e r a t i n g and c a p i t a l e x p e n d i t u r e f o r the u n i v e r s i t y . ( U n i v e r s i t y A c t , s e c t i o n 27) Council regard  has  relied  but  on each Board  i t finds  increasingly  that  such  t o perform i t s duty  in this  reliance  becoming  alone  untenable i n the face of mounting  is  p r e s s u r e s from  government, i n p a r t i c u l a r from T r e a s u r y Board, f o r demonstrable proof t h a t sound budget management p r e v a i l s a t the u n i v e r s i t i e s . In the c u r r e n t view of T r e a s u r y Board the r e s t r a i n t  issue  i s predominant i n a l l areas of budget a n a l y s i s .  Simply s t a t e d ,  this  of  circumstance  expenditure  prevails  i s said  revenue g e n e r a t i o n .  to be  because  the  increasing  rate  faster  government  than the r a t e  of  T h i s r e s u l t s i n the requirement t o examine  a n n u a l l y the contents of every budget base t o v a l i d a t e both the priorities Treasury  o f the programs  Board  has o c c u r r e d  i s looking  and,  government  their  is  costs.  f o r evidence t h a t  consequently, t h a t  to the r e s t r a i n t i s s u e . present  and  Essentially  the  such examination  attention  has been  given  The fundamental budget approach of the that  there  exists  in  each  sector  a  67  minimum l e v e l o f s e r v i c e w i t h an a s s o c i a t e d minimal o p e r a t i o n a l budget  below which  Government  i t does  financial  not make  restraint  sense  requires  that  determined as a base upon which i n c r e a s e d subsequently possible  funding  official). seeks  identified,  looking  (oral  Working  to s a t i s f y  within  itself  option;  the assessment  approach  the base  in priority for Treasury  the Treasury  has been  of c r i t e r i a ,  responsible conditions "evidence".  upon  the Treasury  the  the e x p l o r a t i o n  and exposure o f each  designed  to  In r e l a t i o n  from Treasury  this  the i s s u e  estimates were  produce to  priorities  treats  that  1981-82  for universities  f o l l o w i n g request  v a l i d a t e d by  and impact on  the m i n i s t r i e s the  Board  t o be s a t i s f i e d  addressed,  Board  f o r programs  e t c . To impress  determination  Board  are made; the d e c i s i o n making  consideration  which  may be  i n the way  including  o f management  be  capacity  choices  being  that  of  and the r e l a t e d r i s k s  financial  with  this  level  expenditures  and ranked  presentation  anything.  that  f o r the f o l l o w i n g types o f evidence:  of revenue o p t i o n s  costs,  justified  t o fund  the focus  matter  and i t s  of r e s t r a i n t i s  f o r the  approved the  seriousness  with  foregoing of  ministry  this  appended types  of  study, the  Board t o the M i n i s t e r  formally  i l l u s t r a t e s the government's p o s i t i o n : Complete an i n v e s t i g a t i o n i n t o budget p r e p a r a t i o n a t the three u n i v e r s i t i e s , t h e i r r e p o r t i n g requirements t o the Universities Council of B r i t i s h Columbia, and the effectiveness thereof. Prepare a recommended p l a n f o r i n d i c a t e d improvements and f o r p o t e n t i a l f o r a m u l t i - y e a r a d a p t a t i o n w i t h i n the I n s t i t u t i o n s toward the p r i n c i p l e s of Zero Base Budgeting. Included i n t h i s work, i s t o be an a n a l y s i s o f component expenditure and revenue sources at each U n i v e r s i t y , w i t h comparative i n d i c e s f o r the r e s t of Canada. ( C o u n c i l document 16)  68  To  date  Treasury  the M i n i s t r y  has  been  Board's i n s t r u c t i o n .  attempting  to  comply  with  In terms o f C o u n c i l ' s advice t o  the M i n i s t r y , however, i t i s c l e a r t h a t past measures, such as the a r b i t r a r y deduction o f 1% from the base and approaches as  a historical  expenditure  comparison  levels  between  to v e r i f y  sought  by  Treasury  r e l e v a n t budget  sufficient  Board.  answered, the Board's i n q u i r i e s the  levels  the reasonableness  s i t y ' s budget base, do not p r o v i d e type  budget  If  not  such  and a c t u a l  of a univer-  evidence being  o f the  presently  are s e r v i n g t o d e f i n e f u r t h e r  information  needs  o f both  the Board and  Council. Some b a s i c o b j e c t i v e s are becoming apparent relation  to  operating  estimates  requirements requested should:  these  of from  information  document,  each  in  university  governmental  and  (i) provide a c c o u n t a b i l i t y  made a v a i l a b l e ; i n response the  budget  identify  t o changing  information  trends  needs.  outlining  and  The the  the l e v e l s  annual  operating of  non-governmental  funding sources,  f o r the funding p r e v i o u s l y  i n the a l l o c a t i o n o f resources  demands f o r s e r v i c e s ;  provided  to Council i n  f o r the three  ( i i ) ensure t h a t  institutions  i s as  comparable as p o s s i b l e and t h a t the l e v e l o f d e t a i l i s a proper interpretation facilitate resource  the i n t e r n a l allocations  institutional is  of trends;  planning  a t each  o p e r a t i n g budget  currently considering  submission  and, ( i i i ) p r o v i d e  how  a framework to  and d e c i s i o n making  university  when  finalizing i t s  ( C o u n c i l document 2 2 ) . to re-design  about  Council  the i n s t i t u t i o n a l  document i n these g e n e r a l d i r e c t i o n s .  69  While clearer  the  focus  Treasury  Board  requirements  are  f o r C o u n c i l , i t i s important  to  coming  note  into  that  the  Treasury Board does hot assume r e s p o n s i b i l i t y f o r p o l i c y making in  higher  education.  specifically,  to  It  the  is  to  Ministry  the  of  government  Universities,  Communications t h a t C o u n c i l must look f o r p o l i c y In  this  regard  the  government  been  Science  and  guidance.  somewhat  silent,  i n r e c o g n i t i o n of  afforded  to  world.  Post-  secondary  e d u c a t i o n i s s u e s g e n e r a l l y do not form a v e r y  salient  in  traditional  and,  possibly  universities  the  has  itself  this  f e a t u r e of government's agenda. education focussed  sector more  the  on  the  part  recent  development  system  and  establishment  tional  o r g a n i z a t i o n s such  as  the  In the B r i t i s h Columbia higher  government's  the  of  autonomy which i s  of  of  newer  the  a t t e n t i o n has  the  community  college  n o n - t r a d i t i o n a l educa-  Open L e a r n i n g  the Knowledge Network of the West.  been  Institute  and  With some minor e x c e p t i o n s ,  such as the c r e a t i o n of the David Thompson U n i v e r s i t y Centre r e p l a c e Notre  Dame U n i v e r s i t y and  Western C o l l e g e as  a  limited  the e s t a b l i s h m e n t  of  to  Trinity  degree g r a n t i n g i n s t i t u t i o n ,  the  government and the p r o v i n c i a l l e g i s l a t u r e have not devoted much of say  their that  area. has  The  been  a t t e n t i o n to u n i v e r s i t y the  government  has  activities.  abdicated  i n the  types  and  i s not  responsibility  government view i s t h a t i t s p o l i c y implicit  That  level  of  i n these  in  to  this  matters  funding which i t  has p r o v i d e d to the u n i v e r s i t i e s , f o r example: During the l a s t few y e a r s , we (the government) have i n s t i t u t e d a debenture funding system f o r major c a p i t a l a c q u i s i t i o n s , beginning w i t h b u i l d i n g s and extending now to major equipment. In the e a r l y years of such a system,  70  the c o s t s o f debt s e r v i c i n g are comparatively s m a l l , but on a percentage b a s i s they r i s e very r a p i d l y . Another r e c e n t change has been a government d e c i s i o n t o earmark c e r t a i n funds f o r the support o f u n i v e r s i t y e f f o r t s i n areas which are o f p r i o r i t y t o the government higher than may be f e l t w i t h i n the u n i v e r s i t i e s themselves. The government regards these earmarked funds as p a r t o f u n i v e r s i t y funding, even though the u n i v e r s i t i e s may be r e l u c t a n t t o do so. ( C o u n c i l document 17) S p e c i a l funds f o r the expansion o f medical education  constitute  government.  that  universities these  increases  with  policy  i s that,  higher  the u n i v e r s i t i e s . requested  and Treasury  decisions  of  i n terms o f appro-  i n c r e a s e s , i t has funded rate  are a r e p r e s e n t a t i o n  1978 the M i n i s t e r  the u n i v e r s i t i e s  such  cost of l i v i n g  at a r e l a t i v e l y  government t o support In  of  The government view  p r i a t e comparison w i t h the  examples  and e n g i n e e r i n g  o f the w i l l  o f the  ( C o u n c i l document 16)  Council, Board  f i v e year budget f o r higher e d u c a t i o n .  of i n c r e a s e and  i n consultation  staff,  t o submit  The M i n i s t e r  a  recognized  some d i r e c t i m p l i c a t i o n s o f such an e x e r c i s e : I t w i l l g i v e the Government an o p p o r t u n i t y t o look ahead i n the e d u c a t i o n a l f i e l d i n a way t h a t has not been possible heretofore. In t u r n , the Government may be i n a p o s i t i o n t o g i v e a longer range outlook on i t s own a b i l i t y to make f i n a n c i a l commitments t o post-secondary e d u c a t i o n . There are two important f a c t o r s which w i l l need t o be c o n s i d e r e d i n making judgements about budget requirements f o r the next f i v e y e a r s . The f i r s t i s the p r o p o r t i o n o f income t o be d e r i v e d form non-governmental sources, p a r t i c u l a r l y student f e e s . The second i s the r o l e t h a t each i n s t i t u t i o n w i l l p l a y i n the o v e r a l l program f o r the p r o v i n c e . ( C o u n c i l document 9) Such an approach was not new t o C o u n c i l 1976,  f o r , i n October  i t s second annual r e p o r t s t a t e d : Having now had the experience of two c o n s e c u t i v e annual budgets, i t i s the o p i n i o n o f C o u n c i l t h a t , a t l e a s t i n g e n e r a l terms, u n i v e r s i t y budgeting should be on a three year b a s i s . Year one would show a d e t a i l e d a n a l y s i s o f  71  f i n a n c i a l resources the u n i v e r s i t i e s f e e l they r e q u i r e , w h i l e years two and three would g i v e a l e s s p r e c i s e p i c t u r e of the f i s c a l requirements. The acceptance of this principle by the Government would significantly enhance the q u a l i t y of long range p l a n n i n g and the o p p o r t u n i t y f o r i n c r e a s e d e f f i c i e n c y of o p e r a t i o n s i n the u n i v e r s i t i e s . ( C o u n c i l document 4) In  response  with  the  to  this  specific  universities  and  request,  reported  to  the  Council  consulted  the  Minister  that  c o o p e r a t i o n of the i n s t i t u t i o n s had been secured As  a  first  step  in  the  development  of  the  for this  forecast  the  task.  Council  suggested t h a t : . . . i t would be u s e f u l to d i s c u s s the s p e c i f i c i n f o r m a t i o n which w i l l be r e q u i r e d , and the assumptions regarding government p o l i c y which should be included. We are concerned t h a t C o u n c i l be able to o f f e r guidance to the universities i n terms of which assumptions regarding higher education p o l i c y may be most r e a l i s t i c a l l y built i n t o t h e i r f o r e c a s t s (assumptions, f o r i n s t a n c e , r e g a r d i n g u n i v e r s i t y p a r t i c i p a t i o n r a t e s ) . ( C o u n c i l document 11) .For  reasons  appear  which  i n part  Council's  are  not  to r e l a t e  suggestion,  abandoned.  The  well  to  a  l a c k of  this  issue  understood  Council,  but  government response  undertaking  of  at  planning  was  will  to  subsequently  be  subsequently  d i s c u s s e d i n Chapter s i x . It  is  enunciated  fair  to  observe  statements  of  that  policy  f i n a n c e the Government r e c o r d general sities  p o s i t i o n appears as generously  will  be  both  the  evolving  subject  i s not be  matters  copious.  that  of The  i t supports  i n r e t u r n i t expects these  needs of  d e f i n e d by  in  respect  to  formally  university Government's the  univer-  as i t can i n l i g h t of competing demands on  the p u b l i c purse and meet the  to  with  s o c i e t y which,  the government.  of  needs and  the  institutions  i n selected  to  areas,  In l a r g e measure, however, methods of  satisfying  them  72  will  be  regarded  government consumed  seeks by  effectively  government  only  universities  and  efficiently;  are  relies  held  this  view  in  the  in  has  direction  allowed  has  is  words  that  the  wide  activities  The  Council.  avoided  i n t h e i r m i s s i o n statements,  expended  the advice and  statements.  the u n i v e r s i t i e s  money  accountable.  the U n i v e r s i t i e s  and magnitude o f t h e i r  proclaimed  process  i n s t a n c e upon  government  the  the p u b l i c  other  approach encompassing s p e c i f i c p o l i c y stance  that  appropriately  advisor,  the  o f the u n i v e r s i t i e s :  assured  i n the f i r s t  of i t s chief  taking  t o be  the  universities  opinion  as the p r e s e r v e  a  In  dirigiste  T h i s circum-  latitude  i n the  and, as they  have  they have responded i n  good f a i t h t o meet s o c i e t a l needs i n terms o f new and expanded academic Thus,  endeavours  while  universities development  but t h e r e f o r e r e q u i r e  the absence a to  freedom continue  funding i s r e q u i r e d . a  problem  determining compliance,  arises how  o f government  direction  i n development, a  steady  and  increasing  structure  academic  and  of  the C o u n c i l i n  activities  to  ensure  I t appears  The q u e s t i o n which  and C o u n c i l can l e g i t i m a t e l y  degree the u n i v e r s i t i e s can expect p u b l i c  tions  supply  such  where a p p r o p r i a t e , w i t h t h e i r paymaster's wishes i n  universities  torily  for  A l t e r n a t i v e l y when funding i s c o n s t r a i n e d  the absence o f s p e c i f i c Government p o l i c y . the  funding.  permits the  i n order  f o r the u n i v e r s i t i e s to  increased  that a "policy-free"  ask i s t o what  support?  approach worked  satisfac-  as long as the government revenues p e r m i t t e d a p p r o p r i a t o expand i n l i n e w i t h the annual  i n c r e a s e s requested by  73  the u n i v e r s i t i e s and when  the  forced  supported by the i n t e r m e d i a r y . Conversely,  Government  to a l t e r  experiences  i t s approach,  revenue  to  constraints  i n t e r v e n e and  to  search  i n c r e a s e d i n f o r m a t i o n about expenditures i n order t o its  to other p r i o r i t i e s .  In such  a situation  education  the C o u n c i l  has been i n some measure hampered i n i t s attempts  t o respond  government by  The  enrolments  the  l a c k of  provincial  direction.  for  facilitate  assessment of a p p r o p r i a t e funding f o r u n i v e r s i t y  relative  i t is  to  i s s u e of  i s a case i n p o i n t . In a l e t t e r to C o u n c i l Chairman,  the D e p u t y - M i n i s t e r has s t a t e d The M i n i s t r y does not regard the t o t a l number of u n i v e r s i t y students, or the number of degrees granted per year, as a f i g u r e of m e r i t f o r our u n i v e r s i t i e s or as a measure of t h e i r v a l u e t o our P r o v i n c e . I t i s b e t t e r to have a s m a l l e r number of b e t t e r q u a l i f i e d and r e s p e c t e d graduates than a l a r g e r number w i t h more dubious qualifications. ( C o u n c i l document 17) The  Minister,  tion  the Honorable P.L.  a t C o u n c i l ' s 1981  general  tenor  of  senior  Canadian  annual  these  McGeer, i n an o r a l  outlook conference,  remarks  university  which  educator,  MacDonald, t o be a s i n g u l a r l y important policy,  tantamount  education  no  to  longer  represented  university  implicit every  Dr.  John  statement  by  a  Barfoot  of government to  primary  university  objective  of  B.C.  indeed government holds t h i s view as a s a l i e n t f e a t u r e  of i t s support for  a  a f f i r m e d the  considered  saying t h a t a c c e s s i b i l i t y  government f i n a n c i a l support i n If  were  presenta-  for universities and  position  qualified  of  Council each  student  i t portends  operations.  university  a p p l i c a n t and  to  major  implications  Presently provide  to l i m i t  a  the  i t is  the  place  for  establish-  74  ment of where  enrolment  quotas  extraordinarily  open enrolment. universities  to  high  those costs  Indeed a l l new  for  schools,  approval  of  and  such  other  are  medicine,  factors  program p r o p o s a l s Council  as  to  a  prohibit  submitted large  by  extent  j u s t i f i e d on the b a s i s of student demand. On  the  describing on  the  other  other  the  matter  of  intermediary  important most  requests this the  In B.C.  largely  general  United  Kingdom  and  factor the  upon  or  t a r g e t s are  university.  Act  is silent  the  case  in  neighbouring  agreed  The  in  need  upon for  by  some  enrolment numbers  component, which i s c u r r e n t l y in  determining  universities  enrolment  i n i t s annual purpose  i s not  of government's views on  significant  factor  This  because i t i s t h i s  expenditures.  University  places.  where enrolment  c l e a r understanding  the  the  the  d u t i e s of a u n i v e r s i t y  enrolment  state,  government,  however,  f u n c t i o n s and  jurisdictions,  Washington  is  hand,  instructional  predicate their Council  considers  funding recommendation and  allocates  operating  patterns.  budget  grant  on  an  enrolment  driven  basis. In terms of the l e v e l of f i n a n c i a l support f o r the u n i v e r sities  a s e t of circumstances  as Perry f o r e c a s t i n 1969,  has  developed  the government and  i n B.C. the  i n which,  universities  are i n c o n f l i c t . T h i s disagreement i s recorded i n the f o l l o w i n g table  ( p a r t i c u l a r l y i n column G).  75  B.C. UNIVERSITIES OPERATING GRANT ($000)  1975 1976 1977 1978 1979 1980 1981  C D UCBC Difference Recommenc3ation % B/C  B Universities Request  A Fiscal Year •76 •77 •78 •79 •80 •81 •82  $155,650 192,652 194,235 202,498 218,924 242,255 270,513  $161,689 208,083 213,502 220,880 234,742 254,415 283,210 As  E F G Government Difference Difference Grant % E/C % E/B  -3.73 -7.42 -9.02 -8.32 -6.74 -4.78 -4.48  the p e r i o d o f disagreement  budget  tolerance  internal  by  which  expenditures  the  $150,200 170,400 184,500 200,578 217,226 239,612 271,713  - 3.50 -11.56 - 5.01 - 0.95 - 0.78 - 1.09 + 0.44  lengthens,  the margin of  universities  or e f f e c t  improved  can  - 7.11 -18.11 -13.58 - 9.19 - 7.46 - 5.82 - 4.06  reallocate  use o f r e s o u r c e s t o  accommodate l e s s than requested l e v e l s o f funding d i m i n i s h e s t o the  point  at  curtailed.  which  academic  The u n i v e r s i t i e s  activities  are then  v e r i f y i n g e x i s t i n g program p r i o r i t i e s . circumstances "extent  to  grants". In faces  has  not g i v e n  which  the  any  left  have  to  be  with  the task o f  The government i n these  clear  universities  may  understanding  may  rely  on  o f the  government  (Perry 1969:7) the absence o f such an understanding,  the problem  defensible  level  of  determining  of  funding  what  for  the i n t e r m e d i a r y  is a  reasonable  universities.  This  and is  p a r t i c u l a r l y v e x i n g i n l i g h t o f Bowen's view t h a t the nature o f legitimate  academic  activity  is virtually  bound o n l y by the amount of money a v a i l a b l e It be  i s clear  limitless  and i s  t o support i t .  t h a t d e c i s i o n s on these matters  will  have t o  informed by judgements which i n t u r n can o n l y be p a r t i a l l y ,  76  and  not  n e c e s s a r i l y s i g n i f i c a n t l y , based on e m p i r i c a l  informa-  tion. Summed Council's  up,  two  approach  major to  problems  the  have  development  resulted  of  the  from  annual  the  funding  recommendation. First, fully  Council  of the v a l i d i t y  sities. in  the  The  the  presentation  problem has for  some d e f i n e d  areas  not  to  not  the of  been able  universities,  to  satisfy  a  of  The  an  independent  This  framework  Hence P e r r y ' s i n order  Council  perception  to the  has  of  nor  format  information. analytical  budgeting  Council.  univer-  satisfactory  not been determined.  principles  itself  to develop s i n g l y ,  u n i v e r s i t y budget  been answered by  develop  finances. which  able  of disagreement between the u n i v e r s i t i e s and  ment has able  been  a r i s e n because a s a t i s f a c t o r y  budget review has  for  not  of the budget bases of the three  C o u n c i l has  c o n s u l t a t i o n with  for  has  call  narrow govern-  not  been  university  absence of government p o l i c y about the extent  universities  may  rely  on  government  grants  has  to  compli-  cated C o u n c i l ' s task of f o r m u l a t i n g an annual recommendation on the g e n e r a l purpose o p e r a t i n g grant f o r u n i v e r s i t i e s . Second,  the  inability  of  Council  to  validate  s a t i s f a c t i o n the budget base of each u n i v e r s i t y has the development of an annual funding context with  the  of the  u n i v e r s i t y s e c t o r as  to  allocate  universities.  the  has  a whole  resulted in  (that i s , d e a l i n g  r e q u e s t s ) . T h i s recom-  not been employed as the  provincial  its  recommendation s e t i n the  aggregate of the u n i v e r s i t i e s '  mendation subsequently  to  operating  grant  to  instrument individual  77  Chapter F i v e ANALYSIS OF COUNCIL'S ROLE IN THE ALLOCATION OF THE ANNUAL PROVINCIAL OPERATING GRANTS  The  U n i v e r s i t y A c t empowers C o u n c i l t o  . . . r e c e i v e , a l l o c a t e and d i s t r i b u t e o p e r a t i n g grants and grants designated by the M i n i s t e r , but a u n i v e r s i t y i s not r e q u i r e d t o use o p e r a t i n g grants a l l o c a t e d t o a u n i v e r s i t y for any particular aspects of i t s operations, ( s e c t i o n 69f) In  actual  universities' of  practice  operating  the funds;  the C o u n c i l  grants  nor does  issues  the cheques  Council  does,  however,  contentious  of  the  issue.  directly  allocate  allocation  I t may  not r e c e i v e the  i n the sense of t a k i n g  i t distribute  Ministry  determination  does  fairly  the funds, t o the  the  be  and  remains  said  f o r the  universities.  grants  process  custody  that,  a  the major  i n large  measure, the a l l o c a t i o n e x e r c i s e has been made more troublesome as  a result  of Council's  d e v i s e a wholly the  request  devised  of  operating  collectively.  determination  i n the f i r s t  instance to  s a t i s f a c t o r y procedure f o r the d e t e r m i n a t i o n o f level  universities  inability  grant  Presumably,  o f the funding  required  funding i f Council,  f o r the i n the  f o r the system, had  a working method o f a r r i v i n g a t the l e v e l o f o p e r a t i n g  funds r e q u i r e d by each u n i v e r s i t y , the a l l o c a t i o n o f the amount subsequently Council's  made a v a i l a b l e by the government funding  straightforward  recommendation  fashion.  however, such a f u l l y  could  As the e a r l i e r  satisfactory  i n response t o proceed  in  a  discussion indicates,  method o f e s t a b l i s h i n g the  78  financial  requirements  of  the  universities  has  not  yet  been  developed by C o u n c i l .  THE COUNCIL'S APPROACH In making i t s a l l o c a t i o n d e c i s i o n s , C o u n c i l has f o l l o w e d a different  s e t of procedures  from those employed i n aggregating  the u n i v e r s i t i e s ' budget r e q u e s t s . In p e r s p e c t i v e , i t must be noted t h a t C o u n c i l i n h e r i t e d a h i s t o r i c a l p r a c t i c e of a l l o c a t i o n which was formula cum  c h a r a c t e r i z e d by a  n e g o t i a t i o n and has been d e s c r i b e d thus:  ...the grant used to be d i v i d e d by a f i n a n c i a l A d v i s o r y Board to the M i n i s t e r of E d u c a t i o n . In 1970-71 and 1971-72, UBC and UVic proposed grant d e c i s i o n s t o the Board which were based on a formula approach. The Board modified the proposed divisions but retained the recommended formula as the s t a r t i n g p o i n t f o r the grant divisions. In subsequent years the t h r e e u n i v e r s i t i e s n e g o t i a t e d amongst themselves on the grant d i v i s i o n u s i n g the formula as the s t a r t i n g p o i n t f o r d i s c u s s i o n . The r e s u l t s of these n e g o t i a t i o n s were then conveyed to the A d v i s o r y Board which i n t u r n reviewed and endorsed them and passed on i t s recommendations to the M i n i s t e r of E d u c a t i o n . ( C o u n c i l document 3) In A p r i l 1976  the U n i v e r s i t y of V i c t o r i a expressed concern  t h a t t h e r e i s evidence t h a t the U n i v e r s i t i e s C o u n c i l i s d e p a r t i n g from the use of a r a t i o n a l b a s i s of grant d i v i s i o n which was based upon c r i t e r i a which had been agreed t o by the u n i v e r s i t i e s . ( C o u n c i l document 3) The  criteria  i n question included  the  formula  components  and  t h e i r founding p r i n c i p l e s . * Dr. Petch a l s o noted i n the same l e t t e r  that:  One of the o b j e c t i o n s t o the formula which was used i s t h a t any s p e c i a l f a c t o r s which r e q u i r e r e c o g n i t i o n o u t s i d e the formula must be made a t the expense of one or more of the o t h e r u n i v e r s i t i e s . ( C o u n c i l document 3) *For d e t a i l s of the formula components and the p r i n c i p l e s upon which the formula was based see appendix D.  79  This  fact  include  i s an  axiom  the t o t a l  which  grant  can be  insofar  as  broadened any  i n scope t o  adjustments  t o the  a l l o c a t i o n t o one u n i v e r s i t y have a d i r e c t l y p e r c e p t i b l e impact on  the a l l o c a t i o n s t o the other  f a c t o r which c o n t r i b u t e s stances larger with  a great  such many  This  t o the making o f a d v e r s a r i a l  i n the i s s u e o f grant system  two i n s t i t u t i o n s .  as t h a t  is a  circum-  a l l o c a t i o n d e c i s i o n making. In a o f the United  institutions,  Kingdom o r O n t a r i o  differences  i n one  institu-  t i o n ' s a l l o c a t i o n cannot be d i r e c t l y p e r c e i v e d t o have a d i r e c t e f f e c t on any other i n s t i t u t i o n ' s In issue.  1978  the C o u n c i l  share.  decided  to  review  the  allocation  In i t s a l l o c a t i o n r e p o r t o f t h a t year C o u n c i l s e t f o r t h  the f o l l o w i n g o b j e c t i v e s f o r t h i s  review:  A f t e r some agreement has been reached on what should be the f u t u r e d i f f e r e n c e s i n r o l e s and programs o f B r i t i s h Columbia u n i v e r s i t i e s , f u r t h e r measures can be i n s t i t u t e d to r e f i n e the a l l o c a t i o n p r o c e s s . During the 1978-79 year, the C o u n c i l r e q u i r e d the a s s i s t a n c e , c o o p e r a t i o n and agreement o f the u n i v e r s i t i e s i n studying the a p p r o p r i a t e academic s e r v i c e s t o be d e l i v e r e d by each u n i v e r s i t y and i n d e v i s i n g a s u i t a b l e formula t o r e f l e c t an e q u i t a b l e a l l o c a t i o n o f the p r o v i n c i a l o p e r a t i n g grant. (Council document 8) The  study  o f the academic  university in  the  programs  was not pursued  next  chapter.  and t h i s  Council  development o f an a l l o c a t i o n Prior allocated  to taking  u s i n g an incremental of  the  this  the p r o v i n c i a l  grant  t o be  provided  matter w i l l  did initiate,  be  by  each  discussed  however,  the  formula.  d e c i s i o n the C o u n c i l operating  grant  b a s i c a l l y had  t o each u n i v e r s i t y  approach based upon the h i s t o r i c a l p a t t e r n  allocation.  Council  was,  however,  clearly  uncomfortable w i t h t h i s s i m p l i s t i c procedure because i t was not  80  satisfied  that  i t would  enable  the  g e n e r a l goals on the a l l o c a t i o n  realization  of  i t s stated  process:  In allocating the Provincial Grant among the three u n i v e r s i t i e s , the C o u n c i l seeks the maximum b e n e f i t to the p u b l i c of B r i t i s h Columbia a r i s i n g from the use of the grant. Ideally, each university should receive the f i n a n c i a l support which w i l l enable i t to f u n c t i o n capably i n p r o v i d i n g a p p r o p r i a t e t e a c h i n g , r e s e a r c h and community s e r v i c e s . ( C o u n c i l document 8) In  1978,  associated  with  the  Mr.  B.  consultant, subject.  i n order  to  assist  allocation Hansen,  i t i n a n a l y s i n g the  decisions, Council  to  define  an  S p e c i f i c a l l y the c o n s u l t a n t was  issues  retained a  approach  to  the  asked:  to recommend measures and methodology to the U n i v e r s i t i e s C o u n c i l of B r i t i s h Columbia to a s s i s t i n i t s d e t e r m i n a t i o n of recommendations f o r a p p r o p r i a t e funding of u n i v e r s i t i e s i n B r i t i s h Columbia both as to system need and the e q u i t a b l e d i s t r i b u t i o n of government funds made a v a i l a b l e . ( C o u n c i l document 7) Council  obviously  recognized  connection  between  determining  allocation  of  funding.  levels  of  the  the  universities  the O n t a r i o weighting enrolment relative  in to  University.  B.C., the  the the  the  had  the  consultant  of  of  and  logical  funding  matter  and  of  concluded  significantly  Victoria  and  that, i f student  underfunded Simon  Fraser  the r e l a t i v e l e v e l s among the  u n i v e r s i t i e s he a l s o concluded  the  funding  a p p l i e d to u n i v e r s i t y  been  University  Notwithstanding  level  Regarding  system was UBC  desirable  B.C.  that:  even a l l o w i n g f o r h i s t o r i c a l relationships, roles of i n s t i t u t i o n s , number of u n i v e r s i t i e s , range of program o f f e r i n g , the present alignment of B.C. u n i v e r s i t i e s w i t h r e s p e c t to funding per u n i t of approximately weighted enrolment i s s u b s t a n t i a l l y out of l i n e ( i n the d i r e c t i o n of higher funding i n B.C.). ( C o u n c i l document 7) Although  previously  Council  had  criticized  UBC  on  the  81  grounds amount  that of  that  money  university  on  academic  had  spent  salaries  a  to  disproportionate the  detriment  l i b r a r y , p h y s i c a l p l a n t and other non-salary expenditure Council's  1978-79  allocation  decision  coincided  of  items,  with  the  c o n s u l t a n t ' s f i n d i n g as f o l l o w s : I t i s the o p i n i o n of the C o u n c i l , having regard to the nature and extent of the s e r v i c e s c u r r e n t l y p r o v i d e d by the u n i v e r s i t i e s , t h a t the U n i v e r s i t y of B r i t i s h Columbia m e r i t s a somewhat l a r g e r share of the o p e r a t i n g grant than would be p r o v i d e d by i n c r e m e n t a l funding based on the h i s t o r i c a l p a t t e r n of the grant a l l o c a t i o n . The 1978-79 grant allocation reflects a move to alleviate this imbalance. ( C o u n c i l document 8) T h i s departure smaller  universities  attractions which  from i n c r e m e n t a l  might  of  and  developing  increase  the  funding  probably a  formula  caused  enhanced basis  predictability  concern for  the  them  f o r the of  at  the  allocation  their  individual  grants. On  the method of d e v e l o p i n g  acknowledged the  that  assumption  questions  of  such  a formula  d i f f e r e n c e s i n funding past  roles  and,  the c o n s u l t a n t  occurred  therefore,  because the  of  crucial  related  to the nature of f u t u r e d i f f e r e n c e s i n r o l e s and programs of the B.C. u n i v e r s i t i e s and to how they should be d i f f e r e n t i a l l y funded. ( C o u n c i l document 7) In  responding  to  these  questions  the  consultant  defined  four major t a s k s : 1)  t o d e f i n e the m i s s i o n and r o l e s of the  2)  to  define  and  assemble  appropriate  universities;  information  for  the d e t e r m i n a t i o n of the u n i v e r s i t y system's needs and provision  of  accountability  government  funds;  in  the  expenditure  both the of  82  3)  t o design  4)  to  the a l l o c a t i o n methodology per se; and,  develop  an  annual  reporting  format  revenue and expenditure i n f o r m a t i o n . The  Council  focussed  proceeded  on the t h i r d ;  methodology. staff  and  exercise for  on  A  task  that  force  university  a l l four  matters  t o the p r i n c i p l e s * .  the b a s i s o f a three year t r i a l p e r i o d ; for  the  fiscal  years  1979-80  to  involving a  Council  preliminary  developed. A  grant  Council  i t s priority  o f an a l l o c a t i o n  As  p r i n c i p l e s was  the a l l o c a t i o n o f the o p e r a t i n g  relation  but  established  representatives.  a set of guiding  comparable  ( C o u n c i l document 10)  i s , the design was  for  formula  was then d e v i s e d i n  adopted  the formula  on  t h a t i s , t o be a p p l i e d  1981-82  inclusive  on  the  understanding t h a t continuous review o f the formula would occur during  the p e r i o d  underlying will  of i t s a p p l i c a t i o n .  The  fundamental  the formula i s t h a t over the longer  follow  the students;"  that  tenet  run "the d o l l a r s  i s , i t i s largely  enrolment  driven. The correct  formula some  reporting. relative original  was  revised  inconsistencies  These  funding  changes  i n the f i r s t and  changes  d i d not  year due  significantly  i n order to  to  enrolment  a f f e c t the  l e v e l s o f the u n i v e r s i t i e s i n 1979-80 and the  principles  were  still  satisfied  by  the  revised  formula. In e f f e c t , the a l l o c a t i o n formula c o u l d be d e s c r i b e d f o r c e d - f i t formula i n s o f a r as i n the f i r s t  instance i t s  *For d e t a i l s o f the p r i n c i p l e s and t h e i r r e l a t i o n t o the formula see appendix D.  as a  83  application  resulted  i n levels  o f funding  nearly  i d e n t i c a l to  those o f the l a s t year p r i o r t o i t s implementation. university  has s t a t e d  Indeed one  that:  An i m p l i c i t p r i n c i p l e g u i d i n g the d e l i b e r a t i o n o f the Task Force was t h a t the h i s t o r i c a l funding l e v e l r e l a t i o n s h i p among the u n i v e r s i t i e s . . . should not be s i g n i f i c a n t l y altered by the i n t r o d u c t i o n of a formula. (Council document 19) This  desire  to maintain h i s t o r i c a l  e x p l a i n e d not so much by a b e l i e f t h a t fair  or  equitable  universities minimal  that  but the  acceptable  by most  amount  the  relationships*  the e x i s t i n g  political  recent  o f funding  l e v e l s were  agreement  level that  can be  of  the  approximates  the  each  university  is  prepared t o accept i n d i v i d u a l l y and c o l l e c t i v e l y i n the context of the o v e r a l l a v a i l a b i l i t y o f p r o v i n c i a l This explanation  funds.  i s supported by the f a c t  that  w h i l e the  agreement i n r e s p e c t o f the a p p l i c a t i o n  o f the formula  a minor p o r t i o n  at Council's  the  universities  formula's entire  strongly  application  available  allocation  (5%) t o be d i s t r i b u t e d  the formula  amount.  on t h a t  argued t h a t  basis  i n the f i r s t  be  used  The u n i v e r s i t i e s and t h a t  included  discretion year of the  to d i s t r i b u t e  the  could calculate  the  calculation  showed a r e s u l t  n e a r l y i d e n t i c a l t o the immediately p r e v i o u s year's a l l o c a t i o n . Council this  acquiesced  point  and a l l o c a t e d  of d i s c r e t i o n a r y  the grant on t h a t  judgement  further  basis.  comments  On will  follow. With the completion o f the agreed, t h r e e - y e a r *For a" t e n year appendix E.  overview  o f these  funding  application  relationships  see  84  of the a l l o c a t i o n  formula i n 1981-82, C o u n c i l ,  w i t h the u n i v e r s i t i e s , review  has  cisms  of  not  been  the  enunciated  initiated  in this  a review of the matter.  completed.  formula's  The  main  implementation  study.  in consultation  From t h i s  That  f e a t u r e s and have,  criti-  however,  context the  role  been  of  the  C o u n c i l can be reasonably d e f i n e d . The of  the  first  p o i n t t o be observed  formula  ensured  operating  g r a n t would be  basis  an  of  student (5%)  agreed  numbers,  discretionary used  effect  the  limits in  represents a  significant  least  allocated  enrolment  judgement  entirely,  at  impacts  95%  of  implementation the  i s essentially  driven.  The  allocation.  large on  the  enough  on  This  amount  universities:  the  based  remaining  of C o u n c i l ' s a b i l i t y the  provincial  to the u n i v e r s i t i e s  a l g o r i t h m * which  or  constitutes  that  i s t h a t the  on  portion  to  exercise  factor, of  if  money  i t is  to  large  enough t o a l t e r the e f f e c t s of the enrolment p a t t e r n s e x e r c i s e d i n the a l g o r i t h m . How fair  has C o u n c i l chosen t o e x e r c i s e t h i s d i s c r e t i o n ?  to say t h a t C o u n c i l has r e f r a i n e d  from t a k i n g any  It is discre-  t i o n a r y d e c i s i o n s without the agreement of the u n i v e r s i t i e s even then by l i m i t i n g the area t o approximately 1 to 1%% total  operating grant.  assistance  in  the  Basically  development  of  programs and  support of s p e c i f i c  in  of  the  form  programs  of  two  matters  new  and  and  of the  were  treated:  emergent  academic  areas of academic e x c e l l e n c e  distinction.  In  the  former  C o u n c i l reviewed and approved p r o p o s a l s submitted by the * For an e x p l a n a t i o n of the a l g o r i t h m see appendix  F.  case  85  universities time.  f o r designated  This  procedure  funding  was  for a specific  instituted  i n order  p e r i o d of  t o a s s i s t the  u n i v e r s i t y a d m i n i s t r a t i o n s i n p r o t e c t i n g money f o r new academic initiatives.  Although  Senates  and Boards  without  Council  these  activities  o f Governors,  emphasis  decisions),  they  would have d i f f i c u l t y  small  represented  a  amounts  designated  Ministerial  and  this  Council  and  particular British  the  academic  Columbia*.  programs,  excellence Like  i t i s again  the  felt  Programs  Council  funding  of  Distinction  initiative  which  by mutual consent of  f o r enhancement  of  areas  of  and o f s p e c i f i c  relevance  to  funding  and  of  new  by the u n i v e r s i t y  w i t h i n the i n s t i t u t i o n a l budget a l l o c a t i o n and emergent  basis  of  the  programs,  formula.  the  institution.  description  While  however,  Council  judgement o f each u n i v e r s i t y  emergent  administrations  process.  Council  funding  U n l i k e the  i t i s allocated  relies  upon  the  f o r the use o f these  o f the use o f such  won  (up t o h o f 1% o f  t h a t the C o u n c i l ' s emphasis i s r e q u i r e d t o p r o t e c t such  new  role  process.  was designated  universities  that,  the " f o i l "  i n maintaining  u n i v e r s i t y a p p r o v a l . A small amount o f money the t o t a l o p e r a t i n g grant)  felt  by  r e s p o n s i b i l i t y f o r unpopular  f o r them w i t h i n the i n s t i t u t i o n a l budget The  approved  the P r e s i d e n t s  (one might c a l l  of the C o u n c i l : t h a t i s , t o accept  were  receives  funds,  on the academic  funds w i t h i n a  i t attempts  post-facto no  formal  e v a l u a t i o n o f the v a r i o u s uses t o which the money i s put. * For the formal terms o f r e f e r e n c e o f Programs o f D i s t i n c t i o n see appendix G.  86  These spectrum  two  of  areas  then  Council's  allocating  the  have  exercise  provincial  represented of  almost  the  total  discretionary decisions  operating  grant  by  the  in  allocation  formula*.  In percentage terms the amount of money i n v o l v e d i s  less  three  than  a v a i l a b l e by the  percent  of  the  total  government. F i n a l l y ,  decisions  has  been  the  constrained  seek u n i v e r s i t y agreement i n both  operating  grants  made  d i s c r e t i o n a r y nature  by  Council's  decision  1982,  the  p r a c t i c e has  funds to cover  to  cases.  In p a s s i n g , i t should be noted t h a t d u r i n g the p e r i o d to  of  grown  up  of  designating  the p r o j e c t e d a d d i t i o n a l c o s t s a r i s i n g  operating from  (new  the  shown a w i l l i n g n e s s to  occasions  approve a new funding  program only  commitment  university's an  part  invariant  in  -  C o u n c i l has in principle  there  has  been  to proceed with  situation,  p r i n c i p l e without rejection  when the  the  - that a  emerging).  the  i n t r o d u c t i o n of newly-approved programs few  and  1974  i s , without  reluctance  on  such programs. Although  exercise  of  an  On  a the not  approval-in-  funding has become almost the e q u i v a l e n t of a  those  cases  where  approval  and  concurrently  both  proceed w i t h  such new  the  u n i v e r s i t y has  funding.  And  by  requested  declining  to  programs i n the absence of guaranteed  * For 1981-82 the p r o v i n c i a l o p e r a t i n g grant m a r g i n a l l y exceeded C o u n c i l ' s recommendation. A c c o r d i n g l y C o u n c i l i n i t s a l l o c a t i o n of t h a t year's grant d e v i s e d a system development fund concept which s p e c i f i e d p a r t i c u l a r purposes which C o u n c i l f e l t such " a d d i t i o n a l " monies ought to be put. While C o u n c i l made i t s a l l o c a t i o n on t h i s b a s i s , i t c o u l d , however, only suggest t o each u n i v e r s i t y t h a t i t apply i t s share of these funds along these l i n e s when i t made i t s own i n t e r n a l a l l o c a t i o n . T h i s d i s c r e t i o n a r y d e c i s i o n by C o u n c i l i s e x c e p t i o n a l f o r i t arose i n the anomalous circumstances of r e c e i v i n g a l a r g e r grant than requested.  87  funding,  the d i s s a f f e c t e d  university  in a  sense  shifts  the  burden o f r e s p o n s i b i l i t y f o r the f a i l u r e t o perform over t o the Council  - a t l e a s t i n the f i r s t  instance,  over t o the government i f funding It Council  i s clear  operating  f a r the most  (this and  by  i s not s u p p l i e d .  accepting  the a l l o c a t i o n  e s s e n t i a l l y agreed t o d i s t r i b u t e the v a s t  provincial by  that  l a t e r , by i n f e r e n c e ,  making  on two main bases:  important  was ensured by  grant  basis,  by adopting  previous  enrolment  enrolment f a c t o r i n the a l g o r i t h m ) ; philosophy  that  shifts  in  The presented  first  basis  can  be  This  university  criticism  will  defended  follow  shifts  in  on  two  grounds.  had no reasonable  It  Simply basis  than some a r b i t r a r y i n c r e m e n t a l i s t because  i t lacked  an element o f p r e d i c t a b i l i t y  predominant  t o the u n i v e r s i t i e s .  was not d e s i r a b l e that  the  force  and the second i s the b a s i c  s t a t e d , without such consensus C o u n c i l  approach.  level  students.  the minimum acceptable  to a l l o c a t e the funds other  funding  as the d r i v i n g  levels  resources  enrolment, i . e . d o l l a r s f o l l o w  bulk o f the  the f i r s t , and  i s the past  enrolment  formula  i t was open t o the  both a r a t i o n a l b a s i s and  i n the funding.  I t a l s o i s agreed t h a t any r a d i c a l change from one year t o the  next  conditions as  i s unacceptable  because  i t creates  f o r the a f f e c t e d i n s t i t u t i o n s .  The formula,  i t i s by enrolment, i s not s u s c e p t i b l e  from  year  t o year  because  current  unmanageable  t o great  enrolments  driven  variations  are r e l a t i v e l y  s t a b l e a t the u n i v e r s i t y l e v e l . The  second  base  i s defensible  on  the grounds  t h a t the  88  provincial  grant  i s primarily  c o s t s of e d u c a t i n g B.C. The  intended  to  pay  instructional  students.  r e a c t i o n s of the u n i v e r s i t i e s to the t h r e e year  of the a l l o c a t i o n formula allocating  the  trial  are r e l e v a n t to C o u n c i l ' s problem of  grant.  The  two  newer  universities  favour  r e t e n t i o n of the b a s i c formula:  both have gained more i n terms  of  grant  their  sity.  relative  share  of  the  than  the  oldest univer-  More i m p o r t a n t l y , w i t h the r e t e n t i o n of the formula,  sustained  trend  i n enrolment growth which i s p r o j e c t e d  the  stands  to g a i n them an even g r e a t e r share i n f u t u r e .  A c c o r d i n g l y , the  focus  in  of  their  concerns  lies  elsewhere,  as  the  words  of  . Simon F r a s e r U n i v e r s i t y : The fundamental problem appears not to be w i t h the p r e s e n t formula a l l o c a t i o n mechanism but r a t h e r w i t h the f a i l u r e of the p r o v i n c i a l o p e r a t i n g grants to compensate f o r i n f l a t i o n , enrolment growth and the changing program mix of s t u d e n t s . . . ( C o u n c i l document 18) and, What i s c l e a r l y r e q u i r e d i s r e c o g n i t i o n by the p r o v i n c i a l government of the need to a t l e a s t m a i n t a i n i f not increase the constant dollar discretionary provincial grant per weighted f u l l - t i m e e q u i v a l e n t student. ( C o u n c i l document 18) On t h i s p o i n t UBC  concurs:  The P r e s i d e n t s t a t e d t h a t there were weaknesses i n the p r e s e n t formula. However, i f the money from the government were s u f f i c i e n t l y l a r g e , even w i t h the weaknesses i n the p r e s e n t formula, the U n i v e r s i t y would probably not be as unhappy as i t was today. ( C o u n c i l document 13) The formula  smaller has  universities  improved  the  also  agree  institutions'  that  ability  the to  present  plan.  In  SFU's view: The  use  of a formula  f o r the p a s t t h r e e years  represented  89  the f i r s t attempt t o b r i n g a degree o f s t a b i l i t y and p r e d i c t a b i l i t y , as w e l l as e q u i t y , i n t o the process f o r a l l o c a t i n g p r o v i n c i a l o p e r a t i n g g r a n t s . In l a r g e measure, the p r e s e n t formula has achieved these o b j e c t i v e s , and as a v a l u a b l e by-product, has enhanced the f i n a n c i a l p l a n n i n g process o f each u n i v e r s i t y . ( C o u n c i l document 19) The U n i v e r s i t y of V i c t o r i a  concurs:  One o f the most c o m p e l l i n g reasons from the u n i v e r s i t y ' s p o i n t o f view f o r r e t a i n i n g a formula i s the a s s i s t a n c e i t provides i n forward planning. This i s particularly important when the government i s u n w i l l i n g , or unable, t o g i v e commitments about f u t u r e y e a r s ' f u n d i n g . (Council document 20) The essence o f the p r e d i c t a b i l i t y which the formula a f f o r d s the universities  relates  t o the f a c t  that  each  institution  can  p r e d i c t f a i r l y a c c u r a t e l y i t s share of the p r o v i n c i a l o p e r a t i n g grant then  f o r at least estimate  one year  i n advance.  the percentage  The u n i v e r s i t y can  i n c r e a s e i n the t o t a l  operating  grant and a r r i v e a t a d o l l a r f i g u r e o f the amount o f p r o v i n c i a l o p e r a t i n g funds i t would l i k e l y Accordingly  i t can  institutional any  budget.  planning  role  then  plan  r e c e i v e i n the f o l l o w i n g year. with  greater  I t i s important that  Council  t o note,  may  confidence however,  undertake  an that  i s not  p a r t i c u l a r l y enhanced by the formula - a p o i n t t o be d i s c u s s e d later. The Columbia,  largest however,  experience.  While  institution, i s less  the  University  enamoured  o f the formula  i t t o o , along w i t h i t s s i s t e r  has gained some s t a b i l i t y  and p r e d i c t a b i l i t y  fact  has decreased  i s that  enrolment  UBC's share  indicators  diminution of that  driving  share.  the  of  British by i t s  institutions,  i n i t s g r a n t , the  and, furthermore, the  formula  portend  further  UBC c l a i m s w i t h s u p p o r t i n g evidence  90  that  the formula  shares  which  enrolment. an  are highly  formula  resulted  correlated  which  bears  and p r o f e s s i o n a l only takes  programs,  programs,  weighted  institutional equivalent  i s e s p e c i a l l y punitive to  the g r e a t e s t number  into p a r t i a l  i . e . the  in  to full-time  T h i s f a c t , UBC contends,  institution  graduate  has e s s e n t i a l l y  of high  and the mechanics  account  cost  of the  the enrolment  i n such  equivalent  student  full-time  component o f the formula. All  three  universities  have  a  concern  about  a  formula  component, the SFU t r i m e s t e r constant, which was i n c o r p o r a t e d to  take  into  associated  with  universities the  consideration higher  undertaken;  a trimester operation.  called  suitability  operating  f o r a c o s t study  o f the c o n s t a n t .  costs generally  The consensus  o f the matter  o f the  to verify  T h i s study has not y e t been  an e a r l i e r study by a f i r m o f c h a r t e r e d accountants  r e p o r t e d t h a t t r i m e s t e r o p e r a t i o n s were more c o s t l y .  BASIC PROBLEMS ASSOCIATED WITH COUNCIL'S APPROACH TO THE ALLOCATION OF THE PROVINCIAL OPERATING GRANT  The  record  shows,  therefore,  that  the formula  as an  a l l o c a t i o n mechanism y i e l d e d a m i n i m a l l y a c c e p t a b l e d i v i s i o n o f the  o p e r a t i n g grant  failed  t o c a r r y the consensus  i t s use. in  i n the f i r s t  share  grant/FTE  o f i t s a p p l i c a t i o n but  through the three year p e r i o d o f  In the t h i r d year the l a r g e s t  i t s relative  declining  year  i n s t i t u t i o n was l o s i n g  o f the grant which, ratio  ( i n constant  combined dollars),  w i t h the caused  91  d i s s e n s i o n over the the  formula's continuance.  need f o r f l e x i b i l i t y  annual  review  allocate  a  on  to  make  formula  maintained  and  amount  a  consensus  basis  in  favour  retained  of  -  up  to  an  5%  ability  of  the  to  grant.  i n d i s c o v e r i n g methods, i f  adjustments  some d e f e n s i b l e  recognized  a c c o r d i n g l y made p r o v i s i o n f o r an  however, u n s u c c e s s f u l  existed,  margin  the  discretionary  C o u n c i l was, they  of  and  Council  within which of  this would  the  five  percent  possibly  continuation  have  of  the  formula mechanism. It 1978  should  be  noted here t h a t C o u n c i l has  r e s o l u t i o n which was  consultants  to  r e - a f f i r m e d by  determine  more  one  not of  definitively  d i f f e r e n c e s i n r o l e s and programs among the three Such d i f f e r e n c e s c o u l d c o n c e i v a b l y allocating Perry experience the  i t s financial the  future  universities.  i n p a r t serve as a b a s i s f o r  resources. had  foreseen  the  difficulty  an  intermediary  would  i n coming to g r i p s w i t h a f a i r a l l o c a t i o n process  absence of  government  pursued i t s  an  understanding concerning  a minimal l e v e l  in of  support:  One of the main causes of d i s s e n s i o n between ( s i c ) the three p u b l i c u n i v e r s i t i e s has been due, i n p a r t , to a l a c k of agreement as to what the ground r u l e s were, or ought to be, governing f i n a n c i a l support from the p u b l i c s e c t o r . And we t h i n k t h a t the task of any new i n t e r m e d i a r y would be much more manageable i f there were g e n e r a l g u i d e l i n e s . (Perry, 1969:45) As noted e a r l i e r such g u i d e l i n e s have not been forthcoming  from  government. Currently, finds  itself  the  salient  in allocating  circumstances  the  provincial  in  which  operating  Council  grant  can  92  be summarized as 1)  a  including:  statutory  responsibility  to  allocate  the  determining  a  provincial  o p e r a t i n g grant; 2)  an  unsatisfactory  funding  level  serving  as  method  of  for universities a  basis  for  the  which  recommended  i s not  subsequent  useful  in  allocation  decisions; 3)  a  dissolution  of  any  respecting  a  acceptable  allocation  consensus  methodology  which  result  among would  the  universities  yield  a  minimally  f o r the 1982-83 f i s c a l  year  and beyond; 4)  a  lack  of  government  guidelines  respecting  a  practical  b a s i s of f i n a n c i a l support f o r u n i v e r s i t i e s ; 5)  the  absence  programs  of  t o be  a  clear  perspective  undertaken by  of  the  each u n i v e r s i t y  roles  and  in contri-  b u t i n g toward a r a t i o n a l system of h i g h e r e d u c a t i o n .  93  Chapter S i x CONCLUSIONS  What  problems,  encountered  in  any,  i t s financial  might be done about An  if  approach  has  the  decision-making  on  what  Council  to  these  occasions  experienced  decision-making study  has  Council  role,  and  what  such problems? questions  c o n s i d e r i n g the r h e t o r i c a l q u e s t i o n : is,  Universities  and  under  brought  In  to  in  response, light  be  commenced  In what s i t u a t i o n s ,  what  difficulties  role?  might  circumstances,  has  by that the  executing  its  financial  i t might be  said  that  several  explicit  and  the  implicit  situations. Implicitly, that  the  i t s financial  built-in  Council  role  constraints  has  i s , of  learned course,  affecting  its  through  experience  c i r c u m s c r i b e d by general  role  as  the an  intermediary. Even through the C o u n c i l may judgement about wish to  impartial  a f i n a n c i a l q u e s t i o n r e f e r r e d t o i t , and might  t o implement an  reach a d e f i n i t i v e ,  such  intermediary,  h a r d l y be prudent  a judgement, as i n a l l matters  the  Council  has  learned  that  brought i t would  t o do so u n l e s s i t had the steady support of  a s i g n i f i c a n t p r o p o r t i o n of the a f f e c t e d p a r t i e s . The  analysis  has suggested t h a t the C o u n c i l , as a p r a c t i c a l matter,  probably  has t o have the steady support of the p r o v i n c i a l government and at its  least  one,  i f not two,  decisions w i l l  hold.  of the u n i v e r s i t i e s As  one  t o be  s e n i o r Canadian  sure  that  government  94  o f f i c i a l has  explained  i t must be r e c o g n i z e d t h a t such bodies ( i n t e r m e d i a r i e s ) , whether enshrined i n l e g i s l a t i o n or c r e a t e d by o r d e r - i n council, whether possessed technically of executive a u t h o r i t y or l i m i t e d to an a d v i s o r y r o l e , have no p u b l i c base of a u t h o r i t y and power. What has been c r e a t e d by government i s i n e x i s t e n c e at the p l e a s u r e of government. I t may be more or l e s s independent and i t may be h i g h l y i n f l u e n t i a l , but i t cannot be a b s o l u t e l y a u t h o r i t a t i v e . ( S i b l e y , 1982:11) In order Council fell  conceivably  short  of  problem? And sense? said  The  thoughts  can  has  the about  consultant's It  its  might own  have best  shows only  Council i t s own  to  had,  advocate  judgement. i n the  one or  came  to  1978  genuine  decision-making  having,  case  study  area of the  has  shown t h a t  formulation  be  second  involving a  of a best  some i d e n t i f i a b l e  judgement  difficulties  arise.  shown t h a t  the most d i f f i c u l t  p o i n t of view, the  formal submission funds),  and  available operating  other,  the  joint  as an  insisted  the the  request of  the  funds.  individual institution  undertaking),  (the  one  subsequent d i s t r i b u t i o n  Although each u n i v e r s i t y prepares estimates  tasks:  of the budget spending estimates the  study  problems encountered by  C o u n c i l have a r i s e n i n i t s performance of two  for  a  which  where i t might  close  (the  decision this  financial  From a f i n a n c i a l decision-making has  a  Is  experience  judgement  (as i t were) the  recommendations).  i s i n the  the  a s u f f i c i e n t majority  i t occurred  study  that  that  to secure  a l l the  i t s own  s e t of  spending  (and c e r t a i n l y not as a  universities  i n d e f i n i n g the mode of a l l o c a t i o n  have,  in  effect,  of whatever  funds  95  are  eventually  appropriated  f o r general  operating  purposes  by  the L e g i s l a t u r e . So there i s a j o i n t a l l o c a t i o n approach but singular pre-determination  of needs.  The C o u n c i l f i n d s i t s e l f university the t o t a l  requests  and  methods then,  to  system's request  Government. T h i s task employed  this  -  judgement  f o r c e d to e v a l u a t e formulate  both  has  (determination vex  the  a  of  Council.  close  need In  1981/82, C o u n c i l faced two signals  of  outlook  and  a  the  caused concern - over  the  and  the  vastly  s e t of agreed  Government.  new  changed  the  criteria.  as  of  of  funds)  the  end  complicating -  and  related  of  tasks  continues fiscal  to year  f a c t o r s : the e a r l y  constrained  a sharp d i v i s i o n of thought among the  over the proper mode of  But  s i d e when  between these  allocation  addition,  about  d i s t r i b u t i o n of the a v a i l a b l e  linkage  and  individual  judgement  about needs i s s e t to one  funds i s made w i t h i n i t s own l a c k of  the  recommended to  Council  a l l o c a t i o n task i s performed. The  The  i t s own  t h a t ought to be  in itself  to  a  -  financial  universities  allocation.  So the n e c e s s i t y of r e t a i n i n g s i g n i f i c a n t support  from the  other major e n t i t i e s i n the system has become, almost suddenly, more d i f f i c u l t The suggests  f o r the i n t e r m e d i a r y ,  study's that  examination  these  of  difficulties  the  literature,  are  not  making nor  intermediary.  Bowen s f i n d i n g s i n d i c a t e t h a t there  universities.  unique to the B r i t i s h  1  respecting  reasonable  levels  however,  necessarily  C o u n c i l ' s own  guidance  indeed  the U n i v e r s i t i e s C o u n c i l .  of  of  Columbia  i s not much funding  for  96  In in  addition,  British  n e i t h e r the government nor the u n i v e r s i t i e s  Columbia  have  performed  wholly  satisfactorily  in  t h i s domain. The former has not communicated much i n the way o f fiscal  policies  and g u i d e l i n e s w h i l e the l a t t e r  able t o p r e s e n t t h e i r budget submissions institutional Council  decision-making  clearly  has not been g r e a t l y  these  steps  might  successful  clarify  priorities.  i n persuading  actions.  Council  a p p r o p r i a t e l y take  to  address  difficulties? P u r s u i n g the analyses o f t h i s  upon  i n ways which  i n terms o f academic  these p a r t i e s i n t o t a k i n g such What  have not been  which  requirement  Council  might  f o r Council  to  study any courses o f a c t i o n  embark  ought  attempt  to  to secure  observe  the  significant  support f o r i t s d e c i s i o n s . I t f o l l o w s , t h e r e f o r e , t h a t C o u n c i l ought t o continue t o s o l i c i t  the views and c o o p e r a t i o n o f the  government and the u n i v e r s i t i e s . The  review o f the l i t e r a t u r e ,  the seminal s t u d i e s l e a d i n g  to the e s t a b l i s h m e n t o f C o u n c i l and C o u n c i l ' s own d e l i b e r a t i o n s have a l l p o i n t e d t o a g e n e r a l acceptance o f the d e s i r a b i l i t y of linking  financial  decision-making upon  some  agreed  to  a  planning  preferably  based  set of  assumptions  r e s p e c t i n g the c o n s t i t u e n t elements  process  principles  and  o f the intended  plan. B e a r i n g these f a c t o r s i n mind, some comments a r e i n order respecting  a broadly  defined d i r e c t i o n  which  i t i s suggested  C o u n c i l might assume t o a s s i s t i t i n f u t u r e f i n a n c i a l making.  decision-  97  The  chances  of  a  university  system  emerging  from  l a i s s e z - f a i r e approach by the i n s t i t u t i o n s are very s m a l l . inherent permit tive act  political  nature  of i n s t i t u t i o n a l  survival  an o b j e c t i v e system-wide view t o emerge.  i s r e q u i r e d and i t i s reasonable i n the f i r s t  institutions interests.  and  instance  Additionally,  are  Council's  The  w i l l not  Some  initia-  f o r the i n t e r m e d i a r y t o  s i n c e , as Robbins  government  a  bound  noted,  by  current  both the  their  vested  financial  mandate  can be i n t e r p r e t e d as i n c l u d i n g r e s p o n s i b i l i t y f o r the development  o f a system  requires support  Council  wide  view  t o advise  and development  generally"  or p l a n *  f o r the U n i v e r s i t y A c t  on the monies  o f each  required  university  for  "the  and u n i v e r s i t i e s  ( s e c t i o n 69r, emphasis added).  C o u n c i l has a l r e a d y attempted t o a c t i n a a d v i s o r y manner in all  the case three  establishing  o f the expansion universities expanded  of engineering  expressed  engineering  education.  strong  education  interest  programs,  b e f o r e r e c e i v i n g any formal p r o p o s a l s , i n i t i a t e d  When in  Council  a large scale  g e n e r a l study o f e n g i n e e r i n g e d u c a t i o n i n order b e t t e r t o *The g e n e r a l meaning o f "plan" o f "planning" i n t h i s context has been d e f i n e d by M i l l a r d : the essential components of planning remain fairly constant. B a s i c a l l y p l a n n i n g i n v o l v e s i d e n t i f i c a t i o n o f key problems, accumulation of accurate data about these problems, a n a l y s i s o f t h e i r i n t e r r e l a t i o n s , e x t r a p o l a t i o n of f u t u r e a l t e r n a t i v e s t h a t might emerge from present conditions, assessment o f probable consequences of i n t r o d u c i n g new v a r i a b l e s , and the c h o i c e o f the most d e s i r a b l e m o d i f i e d a l t e r n a t i v e s as b a s i c o b j e c t i v e s t o be obtained...includes a sequential plan o r plans f o r implementing the b a s i c o b j e c t i v e s and a system f o r p e r i o d i c a l l y r e - e v a l u a t i n g the o b j e c t i v e s and the means f o r a c h i e v i n g them. ( M i l l a r d , 1980:79)  98  inform  itself  university still  and  proposals  can  Council's  not  competitive, certainly nate  fully  was  explore  the  possibility  education.  It  determine  the  for  be f i n a n c e d through  of  fiscal  is  any  event,  however,  anticipation  of  the  with  competing  proposals  in  curriculum  sense,  a  developing  identify  emergence i s the  of  a l l three reasonable  a mission  Such  framework  development  policy  interest  additional for  and  investigations  government  government's of  then  In order to e l i m i -  program  p r o f e s s i o n a l programs  in  for  which  resources  the  current  the development of such programs cannot  i n t e r n a l budget r e a l l o c a t i o n s .  current situation,  government kind.  in  appropriation  f i n a n c i a l circumstances  The  In  responsibilities. the  various  matter  c o s t l y , d u p l i c a t i v e e f f o r t s by  by  particularly  this  i n a s i n g l e program area i t would seem  affected  university must  assessed.  strictly  university  be  the  stage, the r e s u l t s of such a c t i o n by  system, which would  determine  which As  i n terms of c l a i m s on r e s o u r c e s .  institutions  would  evaluated.  forward  not  such p o t e n t i a l l y  the  be  within  conducted  coming if  context  could  be  study  universities'  for  a  i n the developmental  Council  to  set  restraint,  dominated as i t i s by the i s s u e of calls  for planning  of  a  special  As Shattock e x p l a i n s : The c r u c i a l danger i n t h i s s i t u a t i o n i s t h a t p l a n n i n g i s abandoned or simply degenerates into a resource redeployment or withdrawal e x e r c i s e , a year by year r e d u c t i o n i n expenditure m i r r o r i n g the annual, seemingly haphazard p u b l i c expenditure cuts. It is necessary, t h e r e f o r e , to e s t a b l i s h a longer term s t r a t e g y which serves as a framework w i t h i n which the s h o r t term p l a n n i n g can take p l a c e . Such a s t r a t e g y should not aim to be unduly complicated nor should be p a r t i c u l a r l y d e t a i l e d . I t might, f o r example, e s t a b l i s h c e r t a i n q u a l i t y f a c t o r s ,  99  the need to improve i n t a k e l e v e l s i n c e r t a i n courses, to b u i l d up s t r o n g e r r e s e a r c h schools i n c e r t a i n areas, to c o n c e n t r a t e resources more on c e r t a i n departments or areas of n a t i o n a l r e p u t a t i o n , n a t i o n a l importance or s t r a t e g i c significance to the university. I t might establish c e r t a i n p l a n n i n g parameters such as encouraging growth i n c e r t a i n s u b j e c t areas a t the expense of o t h e r s . I t might lay down c e r t a i n f i n a n c i a l g o a l s such as the r e d u c t i o n of energy c o s t s or the r e d u c t i o n of f i x e d c o s t s a r i s i n g from premises, or concern i t s e l f w i t h the long term f u t u r e of c e r t a i n s i t e s or b u i l d i n g s . I t might suggest that a c e r t a i n f i g u r e should somehow be saved each year i n order to encourage new academic developments or to p r o t e c t c e r t a i n v u l n e r a b l e areas which the u n i v e r s i t y wishes to preserve. The only e s s e n t i a l of such a s t r a t e g y i s t h a t i t should be r e a l i s t i c w i t h i n the circumstances of the i n s t i t u t i o n and should not e s t a b l i s h long term aims which the u n i v e r s i t y can never r e a l i z e . I f i n s t i t u t i o n s were f o r c e d to s u b s c r i b e to "mission statements" as i n the U n i t e d S t a t e s or a statement of purposes and o b j e c t i v e s as recommended by the S e l e c t Committee... the development of a s t r a t e g y t a i l o r e d to the needs of the i n s t i t u t i o n would be t h a t much e a s i e r . I t i s e s s e n t i a l t h a t the s h o r t term p l a n should be geared to the longer term s t r a t e g y because i n the new s i t u a t i o n t h a t s t r a t e g y w i l l only be r e a l i z e d through a series of o p p o r t u n i s t i c and i n themselves r e l a t i v e l y small d e c i s i o n s . (Shattock, 1982:207) Shattock's institutional r e l a t e d but The recently  observations, level.  The  however,  planning  role  are of  directed an  at  intermediary  the is  different.  U n i v e r s i t y Grants commented  on  Committee i n the U n i t e d Kingdom  its  perception  of  planning  and  has the  Committee's r o l e as f o l l o w s : The Committee sees i t s r o l e i n the p e r i o d ahead not as a formal p l a n n i n g body, but as the body most a b l e to a s s i s t i n s t i t u t i o n s , s e v e r a l l y and t o g e t h e r , to r e a c t i n ways h e l p f u l both f o r t h e i r own f u t u r e and as p a r t of a national system of h i g h e r education where restricted r e s o u r c e s must be used e f f e c t i v e l y . T h i s w i l l only be achieved, however, by j o i n t e f f o r t s and the e s s e n t i a l r o l e w i l l be p l a y e d by each u n i v e r s i t y ' s approval of i t s own p o s i t i o n . . . A d a p t a t i o n to change cannot always be a quick p r o c e s s , and much of what w i l l emerge w i l l be of an e v o l u t i o n a r y k i n d . However, l i t t l e new development w i l l be p o s s i b l e u n l e s s the system can generate, even w i t h i n reduced income, the resources which t h i s may require. (Shattock, 1980:197)  100  One made  way  that  the  adoption  of  by  Council  would  operational  consultation  with  the  such  government  a  direction  be  and  for  the  might  be  Council,  in  universities,  to  attempt to answer three q u e s t i o n s : 1)  What programs w i l l be o f f e r e d a t each u n i v e r s i t y ?  2)  What g e n e r a l s i z e of enrolment ought to be planned  f o r the  major c a t e g o r i e s of programs? 3)  What  ranges  of  costs  institutional  can  experience  be  expected  based  in  the  major  the  report  on  current  categories  of  programs? This  approach  consultant university  in  responds  1978,  mission  which  and  to  suggested  role  be  that  undertaken  of  a  Council's  definition  f o r the  of  purpose  of  determining d i f f e r e n t i a l funding. Moreover, i t i s i n  accordance  with  should  the  C o u n c i l ' s own future  1978  d e c i s i o n to  differences in  universities.  This  task  the  determine what  roles  and  represents  programs  essentially  f u n c t i o n which the Hurtubise-Rowat r e p o r t and t h a t i n t e r m e d i a r i e s assume. On serve  to  determine  universities allocation on  and  in  i s s u e . On  Treasury  the  Board's  levels  measure  insistence  for  a l s o enable  consequences  i t s funding  develop  and  reducing  implement  manpower needs. On  planning  others  recommend  policies  required  settle  government's p a r t the  funding requests and w i l l of  the  B.C.'s  C o u n c i l ' s p a r t the answers  funding  large  of  the  be  will  by  the  subsequent  answers w i l l  focus  more a n a l y t i c a l l y - b a s e d government to assess  for  to  universities  addressing  and  the to  provincial  the u n i v e r s i t i e s ' p a r t i t would permit  them  101  to focus t h e i r e n e r g i e s on developments which have a reasonably good chance of s e c u r i n g funding support - i n e f f e c t i t would be an  incentive  for  institutional  planning.  Additionally  they  would r e t a i n the autonomy of d i r e c t i o n of academic developments as they see f i t , and  even i f they modify or d i s r e g a r d the C o u n c i l ' s  government's  advice  concerning  specific  academic  directions. T h i s approach a l s o r e c o g n i z e s the need i n times of scarce resources  f o r the  imposition  of  external  constraints  which  cannot be reasonably expected t o emanate from the i n s t i t u t i o n s . It  addresses the  implication  c o s t s by r e f r a i n i n g  of  from s e t t i n g  the  diversity  specific  of  university  c o s t s by program. I t  c o u l d be developed t o p r o v i d e a rudimentary l i n k a g e between the i s s u e s o f funding recommendation of  the  implications  university  of  "needs" and  the  and grant a l l o c a t i o n .  inability  "outcomes"  issue  to  define  i t could  In view  objectively a l s o be used  to p l a c e the onus upon the i n s t i t u t i o n s t o demonstrate b e n e f i t s a r i s i n g from any requests f o r funding beyond the d e f i n e d ranges of c o s t s . With Council course  would of  government for  a  some,  even  be  namely:  an agreement  defined  s e t of  of  government  which  a  i n a better  action,  existence  places  incomplete,  the  answers  position  that  these  questions  to pursue a  corollary  Council  to  negotiate  with  f o r a minimal l e v e l of funding university  legitimate  extends beyond  responsibility  upon  educational substantive the mere  government  support  services. interest  provision to  the  of  enunciate  The of  a  funds this  102  interest. reticent  For reasons  t o announce p o l i c y  intermediary The be  e a r l i e r d i s c u s s e d , the government may be  must  attempt  i n h i g h e r e d u c a t i o n . T h i s means an t o persuade  b a s i c o b j e c t i v e o f such to arrive  universities reasonable  the government  discussions with  a t an understanding  about  to act.  government would  the degree  t o which  can r e l y upon government f i n a n c i a l support.  t o assume t h a t the d e t e r m i n a t i o n  of funding  It is levels  may r e s u l t i n e x p l o r a t i o n o f government's s p e c i f i c i n t e r e s t f o r particular is,  s e r v i c e s t o be p r o v i d e d by the u n i v e r s i t i e s  the conscious  expression  of  discussed  e a r l i e r , there e x i s t s  direction  f o r the u n i v e r s i t y  and  accepted  that  changes  substantive  a definite  g u i d e l i n e s . As  l a c k o f government  s e c t o r i n B.C. i n the economic  r e s p o n s i b l e governments from promulgating  - that  I t i s recognized climate  preclude  p o l i c i e s which would  commit them t o f i x e d a p p r o p r i a t i o n s f o r any p u b l i c s e c t o r . T h i s reality  does  not,  responsibility  to  however,  establish  i n t e r e s t i n higher education In education  British  Columbia  by government  d o l l a r s per student.  excuse  government  guidelines  about  from  its  the p u b l i c ' s  services. the  priority  accorded  has d e c l i n e d i f measured  A r e c e n t statement  to by  higher constant  by the D e p u t y - M i n i s t e r  acknowledged i n r e a l terms f i n a n c i a l support per student has dropped s i g n i f i c a n t l y over the past f o u r o r f i v e y e a r s . . . (and) i s about the same now as i t was i n 1972. (Council document 20) This  d e c l i n e i s contrasted with  financial colleges  support and  by  government  institutes,  public  the comparative over  the  schools  same  and  increases i n period f o r  hospitals.  The  103  universities  are  clearly  an  industry  affected  by  public  i n t e r e s t . There has been, however, as d i s c u s s e d e a r l i e r , guidance  offered  by  the government  about  i t s views  little on the  d e f i n i t i o n and maintenance o f the p u b l i c i n t e r e s t i n u n i v e r s i t y education  in  observed,  B.C.  As  a  senior  university  "there appears t o me t o be l i t t l e  governmental (Pedersen,  policy  that  1978:1).  relates  to  For example,  official  has  or no comprehensive  the u n i v e r s i t y  does  a  decrease  scene" i n the  r e l a t i v e supply o f income mean t h a t the government expects some r e c i p r o c a l d i m i n u t i o n of program s e r v i c e s a t u n i v e r s i t i e s ? President in  o f the U n i v e r s i t y o f Toronto  The  has posed the q u e s t i o n  the f o l l o w i n g terms: J u s t what i s the paymaster's view o f the r o l e . . . u n i v e r s i t i e s should be performing i n d i v i d u a l l y and i n concert? That s o r t o f q u e s t i o n has t o be answered b e f o r e u n i v e r s i t i e s can respond i n o p e r a t i o n a l terms. (Ham, 1981:1)  Government s i l e n c e on t h i s matter may r i g h t l y attempt  t o escape  the consequences  of  be viewed as an  i t s own  a c t i o n s , an  understandable  and not unexpected a t t i t u d e , g i v e n the nature of  the  process.  political  In times  government's p r i o r i t i e s and  a r e not e a s i l y  interest low  i n doing  priority,  virtually  defended.  as h i g h e r  c o n s t r a i n t the  vulnerable  to attack  Hence the government's  so i s g r e a t l y d i m i n i s h e d education,  and i n an area o f  the need t o do so i s  The r e c o g n i t i o n by government o f the neces-  sity  to give  clearer  has,  however,  been  proto-type  are p a r t i c u l a r l y  publicly  such  absent.  of f i n a n c i a l  guidance  on higher  r e c e n t l y acknowledged  intermediary  education  decisions  i n relation  - the U n i v e r s i t y Grants  t o the  Committee i n  the U n i t e d Kingdom. The M i n i s t e r there r e c e n t l y s t a t e d  104  t h a t i t might be more a p p r o p r i a t e f o r M i n i s t e r s t o take more responsibility than they have hitherto for determining p r i o r i t i e s a f f e c t i n g the broad c h a r a c t e r of the a l l o c a t i o n of r e s o u r c e s to the u n i v e r s i t i e s . (THES, 16 J u l y 1982:1) The U n i v e r s i t i e s C o u n c i l i s mandated t o a d v i s e the ment about the is  financial  requirements  o b l i g a t e d , t h e r e f o r e , on  concentrate policy  the  government's  i n higher  reasonable  education.  grounds  Berdahl  argued,  interest  as  "a  to  it  C o u n c i l might  joint  venture  views  on  objective  up  ought  to  seek from  matter  the the  universities, matter  make  express  sovereignty".  government formal  the p u b l i c  not  fully  be  i n c o n s u l t a t i o n with  The  critical  o b j e c t i v e s of  As its  for a  government's  Council, the  as  an  universities  t o become i n v o l v e d i n the framing of the  policy.  on  in university  expected, formed,  to  Accord-  support  interest  It  public  decisions.  government  state  of  the government  i t s funding  reasonably  are  intermediary,  of on  to  a c t of  I f , as might this  mind  of the u n i v e r s i t i e s .  I t should press  to a r t i c u l a t e  c o u l d attempt ment's  face  conscious  ingly  education.  behalf  govern-  govern-  these d i s c u s s i o n s  would be t o a s c e r t a i n the nature of the government's agenda f o r universities, financial that  upon  support  can  i t s explicit  taken i n t o  which be  some given,  objectives  in  reasonable and  to  higher  undertakings  assure  the  education  for  government are  being  government  about  account.  Related  to  Council's  discussions with  h i g h e r e d u c a t i o n p o l i c y , a concurrent theme f o r development i s suggested the  by  Treasury  the  current d i f f i c u l t y  Board  with  budgetary  C o u n c i l has submissions  i n providing which  convey  105  among  other  practices  within  described this  matters the  earlier,  problem  "a  at  sense  the  has  been d e s c r i b e d  evaluate to  the  not  the  problems in  Treasury  Board  this  these matters i n other  matter  possible as  by  a to  submission  which  with  of  such  As with  objective  the means employed  solutions  of  indicators and  utilized  but  Ministry  the  be  officials  of  acceptable i n budget  proofs  of  submissions  sector. exercise  the  i t might  be  useful  for  u n i v e r s i t i e s ways of  redesigning  budget  include  p o l i c i e s , plans,  and  to  perhaps  are  requests  to  assumptions and  based.  The  Treasury  Board  to  objective  meet  a  judgements of  e x e r c i s e would be t o a s s i s t the C o u n c i l i n i t s d i s c u s s i o n s the  by  administrations  could  with  and  problems  the It  discussing  their  requests  14) .  a former chairman of i t s  responses of  related, parallel discuss  document  Council's  communication).  developed  d e s c r i p t i o n of the on  the  areas of the p u b l i c  As  the  (oral  management  to b r i n g about the e f f e c t i v e use  prescribe  adequacy of  assisted  Council  to  by  of  unsuccessfully  level.  to evaluate  the u n i v e r s i t y a d m i n i s t r a t i o n s resources;  state  wrestled  institutional  Business A f f a i r s Committee:  of  the  u n i v e r s i t i e s " (Council Council  i n t h i s matter has  of  this with  the  legitimate  i n q u i r i e s of these bodies f o r a c c o u n t a b i l i t y i n the  expenditure  of p u b l i c funds. In call  summary, the  for  the  recognize  the  its  foregoing  Universities  suggested d i r e c t i o n and  Council:  need f o r government and  decisions;  and  second,  to  first,  to  actions  continue  to  u n i v e r s i t i e s support f o r  initiate  and  facilitate  a  106  planning  process  f o r higher  education  in British  Columbia by  commencing d i s c u s s i o n s w i t h the government and u n i v e r s i t i e s on selected This both  issues. study has examined the conceptual c h a r a c t e r i s t i c s of  government-university  relations  and  the  nature  u n i v e r s i t y c o s t s and f i n a n c i a l behaviour. I t has been  of  suggested  t h a t these c h a r a c t e r i s t i c s have i m p l i c a t i o n s f o r the r o l e of an intermediary  body  i n higher  education  i n making  financial  d e c i s i o n s . An a n a l y s i s o f the i n t e r p o s i t i o n o f an i n t e r m e d i a r y in  government-university  indicated  that  significant  i n order  relations  was  f o r a buffer  agency  conducted t o be  which  effective  support f o r i t s d e c i s i o n s by the major e n t i t i e s i n  the system must be secured. The study analyzed the U n i v e r s i t i e s C o u n c i l ' s major d e c i s i o n s r e l a t i n g mandate actions. and  some  and  identified  some  problems  In c o n c l u s i o n , the study consequent  actions  to i t s statutory  that  associated  suggested Council  address these problems i n i t s f u t u r e f i n a n c i a l  a broad might  financial with i t s direction pursue  to  decision-making.  107  BIBLIOGRAPHY  I  Books, Monographs, A r t i c l e s  II  M i s c e l l a n e o u s P u b l i s h e d Documents: Statutes, etc.  III  M i s c e l l a n e o u s Unpublished Documents: D i s s e r t a t i o n s , UCBC correspondence and f i l e documents, e t c .  IV  U n i v e r s i t i e s C o u n c i l of B r i t i s h Columbia (UCBC): Documents  Report,  108  I  Books, Monographs, A r t i c l e s  ALLEN, R i c h a r d . BRINKMAN, P a u l . M a r g i n a l C o s t i n g Techniques f o r Higher E d u c a t i o n . 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I n t e r n a t i o n a l J o u r n a l o f I n s t i t u t i o n a l Management i n Higher E d u c a t i o n . March 1982, V o l . 6 , N o . l , pp.37-43. BOWEN, Howard R. The Costs o f Higher E d u c a t i o n . How Much Do C o l l e g e s and U n i v e r s i t i e s Spend per Student and How Much Should They Spend? A Report o f the Carnegie C o u n c i l on P o l i c y S t u d i e s i n Higher E d u c a t i o n . San F r a n c i s c o : Jossey-Bass P u b l i s h e r s , 1980. CAMERON, J.M. On the Idea o f a U n i v e r s i t y . U n i v e r s i t y of Toronto P r e s s , 1978.  Toronto:  CARNEGIE COUNCIL, The Carnegie C o u n c i l on P o l i c y S t u d i e s i n Higher E d u c a t i o n . A Summary of Reports and Recommendat i o n s . San F r a n c i s c o : Jossey-Bass P u b l i s h e r s , 1980. CARTER, C h a r l e s F. "The B r i t i s h U n i v e r s i t i e s and the S t a t e : A Comment". Higher E d u c a t i o n . 9 (1980) pp.1-5. CASTON, G e o f f r e y . " P l a n n i n g , Government, and A d m i n i s t r a t i o n i n Two U n i v e r s i t y Systems" C a l i f o r n i a and the U n i t e d Kingdon". Oxford Review o f E d u c a t i o n . V o l . 5 , No.2, 1979. COPE, Robert G. S t r a t e g i c P o l i c y P l a n n i n g . L i t t l e t o n , Colorado: The I r e l a n d E d u c a t i o n a l C o r p o r a t i o n , 1978. CORRY, J.A. U n i v e r s i t i e s and Governments. L i m i t e d , 1969.  Toronto: W.J. Gage  DAINTON, S i r F r e d e r i c k . Whitehead R e v i s i t e d : U n i v e r s i t i e s and the S t a t e . E x e t e r : The U n i v e r s i t y o f E x e t e r , 1980.  109  DOBELL, Rodney. ZUSSMAN, David. "An E v a l u a t i o n system f o r government: I f p o l i t i c s i n t h e a t r e , then e v a l u a t i o n i s (mostly) a r t " . Canadian P u b l i c A d m i n i s t r a t i o n . Volume 2 4 , No.3, 1 9 8 1 , pp.404-427. . " P r e s s i n g the Envelope". Options. V o l . 2 , No.5, pp.13-18. GARVIN, David A. The Economics of U n i v e r s i t y New York: Academic P r e s s , 1 9 8 0 .  Behaviour.  . "Models o f U n i v e r s i t y Behaviour," Working Paper, Graduate School o f Business A d m i n i s t r a t i o n , Harvard U n i v e r s i t y , undated. GLENNY, Lyman A. Funding Higher E d u c a t i o n . New York: Publishers, 1979.  Praeger  . "The Next Twenty Years f o r Higher E d u c a t i o n " . Review A r t i c l e , Higher E d u c a t i o n , volume 1 0 , 1 9 8 1 , pp. 4 8 7 - 4 9 0 . . S t a t e Budgeting f o r Higher E d u c a t i o n : Interagency C o n f l i c t and Consensus. B e r k e l e y : Center f o r Research and Development i n Higher E d u c a t i o n , U n i v e r s i t y of C a l i f o r n i a , 1 9 7 6 . GREGOR, Alexander. WILSON, K e i t h , eds. Monographs i n E d u c a t i o n I Issues i n Higher E d u c a t i o n . Winnipeg: U n i v e r s i t y o f Manitoba, 1 9 7 9 . . eds. Monographs i n E d u c a t i o n II Higher E d u c a t i o n i n Canada: H i s t o r i c a l P e r s p e c t i v e s . Winnipeg: U n i v e r s i t y o f Manitoba, 1 9 7 9 . HALSTEAD, D. Kent. Statewide P l a n n i n g i n Higher E d u c a t i o n . Washington: U.S. Department of H e a l t h , E d u c a t i o n , and Welfare, 1 9 7 4 . HARE, Kenneth. On U n i v e r s i t y Freedom i n the Canadian Context. Toronto: The U n i v e r s i t y o f Toronto P r e s s , 1 9 6 8 . HICKS, M i c h a e l . "The Envelope P l e a s e . . . " . B u l l e t i n o f the I n s t i t u t e o f P u b l i c A d m i n i s t r a t i o n o f Canada. 4:4. January 1 9 8 1 . HOPKINS, David S.P. MASSY, W i l l i a m F. P l a n n i n g Models f o r C o l l e g e s and U n i v e r s i t i e s . S t a n f o r d CA: S t a n f o r d University Press, 1981. MILLARD, R i c h a r d M. S t a t e Boards o f Higher E d u c a t i o n . Washington: The American A s s o c i a t i o n f o r Higher E d u c a t i o n , 1976.  110  . "Power o f S t a t e C o o r d i n a t i n g Agencies" i n Improving Academic Management, Paul Jedamus, Marvin W. Peterson and A s s o c i a t e s , San F r a n c i s c o : Jossey-Bass P u b l i s h e r s , 1980. MORTIMER, Kenneth P. MCCONNELL, T.R. Sharing A u t h o r i t y E f f e c t i v e l y . San F r a n c i s c o : Jossey-Bass P u b l i s h e r s , 1978. MOYNIHAN, D a n i e l P a t r i c k . "State v s . Academe". Harpers. December 1980. NEWELL, A l l e n and SIMON, Herbert A. Human Problem S o l v i n g . Englewood C l i f f s , N.J. P r e n t i c e - H a l l Inc., 1972. NOWLAN, David M. BELLAIRE, R i c h a r d , eds. F i n a n c i n g Canadian U n i v e r s i t i e s : For Whom and By Whom? Toronto: OISE P r e s s , 1981. OWEN, Thomas A. "Is the UGC's b u f f e r p r i n c i p l e a t r i s k ? " Times Higher E d u c a t i o n Supplement. 9.5.80. RILEY, Gary L. BALDRIDGE, J . V i c t o r , eds. Governing Academic O r g a n i z a t i o n s . B e r k e l e y : McCutchan P u b l i s h i n g C o r p o r a t i o n , 1977. ROBBINS, L i o n e l C h a r l e s , Baron. Higher E d u c a t i o n R e v i s i t e d . London: MacMillan, 1980. SHATTOCK, M.L. "How Should B r i t i s h U n i v e r s i t i e s Plan f o r the 1980s?". Higher E d u c a t i o n . 11 (1982) 193-210. SHEFFIELD, Edward. CAMPBELL, Duncan D. HOLMES, J e f f r e y . KYMLICKA, B.B. WHITELAW, James H. Systems o f Higher E d u c a t i o n : Canada. New York: I n t e r n a t i o n a l C o u n c i l f o r E d u c a t i o n a l Development, 1978. SKOLNIK, M i c h a e l L. "Coping With S c a r c i t y i n Higher E d u c a t i o n : The O n t a r i o Experience". P l a n n i n g f o r Higher E d u c a t i o n . 10:3 (Spring 1982) pp.5-13. SPROULL, Lee. WEINER, Stephen. WOLF, David. O r g a n i z i n g an Anarchy. B e l i e f , Bureaucracy, and P o l i t i c s i n the N a t i o n a l I n s t i t u t e o f E d u c a t i o n . Chicago: The U n i v e r s i t y o f Chicago P r e s s , 1978. TIMES HIGHER EDUCATION SUPPLEMENT. 5.3.82. e d i t o r i a l . of the UGC".  "Secrets  TROTTER, Bernard. CARROTHERS, A.W.R. P l a n n i n g f o r P l a n n i n g R e l a t i o n s h i p s between u n i v e r s i t i e s and governments: g u i d e l i n e s t o p r o c e s s . Ottawa: A s s o c i a t i o n o f U n i v e r s i t i e s and C o l l e g e s o f Canada, 1974.  Ill  II  M i s c e l l a n e o u s P u b l i s h e d Documents; Reports, S t a t u t e s , e t c .  BLACKBURN, J . Gilmer. Chairman. Alabama's C h a l l e n g e : Higher E d u c a t i o n f o r the 1980's. Report o f t h e Second S p e c i a l Committee t o E v a l u a t e the Alabama Commission on Higher E d u c a t i o n . Montgomery, Albama. March 1979. BLADEN, V i n c e n t W. Chairman. F i n a n c i n g Higher Education i n Canada. Report o f a Commission t o the A s s o c i a t i o n o f U n i v e r s i t i e s and C o l l e g e s o f Canada. U n i v e r s i t y o f Toronto P r e s s , 1965. BREMER, John. Chairman. Working Paper on U n i v e r s i t y Governance i n B r i t i s h Columbia. B r i t i s h Columbia Department o f E d u c a t i o n (undated). COUNCIL FOR POST-SECONDARY EDUCATION. P l a n n i n g and P o l i c y Recommendations f o r Washington Post-Secondary E d u c a t i o n 1976-1982. A p r i l 1976 CURRY, Denis J . FISCHER, Norman N. JONS, Tom. Finance Issue Paper No.2 S t a t e P o l i c y Options f o r F i n a n c i n g Higher E d u c a t i o n and R e l a t e d A c c o u n t a b i l i t y O b j e c t i v e s . D i s c u s s i o n Item. S t a t e o f Washington C o u n c i l f o r Post-secondary E d u c a t i o n . February 18, 1982. FISHER, H.K. Chairman. The Report o f the Committee on the Future Role o f U n i v e r s i t i e s i n O n t a r i o . O n t a r i o M i n i s t r y of C o l l e g e s and U n i v e r s i t i e s . August 1981. HAM, J.M. NOWLAN, D.M. Core Funding f o r U n i v e r s i t i e s Remarks Prepared f o r the AUCC V i c t o r i a Meeting. March 1982. . Article. May 1981.  U n i v e r s i t y o f Toronto, BULLETIN, 25  HURTUBISE, Rene. ROWAT, Donald C. Commissioners. The U n i v e r s i t y , S o c i e t y and Government. The Report o f the Commission on the R e l a t i o n s Between U n i v e r s i t i e s and Governments. Ottawa: The U n i v e r s i t y o f Ottawa P r e s s , 1970. KNIGHT, Walter D. Chairman. Revised Academic Plan 1969-1975. U n i v e r s i t y o f C a l i f o r n i a , B e r k e l e y . 1969. LESLIE, Peter M. Canadian U n i v e r s i t i e s : 1980 and Beyond. Ottawa: A s s o c i a t i o n o f U n i v e r s i t i e s and C o l l e g e s o f Canada. 1980 MACDONALD, John B. Higher E d u c a t i o n i n B r i t i s h Columbia and a Plan f o r the F u t u r e . Vancouver: The U n i v e r s i t y o f B r i t i s h Columbia, 1962.  112  PERRY, G. N e i l . Chairman. Report o f the A d v i s o r y Committee on I n t e r - U n i v e r s i t y R e l a t i o n s . B r i t i s h Columbia Department o f E d u c a t i o n . May 1969. STATUTES OF BRITISH COLUMBIA C o l l e g e and I n s t i t u t e A c t . RS Chapter 53. 1979. E d u c a t i o n a l I n s t i t u t i o n C a p i t a l Finance A c t . RS Chapter 102. 1979. U n i v e r s i t y A c t . RS Chapter 419. 1979. UHLMAN, N e i l . CHANCE, W i l l i a m . P l a n n i n g Issue Paper N o . l : E n r o l l m e n t s and E n r o l l m e n t P o l i c y i n Washington Higher E d u c a t i o n : The Outlook and the Response. F i n a l D r a f t . State o f Washington C o u n c i l f o r Post-secondary E d u c a t i o n . May 18, 1982. UNIVERSITIES COUNCIL OF BRITISH COLUMBIA. Annual Reports, f o r the years 1975-1981 i n c l u s i v e . UNIVERSITY OF BRITISH COLUMBIA. The M i s s i o n o f the U n i v e r s i t y of B r i t i s h Columbia. November 1979. UNIVERSITY OF TORONTO. Budget Report 1982-83. 1 A p r i l 1982. YOUNG, Walter D. Chairman. Report o f The U n i v e r s i t y Government Committee. B r i t i s h Columbia Department o f E d u c a t i o n . May 2, 1974.  Ill  M i s c e l l a n e o u s Unpublished Documents  DENNISON, John D. Some O b s e r v a t i o n s on the A l l o c a t i o n Vancouver, June 19 81.  Formula.  . Post-secondary E d u c a t i o n i n B r i t i s h - A P e r s p e c t i v e f o r the 1980's -, June 1979.  Columbia  GILMOUR, Joseph E l l i o t t , J r . Decision-making f o r C o o r d i n a t i o n : A Study o f the I l l i n o i s Board o f Higher E d u c a t i o n . PhD d i s s e r t a t i o n . The U n i v e r s i t y o f Michigan, 1974. HOLLICK-KENYON, Tim. An A n a l y s i s o f the C o o r d i n a t i o n o f Community C o l l e g e s i n B r i t i s h Columbia. PhD d i s s e r t a t i o n . The U n i v e r s i t y o f Oregon, 1979. MCTAGGART-COWAN, P.D. June 1968.  The Governance of B.C.'s U n i v e r s i t i e s ,  NUSSBAUMER, Margaret. The Worth Report and Developments i n A l b e r t a ' s Post-Secondary P o l i c i e s and S t r u c t u r e s 1968 t o 1976. PhD d i s s e r t a t i o n . The U n i v e r s i t y o f A l b e r t a , 1977.  113  PEDERSEN, K. George. The F r o n t i e r M e n t a l i t y i n E d u c a t i o n a l Governance: The Case of B r i t i s h Columbia. B r i e f prepared f o r meeting o f the B r i t i s h Columbia C o u n c i l f o r L e a d e r s h i p i n E d u c a t i o n , Vancouver, March 9-11, 1978. RIVERA, A l v i n David. The P e r c e p t i o n s o f the S t a t e E d u c a t i o n a l C o o r d i n a t i n g Agency i n F i v e S e l e c t e d S t a t e s . PhD d i s s e r t a t i o n . The U n i v e r s i t y o f Colorado, 1976. SIBLEY, W.M. The Role o f Intermediary Bodies i n Postsecondary E d u c a t i o n . Paper d e l i v e r e d a t C o u n c i l o f M i n i s t e r s o f E d u c a t i o n , Canada Conference o f Postsecondary E d u c a t i o n Issues i n Canada f o r the 1980s. Toronto, October 19-22, 1982. UNIVERSITY OF VICTORIA. Formulae f o r D i v i s i o n o f O p e r a t i n g Grants Amongst the U n i v e r s i t i e s o f B r i t i s h Columbia. 1977.  IV  U n i v e r s i t i e s C o u n c i l o f B r i t i s h Columbia: Documents ( C h r o n o l o g i c a l order)  1.  UCBC. Funding Recommendation 1975-76. 12 December 1974.  2.  P r i c e Waterhouse A s s o c i a t e s . A n a l y s i s o f 1976/77 O p e r a t i n g Budget Submissions o f the U n i v e r s i t i e s o f B r i t i s h Columbia. September 197 5.  3.  Letter: Dr. H.E. Petch, P r e s i d e n t , U n i v e r s i t y o f V i c t o r i a t o Dr. W.M. Armstrong, Chairman, U.C.B.C. 9 A p r i l 1976.  4.  UCBC. Second Annual Report. 15 October 1976.  5.  UCBC. Funding Recommendation 1977-78. 15 October 1976.  6.  UCBC. Funding Recommendation 1978-79. 15 October 1977.  7.  B. Hansen. C o n s u l t a n t . Report. 10 A p r i l 1978.  8.  UCBC. A l l o c a t i o n Statement 1978-79. 11 May 1978.  9.  Letter: Dr. P.L. McGeer, M i n i s t e r o f E d u c a t i o n t o Dr. W.C. Gibson, Chairman, U.C.B.C. 13 June 1978.  10.  L e t t e r : B. Hansen, C o n s u l t a n t , U.C.B.C. t o G.A. Schwartz, E x e c u t i v e D i r e c t o r , U.C.B.C. 30 June 1978.  11.  L e t t e r : Dr. W.C. Gibson, Chairman, U.C.B.C. t o Dr. P.L. McGeer, M i n i s t e r o f E d u c a t i o n . 25 August 1978.  12.  L e t t e r : M. Austen, P r i c e Waterhouse, C o n s u l t a n t , t o G.A. Schwartz, E x e c u t i v e D i r e c t o r , U.C.B.C. 8 January 1979.  114  13.  U n i v e r s i t y of B r i t i s h Columbia. Senate Document. 10 September 1980.  14.  Memorandum: D. S a n d e l l , Senior Treasury Board A n a l y s t t o Dr. W.C. Hardwick, Deputy M i n i s t e r of E d u c a t i o n . 3 March 1980.  15.  P e r r y , G. N e i l . Working paper: February 1981.  16.  Addendum: Treasury Board to M i n i s t e r of U n i v e r s i t i e s , Science and Communications. C o n d i t i o n s R e l a t e d to Approval of 1981/82 E s t i m a t e s . A p r i l 1981.  17.  L e t t e r : Dr. R.W. Stewart, Deputy M i n i s t e r , U n i v e r s i t i e s Science and Communications to Dr. W.C. Gibson, Chairman, U.C.B.C. 26 June 1981.  18.  Letter: Dr. S. Verdun-Jones, SFU C h a i r p e r s o n , Senate Committee on U n i v e r s i t y Budget t o Dr. W.C. Gibson, Chairman, U.C.B.C. 8 September 1981  19.  Simon F r a s e r U n i v e r s i t y . A n a l y s i s of P r o v i n c i a l Operating Grant A l l o c a t i o n Formula and Suggestions f o r the Future. September 1981.  20.  U n i v e r s i t y of V i c t o r i a . Submission to the U n i v e r s i t i e s C o u n c i l o f B r i t i s h Columbia on the Grant A l l o c a t i o n Formula Used During the Three Years Ending i n 1981-82. October 1981.  Information System.  30  21.  L e t t e r : Dr. R.W. Stewart, Deputy M i n i s t e r , U n i v e r s i t i e s , Science and Communications t o Dr. K.G. Pedersen, P r e s i d e n t , Simon F r a s e r U n i v e r s i t y . 9 December 1981.  22.  UCBC. Notes on Annual Operating Estimates Document. 1981.  115  APPENDICES  116  APPENDIX A  1979  UNIVERSITY  RS CHAP. 419  UNIVERSITY A C T [Part to be proclaimed]  CHAPTER 419  PART 12 Interpretation  6 3 . In this Pan unless the context otherwise requires, "executive director" means the executive director of the universities council appointed under section 66. 1974-100-64. Universities c o u n c i l  6 4 . (1) There is established a corporation to be known as the universities council with a common seal, having the rights, powers, duties and liabilities set out in this A c t , and consisting of 1 I persons, one of whom shall be designated chairman, appointed, subject to subsection (5), by the Lieutenant Governor in C o u n c i l . 17  RS C H A P .  UNIVERSITY  419  28 Euz. 2  (2) The members, other than the chairman, shall annually elect one of their number as vice chairman, to act during the illness or absence of the chairman, or during any period that the chairman is unable for any reason to discharge his duties. (3) A member, other than the chairman, shall be appointed for a term of 3 years, and may be reappointed for a second term. (4) The chairman shall be appointed for a term of 3 years and may be reappointed for a second term of 5 years and one subsequent term not exceeding 5 years. (5) The following persons shall not be appointed members or continue to hold office as a member: (a) members of Parliament; (b) members of the Legislative Assembly; (c) employees or students of the universities; (d) members of the public service in the Ministries of Education, Finance or Universities, Science and Communications; (e) persons who are not resident in the Province. (6) Unless his appointment is revoked or he dies or resigns, a member shall hold office during the term for which he is appointed and after that until his successor is appointed. (7) Six members constitute a quorum, and, in the event of an equality of votes, the chairman may cast the deciding vote. (8) Each member shall be reimbursed for reasonable travelling and out of pocket expenses necessarily incurred by him in discharging his duties, and, in addition, may be paid the remuneration for his services that the Lieutenant Governor in Council may decide. (9) Where a vacancy exists on the universities council, the Lieutenant Governor in Council may appoint a person to fill the vacancy and the person so appointed shall hold office only for the remainder of the term for which his predecessor was appointed. (10) A vacancy on the universities council does not impair the authority of the remaining members of the universities council to act. 1974-100-65. 1977-75-1:  1977-76-38: B . C . R e g . 5 4 2 / 7 9 .  Agent  65. (1) The universities council is, for all purposes, an agent of the Crown in right of the Province. (2) The universities council may, as agent, carry out its powers and duties under this Part in its own name and may. with the consent of the Lieutenant Governor in Council, hold property in its own name, and likewise may dispose of its property. 1974-100-66.  Executive director and staff  66. (1) The Lieutenant Governor in Council shall appoint an executive director, define his duties and determine his remuneration and other terms and conditions of employment. (2) The universities council or. if authorized by it, the executive director, may appoint or employ officers and other employees the universities council considers necessary to carry on the business and operations of the universities council and may define their duties and, subject to the regulations, determine their remuneration and other terms and conditions of employment and provide a system of organization to carry out the purposes of the universities council. 18  118  1979  UNIVERSITY  RS CHAP. 419  (3) The provisions of sections 6 (4) and (5). 7, 8 and 9 of the Science Council Act respecting the government, the secretariat under that Act, the officers and employees of the secretariat and a trade union apply to the government, the universities council, the officers and employees of the universities council and a trade union representing employees of the universities council, respectively. I97K-2X-2.V  Company Act 67. Except as provided in this Part, the Company Act does not apply to the universities council, but the Lieutenant Governor in Council may, by order, direct that the Company Act or any provision of it applies to the universities council and that provision then applies to the universities council. 1974-100-68.  Limitation of liability 68. (1) No member or employee of the universities council and no person acting under the authority of this Part or the universities council is personally liable for any loss or damage suffered by any person by reason of anything in good faith done or omitted to be done in the exercise of any power given by this Part. (2) In an action against the universities council, if it appears that the universities council acted under the authority of this Act or..any other Act, the court shall dismiss the action against the universities council. 1974-100-69.  Powers 69.  The universities council has power (a) to provide for the regulation and conduct of its meetings and proceedings; (b) to carry out studies or research projects related to matters within its jurisdiction; (c) to require the universities to prepare and forward to the universities council plans for the short term and long term academic development of the universities, approved by the senate and by the board before being forwarded to the universities council; (d) to advise the government of the Province respecting the establishment of new universities; (e) to approve the establishment of new faculties and new degree programs; (0 to receive, review and co-ordinate the budget requests presented to it annually by the universities or presented at any other time at the request of the universities council; to transmit its recommendations, together with the original proposals from the universities to the minister; and to receive, allocate and distribute operating grants and grants designated by the minister, but a university is not required to use operating grants allocated to a university for any particular aspect of its operations; (g) to require the universities to consult with each other on actions which might be taken to minimize unnecessary duplication of faculties and programs of study; (h) to make recommendations to the universities on any matter; 19  119  RS CHAP. 419  28 buz. 2  UNIVERSITY  (i) in consultation with the universities, to establish standards for various categories of university buildings so as to provide a basis on which the universities council may assess university requests for total capital expenditures, and, in consultation with the universities, to review these standards; (j) to require the universities to provide the universities council with any reports and other information the universities council may require to carry out its powers under this Act; (k) to require a university to establish the accounting and information systems that the universities council considers necessary for the proper conduct of the business affairs of the university; (1) to consult with the universities in an effort to co-ordinate their solicitation of money for research; (m) to receive proposals from the public respecting new programs, institutes and similar matters; (n) to consider matters respecting student aid and fees; (o) to establish evaluation procedures for departments, faculties, programs and institutes; (p) to establish the committees representative of the universities council and the universities that the universities council considers necessary or advisable, but in particular (i) a business affairs committee, the purpose of which is to advise the universities council on financial matters affecting the budgets of the universities; (ii) a program co-ordinating committee, the purpose of which is to advise the universities council on all matters relating to undergraduate programs; (iii) a graduate studies and research committee, the purpose of which is to rationalize all matters respecting postgraduate programs and research in the universities; and (iv) a capital planning and development committee, the purpose of which is to review and advise the universities council on all matters having to do with capital expenditures of or for the universities; (q) to gather and make available to the universities information relevant to university education in the Province to assist in planning and development; (r) generally, to inquire into the financial requirements of universities and advise the minister of the sums of money required for the support and development of each university and universities generally; (s) generally, to act as an intermediary between the government of the Province and the universities, and between the respective universities, for the purposes of this section; and (t) to receive, allocate and distribute operating funds to other education institutions or to programs in those other education institutions that the Lieutenant Governor in Council may designate. 1974-100-70;  20  1976-32-21;  1976-7-13;  1979-8-28.  120  1979  UNIVERSITY  RS CHAP. 4 1 9  Limitation on powers  70. Notwithstanding section 69. the universities council shall not interfere in the exercise of powers conferred on a university, its board, senate and other constituent bodies by this Act respecting (a) the formulation and adoption of academic policies and standards; (b) the establishment of standards for admission and graduation; and (c) the selection and appointment of staff. 1974-100-71.  Public meetings  71. (1) The universities council shall endeavour to hold its meetings in public at locations throughout the Province in which interested members of the public will be encouraged to express their views and concerns respecting the matters under consideration by the universities council. (2) Nothing in subsection (1) shall be construed or interpreted in such a manner as to restrict the right of the universities council to conduct its proceedings in camera where, in its opinion, the public interest so requires. 1974-100-72.  Agreements  72. For the purposes of this Part, the universities council may, subject to the approval of the minister, enter into agreements the universities council considers advisable with (a) Canada; (b) a municipality; (c) a regional district; (d) an agent of the Crown in right of the Province or of Canada; (e) any ministry or department of a provincial or the federal government; or (0 any person or association. 1974-100-73:  1977-75-9.  Reports  73. (1) The universities council shall submit to the minister on or before October 15 in each year (a) a report respecting the operation of the universities council for the immediately preceding fiscal year; and (b) with respect to the operations of the universities, a report including (i) the draft budgets for the next fiscal year submitted by the universities to the universities council; (ii) the draft budget for the next fiscal year prepared by the universities council on behalf of the universities and submitted by the universities council to the minister: (iii) a resume setting out the financial resources provided to the universities council for the universities by the government of the Province for the current fiscal year; and (iv) a statement setting out the allocation by the universities council for the current fiscal year to each university of the financial resources provided by the government of the Province. 21  121  RS CHAP. 4 1 9  UNIVERSITY  28 E i . i z . 2  (2) The minister shall lay the report of the universities council before the Legislature within 15 days after the commencement of the first session in the following year. 1974-100-74.  Inquiries 74.  The universities council, or any other person authorized in writing by it for  the purpose, may make the inquiries it considers advisable for the purposes of this Part and, for this purpose, it (a) may examine any person under oath: and (b) has all the power and authority of a commissioner under sections 12, 15 and 16 of the Inquiry  Act.  1974-100-75.  Financial administration 75. The provisions of sections 11 (2), (3) and (4). 14. 15 and 16 of the Science Council Act respecting the council under that Act apply to the universities council. 1978-28-23.  122  APPENDIX B  University  D e s c r i p t i o n of Budget P r e p a r a t i o n UBC, SFU and U V i c  Processes:  THE  UNIVERSITY OF BRITISH COLUMBIA  BUDGET PREPARATION AND CONTROL PROCESSES  INTERNAL (A)  Formal  scheduled steps i n budgetary  process  The b u d g e t a r y p r o c e s s i n v o l v e s a s e r i e s o f c o n s u l t a t i o n s as f o l l o w s : (1)  G e n e r a l d i s c u s s i o n w i t h Deans - b r o a d o b j e c t i v e s w i t h UBC M i s s i o n Statement  (2)  i n keeping  o r o t h e r l o n g term academic  (a)  Departmental  (b)  Dean's s u b m i s s i o n t o t h e P r e s i d e n t .  (c)  P r e s i d e n t ' s O f f i c e - i n t e r v i e w s w i t h Deans.  plan.  s u b m i s s i o n s t o t h e Dean.  (3)  C o l l e c t i v e r e v i e w w i t h Deans and V i c e - P r e s i d e n t s .  (4)  S e n a t e Budget Committee.  (5)  President's Office.  (6)  F i n a n c e Committee o f Board and Board o f G o v e r n o r s . E x a m i n a t i o n o f Base P r i o r t o s t e p 2(c) above t h e P r e s i d e n t ' s O f f i c e d e t a i l e d e x a m i n a t i o n o f t h e budget  base.  conducts a  T h i s procedure  involves  a l i n e b y l i n e r e v i e w and e n a b l e s us t o : (a)  correct  any e a r l i e r e r r o r s o f c a l c u l a t i o n  (b)  remove o r a d j u s t n o n - r e c u r r i n g i t e m s  (c)  r e v i e w p o s i t i o n s where encumbent i s r e t i r i n g , t e r m i n a t i n g o r has d i e d ,  i n terms  c o n t i n u e d and a t what (B)  Ongoing  analytical  Data r e l a t i n g continual  activities  to s t a f f i n g ,  o f whether t h e f u n c t i o n  i s to be  level.  and a s s e s s m e n t s  student enrolment  r e v i e w by the P r e s i d e n t ' s O f f i c e  the Deans and to the S e n a t e  o r judgement  Budget  and c o s t s a r e k e p t  under  and a r e made a v a i l a b l e t o  Committee.  125 - 2 -  II  EXTERNAL In a d d i t i o n  to the i n t e r n a l  the U n i v e r s i t y These (a)  (b)  p r o c e s s e s used  i s s u b j e c t t o r e v i e w and examination by e x t e r n a l  Comparative  studies  of Business  Officers.  Dentistry,  (d)  agencies.  include: among i n s t i t u t i o n s e.g. by Canadian  A c c r e d i t a t i o n bodies f o r professional  (c)  in formulating f i s c a l planning,  schools l i k e  Association  Architecture,  E n g i n e e r i n g , M e d i c i n e and N u r s i n g .  Universities  Council of B r i t i s h  programs and  budgets.  Columbia  review o f proposed  new  Peer r e v i e w o f r e s e a r c h p r o p o s a l s to g r a n t i n g a g e n c i e s p r o v i d e s another dimension  t o assessment  of c a p a b i l i t i e s  and q u a l i t y o f  faculty. All  o f the above i n t e r n a l  o f the budget  and e x t e r n a l p r o c e s s e s are d i r e c t e d  as a management t o o l  f o r the optimum a l l o c a t i o n o f r e s o u r c e s  to meet c o n t i n u o u s l y e v o l v i n g needs.  T h i s p r o c e s s embodies the  o f program b u d g e t i n g , management by o b j e c t i v e s and III  to the use  concepts  zero base b u d g e t i n g .  MONITORING Apart  from a g e n e r a l o v e r v i e w  review o f b u s i n e s s and affairs (A)  (B)  are monitored  fiscal a t two  o f academic matters by Senate a c t i v i t i e s by the Board l e v e l s i n the f o l l o w i n g  and a s i m i l a r  o f Governors, way:  General (1)  Academic Deans  (2)  Committee o f Deans and A d m i n i s t r a t i v e Heads  Specific (1)  E s t a b l i s h m e n t o f p o l i c i e s and p r o c e d u r e s on  supplementary  including  income.  (2)  Internal  a u d i t and  (3)  External  audit  control.  a n n u a l l y by A u d i t o r G e n e r a l .  policy  university-  126  - 3 -  In a d d i t i o n supplies British  June 4,  to the above i n t e r n a l m o n i t o r i n g a c t i v i t i e s ,  a continuous  stream  University  o f data to the U n i v e r s i t i e s C o u n c i l o f  Columbia on a l l a s p e c t s o f u n i v e r s i t y  1981  the  activities.  SIMoT.f R A S B R |.::':  U N I V E R S I T Y , B U R N ^ B Y . B . C . . C A N A D A V 5 A 1S6 J j ^ g F I C E O f T H E P R E S I D E N T ; 291-4641 4  July.-.10, 1981  Dr. R o b e r t S t e w a r t Deputy M i n i s t e r Ministry of Universities, S c i e n c e and Communications Parliament Buildings V i c t o r i a , B. C. V8V 1X4 Dear Dr. S t e w a r t : A t o u r meeting o f A p r i l 24, 1981, which was h e l d i n t h e UCBC o f f i c e t o a d d r e s s t h e i s s u e s r a i s e d i n t h e T r e a s u r y Board's c o n d i t i o n s w h i c h were a t t a c h e d t o t h e M i n i s t r y ' s budget, each o f t h e u n i v e r s i t i e s undertook t o address a number o f i s s u e s r e l a t e d t o measures o r a c t i v i t i e s t o be i n c l u d e d i n t h e r e p o r t i n g system, t h e q u e s t i o n o f a p o s s i b l e a p p l i c a t i o n o f Zero Base b u d g e t i n g , and c e r t a i n m a t t e r s r e l a t e d t o t h e b u d g e t i n g p r o c e s s employed w i t h i n t h e u n i v e r sities. I w i l l a t t e m p t t o speak, on each o f t h e s e i n t u r n . Zero Base B u d g e t i n g and R e p o r t i n g System We a r e , o f c o u r s e , w i l l i n g t o p a r t i c i p a t e i n any c o n s i d e r a t i o n r e l a t e d t o the p o s s i b l e a p p l i c a t i o n o f Zero Base budgeti n g b u t must e x p r e s s some i n i t i a l r e s e r v a t i o n s i n t h i s r e g a r d , including: 1.  Zero Base b u d g e t i n g p r a c t i c e s have m e r i t when a p p l i e d t o o p e r a t i o n s which a r e e s s e n t i a l l y production oriented but i t s appropriateness i n a u n i v e r s i t y environment i s q u e s t i o n a b l e . Indeed, a c o n c l u s i o n o f one u n i v e r s i t y which undertook an e x t e n s i v e assessment o f Zero Base b u d g e t i n g was t h a t i t was q u i t e i n a p p r o p r i a t e , p a r t i c u l a r l y i n t h e academic components o f t h e institution.  2.  Any such e x a m i n a t i o n would be v e r y time consuming and would r e q u i r e t h e i n v o l v e m e n t of some o f o u r most knowledgeable and busy p e o p l e , e s p e c i a l l y J J L , the a r e a o f f i n a n c e .  128  Dr. Robert Stewart Page 2 J u l y 10, 1981  Given the l i m i t a t i o n s o f our s t a f f i n g l e v e l s , i t i s not r e a d i l y apparent to us how the demands o f such an undertaking c o u l d be s a t i s f i e d i n a reasonable manner. 3.  We have, b e f o r e now, given b r i e f c o n s i d e r a t i o n to the p o s s i b l e a p p l i c a t i o n of Zero Base budgeti n g but our p e r s u a s i o n has been t h a t the budgetary p r a c t i c e s which we f o l l o w are more a p p r o p r i a t e and s e n s i t i v e to the r e a l i t i e s of our i n s t i t u t i o n . I w i l l b r i e f l y address c e r t a i n of these budgetary c o n s i d e r a t i o n s below.  I t i s our understanding t h a t the T r e a s u r y Board d e s i r e s to see a r e p o r t i n g system which would p r o v i d e a r e c o n c i l i a t i o n , by o b j e c t , of the o p e r a t i n g grant a l l o c a t i o n and the a c t u a l expenditure f o r the f i s c a l year. The u n i v e r s i t i e s and C o u n c i l are c u r r e n t l y a d d r e s s i n g t h i s matter with the o b j e c t i v e of attempting t o i n c l u d e , i n the schedules s u p p o r t i n g the 1982/83 o p e r a t i n g request, a r e c o n c i l i a t i o n f o r the r e c e n t l y completed f i s c a l year 1980/81. I t must be noted, however, t h a t any such r e c o n c i l i a t i o n i s reasonably complex. On the one hand, the o p e r a t i n g grant i s , i n l a r g e measure, based.on the a n n u a l i z a t i o n concept whereas the f i n a n c i a l statements of the i n s t i t u t i o n which r e p o r t a c t u a l expenditures i s of course not a n n u a l i z e d . A l s o , f o r example, the f i n a n c i a l statements i n c l u d e n o n - r e c u r r i n g e x p e n d i t u r e s and o t h e r r e a l o p e r a t i n g events i n a manner d i f f e r e n t than t h a t embodied i n the o p e r a t i n g request. To r e p e a t , such a r e c o n c i l i a t i o n i s under development but i t may a l s o be h e l p f u l t o Treasury Board p e r s o n n e l , i n a d d i t i o n , to be p r o v i d e d an o p p o r t u n i t y t o become more f a m i l i a r w i t h u n i v e r s i t y budget and a c c o u n t i n g p r a c t i c e s . Budget P r e p a r a t i o n Process The budget p r e p a r a t i o n process a t Simon F r a s e r U n i v e r s i t y , as a t the o t h e r u n i v e r s i t i e s , i s l a r g e l y dominated by the f a c t t h a t we are a people i n t e n s i v e o p e r a t i o n . That i s , our human r e s o u r c e absorbs approximately 80% of our o p e r a t i n g funds. As such, our budget p r e p a r a t i o n process i s s t r o n g l y a f f e c t e d by the manner i n which we c o n t r o l our a u t h o r i z e d s t a f f complements, not o n l y a t the time of the budget p r e p a r a t i o n o r aggregation, but throughout the f i s c a l year. Our d e t a i l e d budget a g g r e g a t i o n process i s under way by December 1 o f the year p r e c e d i n g the upcoming f i s c a l year. Submissions are prepared a t the departmental l e v e l embodying both proposed complement changes and n o n - s t a f f support p r o j e c t i o n s . These are r e l a t e d to departmental p l a n n i n g , programs, and o b j e c t i v e s f o r the e n s u r i n g f i s c a l year. The budget requests are advanced up through the o r g a n i z a t i o n a l s t r u c t u r e to the V i c e -  Dr. R o b e r t S t e w a r t J u l y 1 0 , 1981 Page 3  P r e s i d e n t and P r e s i d e n t i a l l e v e l . In addition, similar budgetary proposals are prepared r e l a t e d t o university-wide a c t i v i t i e s o r expenditure areas. These r e q u e s t s a r e a n a l y z e d b o t h w i t h r e g a r d t o t h e m e r i t o f t h e r e q u e s t as j u d g e d by o u r a d m i n i s t r a t o r s and i n r e l a t i o n t o t h e l i m i t a t i o n o f o u r projected f i n a n c i a l resources. We s e e k t o c o n s o l i d a t e a p r e l i m i n a r y o p e r a t i n g b u d g e t b y t h e month o f M a r c h , p e n d i n g determination o f the actual operating grant. Upon d e t e r m i n a t i o n o f t h e a c t u a l o p e r a t i n g g r a n t , s u c h m o d i f i c a t i o n s a s may prove necessary a r e incorporated p r i o r t o submission o f the budget t o t h e Board o f Governors f o r approval. We a l s o s e e k t o o b t a i n t h a t a p p r o v a l as e a r l y as p o s s i b l e i n t h e f i s c a l y e a r i n o r d e r t h a t i n d i v i d u a l o p e r a t i n g u n i t s - may h a v e c o n f i r m e d t o t h e m t h e human a n d f i n a n c i a l c o n s t r a i n t s w i t h i n w h i c h t h e y must f u n c t i o n . Operating  Grant Request  The a b o v e o u t l i n e o f b u d g e t p r e p a r a t i o n p r o c e s s r e l a t e s t o t h e u n i v e r s i t y budget f o r t h e f i s c a l y e a r as d i s t i n c t from t h e p r o c e s s which ensues p r i o r t o the submission o f t h e o p e r a t i n g g r a n t r e q u e s t t o UCBC. The l e a d t i m e s w h i c h a t t a c h t o t h e UCBC s u b m i s s i o n a r e s u c h t h a t i t w o u l d be q u i t e i m p r a c t i c a l t o c a l l f o r d e p a r t m e n t a l and f a c u l t y r e q u e s t s and to i n c o r p o r a t e these i n the o p e r a t i n g grant request. The s u b m i s s i o n t o C o u n c i l i s made o n A u g u s t 15 a n d r e q u i r e s a p p r o v a l b y t h e B o a r d o f G o v e r n o r s d u r i n g t h e month o f J u l y . To e v e n c o n s i d e r c a l l i n g f o r d e p a r t m e n t a l a n d f a c u l t y i n p u t s w o u l d n e c e s s i t a t e a s k i n g f o r t h e s e b y e a r l y i n May a n d a t a t i m e w h i c h , i n t h e n o r m a l y e a r , may e v e n p r e c e d e t h e i r b u d g e t a l l o c a t i o n f o r the current f i s c a l year. Our a p p r o a c h t o t h e p r e p a r a t i o n o f t h e s u b m i s s i o n t o UCBC i s t h e r e f o r e c o m p r i s e d o f two p a r t s , e a c h o f w h i c h i s p r e p a r e d by o u r s e n i o r a d m i n i s t r a t o r s . P a r t 1 encompasses the a n n u a l i z e d b u d g e t p r o j e c t i o n , and i n c o r p o r a t e s o u r f o r e c a s t o f s a l a r y and n o n - s a l a r y i n f l a t i o n a r y components t o g e t h e r w i t h a r e c o g n i t i o n o f changes i n academic and s u p p o r t s t a f f r e q u i r e m e n t s t o meet p r o j e c t e d e n r o l m e n t o b l i g a t i o n s . I n a d d i t i o n , any o t h e r c o n t i n u i n g o b l i g a t i o n s , s u c h a s t h e i n c r e a s i n g l y o n e r o u s r e q u i r e m e n t t o accommodate i n d i r e c t expenditure support f o r external research grants, i s included i n P a r t 1. P a r t 2 o f o u r s u b m i s s i o n i s s p e c i f i c a l l y i n t e n d e d t o a d d r e s s p o t e n t i a l n o n - d i s c r e t i o n a r y a l l o c a t i o n s w h i c h may be made b y C o u n c i l a s p a r t o f up t o t h e 5% o f t h e g l o b a l o p e r a t i n g g r a n t which has been earmarked f o r a l l o c a t i o n outside of the a l l o c a t i o n formula. Included i n Part 2 are s u c h i t e m s a s new a n d e m e r g e n t p r o g r a m s , p r o g r a m s o f d i s t i n c t i o n , development and e n r i c h m e n t o f e x i s t i n g programs a l o n g w i t h any o t h e r s i m i l a r r e q u i r e m e n t s . I n each i n s t a n c e , a c t i o n s by S e n a t e o r by t h e P r o g r a m C o o r d i n a t i n g C o m m i t t e e o f C o u n c i l  131  U N I V E R S I T Y OF  VICTORIA  P.O. B O X 1700, V I C T O R I A , B R I T I S H C O L U M B I A , C A N A D A VOW 2Y2 T E L E P H O N E (604) 477-6911  Office,  of the  President  &  Vice-Chance  8 July, 1981. Dr. R.W.Stewart, Deputy Minister, Ministry of Universities, Science and Cortrriunications, Parliament Buildings, Victoria. B.C. V8V LX4 ,-> Dear Dr. Stewart: Re: Budget Preparation Process As requested earlier this Spring, this letter attempts to describe the budgetary process at the University of Victoria. Before describing some of the procedural aspects of our budgeting, I thirJc i t i s important to cornnent on some more general points as follows: 1.  A l l budgets are prepared on a f u l l y annualized basis, so that there are no b u i l t - i n corrrrdtments requiring increased government funding in subsequent years. Probably the easiest way to i l l u s t r a t e how this works i s to take the example of the adding of a new c l e r i c a l position to the "establishment". If i t was decided that such a position was justified and was to be f i l l e d starting on January 1st, then the f u l l annualized cost of the position, including personnel benefits, would have to be identified'in the current year's base operating budget and set aside for trie new position - notwithstanding the fact that the person would only have to be paid for three months (from January 1st to March 31st) i n the current budget year.  2.  The second general point I would like to make concerns our budget carry over procedures. Unlike many public organizations, there i s no incentive at the University of Victoria to f u l l y spend your budget by the end of the f i s c a l year - i n fact just the opposite i s the case. We permit the carry-over of unspent budgets into the following f i s c a l year for use i n meeting non-recurring expenditures. By introducing this procedure we have elinxLnated the year-end spending rush. Managers are encouraged to save funds to meet anticipated needs which could not otherwise be financed through the regular budget.  .. ./2  132  - 2 Dr.  3.  p  w  c«-™-'=>vt  8 J u l y , 1981  I n t h e f i n a l a n a l y s i s , no b u d g e t a r y system w i l l guarantee an e f f e c t i v e u t i l i z a t i o n o f r e s o u r c e s u n l e s s t h e p e o p l e working i n t h e o r g a n i z a t i o n a r e committed t o t h a t u l t i m a t e o b j e c t i v e . The c r i t i c a l p l a c e a t which such a comrrdtment i s e s s e n t i a l i s a t t h e working l e v e l i . e . w i t h i n each o p e r a t i n g department and u n i t . Therefore, a t the University o f V i c t o r i a we have d e v e l o p e d a d e c e n t r a l i z e d system o f b u d g e t i n g and financial control. We p l a c e a h i g h degree o f r e l i a n c e upon department heads and managers t o manage t h e i r u n i t s e f f e c t i v e l y and w i t h i n b u d g e t a r y limits.  The b u d g e t i n g p r o c e s s a t t h e U n i v e r s i t y o f V i c t o r i a f o r a p a r t i c u l a r y e a r s t a r t s w i t h t h e p r e p a r a t i o n and s u b m i s s i o n o f budget r e q u e s t s t o t h e U n i v e r s i t i e s C o u n c i l i n e a r l y August each y e a r . I n d e v e l o p i n g our budget r e q u e s t we c o n s u l t w i t h Deans and o t h e r s e n i o r a d r n i n i s t r a t i v e o f f i c e r s . Our e x p e r i e n c e i s t h a t i n v o l v i n g o t h e r s such a s department heads and chairmen a t lower l e v e l s i n t h e o r g a n i z a t i o n a t t h i s stage o f t h e process r e s u l t s i n the b u i l d - u p o f u n r e a l i s t i c budgetary e x p e c t a t i o n s . A t t h i s s t a g e we i d e n t i f y a r e a s which a r e e x p e r i e n c i n g growth and enrolment p r e s s u r e s , any i n which t h e o p p o s i t e i s occurring, t h e needs o f a d n v i n i s t r a t i v e and s u p p o r t departments and maintenance r e q u i r e m e n t s f o r new b u i l d i n g s . We a l s o t a k e i n t o account new academic programme p r o p o s a l s w h i c h have been approved by t h e Senate, t h e Board o f Governors and t h e U n i v e r s i t i e s C o u n c i l , and m a t t e r s r a i s e d by t h e Senate's budget committee. T h i s i n f o r m a t i o n , t o g e t h e r w i t h our knowledge about i n f l a t i o n a r y f a c t o r s a s t h e y a p p l y t o u n i v e r s i t i e s , i s then t a k e n t o t h e Board o f Governors. The Board r e v i e w s o u r budget p r o p o s a l s and d e c i d e s what l e v e l o f s a l a r y i n c r e a s e s s h o u l d be r e q u e s t e d . The Board then approves o u r t o t a l budget s u b m i s s i o n and t h e l e v e l o f p r o v i n c i a l g r a n t support t o be r e q u e s t e d . The n e x t f o r m a l s t a g e i n t h e b u d g e t i n g p r o c e s s does n o t u s u a l l y o c c u r u n t i l t h e P r o v i n c i a l o p e r a t i n g g r a n t f o r t h e t h r e e u n i v e r s i t i e s i s known. I n s a y i n g t h i s i t must be acknowledged t h a t t h e b u d g e t i n g p r o c e s s i s i n f a c t g o i n g o n c o n t i n u o u s l y a s s t a f f i n g d e c i s i o n s and p l a n s a r e made on a day-to-day basis. I n t h e main such d e c i s i o n s w i l l u s u a l l y i n v o l v e t h e r e a l l o c a t i o n o f r e s o u r c e s , w i t h budget i n c r e a s e s l i m i t e d t o t h e p r o b a b l e i n c r e a s e w h i c h w i l l be a v a i l a b l e t h r o u g h t h e g r a n t a l l o c a t i o n f o r m u l a . (As an a s i d e , i t i s n o t e worthy t h a t t h e c u r r e n t u n c e r t a i n t y about t h e f u t u r e o f t h e g r a n t a l l o c a t i o n f o r m u l a removes t h e one and o n l y f e a t u r e o f u n i v e r s i t y f u n d i n g w h i c h p e r m i t s any f o r w a r d f i n a n c i a l p l a n n i n g t o occur.) Once t h e P r o v i n c i a l g r a n t i s known and a l l o c a t e d amongst t h e u n i v e r s i t i e s we p r o c e e d t o d e v e l o p o u r a c t u a l budget f o r t h e y e a r . This process i s i n i t i a t e d a t meetings o f our E x e c u t i v e C o u n c i l , which c o n s i s t s o f the P r e s i d e n t , the V i c e P r e s i d e n t s , t h e Deans and t h e U n i v e r s i t y L i b r a r i a n . We have f u l l and f r a n k d i s c u s s i o n s about t h e r e l a t i v e p r i o r i t i e s w h i c h might be a s s i g n e d t o such t h i n g s as s a l a r y adjustments, i n f l a t i o n o f n o n - s a l a r y c o s t s , s t a f f i n g i n c r e a s e s , e t c . We a l s o d i s c u s s the' need f o r t u i t i o n f e e i n c r e a s e s . As a r e s u l t o f t h e s e d i s c u s s i o n s , f o l l o w e d by i n f o r m a l d i s c u s s i o n s w i t h the F i n a n c e Committee o f t h e Boeird o f Governors, we e s t a b l i s h budget t a r g e t s f o r each broad a r e a o f budgetary r e s p o n s i b i l i t y ( f o r example f o r each Dean, f o r each D i r e c t o r o f A d m i n i s t r a t i v e S e r v i c e s e t c . , ) and d e v e l o p budget g u i d e l i n e s . Each i n d i v i d u a l i s then r e q u e s t e d t o submit l i n e - b y - l i n e budget p r o p o s a l s f o r a l l budgetary u n i t s w i t h i n  134  APPENDIX C  B a s i c Formula Used f o r D i v i s i o n o f the Annual P r o v i n c i a l Operating Grant 1970-71 t o 1973-74  (a)  70% o f the grant was a l l o c a t e d on the b a s i s o f the estimated number o f weighted f u l l - t i m e e q u i v a l e n t students;  (b)  20% of the grant was a l l o c a t e d on the b a s i s o f the estimated number o f f u l l - t i m e e q u i v a l e n t students (unweighted);  (c)  10% o f the grant was d i v i d e d e q u a l l y amongst the three universities.  135 Appendix  GENERAL  1  D  PRINCIPLES  PROVINCIAL  UNDERLYING  OPERATING  T H E A L L O C A T I O N OF  GRZ'.NT :  :  THE  ANNUAL  :  The m e t h o d o l o g y o f a l l o c a t i o n s h o u l d r e f l e c t c o n s i d e r a t i o n o f the p r i n c i p l e s o u t l i n e d below. Once t h i s has been done, t h e funding formula i t s e l f should: 1)  Assist the individual u n i v e r s i t i e s i n forecasting i t s p r o v i n c i a l g r a n t a minimum o f two y e a r s i n advance.  2)  Recognize  3)  Recognize t h a t some c o s t s v a r y w i t h t h e n u m b e r o f s t u d e n t s e n r o l l e d - i e : h e a d c o u n t , number o f s t u d e n t s t o be s e r v e d , ( s e e f o o t n o t e #2 b e l o w )  4)  Recognize t h a t some c o s t s v a r y the academic programs i n which enrolled - i e weighting of f u l l (FTE).  5)  Allow the u n i v e r s i t i e s time of enrollment d e c l i n e s .  6)  Recognize in stages  7)  Be r e s p o n s i v e i n t h e l o n g r u n t o e n r o l l m e n t c h a n g e s and s h i f t s ; a n d s h o u l d , a s s u m i n g c o n s t a n t d o l l a r s , r e s u l t i n d e c l i n i n g average costs to the province as e n r o l l m e n t i n c r e a s e s (and i n c r e a s e d a v e r a g e costs i f enrollment decreases).  8)  Provide that the marginal costs to the province of i n c r e a s e d e n r o l l m e n t i n c o m p a r a b l e p r o g r a m s w i l l be t h e same a t a l l u n i v e r s i t i e s .  9)  Recognize the higher per student costs associated with a t r i m e s t e r operation i n which enrollments are not a p p r o x i m a t e l y t h e same i n e a c h t r i m e s t e r .  economies  of scale  i n the  universities.  with the nature of the students are time e q u i v a l e n t s  to respond  to the  the marginal costs of increased over a p e r i o d of years.  effects  enrollments  10)  Be s u b j e c t t o r e g u l a r r e v i e w , a n d i n p a r t i c u l a r , should be r e v i s e d a s a p p r o p r i a t e a s a n i n s t r u m e n t o f p u b l i c policy objectives - e g . by c h a n g i n g the weighting system i n r e s p o n s e t o a no g r o w t h s i t u a t i o n , s e t t i n g an i n c r e a s e d participation percentage goal, e t c .  11)  A l l o w f o r ammendments t o b e p h a s e d s i g n i f i c a n t rer.ource r e a l l o c a t i o n s ( s e e f o o t n o t e "1)  i n i f they r e s u l t i n between t h e u n i v e r s i t i e s  136 2  12)  P r o v i d e f o r funds to be d i s t r i b u t e d o u t s i d e the funding formula f o r s p e c i a l purposes based on C o u n c i l ' s judgement. In each year, these amounts should be c o n s i d e r e d i n the l i g h t of the a c t u a l p r o v i n c i a l grant and any o t h e r s p e c i a l s e r v i c e s eg. new and emerging programs, (see f o o t n o t e #3 below), programs of d i s t i n c t i o n , upgrading or s t r e n g t h e n i n g of e x i s t i n g programs, i n c e n t i v e s f o r improved u t i l i z a t i o n of r e s o u r c e s , maintenance c o s t s f o r new c a p i t a l c o n s t r u c t i o n , e t c .  13)  Recognize t h a t i n making grants f o r s p e c i a l purposes o u t s i d e the f u n d i n g formula, C o u n c i l must make an e x p l i c i t statement to the u n i v e r s i t y or u n i v e r s i t i e s outlining precisely whether the funds are one time a l l o t m e n t s or r e c u r r i n g , and i f r e c u r r i n g the l e n g t h of time over which they w i l l be granted.  14)  Be uncomplicated and economical and to a d m i n i s t e r a n n u a l l y .  15)  Be seen to be e q u i t a b l e by the u n i v e r s i t i e s and Council.  f o o t n o t e s #1  to implement  initially by  ( r e f e r e n c e item #11 above) - i n a d d i t i o n to the e f f e c t s of formula amendment, i n the i n i t i a l years of a p p l i c a t i o n of the new formula, any s i g n i f i c a n t f l u c t u a t i o n s from the h i s t o r i c a l funding p a t t e r n s between the u n i v e r s i t i e s should be c o n s i d e r e d f o r p a r t i c u l a r C o u n c i l a n a l y s i s i n o r d e r to a l l o w f o r c o r r e c t i o n s i n those i n i t i a l y e a r s .  #2 - the i s s u e of the e f f e c t of the growing number of p a r t - t i m e students w i l l be addressed as one element of c o s t s to be c o n s i d e r e d under item #3 above. 3# - the students a n t i c i p a t e d to be e n r o l l e d i n t o new and emerging programs w i l l be i n c l u d e d i n the headcount and FTE c a l c u l a t i o n s and the formula w i l l p r o v i d e v ^ l v ^ c r e d i t s f o r these u n i t s . If p r o j e c t e d student enrollment does not m a t e r i a l i z e , the c o r r e c t i n g f a c t o r of the two or three year "time base" w i l l a d j u s t i n f u t u r e y e a r s . Under t h i s method, o n l y i n c r e m e n t a l c o s t s w i l l be added to the u n i v e r s i t y budget f o r emergent programs, as at p r e s e n t .  137  Revised  3. 0  Allocation  Formula  Methodology  PROPOSED ALLOCATION PROCEDURE: 3.1  The proposed  b a s i s on which a minimum of 95% o f each  year's g r a n t would be a l l o c a t e d may be summarized as follows: (a) The grant i s a l l o c a t e d  amongst the u n i v e r s i t i e s i n  p r o p o r t i o n to the number o f "grant u n i t s " university.  f o r each  A d e t a i l e d d e s c r i p t i o n o f "grant  i s given l a t e r ,  units"  but i n g e n e r a l they are based on  a c t u a l e n r o l l m e n t s two y e a r s e a r l i e r p l u s provision f o ranticipated  partial  enrollment i n c r e a s e s .  (b) Adjustments a r e made t o t h e amounts a l l o c a t e d on the b a s i s o f g r a n t u n i t s i n the p r e c e d i n g year to r e f l e c t the a c t u a l ,  r a t h e r than p r o j e c t e d , e n r o l l m e n t  i n c r e a s e s which o c c u r r e d the p r e v i o u s y e a r . 3.2  E x h i b i t I (on page 10 ) p r o v i d e s a h y p o t h e t i c a l i l l u s t r a t i o n o f the proposed  a l l o c a t i o n mechanism which  i s d e s c r i b e d i n the f o l l o w i n g paragraphs  of this  of the Report. 3.3  I n i t i a l l y determine  the number o f weighted and  section  138 unweighted years  prior  (Year  the o p e r a t i n g grant  A summary  o f the weighting  year  (Year  and u n w e i g h t e d  f o r which  reviewed  academic year and  the grant  in late  C a l c u l a t e t h e number  for for  (Year  These  or early  amongst  the grant  number o f w e i g h t e d  These  figures  total  to arrive  a r e then  summed  (a)  The number o f " e n r o l l m e n t  December the (b)  of F a l l  a r e used  t o be  the f o l l o w i n g  o f "Winter  Session"  o f U.B.C. and U.  semesters  o f S.F.U.  i s used);  t o 15% o f t h e  I "enrollment  units"  Vic.  units"  of University  "B" i n  units");  o f any p r o j e c t e d i n c r e a s e s i n " e n r o l l m e n t  (Year  calculation level  units"  i n Year I;  t o S.F.U. e q u a l  975 " g r a n t  f o r the grant  previous  and i n  and i n t h e c a s e  and S p r i n g  (15% o f 6500 " e n r o l l m e n t  units"  units"  i n c l u d e d i n Year  I equals  o f 6000  I I I are c a l c u l a t e d  I (Ln t h e c a s e  A t r i m e s t e r allowance  One t h i r d  university  by summing  (5%) o f t h e number  1st figures  F.T.E. u n i t s  (c)  i n excess  allocation.  and i n t o t a l ,  i n Year  average  Exhibit  FTE's  f o r Year  each u n i v e r s i t y ,  headcounts  each  f o r each  I I I Grant  of "grant units"  percent  (Year I I I )  FTE's  for  Five  units"  made  a t t h e number o f " e n r o l l m e n t  i n t h e Year  The number  two y e a r s  i s being  2 5 % o f t h e number o f u n w e i g h t e d  3.6  the u n i v e r s i t i e s  units"  e a c h u n i v e r s i t y as f o l l o w s : A minimum o f 6000 u n w e i g h t e d F T E ' s  employed  February of  time.  of "enrollment  f o r which  made  p r o j e c t i o n s are  January  at that  i s being  I) and t h e p r o j e c t e d " e n r o l l m e n t  the year  The  made.  i s a t t a c h e d as  allocation  I I and a r e a g r e e d  the C o u n c i l s t a f f  earlier  i s being  p r o j e c t e d FTE e n r o l l m e n t s f o r  I I I ) are determined.  normally  t o the year  allocation  system  two  B.  The w e i g h t e d the  3.5  I i n the i l l u s t r a t i o n )  f o r which  Appendix 3.4  FTE (Full-Time E q u i v a l e n t ) enrollments  year  I) a c t u a l  excludes  o f 6000 F T E ' s ) .  (Year  I I I ) over  "enrollment  two y e a r s  units."  (This  any i n c r e a s e s i n F T E ' s up t o a No a l l o w a n c e  i s made f o r  139 projected  e n r o l l m e n t decreases  i n the c u r r e n t year i n  o r d e r to a l l o w time f o r the u n i v e r s i t i e s to respond long-term 3.7  to  declines.  The  amount of the g r a n t f o r Year I I I which i s a v a i l a b l e  for  d i s t r i b u t i o n on the predetermined  basis i s allocated  i n p r o p o r t i o n to the number of "grant u n i t s " Using  the i l l u s t r a t i o n  in Exhibit  f o r Year I I I .  I, the a l l o c a t i o n may  be  summarized as f o l l o w s :  Year i:r.I "Grant U n i t s " Number % of T o t a l  University  A l l o c a t i o n of 95% of Year I I I Grant (000*s)  A B C  57,000 20,967 16,500  60.34% 22.19 17 . 47  $114 , 646 42 , 161 33,193  Total  94,467  100.00%  $190,000  (It should be noted  t h a t the a c t u a l a l l o c a t i o n  should be made  i n s t r i c t p r o p o r t i o n to the number of g r a n t u n i t s , r a t h e r than u s i n g the approximate methods employed 3.8  The  allocation  reflect  i n 3.7  in this  report).  above i s then a d j u s t e d a n n u a l l y to  the p r e v i o u s year's a c t u a l e n r o l l m e n t s a t the  three u n i v e r s i t i e s ,  s i n c e the Year II a l l o c a t i o n would  have been based, i n p a r t , on p r o j e c t e d e n r o l l m e n t for  Year I I .  To the e x t e n t t h a t a u n i v e r s i t y over -  (or under-) estimated  i t s FTE and weighted  i t w i l l have r e c e i v e d a l a r g e r  e n r o l l m e n t d a t a , i f t h a t data had time of Year I I a l l o c a t i o n . amounts o f Year I I over -  estimated  the  by the a c t u a l  been a v a i l a b l e at the  In p a r t G of E x h i b i t I the  and a p p l i e d as adjustments above.  are  t o the Year I I I The  e f f e c t of the  i s to r e q u i r e a u n i v e r s i t y which has i t s enrollment  enrollments  (or under-) a l l o c a t i o n s  a l l o c a t i o n s d e s c r i b e d i n 3.7 adjustment  FTE  (smaller) p o r t i o n of  grant than would have been warranted  determined  data  over-  i n c r e a s e r e l a t i v e t o those of  the o t h e r u n i v e r s i t i e s to r e l i n g u i s h any  excess  grants  140  r e c e i v e d as a r e s u l t . i n c e n t i v e t o ensure 3.9  The proposed  This w i l l  serve as an a d d i t i o n a l  the accuracy of e n r o l l m e n t  allocation  forecasts.  i s a p p l i c a b l e o n l y to f u t u r e  years.  However, i n Appendix A the procedure  has been  applied  t o the t o t a l o p e r a t i n g grant a l l o c a t i o n s f o r  the l a s t s i x years and compared with the r e s u l t s of the a c t u a l g r a n t 4.0  allocation.  RESPONSE OF ALLOCATION PROCEDURE TO PRINCIPLES 1-9, APPENDIX D: 4.1  P r i n c i p l e 1 - " A s s i s t the i n d i v i d u a l u n i v e r s i t i e s i n f o r e c a s t i n g i t s p r o v i n c i a l grant a minimum of two years i n advance." As e x p l a i n e d above, each u n i v e r s i t y "grant u n i t s " which enables future grants.  r e c e i v e s a number of  i t to f o r e c a s t  The number of "grant u n i t s "  i t s share o f i s primarily  dependent upon a c t u a l e n r o l l m e n t s experienced  two years  p r i o r to the year f o r which the o p e r a t i n g grant i s being allocated.  Thus each u n i v e r s i t y  "grant u n i t s " 4.2  i s a b l e to f o r e c a s t  two years i n advance.  P r i n c i p l e 2 - "Recognize universities."  economies o f s c a l e i n the  The  views 6000 FTE's as being a  a l l o c a t i o n procedure  r e a s o n a b l e minimum e n r o l l m e n t university. units"  i n the development of a  Beyond 6000 FTE's the c a l c u l a t i o n o f "grant  r e c o g n i z e s economies o f s c a l e .  g r e a t e r than 6000 FTE's the procedure  For e n r o l l m e n t s t r e a t s FTE's as  h a v i n g c o s t s e q u i v a l e n t t o 25% o f the c o s t o f each o f the first  6000 FTE's.  Thus beyond 6000 FTE's the procedure  i m p l i e s d e c l i n i n g average c o s t s . 4.3  P r i n c i p l e 3 - "Recognize t h a t some c o s t s v a r y with the number o f students e n r o l l e d - eg: headcount, number o f s t u d e n t s t o be served." I t was the view o f the Task Force t h a t t h i s f a c t o r was of s i g n i f i c a n c e d u r i n g the peak p e r i o d s o f the y e a r . these times a d d i t i o n a l  At  students impose f u r t h e r c o s t s which  141  i t was  f e l t are p r i m a r i l y a d m i n i s t r a t i v e i n nature.  c o s t s i n q u e s t i o n r e p r e s e n t approximately  5% of the  o p e r a t i n g budgets of the three u n i v e r s i t i e s . the Winter  The  Thus 5% of  S e s s i o n headcounts are i n c l u d e d i n the  c a l c u l a t i o n of "grant u n i t s " . 4.4  P r i n c i p l e 4 - "Recognize t h a t some c o s t s vary with the nature of the academic programs i n which the students are e n r o l l e d - eg. weighting of f u l l time e q u i v a l e n t s (FTE) . " As proposed, determining The  both FTE's and weighted the number of "grant  units".  Task Force a l s o c o n s i d e r e d the c o s t impact  i n the e n r o l l m e n t mix. 100  FTE's are used i n  student  broad  i n c r e a s e i n an academic u n i t which has a  e n r o l l m e n t base, c o u l d be more e a s i l y  i n c r e a s e i n another  accommodated  program.  t h i s i s s u e has not been r e s o l v e d the as proposed,  i n c r e a s e s a f t e r two  student  u n i t with a much s m a l l e r e n r o l l m e n t  base such as i n a p r o f e s s i o n a l procedure,  shifts  For example, i t i s l i k e l y t h a t a  w i t h i n an e s t a b l i s h e d budget than c o u l d a 100  While  of  gives marginal  allocation  "grant u n i t "  years to the v a r i o u s weighting  c a t e g o r i e s as f o l l o w s :  WEIGHT  MARGINAL INCREASES  1 1.5 2 2.5 3 4 5 6  62.5% 70.0 75.0 78.6 81.3 85.0 87 . 5 '89.3  (These percentages o n l y apply to e n r o l l m e n t a d d i t i o n s above 6000 FTE's). 4.5  P r i n c i p l e 5 - "Allow the u n i v e r s i t i e s time t o respond the e f f e c t s of e n r o l l m e n t d e c l i n e s . " As the proposed  procedure  uses e n r o l l m e n t s from  two  to  years  p r i o r t o the year f o r which the a l l o c a t i o n i s being made,  142 a  university  term  appointments)  its  own  made  planning.  for projected  (the usual  period of  to declining  enrollments  Furthermore,  no a l l o w a n c e  enrollment  decreases  in i s  i n the current  year.  P r i n c i p l e 6 - "Recognize the marginal costs of increased enrollments i n stages over a period of years." In  the proposal  marginal  costs  recognized. one  third  in  i t takes  two y e a r s  of actual  For a given  over  the base  the c a l c u l a t i o n  of  before  enrollment  costs  two  the  Grant  allocation  of p r o j e c t e d  years  t h e number  full  increases are  Operating  o f the marginal  increases  4.7  two y e a r s  to adjust  financial  allocation 4.6  has a t l e a s t  earlier of  only  enrollment  are recognized  "grant  units."  P r i n c i p l e 7 - "Be r e s p o n s i v e i n t h e l o n g r u n t o e n r o l l m e n t changes and s h i f t s ; and s h o u l d , assuming c o n s t a n t d o l l a r s , r e s u l t i n d e c l i n i n g average c o s t s t o t h e P r o v i n c e as e n r o l l m e n t i n c r e a s e s (and i n c r e a s e d a v e r a g e costs of enrollment decreases)." Responses  relating  are  commented on  the  proposed  programs  As  noted  reacts  universities  changes  and  shifts"  paragraphs.  to s h i f t s as w e l l  In  between  summary  academic  as t o i n c r e a s e s and  i n enrollment. under  "declining increases  i n the preceding  procedure  and/or  decreases  to "enrollment  paragraph  average  costs  (and i n c r e a s e d  4.2  the proposal  to the Province average  costs  results as  in  enrollment  i f enrollment  decreases)." 4.8  P r i n c i p l e 8 - "Provide that the marginal costs Province of increased enrollment i n comparable w i l l b e t h e same a t a l l u n i v e r s i t i e s . " The  same  units" point in  base  enrollment  f o r each marginal  comparable  should  i s used  university costs  a r e t h e same  programs  be n o t e d ,  in calculating FTE's).  student  will  because  of the economies  that  t h e same  Beyond  this students  universities.  average  absolute  f o r comparable  of scale  "grant  for additional  a t a l l three  however,  n o t be  (6000  to the programs  factor.  It  costs per  programs  143  4.9  P r i n c i p l e 9 - "Recognize the h i g h e r per student c o s t s a s s o c i a t e d with a t r i m e s t e r o p e r a t i o n i n which e n r o l l m e n t s are not approximately the same i n each trimester." C u r r e n t r e l i a b l e data on the a d d i t i o n a l c o s t s of a t r i m e s t e r system which might be u s e f u l l y a p p l i e d B r i t i s h Columbia  u n i v e r s i t y system  the p r e s e n t time.  i n the  are u n a v a i l a b l e at  Previous s t u d i e s have i n d i c a t e d  d i f f e r e n t i a l c o s t s "ftwu -ouch otudie-3—were" those commissioned  by Simon F r a s e r U n i v e r s i t y and  of O n t a r i o U n i v e r s i t i e s ) . additional  recognition  t r i m e s t e r system units".  P r o v i s i o n has been made f o r  to be g i v e n to the S.F.U.  in calculating  Furthermore,  Task Force suggests  the C o u n c i l  the number o f "grant  i n i t s Recommendation 2.5,  the  that the U n i v e r s i t i e s C o u n c i l c o n s i d e r  u n d e r t a k i n g a review of the a d d i t i o n a l c o s t s a s s o c i a t e d w i t h the t r i m e s t e r system t h a t o p t i o n to B.C.  and a c o s t - b e n e f i t a n a l y s i s of  students.  output of such a review,  I t i s a n t i c i p a t e d that  should i t take p l a c e , would be  u s e f u l i f f u t u r e r e v i s i o n s of the proposed procedure 5. 0  the  allocation  are i n d i c a t e d i n t h i s area.  SPECIAL PURPOSE GRANTS": 5.1  In i t s Recommendation 2.2,  on page 1, c o n s i s t e n t w i t h  P r i n c i p l e 12, Appendix D, the Task Force i n d i c a t e s  that  not l e s s than 95% of the annual P r o v i n c i a l O p e r a t i n g Grant should be a l l o c a t e d on a predetermined Task Force wishes  basis.  The  to recommend the f o l l o w i n g e x c e p t i o n :  "The amount to be d i s t r i b u t e d by formula should be not l e s s than 95% o f the P r o v i n c i a l Grant. However, s h o u l d the U n i v e r s i t i e s C o u n c i l of B r i t i s h Columbia S p e c i a l Purpose items reach a t o t a l o f 5% of the P r o v i n c i a l Grant i n any one year, then the U n i v e r s i t i e s C o u n c i l may encroach on the 95% p o r t i o n of the P r o v i n c i a l Grant to a maximum of $1 m i l l i o n i n t h a t f i s c a l year f o r the purpose of p r o v i d i n g i t w i t h a g l o b a l d i s c r e t i o n a r y amount f o r t h a t year." 5.2  The Task Force f u l l y agrees that Funds should be d i s t r i b u t e d judgment as i n d i c a t e d  these S p e c i a l  i n accordance  Purpose  with Council's  i n P r i n c i p l e 12 of Appendix D .  144 The  Task  Purpose  5.3  Force  recommends  grants  be  r e p l a c e d by  of  items  contained  the examples  in Principle  the non-comprehensive  for Special  Appendix  C.  Finally,  the Task  D which  that  Purpose  Force  endorses  Special  12 o f A p p e n d i x list  Funding  of  of  D  examples  contained i n  Principle  13 o f  Appendix  states:  "Recognize t h a t i n making g r a n t s f o r s p e c i a l purposes outside the funding formula, Council m u s t make a n e x p l i c i t s t a t e m e n t t o t h e university or universities outlining precisely whether t h e funds a r e one time a l l o t m e n t s o r r e c u r r i n g , and i f r e c u r r i n g t h e l e n g t h o f time o v e r w h i c h t h e y w i l l be g r a n t e d . " ; and  further  reiterates  requirement duration permit  the u n i v e r s i t i e s  IMPLEMENTATION  6.1  f o r an e x p l i c i t  of the Special  allocation  6.0  on a  early  years  grant  on  -  -  essential  C o u n c i l statement  Purpose  Grants,  to plan  their  rational  as to  i n order  to  internal  basis.  PERIOD:  I t i s suggested  the  the absolutely  that  Council give  to allocating  the predetermined  advantages softening  more  than  basis.  the adjustments  T h i s would  required  t o t h e new  would  Council to acquire  enable  Special  95% o f t h e  i n the total  have  of:  institutions  establish  consideration  precedents  Purpose  approach;  for individual and  experience  and  i n i t sd e t e r m i n a t i o n o f  Grants.  APPENDIX  E  GENERAL PURPOSE OPERATING GRANT (see notes) ($000)  OPERATING GRANT  YEAR Total Grant*  Actual A l l o c a t i o n s UBC SFU UVIC  RESTATED IN CONSTANT 1971 DOLLARS"  FTE ENROLMENT Share of A l l o c a t i o n (7=) UBC SFU UVIC  Share of FTE (7.) UBC SFU UVIC  Total FTE  Total Grant  Grant Per FTE  1971-72  86,000  53,492  18,449  14,058  62.20  21.45  16.35  65.17  17.58  17.25  32,873  85,828  2,611  1972-73  93,500  58,500  19,900  15,100  62.57  21.28  16.15  65.04  18.53  16.43  31,355  88,963  2,837  1973-74  100,255  62,720  21,340  16,195  62.56  21.29  16.15  64.43  18.88  16.69  32,794  88,564  2,701  1974-75  119,140  74,081  25,824  19,234  62.18  21.68  16.14  62.71  19.43  17.86  35,668  93,811  2,630  1975-76  150,200  91,989  33,044  25,167  61.24  22.00  16.76  61.55  20.92  17.53  37,971  106,148  2,796  1976-77  170,400  103,921  37,739  28,741  60.99  22.15  16.87  61.49  21.60  16.92  38,506  110,291  2,864  1977-78  184,500  111,315  41,234  31,950  60.33  22.35  17.32  61.76  21.51  16.73  38,036  111,683  2,936  1978-79  200,578  122,286  44,131  34,161  60.97  22.00  17.03  60.64  22.20  17.17  37,822  112,180  2,966  1979-80  217,226  131,832  48,523  36,871  60.69  22.34  16.97  60.17  21.85  17.98  38,317  112,962  2,948  1980-81  239,612  143,324  54,318  41,970  59.81  22.67  17.52  59.17  22.59  18.26  39,428  113,938  2,890  1981-82  271,713  161,781  61,325  48,606  59.54  22.57  17.89  57.93  22.76  19.31  40,987  113,119  2, 760  +  Notes: *In a d d i t i o n to the above, s p e c i f i c purpose a p p r o p r i a t i o n s , r e f e r r e d been approved i n support of the f o l l o w i n g a c t i v i t i e s : . Expansion of non-metropolitan programs (from 1976/77) . Expansion o f undergraduate medical expansion (from 1977/78) . Replacement of o p e r a t i n g equipment (from 1977/78) •Includes s p e c i a l $7.5 m i l l i o n supplementary "Deflated by the Vancouver CPI, 1971 = 100  warrant  to as o p e r a t i n g grants ( o t h e r ) , and cash c a p i t a l equipment g r a n t s , have  i n connection with the M i n i s t e r ' s  'no commitment' funding p o l i c y .  146  APPENDIX F  THE ALLOCATION FORMULA How the grant u n i t s are determined  Enrolment two years back i n time All All  students t r a n s l a t e d i n t o FTEs.... students t r a n s l a t e d i n t o WFTEs...  CONTRIBUTES ABOUT 86% OF GRANT UNITS  100% 100% SUM  Headcount c u r r e n t year  Economies o f S c a l e  4,050 SUM  The T r i m e s t e r Adjustment  CONTRIBUTES ABOUT 12% OF GRANT UNITS  1,650  CONTRIBUTES ABOUT 1.3% OF GRANT UNITS  1/3 o f p r o j e c t e d i n c r e a s e over the c u r r e n t year  CONTRIBUTES ABOUT 0.7% OF GRANT UNITS  SFU  i s g i v e n a constant 1,650 u n i t s . .  Enrolment Increase  Expected  SUM  =  100% of grant u n i t s  147 APPENDIX  G  PROGRAMS OF  DISTINCTION  At i t s meeting o f May 28th, 1979, passed the f o l l o w i n g motion: That the of policy  Universities on Programs  Council of  the U n i v e r s i t i e s adopt as Distinction:  a  Council  statement  (1)  That the Universities Council, in its annual funding recommendations to the Minister of Education, will include for programs of distinction a separate line item calculated at up to % of 1% of the current year's recommended provincial operating grant.  (2)  That the Council shall H of 1% of the provincial programs of distinction. "special purpose grant" formula, as defined in Force on the Provincial  (3)  allocate a sum of up to operating grant for This allocation is a outside the funding the Report of the Task Grant Allocation (p.8).  That Council endorses the concept of allocating funds for programs of distinction for a three year period, commencing with 1979-80 for which year the funding will be based on Grant Units as defined in the Report of the Task Force on the Provincial Grant Allocation.  (4)  That., as a general rule, a Program of Distinction will not be funded as such for more than a period of three years. Normally, continuation of the Programs of Distinction beyond the three year period will be at the discretion of the individual university, using its operating funds or other .- :• sources.  (5)  That the programs will be selected on the basis, of their particular economic, social, cultural or educational benefit to British Columbia, or their potential for national or international recognition. Since such criteria may prove difficult to establish beforehand, it is recommended that:  148  UCBC approved 05-28-1979 GL  (a)  the universities be relied upon to select programs which they feel to have the potential for making such a contribution for excellence and which can be further developed by the universities, and to report to the Universities Council, for information purposes, at the time of selection;  (b)  the internal be reported time of the  (c)  the effect of the additional programs thus identified as be assessed by Council after  allocations made by each university to the Universities Council at the next operating budget submission; allocation programs the said  on of three  distinction years.  

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