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The financing of non-university post-secondary institutions in British Columbia : the case of the colleges Quarshie, James D. 1982

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THE FINANCING OF NON-UNIVERSITY POST-SECONDARY INSTITUTIONS IN BRITISH COLUMBIA - THE CASE OF THE COLLEGES by James D. Quarshie B . E d . , U n i v e r s i t y of A l b e r t a , 1971 M.Ed., U n i v e r s i t y of A l b e r t a , 1973  A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS in THE FACULTY OF GRADUATE STUDIES (Department of A d m i n i s t r a t i v e , Adult and Higher Education)  We accept t h i s thesis as conforming to the required standard  THE UNIVERSITY OF BRITISH COLUMBIA S p r i n g , 1982 ©  James D. Quarshie, 1982  In p r e s e n t i n g requirements  this thesis  British  it  freely available  for  f u l f i l m e n t of the  f o r an a d v a n c e d d e g r e e a t t h e U n i v e r s i t y  of  agree t h a t  i n partial  Columbia,  I agree  f o rreference  permission  scholarly  that  the Library  s h a l l make  and study.  I  f o r extensive  copying o f t h i s  for  that  copying or p u b l i c a t i o n  f i n a n c i a l gain  shall  of this  of  Set*  ct^/y'a^csj  The U n i v e r s i t y o f B r i t i s h 2075 Wesbrook P l a c e V a n c o u v e r , Canada V6T 1W5  It is thesis  n o t b e a l l o w e d w i t h o u t my  permission.  Department  thesis  p u r p o s e s may be g r a n t e d by t h e h e a d o f my  d e p a r t m e n t o r by h i s o r h e r r e p r e s e n t a t i v e s . understood  further  Jlc&m^/jpfco^'e^  Columbia  written  ABSTRACT  The present study was undertaken with three major o b j e c t i v e s , namely: 1.  to determine the revenue d i s t r i b u t i o n c r i t e r i a employed by the B.C. M i n i s t r y of Education in a l l o c a t i n g operational funds to the c o l l e g e s ;  2.  to a s c e r t a i n the types o f , and extent of government controls over c o l l e g e operational funds; and  3.  to determine the adequacy of the revenue d i s t r i b u t i o n  criteria  and government controls over c o l l e g e operational funds. The study was c a r r i e d out in three main phases.  The f i r s t  phase involved a n a l y s i s of f i n a n c i a l records of the p a r t i c i p a t i n g colleges f o r the period 1972-1976 to determine v a r i a t i o n s i n sources and s i z e of operational funds to i n d i v i d u a l c o l l e g e s .  Using these  data, interviews were held with M i n i s t r y of Education o f f i c i a l s r e s ponsible f o r d i s t r i b u t i n g c o l l e g e operational funds to determine the method used f o r a l l o c a t i n g funds to each college and government controls over these funds.  The f i n a l phase consisted of interviews with M i n i s t r y  o f f i c i a l s and p r i n c i p a l s of selected colleges to determine the strengths and weaknesses of the present system used for d i s t r i b u t i n g funds.  operational  P a r t i c i p a n t s were also asked what the l i m i t a t i o n s of government  controls over c o l l e g e funds a r e , and what changes they would l i k e to see take p l a c e .  i i  Analysis of the data indicated that the M i n i s t r y of Education did not employ any s p e c i f i c a l l y defined c r i t e r i a f o r determining the l e v e l of operational funds that went to each c o l l e g e ; p r i o r i t y was  ;  given, however, to such f a c t o r s as approved new programmes, new f a c i l i t i e s , p r i o r y e a r ' s commitments, and approved areas of growth.  It was  also found that the M i n i s t r y of Education exercised formal controls through l e g i s l a t i o n and regulation and informal controls through budget a l l o c a t i o n decisions and through influence over several areas of college operational funds.  Further, i t was found that the majority of respon-  dents were generally s a t i s f i e d with the e x i s t i n g method used by the M i n i s t r y of Education f o r d i s t r i b u t i n g college operational funds; minor changes were suggested which would improve the method.  With respect to  government controls over operational funds, concern was expressed f o r the lack of d i s c r e t i o n a r y power of c o l l e g e p r i n c i p a l s in the internal a l l o c a t i o n (and r e a l l o c a t i o n ) of funds.  TABLE OF CONTENTS Page ABSTRACT  i i  LIST OF TABLES  viii  LIST OF FIGURES  x  LIST OF CHARTS  xi  ACKNOWLEDGEMENTS CHAPTER I:  xii  INTRODUCTION  1  Background to Issues in Financing Non-University Post-Secondary I n s t i t u t i o n s  1  Issues in the Financing of Non-University Post-Secondary I n s t i t u t i o n s in B r i t i s h Columbia - The Case of the Colleges The c o l l e g e system in B r i t i s h Columbia  19 20  An overview of the financing arrangements f o r the colleges  21  Some basic issues in financing the colleges in B r i t i s h Columbia  22  The objectives of the study  23  CHAPTER I I :  DESIGN OF THE INVESTIGATION  P a r t i c i p a n t s i n the Study S e l e c t i n g the i n s t i t u t i o n s  26 26  f o r the study  Selecting the respondents  26 28  Research Method  29  S p e c i f i c Questions, Research A c t i v i t i e s and Data Requirements  30  The revenue d i s t r i b u t i o n c r i t e r i a iv  31  Page The views of major constituent groups concerning the adequacy of ( i ) the present revenue d i s t r i b u t i o n c r i t e r i a , and ( i i ) provisions for t h e i r modification  32  The nature, extent and appropriateness of government controls over college operating revenues  33  CHAPTER I I I :  THE PRESENT SYSTEM OF FINANCING OPERATING COSTS OF THE COLLEGES IN BRITISH COLUMBIA  Sources of College Operating Revenues  34 34  The Present Approach to D i s t r i b u t i n g A v a i l a b l e Government Funds among the Colleges f o r Operating Purposes  37  Development  39  Procedures in the present approach  39  Factors and p r i o r i t i e s considered  43  Channels of appeal  44  Generalizations on the present approach to a l l o c a t i n g college operating funds Performance of i n d i v i d u a l colleges in terms of government grant receipts and internal resource allocation  46 46  The strengths of the present method  54  The weaknesses of the present method  60  Government Controls over College Operating Funds  62  Level of t u i t i o n fees  63  Faculty s a l a r i e s  63  S a l a r i e s of members of the administration  64  Sabbatical leaves and other leaves of absence  65  Transfers of monies between programmes  '66  v  Page Transfers of monies between other expenditure categories  67  Other  68  Conclusion  68  CHAPTER IV:  CHANGES TO THE PRESENT METHOD OF FINANCING COLLEGE OPERATING COSTS ENVISAGED BY COLLEGE PRINCIPALS AND MINISTRY OF EDUCATION OFFICIALS  70  Envisaged Changes to Sources of College Operating Revenues  70  Envisaged Changes to the Method of D i s t r i b u t i n g A v a i l a b l e Government Funds among the Colleges f o r Operating Purposes  74  A modified form of the present approach  75  A l t e r n a t i v e s to the present approach  76  Envisaged Changes to Government Controls over College Operating Funds Controls over internal  78 allocations  78  Maintenance of the Status Quo  79  The need f o r a framework f o r controls  80  Controls over surpluses  81  CHAPTER V:  CONCLUSIONS AND RECOMMENDATIONS  Conclusions  82 82  Sources of college funds  82  Method f o r d i s t r i b u t i n g a v a i l a b l e government funds among colleges  83  Government control over college operating funds  86  Recommendations  88  Sources of college funds  88  vi  The method f o r d i s t r i b u t i n g funds among the colleges  a v a i l a b l e government  Government controls over college operating funds APPENDIX. I:  Interview Guide f o r O f f i c i a l s of the M i n i s t r y of Education  APPENDIX I I :  Interview Guide f o r P r i n c i p a l s of P a r t i c i p a t i n g Colleges  LIST OF TABLES  TABLE I.  Non-University Post-Secondary Full-Time Enrollment by Provinces f o r Selected Years, 1960-1975  TABLE II.  Non-University Post-Secondary Percentage Increases i n Enrollment by Provinces, 1960-61 to 1970-71  TABLE I I I .  Post-Secondary Education Full-Time Enrollments as a Percentage of the 18-24 Age Group Population by Province and Canada for the Period 1965-1974  TABLE IV.  Expenditures on Post-Secondary Education, Provinces and Canada by Type of Education f o r Selected Years  TABLE V.  Percentage Increases in Expenditures on Post-Secondary Education by Provinces and Canada, 1961 to 1971  TABLE VI.  1965-1974 Growth Rates of the Economy, Government Spending and Education Spending  TABLE VII.  Per Capita D i s t r i b u t i o n of Net General Expenditures of P r o v i n c i a l Governments, C l a s s i f i e d by Function, 1952, 1961-62 and 1971-72  TABLE V I I I .  Average Annual Proportion of Operating Revenues Derived from Various Sources, 1972-1976 (The Six P a r t i c i p a t i n g Colleges)  TABLE IX.  Annual Total Number of Service U n i t s , 1972-1976 by College (For the Six P a r t i c i pating Colleges)  TABLE X.  Government Operating Grants Per Service U n i t , 1972-1976  TABLE XI.  Proportion of College Operating Revenues Derived from Government Grants, 1972-1976  viii  Page Average Annual Proportion of Total Operating Expenditures Devoted to the D i f f e r e n t Expenditure Categories, 1973-1976  53  TABLE X I I I .  D i s t r i b u t i o n of College Operating Expenditures Per Service U n i t , 1973-1976  56  TABLE XIV.  D i s t r i b u t i o n of College Operating Expenditures (Percentages), 1973-1976  57  TABLE XV.  Perceived Strengths of the Present Method of D i s t r i b u t i n g A v a i l a b l e Government Funds Among the Colleges  58  Perceived Weaknesses of the Present Method of D i s t r i b u t i n g A v a i l a b l e Government Funds among the Colleges  61  TABLE XVII.  Observations of Respondents on T u i t i o n Fees as a Source of College Operating Revenues  72  TABLE X V I I I .  Observations of Respondents on College Operating Cost Sharing Arrangements between the P r o v i n c i a l Government and P a r t i c i p a t i n g Local School Board(s)  73  TABLE XII.  TABLE XVI.  ix  LIST OF FIGURES Page FIGURE 1.  FIGURE 2.  Average Annual Proportion of Total College Operating Revenues Derived from Various Sources, 1972-1976  38  Average Annual Proportion of Total College Operating Expenditures Devoted to I n s t r u c t i o n A d m i n i s t r a t i o n , L i b r a r y , and Student S e r v i c e s , 1973-1976  55  x  LIST OF CHARTS  CHART A.  Selected Age Group Populations of Relevance to School Enrollment f o r Canada, 1961-2001  8  CHART B.  Selected Age Group Population Approximately Relevant to School Enrollment, B . C . , 1961-2001  9  xi  ACKNOWLEDGEMENTS  The author wishes to express his indebtedness to Dr. Jamie H.A. Wall i n , Professor of Educational Administration and his t h e s i s superv i s o r , for his enduring patience and useful advice at a l l phases of the study. Great appreciation i s also expressed to Dr. John F. Newberry of the B r i t i s h Columbia M i n i s t r y of Education; Dr. Fred J . Speckeen, P r i n c i p a l of the College of New Caledonia; Dr. Lome W. Downey, Dr. John Dennison and Dr. William L. Tetlow, Professors in the Department of A d m i n i s t r a t i v e , Adult and Higher Education, the U n i v e r s i t y of B r i t i s h Columbia, f o r t h e i r assistance at various phases of the study. The author i s also grateful to a l l respondents who wholeheartedly discussed various issues of concern in college financing with him. College bursars and M i n i s t r y of Education o f f i c i a l s who f r e e l y gave t h e i r time to discuss various aspects of c o l l e g e f i n a n c i a l s t a t e ments need s p e c i a l mention. F i n a l l y , to the D i v i s i o n of Educational A d m i n i s t r a t i o n , s p e c i f i c a l l y , and the U n i v e r s i t y of B r i t i s h Columbia, as a whole, the w r i t e r renders sincere thanks for funds made a v a i l a b l e to him through f e l l o w ships and other forms of f i n a n c i a l a s s i s t a n c e , a l l of which went to make the study p o s s i b l e .  xii  CHAPTER I  INTRODUCTION This chapter attempts to put the subject of the present study, i . e . , college f i n a n c i n g , into i t s proper perspective.  It does t h i s  by f i r s t examining the c o l l e g e system (with other u n i v e r s i t y postsecondary i n s t i t u t i o n s )  in terms of enrollment and expenditure trends  over the past decade and a h a l f , and future projections in B r i t i s h Columbia and across Canada.  Some of the issues in financing which  r e l a t e p a r t i c u l a r l y to B r i t i s h Columbia flowing from the enrollment and expenditure a n a l y s i s w i l l then be i d e n t i f i e d , a f t e r which the objectives of the study w i l l be s t a t e d . Background to Issues in Financing Non-University Post-Secondary Institutions H i s t o r i c a l l y , post-secondary education in Canada has commonly meant u n i v e r s i t y education.  However, w i t h i n the l a s t decade and a h a l f ,  the once l i t t l e known s e c t o r , the non-university post-secondary s e c t o r , has shown such great expansion a l l across the country that i t s v i s i b i l ity is quickly increasing.  In the 1960-61 academic y e a r , there were  51,484 f u l l - t i m e students e n r o l l e d in t h i s sector in Canada ( S t a t i s t i c s Canada, Catalogue 81-208, September 1975).  By 1970-71, a decade l a t e r ,  t h i s f i g u r e had r i s e n to 168,878 ( I b i d . ) , representing an increase of 228 per cent over the 1960-61 f u l l - t i m e enrollment.  The 1975-76 f u l l -  time enrollment was estimated by S t a t i s t i c s Canada (Catalogue 81-220, August 1975) to reach 238,560.  1  2  The growth i n enrollment i n t h i s sector in B r i t i s h Columbia over the same period (1960-61 to 1970-71) was even more dramatic-from 1,814 f u l l - t i m e students in 1960-61 to 13,256 in 1970-71 ( S t a t i s t i c s Canada, Catalogue 81-208), an increase of 630 per cent over the 1960-61 enrollment.  Table I contains the d e t a i l s of the growth in e n r o l l -  ments in t h i s sector across Canada for selected years and Table II shows the percentage increases in enrollments over the period 1960-61 to 1970-71 across Canada.  Add to the f u l l - t i m e enrollment figures the  part-time ones, which have also of l a t e been on the r i s e , and the expansion in the non-university post-secondary sector becomes more astronomical. More r e c e n t l y , there has been a steady but lower annual increase in enrollments in the sector.  For example, f o r the nation  as a whole, enrollment increased by only 4.6 per cent between the 1973-74 and 1974-75 academic y e a r s , that i s , from 201,920 in 1973-74 to an estimated 211,260 in 1974-75.  The largest p r o v i n c i a l  enrollment  increase (over 10 per cent) f o r t h i s period occurred in B r i t i s h Columbia and Newfoundland. Not only have the enrollments increased i n absolute terms, but the p a r t i c i p a t i o n rates ( i . e . , the proportion of the relevant age group) at the non-university post-secondary level s p e c i f i c a l l y and at the post-secondary l e v e l generally have been increasing in several provinces over the past decade and a h a l f , though l a t e l y they have gradually been l e v e l l i n g o f f .  Table III  contains the d e t a i l s of  t h i s trend. The rapid r i s e in enrollments for the sector has resulted from several f a c t o r s , among which a r e :  (1)  the general acceptance by the  TABLE I NON-UNIVERSITY POST-SECONDARY FULL-TIME ENROLLMENTS BY PROVINCES FOR SELECTED YEARS, 1960-1975  ONT  MAN  SASK  ALTA  BC  CANADA  22,415  16,671  1,764  2,568  2,486  1 ,814  51,484  2,495  29,436  21,665  1,932  1,756  4,624  3,225  68,353  2,966  2,734  74,550  55,478  3,691  2,365  12,051  13,256  168,876  584  2,893  2,506  84,210  50,345  3,808  2,436  12,610  12,823  173,763  1,491  492  2,478  1 ,953  88,853  52,232  2,762  2,670  12,895  13,174  179,000  1973-74  1,638  860  2,509  1,236  107,609  55,399  3,258  2,523  13,590  13,298  201,920  1974-75  1 ,810  860  2,260  1,180  112,600  58,400  2,970  2,300  14,200  14,680  211,260  Sources:  1960-61;i 1965--66; 1970-71:  YEARS  NF  PEI  NS  NB  1960-61  509  242  1,677  1,338  1965-66  1,003  203  2,014  1970-71  1,431  354  1971-72  1,548  1972-73  QUE  S t a t i s t i c s Canada, Financial S t a t i s t i c s of 1Education, 1969 and  1970 (Sept. 1975). 1971-72; 1972-73:  S t a t i s t i c s Canada, Advance S t a t i s t i c s of Education, 1973-74 (Aug. 1973).  1973-74; 1974-75:  S t a t i s t i c s Canada.  Ibid.  TABLE  II  NON-UNIVERSITY POST-SECONDARY PERCENTAGE INCREASES IN ENROLLMENT, BY PROVINCES, 1960-61 TO 1970-71 (A DECADE)  PROVINCE  NEWFOUNDLAND  PERCENTAGE INCREASE ENROLLMENTS  181  PRINCE EDWARD ISLAND  46  NOVA SCOTIA  77  NEW BRUNSWICK  104  QUEBEC  233  ONTARIO  232  MANITOBA  109  SASKATCHEWAN  -8  ALBERTA  385  BRITISH COLUMBIA  630  TABLE  III  POST-SECONDARY EDUCATION FULL-TIME ENROLLMENTS AS A PERCENTAGE OF THE 18-24 AGE GROUP POPULATION BY PROVINCE AND CANADA FOR THE PERIOD 1965-1974  Newfoundland YEAR  Nova Scotia  P.E.I.  Quebec  New Brunswick  NonUniv  Univ  Total  NonUniv  Univ  Total  NonUniv  Univ  Total  NonUniv  Univ  Total  NonUniv  Univ  Total  1965-66  1.9  6.0  7.9  2.0  9.2  11.2  2.3  11.8  14.1  4.2  10.9  15.1  4.5  10.2  14.7  1966-67  2.0  7.0  9.0  1.8  10.4  12.2  2.7  11.8  14.5  3.9  10.1  14.0  4.8  10.8  15.6  1967-68  2.0  7.6  9.6  1.6  11.7  12.3  2.8  12.3  15.1  3.7  11.1  14.8  5.5  10.9  16.4  1968-69  2.2  7.7  9.9  1.5  12.4  13.9  2.9  13.1  16.0  3.7  11.8  15.5  7.3  8.6  15.9  1969-70  2.2  7.9  10.1  2.1  12.0  14.1  2.9  14.9  17.8  3.5  12.2  15.7  8.0  8.7  16.7  1970-71  2.1  9.6  11.7  2.7  13.3  16.0  3.0  16.1  19.1  3.3  13.1  16.4  9.5  7.9  17.4  1971-72  2.3  10.7  13.0  4.4  13.2  17.4  2.9  16.5  19.4  3.0  13.2  16.2  10.7  8.0  18.7  1972-73  2.1  10.2  12.3  3.4  10.8  14.2  2.4  15.7  18.1  2.3  11.7  14.0  12.4  8.1  20.5  1973-74  2.2  8.6  10.8  5.8  9.5  15.3  2.4  15.6  18.0  1.4  10.0  11.4  13.1  8.3  21.4  1974-75  2.3  7.7  10.0  5.6  9.1  14.7  2.1  16.1  18.2  1.3  9.7  11.0  13.2  8.7  21.9  TABLE III  YEAR  Saskatchewan  Manitoba  Ontario  (continued)  British  Alberta  Canada  Columbia  NonUniv  Univ  Total  NonUniv  Univ  Total  NonUniv  Univ  Total  NonUniv  Univ  Total  NonUn1v  Univ  Total  NonUnlv  Univ  Total  1965-66  3.2  89 A  12.1  2.1  11.4  13.5  1.9  11.7  13.6  3.7  9.8  13.5  2.1  12.7  14.8  3.4  10.0  13.4  1966-67  3.4  9.4  12.8  2.0  12.2  14.2  2.0  12.0  14.0  4.0  16.1  20.1  2.6  12.8  15.4  3.7  10.5  14.2  1967-68  4.4  10.3  14.7  2.2  12.8  15.0  2.0  12.7  14.7  4.9  11.7  15.6  3.6  13.0  16.6  4.4  11.1  15.5  1968-69  5.5  11.4  16.9  2.3  13.7  16.0  1.8  13.2  15.0  5.9  13.5  19.4  3.7  13.3  17.0  5.4  11.0  15.4  1969-70  5.7  12.6  18.3  2.5  14.1  16.6  1.8  13.7  15.5  5.8  14.5  20.3  4.1  12.8  16.9  5.7  11.6  17.3  1970-71  6.0  13.2  19.2  2.8  14.0  16.8  2.0  13.7  15.7  5.9  15.2  21.1  5.2  12.3  17.5  6.3  11.8  18.1  1971-72  5.3  14.2  19.5  3.1  14.2  17.3  2.4  14.3  16.7  6.2  14.2  20.4  4.9  11.0  15.9  6.5  12.0  18.5  1972-73  5.4  13.8  19.2  2.7  13.5  16.2  2.3  12.3  14.6  6.3  13.1  19.4  4.6  10.0  14.6  6.8  11.5  18.3  1973-74  5.7  14.4  20.1  2.6  13.4  16.0  2.2  12.0  14.2  6.4  13.6  20.0  4.7  10.1  14.8  7.2  11.8  19.0  1974-75 *  5.5  14.2  19.7  2.3  13.3  15.6  2.0  11.1  13.1  6.2  13.2  19.4  4.8  10.0  14.9  7.1  11.7  18.8  Source:  Derived from Hiroko N. Wennevold, Enrolment Trend Analyses of B r i t i s h Columbia Education 1967-75 ( B r i t i s h Columbia Post-Secondary Enrollment Forecasting Vancouver)  Report #20, 1976.  Post-Secondary  Committee, CTl  7  public that education in a democratic society i s a r i g h t and not a p r i v i l e g e , and therefore a public service to be provided by the government to a l l those who are able and w i l l i n g to make use of (2)  it;  the baby boom of the 1940 s which has led to an increase i n 1  the relevant age group i n the 1970's; and  (3)  the recognition of  l a t e that education i s a l i f e - l o n g enterprise and therefore should not be r e s t r i c t e d to a given age group, hence encouraging the older persons who would not normally e n r o l l i n post-secondary i n s t i t u t i o n s  to  begin to do s o , e s p e c i a l l y at the non-university post-secondary l e v e l . What does the future hold in terms of post-secondary and nonu n i v e r s i t y post-secondary enrollment trends?  Charts A and B contain  demographic trends for Canada and B r i t i s h Columbia.  A n a l y s i s of these  trends indicates that the age group 18-24, the relevant age group f o r post-secondary education, w i l l  continue to grow f o r the nation as a  whole u n t i l about 1981 when i t w i l l i n 1996.  begin to f a l l , and then r i s e again  In B r i t i s h Columbia, t h i s age group w i l l continue to r i s e  u n t i l about 1985 when i t w i l l begin to f a l l , and then begin to r i s e again i n 1991. The possible implications of these population trends, as seen by S t a t i s t i c s Canada, are that w i t h i n the next f i v e to  twenty-five  y e a r s , post-secondary enrollments i n Canada w i l l grow, reaching i t s f i r s t peak of about 670,000 students in the e a r l y 1980's, f a l l i n g  to  about 660,000 by the year 2001 (Catalogue 81-220, August 1975:22). B r i t i s h Columbia, which follows the national demographic trends very c l o s e l y , would l i k e l y follow these future national enrollment  trends.  Relating the demographic trends to enrollments i n post-secondary institutions  and to the recent trends i n non-university post-secondary  8  CHART A Selected Age Group Populations of Relevance to School Enrolment, f o r Canada, 1961-2001. Population par groupe d'tges spgcifique c o r r e s pondant aux e f f e c t i f s s c o l a i r e s , Canada, 1961-2001. A Millions  B  Millions  4.4  44.0  4.2 4.0  \  /  3.8 3.6  A  \  Agp h(K indergart<•n-grade 8 ) / / Age 5- 13 / aternelle -8e annfiej /  \  3.4  /  /  /  /  /  42.0 40.0 38.0  »Post-seco idary)  Age 18-24 (  3.2 3.0 2.6 2.6 2.4  /  2.2  /  /  ""XAge 18-24 (  \  /  Tote 1 Canada  • 36.0 34.0  Postsecon Jaire)  /  /  VI  pofmlation Populatic>n totale 3 du C a n a d a ^ ''Age 0-99 and over Age 0-99 et plus  26.0  - 24.0 22.0  - 200  i.e  1.6  /  1.4  18.0  >  y  \  -  - 16.0 Y  ^  A  ade 9 and Age 14-17 (6r Age 14-1 7 (9e anne e e?^plus'  1.2 1.0 0.8  30.0  - 28.0  J  2.0  • 32.0  Medium pr Djection Key assum ptions:  Act ual Obs erv§  0.6  1  I  Projection moyenne  1 - Fertil ityteconcnte: rate: 2.20 Taux de 2 - Net annual migration: 60 ,000 (+) Migration annuel le nette 60 ,000 (+)  14.0  - 12.0 10.0  - 8.0 6.0  0.4  -4.0  0.2  20  0  1 1 1 1 If 1961 1966  Source:  1 1  t i l l  1971  t i l l  1976  1 II 1 II 1981 1986  1 1 1 1 1 1 1 1 1 1 -00 1991 1996 ZOO I  Z. Zsigmond, "Patterns of Demographic Change A f f e c t i n g Education, 1961-2000," 1975:12.  9  CHART B Selected Age Group Population Approximately Relevant to School Enrolment, B r i t i s h Columbia 1961-2001. Population par groupe d'tges specifiques correspondant approximativement aux e f f e c t i f s s c o l a i r e s , ColombieB r i t a n n i q u e , 1961-2000. A '000  B Millions 6.0  600  550  500  450  H  400  S50  H  soo —t  250  H  200  I50-H  100  1961  1966  Source:  1971  1976  1981  Z. Zsigmond ( I b i d . : 1 7 ) .  • 986  1991  1996  2C0I  10  education s e c t o r , S t a t i s t i c s Canada concludes t h a t : In the next few y e a r s , national non-university post-secondary enrollment i s expected to r i s e . The largest percentage increases are l i k e l y in the A t l a n t i c Provinces and B r i t i s h Columbia. Quebec, Ontario, Manitoba and Alberta w i l l have s m a l l e r , but steady gains. A s l i g h t decrease i s a n t i c i p a t e d for Saskatchewan's technical i n s t i t u t e s because of the continued Grade 12 decline ( I b i d . , p. 30). The f i n a n c i a l implications of the expansion i n the nonu n i v e r s i t y post-secondary education s p e c i f i c a l l y , and i n post-secondary education g e n e r a l l y , have been and continue to be enormous.  In  1961, expenditures on non-university post-secondary education i n Canada amounted to $58,428,000, of which $49,030,000 and $6,942,000 were a l l o t t e d to operating and c a p i t a l expenditures r e s p e c t i v e l y .  By 1971,  the national expenditures on non-university post-secondary education had reached $499,100,000, representing an increase of 754 per cent over the 1961 expenditures.  Operating expenditures had reached  $368,061,000 and c a p i t a l expenditures t o t a l l e d $84,149,000.(Review of Educational P o l i c i e s in Canada, Foreword and I n t r o d u c t i o n ) . The growth i n expenditures on non-university post-secondary education i n B r i t i s h Columbia f o r the same p e r i o d , 1961-71, was s i m i l a r l y large.  In 1961, B r i t i s h Columbia spent $1,999,000 on t h i s s e c t o r .  By 1971, t h i s had grown to $31,945,000, representing an increase of 1498 per cent over the 1961 expenditures.  The proportion of the t o t a l  expenditure a l l o t t e d to c a p i t a l cost became much l a r g e r in the l a t t e r 1960's through the e a r l y 1970's as a r e s u l t of increasing construction of several new f a c i l i t i e s w i t h i n that period ( I b i d . ) . It i s estimated that, by 1976, the national expenditures on postsecondary education would have grown to $3,961,940,000 and those f o r  11  B r i t i s h Columbia to $355,176,000.  The non-university sector expendi-  tures alone would have increased to $1,009,947,000 n a t i o n a l l y and $91,259,000 f o r B r i t i s h Columbia ( S t a t i s t i c s Canada, Catalogue 81-220, August 1975).  Table IV shows the growth in expenditures on post-  secondary education ( u n i v e r s i t y and non-university)  across Canada f o r  selected years from 1956 to 1973; and Table V shows the percentage increases i n the expenditures for the period 1961-1971.  It  should  be pointed out, however, that the expenditures are a l l in current d o l l a r values and they contain some i n f l a t i o n a r y  factors.  The growth i n post-secondary educational spending i n B r i t i s h Columbia i s f u r t h e r depicted i n a recent study by Dennison and others (1975).  Among other t h i n g s , they compared the growth rates of the  economy, government spending and educational spending over a ten-year period.  Table VI contains the d e t a i l s of t h e i r findings which, unlike  those c i t e d e a r l i e r , are corrected f o r i n f l a t i o n using 1973 d o l l a r s as the base. From Table V I , i t could be seen t h a t : Expenditures i n post-secondary education have shown the greatest increase among the areas shown, averaging a 10.5% annual compound growth r a t e . Total education expenditures i n B.C. given at a rate of 8.2% which i s considerably f a s t e r than the 6.3% annual growth rate of the p r o v i n c i a l economy (Dennison et a l . , 1975:125) Dennison and others' d e f i n i t i o n of "post-secondary education" does not include i n s t i t u t i o n s  which give t r a i n i n g f o r nurses' diplomas,  i . e . , h o s p i t a l s which are included in the c i t e d references from S t a t i s t i c s Canada and the Council of M i n i s t e r s of Education Reports. This does not, however, undermine the point the table attempts to get across.  In f a c t , adding these i n s t i t u t i o n s would most l i k e l y increase  TABLE I V EXPENDITURES ON POST-SECONDARY EDUCATION, PROVINCES AND CANADA BY TYPE OF EDUCATION  FOR SELECTED YEARS  Cin thousands of d o l l a r s ) TOTAL (University Non-Unlv.)  U N I V ER S I T Y Operating  Capital  1,881 5,563 18,229 24,664 29,246 27,482  1,543 17,849 2,181 6,991 1,125 1.000  Departmental and Others  NON Subtotal  Operating  -  UNI V E R S IT Y  Capital  Departmental and Others  Subtotal  NEWFOUNDLAND 1956 1961 1966 1970 1971 1972 1973  4.154 25,980 27,388 38.554 37,422 36,674  169 783 2,582 2.350 2,432 2.287  3,593 24.195 22,992 34.005 32,803 30.769  388 561 1,681 3,766 4,372 4.423 5,186  29 63 65 500  41 565 177 196 219  417 561 1.785 4,396 4,549 4,619 5,905  PRINCE EDWARD ISLAND 1956 1961 1966 1970 1971 1972 1973  -  1,335 2.586 7.114 8.686 10,383 9,413  -  749 1,809 4,560 4,696 4.976 4,777  -  300 412 177 1,569 2,855 500  -  50 96 1,243 787 1,066 1.015  -  1,099 2.317 5,980 7.052 8,897 6.292  9 209 269 1,102 1.447 1,285 2.503  _  139 27  _  _  90 95 500  32 97 106 118  151 236 269 1,134 1,634 1,486 3,121  TABLE IV (continued)  TOTAL (University Non-Untv.)  UNIVERSITY Operating  Capital  NOM -  Departmental and Others  Subtotal  Operating  UNIVERSITY Departmental and Others  Subtotal  687 160 607 895 700  45 79 225 480 2,319 1.812 2,150  1,034 2,506 3,497 8,242 11,236 9.886 9,825  262 160 286 382 250  109 68 215 359 781 855 953  953 1.636 3,114 5.052 6,151 5.486 3.886  106 881 1.460 15,433 15,005 15,966 17.848  11.159 23.930 40,035 142,238 178.786 229,514 277,362  Capital  NOVA SCOTIA 1956 1961 1966 1970 1971 197Z 1973  - 167  1,194 6,267 8.705 9,564 9.890  9.434 44,925 90.918 83,700 72,132 76,178  989 1,740 3,112 7,155 8,022 7,374 7,675  1.763 12.887 7.149 7,775 544 1.000  190 808 5.052 4.352 4,664 4.809  7.347 26,735 41.606 45.696 43.694 47.931  844 1.306 2,739 4,407 4,988 4.381 2,933  6.796 27,706 36.734 61,093 34,103 35,538 40,000  1.612 4,976 22.207 46,658 32,497 46,469 48,919  32,592 100,767 213,279 364,597 355,633 390,714 432,758  11.053 18.932 36.569 118.180 149,609 194,593 239,514  _  11.940 48,422 99,160 94.936 82.018 86,003  8,311 • 23,024 51.460 58,748 59,616 63,788  956 20,707 33,191 16,247 2,952 2,500  8,983 29,849 46.658 51.847 49.180 51.817  5,394 13,040 29.405 33,569 38.486 42.122  43.751 124.697 253,314 506,835 534,419 620,228 710,120  24.184 68.082 154.338 256,846 283,033 308,707 343.839  -  -  NEW BRUNSWICK 1956 1961 1966 1970 1971 1972 1973 QUEBEC 1956 1961 1966 1970 1971 1972 1973  -  4,117 2.006 8,625 14,172 18,955 20.000  TABLE IV (continued)  TOTAL (University Non-Unlv.)  U N I V E RS I T Y Operating  Capital  Departmental and Others  53,657 122.685 424,897 1.006.807 1,050,182 1.034,979 1,110,229  34.726 69,043 217.893 528.624 613,078 621,683 696,896  6.012 32,147 144,549 196.336 140,195 111,805 120,000  1,197 1,979 19,310 94,134 79.720 81.069 84.410  18,288 42,618 84,442 91,624 100.583 110,338  11,593 28,948 58.944 61.415 65.040 70.796  3.992 9.398 13,364 15.390 20,704 24.000  14,189 44,633 66,238 73,076 73.585 79,561  9.103 26.494 47.886 52,027 56.871 61,316  2,403 14.163 10,211 11,070 5.401 6.000  NON Subtotal  -  U N I1 V E R S I T Y  Operating  Capital  41.935 103,169 381.752 819,094 832.993 814,557 901.306  11,488 17,179 35,441 125.802 134,428 149.778 159,447  1.124 4,989 49.222 63,000 49.191 25.554  390 1,222 5,957 5,507 5.463 5.701  15.975 39,568 78,265 82,312 91,207 100.497  1,343 2,225 2,812 5.808 7,049 6,946 7,466  340 1,002 3.813 3.740 4,069 4,213  11,846 41,659 61,910 66,837 66,341 72,529  1,658 2.250 2.674 3,645 4.692 5,101 6,980  Departmental and Others  Subtotal  ONTARIO 1956 1961 1966 1970 1971 1972 1973  234 1.213 2,715 12.689 19.761 21,453 23,922  11,722 19,516 43,145 187,713 217,189 220,422 208,923  55 88 83 163 1,963 2,130 2,375  1,398 2,313 3,050 6,177 9,312 9,376 9.841  10 55 73 363 867 943 1,052  1,668 2,343 3.004 4,328 6,239 7,244 8,032  MANITOBA 1956 1961 1966 1970 1971 1972 1973  155 206 300 300  SASKATCHEWAN 1956 1961 1966 1970 1971 1972 1973  38 257 320 680 1,200  TABLE IV (continued)  TOTAL (University Non-Unlv.)  U N I V E R S I T Y Operating  Capital  NON  Departmental and Others  Subtotal  Operating  -  U N I V E R S I T Y Departmental and Others  Subtotal  -  25 28 165 650 2.384 2.632 2.935  2,158 3.388 12,008 27,592 32,059 36.757 45,626  -  58 17 203 625 3.536 3,886 4.333  1.526 1,999 11.792 29,140 31.945 32,894 35,137  683 2,456 8,446 43,652 46,890 49.979 55,905  32.186 58.428 124.965 428.305 499.100 557,684 607.658  Capital  ALBERTA  1956 1961 1966 1970 1971 1972 1973  -  26.797 104.340 203.426 219.864 215.359 229.734  -  14,924 47.476 111.840 121.003 124.000 138,682  -  7,347 41.308 49,374 53.004 40,445 30,000  1.138 3,548 14.620 13.798 14.557 15.526  -  -  23.409 92.332 175.834 187,805 178,602 184,108  2,133 2,646 6,380 24.267 29.075 33.525 41,191  714 5.463 2.675 600 600 1.500  BRITISH COLUMBIA  1956 1961 1966 1970 1971 1972 1973  -  -  31,728 104,838 174,888 196,048 188,886 206.669  22.250 63.710 116.153 125.518 132,606 147.162  148.295 369.057 1,116,612 2.257.909 2,387,223 2.443.190 2.662,218  90,119 211,330 582.295 1,223,947 2.377,751 1,441.231 1,596,860  6,851 26.459. 19,167 29.809 14.479 15,000  -  628 2.877 10.428 8.776 8.907 9.370  29,729 93,046 145,748 164,103 155,992 171.532  1.468 1.982 4.895 22,889 24.379 25,965 30,804  4.956 14.291 84.886 213.414 194,219 208.829 217.700  116.109 310,629 991.647 1.829.604 1.888,123 1,885,506 2,054.560  31.503 49.030 96.570 316,946 368.061 433,371 503.699  6.696 5.626 4.030 ' 3i043  -  CANADA  1956 1961 1966 1970 1971 1972 1973  Source:  21.034 85,008 324.466 392.243 316.153 235.448 240.000  -  6.942 19.949 67.707 84,149 74.334 48,054  Derived from Review o f Educational P o l i c i e s i n Canada, Foreword and Introduction (The Secretary o f S t a t e , Ottawa), 1975, pp. 66-68.  16  TABLE V PERCENTAGE INCREASES IN EXPENDITURES ON POST-SECONDARY EDUCATION BY PROVINCES AND CANADA, 1961 TO 1971  PROVINCE  PERCENTAGE INCREASES IN EXPENDITURES UNIVERSITY  NON-UNIVERSITY  TOTAL  Newfoundland  846  711  828  Prince Edward Island  542  592  551  Nova Scotia  787  348  695  New Brunswick  522  276  477  Quebec  253  647  329  Ontario  707  1,013  756  Manitoba  415  303  401  Saskatchewan  464  166  415  Alberta  702  846  720  B r i t i s h Columbia  452  1,498  CANADA  507  754  .  518  546  17  TABLE VI 1965-1974 GROWTH RATES OF THE ECONOMY, GOVERNMENT SPENDING 1  AND EDUCATION SPENDING (PERCENTAGES)  NEW GROWTH 1965-75 TEN-YEAR TOTAL  ANNUAL RATE  CANADA Gross National Product  67  5.3  117  8.1  84  6.3  P r o v i n c i a l Government Expenditures  158  10.0  Total Educational Expenditures  119  8.2  M i n i s t r y of Education Expenditures  112  7.8  Post-Secondary Education Expenditures  172  10.8  Federal Government Expenditures BRITISH COLUMBIA Gross P r o v i n c i a l Product  1 Corrected f o r i n f l a t i o n using 1973 d o l l a r s as the base. Source:  Dennison, John D. et a l . , The Impact of Community Colleges (B.C. Research, Vancouver), 1975.  18  the growth rate in the expenditures of the post-secondary education and thus strengthen the point the table attempts to get across. The immense expansion i n post-secondary education and more so in non-university post-secondary education, giving r i s e to increasing expenditures, i s taking place at a time when the nation as a whole i s having to cope with a number of serious economic problems such as i n f l a t i o n , unemployment and slow economic growth.  In a d d i t i o n , expenditures  i n other p u b l i c services such as h e a l t h , welfare and other aspects of education ( p a r t i c u l a r l y  elementary and secondary) have s i m i l a r l y been  on the r i s e (see, f o r example, the growth i n per c a p i t a expenditures of p r o v i n c i a l governments on various services provided in Table V I I ) .  TABLE VII PER CAPITA DISTRIBUTION OF NET GENERAL EXPENDITURES OF PROVINCIAL GOVERNMENTS, CLASSIFIED BY FUNCTION, 1952, 1961-62, and 1971-72  Functions  1952  1961-62  1971-72  Education Health Social Welfare Transportation & Communications National Resources General Government Protection of Persons & Property Debt Charges Other Expenses  15.3 13.4 6.6 25.5 6.5 3.3 4.7 3.9 4.6  45.8 32.8 15.0 36.0 11.0 7.4 7.7 4.4 9.3  193.8 136.4 69.9 51.3 26.1 26.7 26.3 47.5 54.9  Source:  % Growth 1952-72 1 .166 .7 917 .9 959 .1 101 .2 301 .5 709 .1 459 .6 1 .117 .9 1 .093 .5  J . E . Hodgetts and O.P. Dwived. P r o v i n c i a l Governments as Employers (McGi11-Queen's U n i v e r s i t y P r e s s , Montreal and London), 1974:5.  19  The public has thus, of l a t e , begun to r a i s e questions regarding the way expenditures on public s e r v i c e s , including those on postsecondary education, have been r i s i n g .  Well a r t i c u l a t e d demands f o r  increasing control of these expenditures have not been uncommon l a t e l y . Hence, the dilemma in post-secondary education—an e v e r - i n c r e a s i n g demand f o r higher education with r e s u l t i n g increases in expenditures and, at the same time, public demand f o r control of these expenditures. This section of the d i s s e r t a t i o n have provided the reader with the general state of a f f a i r s i n non-university post-secondary education i n terms of enrollments and expenditure trends in B r i t i s h Columbia and across Canada.  The next section w i l l address i t s e l f to some of the  basic issues which have arisen i n B r i t i s h Columbia s p e c i f i c a l l y with regard to financing the colleges and, f i n a l l y , objectives of the study w i l l be s t a t e d . Issues i n the Financing of Non-University Post-Secondary Education in B r i t i s h Columbia - The Case of the Colleges The increasing growth i n expenditures on education g e n e r a l l y , and on non-university post-secondary education s p e c i f i c a l l y , coupled with increasing demands on government funds from other public services such as health and s o c i a l welfare,has led governments at a l l l e v e l s - the Government of B r i t i s h Columbia i s no exception—to begin to rethink p r i o r i t i e s to see where constraints can be a p p l i e d .  To t h i s end, i t  has become more urgent f o r a careful a n a l y s i s of the manner by which the major public s e r v i c e s , including c o l l e g e s , are financed. In t h i s section of the chapter some of the basic issues i n financing colleges in B r i t i s h Columbia giving r i s e to the objectives of the study are discussed.  Before doing t h i s , a b r i e f discussion of  20  the college system i n B r i t i s h Columbia and the nature of college finance are presented. The college system i n B r i t i s h Columbia.  The college system  forms the l a r g e s t component of non-university post-secondary education i n B r i t i s h Columbia i n terms of enrollments and expenditures (Dennison et a l . , 1975).  The other components are the B r i t i s h Columbia I n s t i t u t e  of Technology ( B . C . I . T . ) , vocational schools (or vocational c e n t r e s ) , and a l i m i t e d number of hospital Schools of Nursing. The f i r s t college i n B r i t i s h Columbia, V i c t o r i a C o l l e g e , was founded i n 1903, but t h i s college became a u n i v e r s i t y college of the U n i v e r s i t y of B r i t i s h Columbia i n 1945 and a f u l l - f l e d g e d U n i v e r s i t y of V i c t o r i a i n 1963.  The h i s t o r y of the present college system began  with the founding of Vancouver Community College i n 1965 following a Government of B r i t i s h Columbia Royal Commission on Education (1960) and the MacDonald Report (1962). colleges had been founded.  By the end of that decade, f i v e more  Eight more were founded i n the 1970's.  A l l the colleges are b u i l t and operated by one or more school d i s t r i c t s in conjunction with the  Ministry  of Education.  Hence, the  governance of each college i s vested i n a College Council whose members are appointed by the p a r t i c i p a t i n g school boards, by the M i n i s t e r of Education, and by the P r o v i n c i a l Cabinet. The colleges are a l l comprehensive i n s t i t u t i o n s  offering  programmes ranging from u n i v e r s i t y t r a n s f e r through technical and vocational to extensive community service type programmes.  This  aspect of the college system introduces some complexities into the financing arrangements, since the various programmes are financed differently.  21  An overview of the financing arrangements for the c o l l e g e s . In terms of c a p i t a l expenditures, the P r o v i n c i a l Government pays 100 per cent of the p r i n c i p a l and i n t e r e s t on debt for a l l approved c o s t s . However, for operating expenditures there are three main sources of college funding i n B r i t i s h Columbia.  These are the P r o v i n c i a l Govern-  ment g r a n t s , l o c a l property t a x , and students' t u i t i o n f e e s .  The  P r o v i n c i a l Government contributes not l e s s than 60 per cent of approved operating expenses, except f o r vocational programmes where the government pays 100 per cent of the operating c o s t .  The remaining cost i s  covered through school board contributions and t u i t i o n fees (Dennison et a l . , 1975; Department of Education, 1976).  Dennison and others  (1975) estimate that f o r the 1973-74 academic y e a r , 63 per cent of college funds was derived from government grants, 24 per cent from l o c a l property t a x , and 13 per cent from t u i t i o n f e e s .  They speculate  that these proportions have not changed s i g n i f i c a n t l y since 1970. There i s , however, mounting pressure from some quarters that the government's share toward college funding be increased.  For example,  a commission set up to study the college system i n B r i t i s h Columbia in 1974 recommended a 100 per cent p r o v i n c i a l support toward college operating costs (see The Task Force on Community C o l l e g e , 1974).  They  also recommended that there be no l o c a l property tax support, and only a nominal students' fee toward college funding ( I b i d . ) .  The commission  found t h i s funding arrangement to be the p r a c t i c e in a l l the college systems across Canada.  Dennison (1976) also speculates that in the  foreseeable future t h i s would be the p r a c t i c e i n B r i t i s h Columbia. It should be pointed out t h a t , as of now, P r o v i n c i a l Government grants to the colleges have a federal component under the Federal-  22  P r o v i n c i a l F i s c a l Arrangements Act of 1967 (extended and revised in 1972).  Under the A c t , an equivalent of 50 per cent of operating costs  of c o l l e g e s (and other post-secondary i n s t i t u t i o n s )  are funded by the  Federal Government, subject to a minimum of $15 per c a p i t a of p r o v i n c i a l population to each province and a maximum of 15 per cent annual increase i n the t o t a l federal support (Review of Educational P o l i c i e s i n Canada, 1976:26; U n i v e r s i t y A f f a i r s , September 1976; Dennison et a l . , 1975). Some basic issues in financing the c o l l e g e s .  The huge growth  i n expenditures of the colleges has i n e v i t a b l y resulted in the government's i n a b i l i t y to meet t o t a l budget requests from the c o l l e g e s .  This,  i n t u r n , has given r i s e to a need f o r a mechanism by which the a v a i l able funds could be equitably d i s t r i b u t e d among the c o l l e g e s .  This  need would become even more pressing i f the government's share of the c o l l e g e s ' funding should increase as a n t i c i p a t e d .  In 1975, a s i m i l a r  need became apparent at the u n i v e r s i t y l e v e l when large government cutbacks in funds led o f f i c i a l s of the u n i v e r s i t i e s i n B r i t i s h Columbia and the government to begin to give serious thought to the manner by which funds were a l l o c a t e d to the u n i v e r s i t i e s .  The r e s u l t of t h i s  exercise was the establishment by the government of a U n i v e r s i t i e s Council in 1975 whose envisaged functions would i n c l u d e , among other t h i n g s , the a l l o c a t i o n of government funds to the i n d i v i d u a l  university  i n s t i t u t i o n s on the basis of need. The a l l o c a t i o n of funds to the colleges s t i l l  resides with the  government's M i n i s t r y of Education,.as i t has always been.  How has  the M i n i s t r y of Education been a l l o c a t i n g the a v a i l a b l e funds among the colleges?  Considering the trend of increasing enrollments and  23  expenditures i n the c o l l e g e s , coupled with pressure on the government to cut back on educational spending (see, f o r example, Edward C a r r i g a n ' s a r t i c l e in The Sun, September 21, 1976), a f u r t h e r question now a r i s e s : would the present approach to a l l o c a t i n g funds among the colleges be appropriate in the future?  These are questions which deserve some  hard examination before we can begin thinking of a l t e r n a t i v e approaches to financing the c o l l e g e s . Further, the study would be l i m i t e d to the financing of the two major programmes of U n i v e r s i t y Transfer and Career/Technical where the present cost-sharing arrangements between the P r o v i n c i a l Government and the l o c a l p a r t i c i p a t i n g school board(s) i s a 60-40 s p l i t . The objectives of the study.  A number of questions emerge from  the discussion i n the preceding s e c t i o n s .  Examination of some of these  w i l l form the major objectives of the present study.  Those to be  examined f a l l i n t o the following areas: 1.  Revenue D i s t r i b u t i o n C r i t e r i a :  To determine the revenue  d i s t r i b u t i o n c r i t e r i a employed by the B.C. M i n i s t r y of Education to a l l o c a t e operational funds to the c o l l e g e s ; 2.  M o d i f i c a t i o n of the Revenue D i s t r i b u t i o n C r i t e r i a :  To  determine how the revenue d i s t r i b u t i o n c r i t e r i a become modified; 3.  Government Controls over College Expenditures:  To ascer-  t a i n the types and extent of government controls over the way colleges spend t h e i r monies; and  24  4.  Adequacy of the Present Revenue D i s t r i b u t i o n C r i t e r i a , Provisions f o r t h e i r M o d i f i c a t i o n , and Government C o n t r o l s : To s o l i c i t the views of the major constituent groups in the c o l l e g e system with regard to the adequacy of the e x i s t i n g revenue d i s t r i b u t i o n c r i t e r i a , the provisions f o r t h e i r m o d i f i c a t i o n s , and of government controls over c o l l e g e expenditures.  The meeting of the objectives i n the aforementioned four areas should provide a basis f o r the development of a l t e r n a t i v e model(s) the d i s t r i b u t i o n of c o l l e g e operating funds.  for  Hence, the study w i l l go  a step f u r t h e r to include the following f i f t h o b j e c t i v e : 5.  The Development of Recommendations f o r Improvement of College Financing:  To develop h e u r i s t i c a l l y some a l t e r n a -  t i v e models f o r the d i s t r i b u t i o n of college operating funds, t e s t the a l t e r n a t i v e s for robustness with the major c o n s t i t u ent groups of the college sector and, having done so* make some recommendations f o r c o n s i d e r a t i o n . This chapter has provided the reader with background to issues in financing c o l l e g e s .  Some of these issues g i v i n g r i s e to the objec-  t i v e s of the study were discussed and, f i n a l l y , the objectives of the study were i d e n t i f i e d . of the I n v e s t i g a t i o n .  Chapter II presents a discussion of the Design P a r t i c i p a n t s in the study w i l l be i d e n t i f i e d ,  the research method w i l l be discussed and, f i n a l l y , the research a c t i v i t i e s undertaken in an attempt to meet the objectives of the study w i l l be presented.  Chapter III  presents a d e s c r i p t i o n of the current  arrangements in c o l l e g e financing in B r i t i s h Columbia, and Chapter IV  25  i d e n t i f i e s the changes which college p r i n c i p a l s and M i n i s t r y of Educat i o n o f f i c i a l s would l i k e to see i n these arrangements. presents the Conclusions and Recommendations.  Chapter V  CHAPTER II  DESIGN OF THE INVESTIGATION In t h i s chapter, p a r t i c i p a n t s to be involved in the study are identified.  This i s followed by a discussion of the research techniques  employed in gathering the relevant data.  F i n a l l y , the research a c t i v i t i e s  and data requirements toward answering the research questions are presented. P a r t i c i p a n t s in the Study This part of the study w i l l be discussed under two main subheadings:  S e l e c t i n g the I n s t i t u t i o n s f o r the Study and S e l e c t i n g the  Respondents f o r the Study. S e l e c t i n g the i n s t i t u t i o n s f o r the study.  B r i t i s h Columbia  has three main types of non-university post-secondary i n s t i t u t i o n s . These a r e : 1.  The B r i t i s h Columbia I n s t i t u t e of Technology ( B . C . I . T . ) ,  2.  The Community College System (also referred to in the study as the College System) comprising fourteen p u b l i c and two private c o l l e g e s , and  3.  Vocational Centres.  In addition to the above, there i s also a l i m i t e d number of Hospital Schools of Nursing. For the purposes of t h i s study, i t was found that these types of non-university post-secondary i n s t i t u t i o n s could not be studied  26  27  together, f o r at l e a s t two reasons. a l i t i e s i n programme o f f e r i n g s .  The f i r s t reason i s lack of common-  The colleges are t y p i c a l l y comprehen-  sive i n s t i t u t i o n s o f f e r i n g programmes which range from u n i v e r s i t y t r a n s f e r , through technical and v o c a t i o n a l , to extensive community service-type programmes.  B . C . I . T . j on the other hand, provides tech-  n i c a l t r a i n i n g programmes to a much higher l e v e l of p r o f i c i e n c y than i s usually provided at the college l e v e l .  F i n a l l y , the vocational  centres o f f e r vocational courses aimed at developing lower l e v e l or f i r s t entry s k i l l s .  The r e s u l t of these d i f f e r e n t programme o f f e r i n g s  i s that we have a d i f f e r e n t  student mix among the three types of  i n s t i t u t i o n s , which would make comparisons of revenues and costs among i n d i v i d u a l i n s t i t u t i o n s from the d i f f e r e n t types less meaningful. The second reason i s that funding arrangements d i f f e r among these diverse programmes.  Hence, in a study of f i n a n c i n g , i t would be more  appropriate to compare i n s t i t u t i o n s  having s i m i l a r programmes.  In a d d i t i o n , the very f a c t that the p u b l i c l y funded c o l l e g e system c o n s i s t s of fourteen i n s t i t u t i o n s makes the a l l o c a t i o n of a v a i l a b l e funds among them a very complex problem.  For these reasons,  the present study was l i m i t e d to the financing aspects of only the p u b l i c l y funded college system. As has been pointed out, there are fourteen p u b l i c l y funded colleges i n B r i t i s h Columbia.  Because of the nature of the study,  however, i t i s important that only i n s t i t u t i o n s which have had a reasonable number of years of experience with the method of financing be included in the study.  It was therefore considered that only  colleges in existence before 1972 would be included.  It was also  decided that Vancouver Community College and S e l k i r k College would  28  not be included f o r the following reasons:  Vancouver Community College  i s a t y p i c a l , not only i n terms of i t s s i z e , but also i t s uniqueness and long h i s t o r y ; S e l k i r k College was excluded f o r lack of of p r i n c i p a l s h i p i n the period under study, 1972-1976. seven colleges founded before 1972 were i n i t i a l l y study.  continuity  As a r e s u l t ,  included i n the  These were: Camosun C o l l e g e , founded i n 1971 Capilano C o l l e g e , founded in 1968 Cariboo C o l l e g e , founded in 1970 Douglas C o l l e g e , founded in 1970 Malaspina C o l l e g e , founded i n 1969 College of New Caledonia, founded i n 1969 Okanagan C o l l e g e , founded i n 1968.  Malaspina College was unable, however, to p a r t i c i p a t e i n the study; hence the f i n a l number of colleges included in the study was s i x . S e l e c t i n g the respondents.  The choice of respondents f o r the  study was based on two main f a c t o r s :  proximity to issues i n those  aspects of c o l l e g e financing under study and expertise i n the aspects of college financing under study.  Based on these two f a c t o r s , f i v e  major constituent groups i n the c o l l e g e system were considered f o r p a r t i c i p a t i o n i n the study.  These were:  1.  O f f i c i a l s of the M i n i s t r y of Education,  2.  College P r i n c i p a l s ,  3.  Chairmen of College C o u n c i l s ,  4.  Presidents of College Faculty A s s o c i a t i o n s , and  5.  O f f i c i a l ( s ) of the B.C. A s s o c i a t i o n of Colleges.  29  In the M i n i s t r y of Education, two respondents were selected from among the o f f i c i a l s who were responsible f o r deciding how much money would be a l l o c a t e d to i n d i v i d u a l colleges f o r operating purposes. These were the A s s i s t a n t Superintendent of Post-Secondary Programmes and an Audit Accountant.  One o f f i c i a l of the B.C. A s s o c i a t i o n of  Colleges ( B . C . A . C . ) , the Executive D i r e c t o r , was i n v i t e d to p a r t i c i p a t e in the study.  However, i t was l a t e r discovered that chairmen of  college c o u n c i l s , presidents of f a c u l t y a s s o c i a t i o n s , and the executive d i r e c t o r of the B . C . A . C . would not be r e a d i l y a c c e s s i b l e .  Thus they  were not f i n a l l y included i n the l i s t of p a r t i c i p a n t s , leaving two groups:  m i n i s t r y o f f i c i a l s and p r i n c i p a l s .  Fortunately, they are  the persons most c l o s e l y associated with the financing of c o l l e g e s . Research Method The major technique employed i n gathering data f o r the study was i n t e r v i e w i n g . technique.  Several f a c t o r s were behind the choice of t h i s  In the f i r s t p l a c e , the f a c t that the study attempted to  tap information and experience of the respondents made i t necessary f o r a more f l e x i b l e approach to questioning.  This could better be  done in an interview s i t u a t i o n than through a mailed questionnaire. Secondly, i t was f e l t that the interview technique would permit follow-up leads which would enable the researcher to obtain complete data that would otherwise be unobtainable.  F i n a l l y , i t was f e l t  that some of the questions required lengthy opinion-type answers which some respondents might not so r e a d i l y be prepared to w r i t e , though, they would be ready to give them o r a l l y . To determine the present arrangements i n financing colleges i n B r i t i s h Columbia, and to seek suggestions f o r t h e i r improvements,  30  interviews were held with two o f f i c i a l s of the M i n i s t r y of Education and p r i n c i p a l s of the s i x p a r t i c i p a t i n g c o l l e g e s . were conducted from March 22 to May 4, 1977.  These interviews  Except for one interview  conducted by telephone, which lasted f o r approximately 30 minutes, the interview time usually ranged from approximately one hour to two hours. The interview guides for the college p r i n c i p a l s and f o r o f f i c i a l s of the M i n i s t r y of Education are contained in the Appendix. Each of the interviewees granted the researcher permission to record the interview on a cassette tape recorder, thus making notetaking i n the course of the interviews unnecessary.  A f t e r the i n t e r -  views were completed, the data were transcribed from the tapes and summarized by the i n v e s t i g a t o r for a n a l y s i s . The interview technique was supplemented by review of the P u b l i c Schools Act (1975), P u b l i c Schools Act Regulations (1975), and other appropriate l i t e r a t u r e on B.C. college f i n a n c e . S p e c i f i c Questions, Research A c t i v i t i e s and Data Requirements This section i d e n t i f i e s the s p e c i f i c research questions studied i n the areas i d e n t i f i e d in the "Objectives of the study", the types of research a c t i v i t i e s undertaken toward answering these questions, and the research data gathered.  To do t h i s , the broad objective areas  (stated i n the "Objectives of the study") are set f o r t h , a f t e r each of which the s p e c i f i c q u e s t i o n s , research a c t i v i t i e s and data r e q u i r e ments are discussed. The revenue d i s t r i b u t i o n c r i t e r i a (Objective #a).  In prepara-  t i o n for interviews with the c o l l e g e p r i n c i p a l s and o f f i c i a l s of the M i n i s t r y of Education to determine the revenue d i s t r i b u t i o n  criteria  31  employed by the B.C. M i n i s t r y of Education to a l l o c a t e operating funds to the c o l l e g e s , two preliminary studies were undertaken.  The  f i r s t of these attempted to answer the following s p e c i f i c question: What proportion of college operating revenues over the f i v e - y e a r p e r i o d , 1972-1976, was derived from each of the following sources: Government grants? Local p a r t i c i p a t i n g school board(s) Student t u i t i o n fees? Other, e . g . , donations?  contribution?  The second preliminary study examined the following question: What d i f f e r e n c e s , i f any, e x i s t e d among the colleges i n the proportion of operating revenues devoted to d i f f e r e n t expenditure categories over the f i v e - y e a r p e r i o d , 19721976? The f i r s t preliminary study made use of the c e r t i f i e d  finan-  c i a l statements over the f i v e - y e a r period from each of the p a r t i c i pating c o l l e g e s .  Where necessary, these data were supplemented by  other f i n a n c i a l data a v a i l a b l e at the M i n i s t r y of Education.  Tables  and graphs were developed to show changes i n the proportions of funds derived from each of the four sources over the f i v e - y e a r period for a l l the colleges considered and f o r each p a r t i c i p a t i n g  college.  The second preliminary study involved the following research activities.  Working from the programme enrollments and the f i n a n c i a l  statements from each college f o r the f i v e - y e a r p e r i o d , f i r s t , the operating costs per service unit (a service unit was defined as one f u l l - t i m e student or 3.5 part-time students) for the selected programmes ( U n i v e r s i t y Transfer and Career-Technical) were c a l c u l a t e d . Then the l e v e l of expenditure per service unit f o r the d i f f e r e n t  32  expenditure categories ( a d m i n i s t r a t i o n , i n s t r u c t i o n , plant o p e r a t i o n , l i b r a r y , and student services) were also determined.  F i n a l l y , the  government grant per service u n i t was also determined. The data obtained from these preliminary studies revealed d i s - crepancies i n the areas surveyed from year to y e a r , as well as from college to c o l l e g e , and therefore provided a basis f o r a s c e r t a i n i n g the c r i t e r i a which underlay the budget d e c i s i o n s , and hence the c r i t e r i a which were i m p l i c i t in the a l l o c a t i o n of funds among the colleges i n B r i t i s h Columbia. The interviews i n t h i s objective area thus attempted to get at the following s p e c i f i c questions: a)  What are the procedures followed by the M i n i s t r y of Education as i t a l l o c a t e s operating funds to the colleges?  b)  What s p e c i f i c f a c t o r s or c r i t e r i a are considered i n the a l l o c a t i o n of operating funds among the colleges?  c)  What p r i o r i t i e s , i f any, are assigned to these factors?  d)  What i s the extent of college input i n t o the method of a l l o c a t i n g operating funds among the colleges?  The views of major constituent groups concerning the adequacy of ( i ) the present revenue d i s t r i b u t i o n c r i t e r i a and ( i i ) provisions f o r t h e i r m o d i f i c a t i o n (Objective #b and the f i r s t part of objective" #d). In addition to i d e n t i f y i n g c r i t e r i a i m p l i c i t in the financing arrangements, the interviews with the college p r i n c i p a l s and the M i n i s t r y of Education o f f i c i a l s also attempted to examine two of the other major concerns of the d i s s e r t a t i o n :  the adequacy of the present c r i t e r i a  and the adequacy of the present p r o v i s i o n s , i f any, f o r t h e i r m o d i f i c a tion.  With regard to these areas, the following s p e c i f i c questions  were probed:  33  a)  What are the strengths and weaknesses of the present revenue d i s t r i b u t i o n c r i t e r i a ?  b)  What changes, i f any, should be made?  c)  How often are the c r i t e r i a reviewed, i f they are? Who gets involved i n such reviews?  d)  What changes, i f any, should be made with respect to review procedures?  The nature, e x t e n t , and appropriateness of government controls over c o l l e g e operating revenues (Objective #c and the l a s t part of #d). With respect to t h i s s u b j e c t , the interviews with the college p r i n c i p a l s and M i n i s t r y o f f i c i a l s also probed the following s p e c i f i c questions: a)  In what way(s), i f any, does the government presently exercise control over: .  the l e v e l of t u i t i o n fees a college charges? s a l a r i e s of f a c u l t y members and members of the administration?  b)  .  sabbatical leaves and other leaves of absence?  .  other aspects of college expenditures?  What should be the extent of government controls over the operating funds of the colleges?  CHAPTER  III  THE PRESENT SYSTEM OF FINANCING OPERATING COSTS OF THE COLLEGES IN BRITISH COLUMBIA The d e s c r i p t i o n of the present system of financing colleges i n B r i t i s h Columbia was based on interviews with o f f i c i a l s of the Post-Secondary D i v i s i o n of the M i n i s t r y of Education and p r i n c i p a l s of the s i x p a r t i c i p a t i n g c o l l e g e s , on careful examination of the relevant sections of the P u b l i c Schools Act (1975) and P u b l i c Schools Act Regulations (1975), and on review of relevant l i t e r a t u r e on the s u b j e c t , p a r t i c u l a r l y Dennison, 1976; Beinder, 1976; the M i n i s t r y of Education News Release No. 71-75, 1975; and The Task Force on the Community College Report, 1974.  The d e s c r i p t i o n i s presented under  three main sub-headings, v i z . , Sources of College Operating Revenues; The Present Approach to D i s t r i b u t i n g A v a i l a b l e Government Funds Among the Colleges for Operating Purposes; and Government Controls over College Operating Funds. Sources of College Operating Revenues In B r i t i s h Columbia, unlike any other province i n Canada where college operating revenues are derived mainly through government grants and i n some j u r i s d i c t i o n s supplemented by nominal student t u i t i o n f e e s , there are three major sources of college operating revenues.  These  are: 1.  Government grants,  2.  Local p a r t i c i p a t i n g school board(s) tax c o n t r i b u t i o n s , and  3.  Student t u i t i o n f e e s . 34  35  The t u i t i o n fee portion of the revenues, however, tends to be as low as i n other provinces where fees are charged. The l e g i s l a t i o n ( P u b l i c Schools' A c t , 1975) provides that the P r o v i n c i a l Government contributes i n each f i s c a l year an amount of grant not l e s s than 60 per cent of each c o l l e g e ' s approved operating expenditures.  The remaining 40 per cent i s covered by l o c a l p a r t i c i -  pating schools board(s) tax contribution and student t u i t i o n f e e s , the amount of the Board's c o n t r i b u t i o n being equal to the 40 per cent less amount of t u i t i o n fees accruing to the c o l l e g e .  Thus, expressed  algebraically: LC - 100 - (60 + X) where: LC i s Local ( p a r t i c i p a t i n g school board(s)) C o n t r i b u t i o n , and X i s the proportion of revenue raised through student t u i t i o n fees. Hence, the higher the proportion of revenue derived from t u i t i o n f e e s , the lower the l o c a l p a r t i c i p a t i n g school board(s) c o n t r i b u t i o n , and vice versa. The f i n a l proportions of the t o t a l revenue contributed by the government and by the l o c a l p a r t i c i p a t i n g school board(s) are tempered by adjustments  r e s u l t i n g from surpluses or d e f i c i t s from the immedi-  a t e l y preceding f i s c a l y e a r , and from amounts of any miscellaneous revenues accruing to the c o l l e g e i n the current f i s c a l y e a r . For the s i x colleges p a r t i c i p a t i n g i n the study, the average annual proportion of operating revenue derived from the various sources  36  f o r the period 1972-76 are contained in Table V I I I .  Figure 1 presents  the same data g r a p h i c a l l y . It should be pointed out that i n the Tables the reported government c o n t r i b u t i o n may be s l i g h t l y understated while the l o c a l p a r t i c i p a t i n g school board(s) c o n t r i b u t i o n may be s l i g h t l y overstated. This i s due to the f a c t that amounts toward Debt Services Charges which were excluded as an item from the annual operating expenditures were t o t a l l y deducted from the amount of government grants.  Since,  i n p r a c t i c e , a small f r a c t i o n of the Debt Services Charges was cont r i b u t e d by the l o c a l school boards, such amounts should have been deducted from the l o c a l p a r t i c i p a t i n g school board(s)  contributions.  This was not possible because the data was not obtainable - they were confidential. Examination of Table VIII i n d i c a t e s that as a proportion of the t o t a l operating revenue, government grants have ranged from a low of 55 per cent i n 1973 to a high of 62 per cent i n 1975.  Local p a r t i -  c i p a t i n g school board(s) contributions have ranged from a low of 25 per cent i n 1972 to a high of 32 per cent i n 1973 and 1976.  It could  be seen from the Table that even though the government c o n t r i b u t i o n  in  1976 (57 per cent) was much higher than that of 1973 (55 per c e n t ) , both years had a high l o c a l c o n t r i b u t i o n of 32 per cent.  This could  be explained by the f a c t that the proportion of the revenue derived from t u i t i o n fees was s i g n i f i c a n t l y higher in 1973 (13 per cent) than i n 1976 (10 per c e n t ) .  T u i t i o n fees as a proportion of t o t a l college  oeprating revenues have been d e c l i n i n g over the f i v e - y e a r period 1972-76, having declined from a high of 13 per cent i n 1972 and 1973 to a low of 10 per cent i n 1976.  37  TABLE VIII AVERAGE ANNUAL PROPORTION OF OPERATING REVENUES DERIVED FROM VARIOUS SOURCES, 1972-1976 (THE SIX PARTICIPATING COLLEGES)  YEAR ENDING MARCH 31  S 0 U R CE S GOVERNMENT GRANTS %  LOCAL CONTRIBUTIONS  TUITION FEES  %  %  OTHERS  TOTAL  %  %  1972  61.1  25.2  13.0  0.6  99.9  1973  54.9  32.0  12.7  0.4  100.0  1974  56.6  30.0  12.6  0.7  99.9  1975  61.7  26.7  11.1  0.6  100.0  1976  57.1  31.5  10.1  1.3  100.0  "Other" sources of operating revenues have generally  contribu-  ted a very small proportion to the t o t a l revenues. The Present Approach to D i s t r i b u t i n g A v a i l a b l e Government Funds Among the Colleges f o r Operating Purposes In t h i s s e c t i o n , the present approach to d i s t r i b u t i n g  available  government funds among the colleges for operating purposes in terms of development, procedures, factors and p r i o r i t i e s  considered, channels  of appeal, strengths and weaknesses, i s presented.  Because of the  absence of any l i t e r a t u r e on t h i s aspect, the presentation here i s  38  FIGURE 1 AVERAGE ANNUAL PROPORTION OF COLLEGE OPERATING REVENUES DERIVED FROM VARIOUS SOURCES, 1972-1976  39  l a r g e l y based on the r e s u l t s of the interviews held with o f f i c i a l s  of  the M i n i s t r y of Education and the college p r i n c i p a l s . Development.  The present approach to d i s t r i b u t i n g  operating  funds among the colleges had been i n operation (at the time of the interviews) f o r approximately four y e a r s , evolving gradually over that span of time.  In the U n i v e r s i t y Transfer/Career-Technical areas (which  are the areas under study) the method has not changed s i g n i f i c a n t l y . Two major factors have contributed toward the development and use of the present approach.  The f i r s t of these i s the f a c t that the  colleges have been in a developmental phase, thus making i t  difficult  for any method (such as a more mechanistic one) other than the one i n use now.  The second i s the f a c t that the M i n i s t r y of Education has not  had the capacity in terms of s t a f f and other resources to r e a l l y attempt to develop an a l t e r n a t i v e method that may probably be a more s o p h i s t i c a t e d system of resource a l l o c a t i o n . Procedures in the present approach. cedures, one o f f i c i a l  To best explain the pro-  of the M i n i s t r y described the process by which  the 1977-78 f i s c a l year budget f o r the colleges were developed.  The  following i s the d e s c r i p t i o n . During the period August-September 1976, a team of f i v e  offi-  c i a l s c o n s i s t i n g of the A s s i s t a n t Superintendent, Post-Secondary Programmes, an Audit Accountant, both from the M i n i s t r y (and both of whom were respondents in the s t u d y ) , the Bursar of B . C . I . T . , and two other o f f i c i a l s of the M i n i s t r y v i s i t e d each college and met with o f f i c i a l s of the colleges to discuss college budgets f o r the 1977-78 f i s c a l year. discussed:  At each of these meetings, the following topics were  40  .  the operation and performance of the c o l l e g e in the current year,  .  the c o l l e g e ' s educational plans f o r the following f i s c a l y e a r , and  .  any relevant issues p e c u l i a r to the c o l l e g e .  No request was made by the M i n i s t r y of Education for the submission of p r o v i s i o n a l budgets from the colleges at these meetings.  However, some  colleges did submit something l i k e p r o v i s i o n a l budgets and these were accepted by the team. Back in V i c t o r i a , the team prepared a document of two to three pages on each c o l l e g e in which everything was costed out.  These,  together with s i m i l a r documents prepared on the other non-university post-secondary i n s t i t u t i o n s , served as bases f o r a budgetary presentat i o n to the M i n i s t e r .  The f i g u r e f i n a l l y submitted by the M i n i s t e r to  the Treasury Board thus represented the t o t a l amount of funds requested f o r the operation of a l l the non-university post-secondary i n s t i t u t i o n s f o r the 1977-78 f i s c a l year.  The process to t h i s point was completed  by November, 1976. The colleges then submitted t h e i r f i n a l budgets f o r the 1977-78 f i s c a l year which were to be in by December 1, 1976.  The budgets sub-  mitted by each c o l l e g e was t y p i c a l l y broken into l i n e - b y - l i n e categories of: .  administration,  .  instruction:  U n i v e r s i t y Transfer Career/Technical Vocational Non-credit,  41  .  plant operation,  .  repairs and maintenance,  .  l i b r a r y , and student s e r v i c e s .  On receipt of these f i n a l budgets from the c o l l e g e s , the team gave some preliminary consideration to them.  However, i t was not u n t i l the budget  speech was read and the M i n i s t r y knew how much money i t had to  distribute  that serious consideration was given to the budgets. When the M i n i s t r y knew the amount of money voted f o r the nonu n i v e r s i t y post-secondary s e c t o r , an i n i t i a l breakdown was made in gross terms between the various areas of the sector (Vocational T r a i n i n g , B . C . I . T . , U n i v e r s i t y Transfer and Career/Technical). Three major documents served as bases f o r deriving each c o l l e g e ' s budget f o r the 1977-78 " f i s c a l y e a r .  These were:  1.  each c o l l e g e ' s budget f o r the 1976-77 f i s c a l y e a r ,  2.  each c o l l e g e ' s budget request f o r the 1977-78 f i s c a l y e a r , and  3.  the notes developed by the team during i t s v i s i t s to the colleges in August-September 1976.  To a r r i v e at a budget f o r the 1977-78 f i s c a l y e a r , each c o l l e g e ' s budget f o r the 1976-77 f i s c a l year was taken as given.  To that was  added or deleted (but generally added) some base adjustments so that a revised budget base was obtained.  To t h i s was then added a f a c t o r to  cover increased c o s t s — t h i s f a c t o r being 6.8 per cent f o r the 1977-78 f i s c a l year.  The f a c t o r was a r r i v e d at by applying a c e r t a i n percentage  point against s a l a r i e s , and a d i f f e r e n t percentage point against nons a l a r i e d categories of the expenditures.  These percentage points applied  to the d i f f e r e n t categories were c l a s s i f i e d as c o n f i d e n t i a l . struck at t h i s point f o r each c o l l e g e was a recommended one.  The budget  42  Once the recommended budget f o r each college had been s t r u c k , i t was presented f o r discussion before the Deputy-Minister and the Minister.  A f t e r t h i s d i s c u s s i o n , the A s s i s t a n t Superintendent of Post-  Secondary Programmes and the Audit Accountant went back to each college f o r budget reviews with the college o f f i c i a l s . 1977.  This occurred in March,  At each of these meetings, the M i n i s t r y o f f i c i a l s  indicated the  budget f o r . t h e college f o r the 1977-78 f i s c a l year they were preparing to recommend to the M i n i s t e r , and discussed some s p e c i f i c items with the college o f f i c i a l s , allowing them to give t h e i r views. Back i n V i c t o r i a , some few adjustments a r i s i n g from the meetings were made to the budgets.  The new, revised budgets for the 1977-78  f i s c a l year were submitted to the c o l l e g e c o u n c i l s .  Each college  council then had to pass a r e s o l u t i o n to the e f f e c t that the budget was acceptable.  Upon the passing of the r e s o l u t i o n , the M i n i s t e r then  approved the budgets.  The colleges were then o f f i c i a l l y  informed  in  A p r i l 1977 as to what t h e i r budgets f o r the 1977-78 f i s c a l year were. From the discussion of the procedures above, the following major steps can be i d e n t i f i e d  six  in the present approach used by the  Government f o r a l l o c a t i n g operating funds: 1.  Consultation:  This takes place in August-September when  o f f i c i a l s f o r the Department of Education v i s i t each college to confer with the college o f f i c i a l s . 2. Education:  Development of college system budget by the M i n i s t r y of . This i s submitted to the M i n i s t e r and i t i s upon t h i s that  the M i n i s t e r puts in his request to the Treasury Board. 3. Education.  Submission of i n d i v i d u a l college budgets to the M i n i s t r y of  43  4.  L i n e - b y - l i n e review of i n d i v i d u a l college budget.  This  takes place a f t e r the Department has learned from the Treasury Board how much money had been a l l o c a t e d to the non-university post-secondary sector. 5.  Approval of i n d i v i d u a l college budget by college c o u n c i l s .  6.  Approval of the budget by the M i n i s t e r .  Factors and p r i o r i t i e s considered.  The M i n i s t r y does not have  a l i s t of s p e c i f i c factors which i t considers when i t attempts to d i s t r i b u t e the a v a i l a b l e funds among the c o l l e g e s .  Budget decisions are  b a s i c a l l y the professional judgement of the o f f i c i a l s of the M i n i s t r y . Hence, there are no defined c r i t e r i a .  The judgement of the M i n i s t r y  o f f i c i a l s i s based on t h e i r knowledge of the college system and t h e i r sense of f a i r n e s s or equity. However, i t should be pointed out that during t h e i r v i s i t s to the colleges i n August and September, the o f f i c i a l s gather  information  on: programme o f f e r i n g s :  - e x i s t i n g programmes - expansion in e x i s t i n g programmes - approved new/emerging programmes  expectations of changes in enrollments new f a c i l i t i e s demonstrated/identified s p e c i a l needs, e . g . , depletion of inventory, new personnel needs, e t c . In addition to t h i s information, the budget requests from the colleges submitted by December 1, 1976 were given serious consideration in the development of each c o l l e g e ' s f i n a l budgets.  F i n a l l y , during the  44  budget review time, the colleges were given a f u r t h e r opportunity  to  provide some feedback to the budgets about to be recommended. In terms of p r i o r i t i e s , the M i n i s t r y places o v e r a l l top p r i o r i t y on i n s t r u c t i o n .  From time to time, however, the M i n i s t e r assigns some  p r i o r i t i e s to s p e c i f i c areas.  For example, f o r the present he has  indicated that the "Outreach" programme functions of the colleges have to be protected.  In a d d i t i o n , the f o l l o w i n g areas tend to receive high  priority: approved new programmes, new f a c i l i t i e s , p r i o r y e a r ' s commitments, and approved areas of growth. There are no formal mechanisms f o r review of e i t h e r the factors or p r i o r i t i e s .  However, by the maintenance of close l i a i s o n with the  c o l l e g e s , the M i n i s t r y gets enough feedback as to which areas are to receive what p r i o r i t y .  There i s also an informal process of p r i o r i t y  reviews at the M i n i s t r y l e v e l .  This i s done through consultations with  the M i n i s t e r and the Deputy M i n i s t e r on c r i t i c a l areas to be s t r e s s e d , , or what are perceived as areas of Channels of appeal.  priority.  This section examines the avenues open to  colleges who f e e l they have not had a f a i r hearing in terms of the l e v e l s of grants a l l o t t e d them f o r operational purposes through the usual established procedures. In the f i r s t p l a c e , there are no provisions in e i t h e r the l e g i s l a t i o n or regulations f o r any such appeals.  However, an overwhelming  majority of the p r i n c i p a l s and both o f f i c i a l s of the M i n i s t r y admitted  45  to the existence of rather informal mechanisms by which such appeals could be made. Two major l e v e l s of appeal were i d e n t i f i e d by the respondents. The f i r s t of these was the M i n i s t r y o f f i c i a l s ' administrative  level.  level o r , r a t h e r ,  the  This usually involved an appeal to the A s s i s t a n t  Superintendent of Post-Secondary Programmes and his o f f i c i a l s who are d i r e c t l y involved in the d i s t r i b u t i o n  of funds.  The majority of the  respondents f e l t that usually some form of compromise was reached at this level. The other level which was l e a s t often used was the  political  level by which a college council did appeal to the Deputy M i n i s t e r or the M i n i s t e r f o r more funds a f t e r channels at the administrative  level  had been exhausted. The majority of the college p r i n c i p a l s f e l t that l o c a l M . L . A . ' s could be used only i n d i r e c t l y  to influence budget a l l o c a t i o n s ; and t h i s  was even more so in c a p i t a l requests, e . g . , b u i l d i n g s , equipment, e t c . There were other means, however, which colleges could use to obtain more funds i f they f e l t the funds a v a i l a b l e to them were too small.  For example, there i s a p r o v i s i o n i n the l e g i s l a t i o n which  allows a c o l l e g e , which cannot cope with the funds made a v a i l a b l e to to request f o r over-run.  it,  For such over-run to be approved by the M i n i s t e r ,  there has to be unanimous consent of the p a r t i c i p a t i n g  school boards.  F i n a l l y , the M i n i s t e r has also indicated that i f a college cannot support i t s e l f , at l e a s t to i t s level of a c t i v i t i e s f i s c a l year with the funds a l l o t t e d to i t , fees.  in the p r i o r  i t can increase i t s  tuition  The amount of money thus raised would be 40 per cent and the  M i n i s t r y would contribute the remaining 60 per cent.  46  Generalizations on the present approach to a l l o c a t i n g college operating funds.  From the discussions above on the various aspects of  the present approach to a l l o c a t i n g college operating funds, the f o l l o w ing g e n e r a l i z a t i o n could be deduced: 1.  Budget a l l o c a t i o n decisions are based on professional judgement of the M i n i s t e r of Education o f f i c i a l s , derived from:  2.  .  knowledge of the system, and  .  fairness.  There are no e x p l i c i t c r i t e r i a in use f o r the a l l o c a t i o n of funds.  3.  Colleges are generally guaranteed t h e i r previous y e a r ' s l e v e l of revenue.  4.  The major concerns of M i n i s t r y of Education o f f i c i a l s and college p r i n c i p a l s in the budgets are the marginal amount of annual revenues.  Performance of i n d i v i d u a l colleges in terms of government grant receipts and i n t e r n a l resource a l l o c a t i o n .  How have the colleges fared  in terms of government grant receipts under the present approach to a l l o c a t i n g c o l l e g e operating funds?  Two ways were employed to determine  the l e v e l of grant per service u n i t , a service u n i t being defined as one f u l l - t i m e student or 3.5 part-time students. Table IX contains the annual t o t a l number of service units each of the s i x p a r t i c i p a t i n g colleges f o r the period 1972-76.  for  The  annual t o t a l service units f o r each c o l l e g e was then divided into the amount of government grants f o r the year to obtain the government operating grants per s e r v i c e u n i t contained in Table X.  TABLE IX COLLEGE ANNUAL NUMBER OF SERVICE UNITS, 1972-1976  YEAR ENDING MARCH 31  CAMOSUN  CAPILANO  CARIBOO  DOUGLAS  C.N.C.  OKANAGAN  1972  1,009.8  -  452.0  1 ,754.0  414.7  635.0  853.1  1973  1,058.6  892.3  477.3  1,733.0  373.0  506.6  840.1  1974  1,103.9  1 ,292.8  638.3  1,896.5  561.4  755.5  1,041.4  1975  1,189.2  1,812.8  864.2  2,446.6  714.0  1,106.0  1 ,355.5  1976  1,258.2  2,064.5  848.1  2,457.5  673.0  1 ,262.9  1 ,427.4  C 0  L  L E  G E S AVERAGE  TABLE X GOVERNMENT OPERATING GRANTS PER SERVICE UNIT, 1972-1976  YEAR ENDING MARCH 31  CAMOSUN $  CAPILANO $  -  MEAN (x)  CARIBOO $  DOUGLAS $  C.N.C. $  OKANAGAN $  1,349.00  1,078.00  1 ,324.00  1,125.00  1,097.00  $  1972  609.00  1973  1,051.00  1,147.00  1,611.00  1,275.00  1,393.00  1,398.00  1,313.00  1974  1,300.00  1 ,067.00  1,363.00  1,298.00  1,602.00  1,069.00  1 ,283.00  1975  1,424.00  1,522.00  1,643.00  1,356.00  2,077.00  1,419.00  1,574.00  1976  1,829.00  1 ,506.00  2,156.00  1,798.00  2,245.00  1,581.00  1,853.00  MEAN (x)  1,243.00  1,311.00  1,624.00  1,361.00  1,728.00  1,318.00  1,424.00  49  It can be seen from Table X t h a t , on the average, the government grant per service unit to the colleges has been r i s i n g from the 1972 average of $1,097.00 to the 1976 average of $1,853.00, representing an increase of 68.9 per cent over the 1972 f i g u r e .  The table also i n d i -  cates that the government grant per service unit tends to vary widely from c o l l e g e to c o l l e g e even w i t h i n the same year. If we rank the colleges in terms of performance in government grants per service unit from 1 to 6, with 1 i n d i c a t i n g the college with the highest level of government grant per service unit and 6 the college with the l e a s t level on t h e i r averages f o r the f i v e - y e a r p e r i o d , we get the f o l l o w i n g rankings (as derived from Table X , bottom l i n e ) :  College  Average Rank (on government grant per s e r v i c e u n i t )  College of New Caledonia  1  Cariboo College  2  Douglas College  3  Okanagan College  4  Capilano College  5  Camosun College  6  It can be seen, then, that the College of New Caledonia and Cariboo College have generally tended to receive much higher government grants per service u n i t than the other c o l l e g e s , and Camosun and Capilano Colleges have fared poorly over the f i v e - y e a r p e r i o d , in terms of government grants per service u n i t . There are several factors which could account f o r such v a r i a t i o n s in receipts of government grants per service u n i t .  Among these a r e :  50  the .size of the c o l l e g e , the geographical l o c a t i o n of the c o l l e g e , and the geographical region served by the c o l l e g e . Experience has shown that the smaller the c o l l e g e , the higher the per service u n i t c o s t , since at a l a r g e r c o l l e g e the overhead i s spread over a greater number of students.  S i m i l a r l y , colleges s i t u a t e d in i s o l a t e d  regions, e . g . , the College of New Caledonia in the north, w i l l  tend  to have higher costs because of transportation and other related c o s t s . F i n a l l y , where a c o l l e g e has programmes spread over a large geographical r e g i o n , such as the case with the College of New Caledonia, per unit costs are bound to be higher.  It  i s therefore safe to conclude that  these f a c t o r s have contributed toward the wide v a r i a t i o n s among the colleges in government grants per s e r v i c e u n i t . The second approach employed to determine the level of performance was to measure what proportion of the college t o t a l operating revenue was derived from government grants.  This i s shown in Table X I .  It can be seen from the table t h a t , in terms of contributions from government g r a n t s , the best year f o r the colleges was 1975, when an average of 62 per cent was obtained from t h i s source. How i s the v a r i a t i o n among the colleges in terms of proportion of revenue derived from government grants?  This can be determined by  ranking the colleges on t h e i r f i v e - y e a r averages. from the bottom l i n e of Table XI i s as f o l l o w s :  The ranking derived  TABLE XI PROPORTION OF COLLEGE OPERATING REVENUES DERIVED FROM GOVERNMENT GRANTS, 1972-1976  YEAR ENDING MARCH 31  CAMOSUN %  CAPILANO %  CARIBOO %  DOUGLAS %  C.N.C. %  OKANAGAN %  AVERAGE %  1972  55.7  -  56.7  62.6  69.4  61.2  61.1  1973  56.8  59.3  55.1  53.5  51.4  53.3  54.9  1974  59.5  59.4  55.2  51.2  62.9  51.6  56.6  1975  60.3  63.7  62.5  57.1  66.7  59.8  61.7  1976  54.4  59.3  63.9  59.9  54.1  50.7  57.1  MEAN (x)  57.3  60.4  58.7  56.9  60.9  55.3  58.3  52  Col lege  Average Rank (on government grants)  College of New Caledonia Capilano College  2  Cariboo College  3  Douglas College  4  Camosun College  5  Okanagan College  6  It can be concluded from the above rankings that Capilano College and the College of New Caledonia have fared very well on government grant r e c e i p t s , while Okanagan College and Camosun College have not fared quite as wel1. I d e a l l y , a l l colleges should receive the same proportion of revenue from government grants.  T h i s , however, assumes equal f i s c a l  a b i l i t y among college d i s t r i c t s and also an e f f e c t i v e basic cost u n i t , both of which a r e , i n p r a c t i c e , absent.  Another f a c t o r which helps to  bring about in some small way such a v a r i a t i o n i s the c o n t r i b u t i o n Debt Service Charges.  toward  And, of course, under the present method, the  a b i l i t y of the p r i n c i p a l to bargain ( i . e . , how convincingly he puts his case before the o f f i c i a l s of the M i n i s t r y of Education) influences the level of grant he receives f o r his c o l l e g e . In t h i s s e c t i o n , we also take a look at how the colleges have a l l o c a t e d t h e i r revenues (in t h i s case the t o t a l operating revenues) among the various expenditure categories.  Table XII indicates t h a t , on  the average, i n s t r u c t i o n receives the highest proportion of college expenditures.  The proportion taken by t h i s category of expenditure has  TABLE XII AVERAGE ANNUAL PROPORTION OF TOTAL OPERATING EXPENDITURES DEVOTED TO THE DIFFERENT CATEGORIES, 1973-1976 (THE SIX PARTICIPATING COLLEGES)  YEAR ENDING MARCH 31  ADMINISTRATION %  INSTRUCTION  PLANT OPERATION  LIBRARY  %  %  %  %  STUDENT SERVICES  OTHER  TOTAL  %  %  1973  10.7  59.6  3.8  7 A  7.3  11.2  100.0  1974  10.5  63.6  4.8  7.2  7.4  6.5  100.0  1975  9.8  64.4  3.4  6.6  7.9  8.0  100.1  1976  8.6  63.9  5.8  6.8  7.5  7.4  100.0  MEAN (x)  9.9  62.9  4.5  7.0  7.5  8.3  100.1  Cn co  54  r i s e n from 60 per cent in 1973  to 64 per cent in 1976--the average  f o r the four-year period was 63 per cent.  On the other hand, the  proportion of the expenditures devoted to administration has been d e c l i n i n g over the 1973-76 p e r i o d , from i t s highest of 11 per cent i n 1973 to i t s lowest of 9 per cent in 1976.  The proportions spent in  l i b r a r y and student services have remained r e l a t i v e l y stable at 7 per cent and 8 per cent, r e s p e c t i v e l y .  Expenditures on Plant Operation  have r i s e n from 4 per cent in 1973 to 6 per cent in 1976.  Figure 2  shows g r a p h i c a l l y some of these trends. Tables XIII and XIV show the d i s t r i b u t i o n of expenditures f o r i n d i v i d u a l colleges on Per Service Unit and proportion of t o t a l expenditure basis.  From both of these t a b l e s , i t could be seen that Capilano  College and College of New Caledonia tend to spend much higher proportions of t h e i r revenues on administration than the other c o l l e g e s , while Camosun College spent the l e a s t proportion on administration f o r the f i v e years under study.  At Capilano C o l l e g e , the tables i n d i c a t e that  the high expenditures on administration were achieved at the expense of i n s t r u c t i o n , while at the College of New Caledonia they were achieved at the expense of plant operation. The strengths of the present method.  Respondents ( i . e . ,  the  s i x c o l l e g e p r i n c i p a l s and the two M i n i s t r y of Education o f f i c i a l s ) were asked to i d e n t i f y what they perceived as the strengths of the present approach to d i s t r i b u t i n g a v a i l a b l e government funds among the c o l l e g e s . Table XV contains the summary of t h e i r responses.  1. Because of lack of uniformity i n the. format used f o r reporting expenditures f o r 1972 by the c o l l e g e s , i t was not possible to determine the averages f o r that year.  55  % 60 U  70  h  2§1  -x  Instruction  xzx  oeo  «860  h  So L  AO L  30  20  L  Administration 10  Student Services  h  Library 0  1972  1973  1974  1975  1976  FIGURE 2 AVERAGE ANNUAL PROPORTION OF TOTAL OPERATING EXPENDITURES DEVOTED TO INSTRUCTION, ADMINISTRATION, LIBRARY, AND STUDENT SERVICES, 1973-1976  TABLE XIII DISTRIBUTION OF COLLEGE OPERATING EXPENDITURES PER SERVICE UNIT, 1973-1976  YEAR ENDING MARCH 31 & CATEGORIES  CAMOSUN $  CAPILANO $  _  CARIBOO  DOUGLAS  C.N.C.  $  $  $  OKANAGAN $  AVERAGE $  1973: Administration Instruction Plant Operation Library Student Service Other TOTAL  104.46 1,093.80 67.36 90.26 146.83 349.82  221.44 1 ,034.07 74.84 207.06 160.32 237.84  384. 57 1,515. 98 46. 24 140. 81 146. 84 687. 06  229.83 1,479.00 160.87 210.75 140.06 164.47  371.84 1 ,752.07 65.34 245.70 265.70 8.72  282.09 1 ,754.57 124.54 154.41 178.11 131.27  265.71 1,438.25 89.87 174.83 172.98 263.20  1,852.53  1,935.57  2,921. 50  2,384.98  2,709.37  2,624.99  2,404.84  133.15 1,394.17 82.91 115.30 186.01 271.36  299.14 1,056.10 171.34 164.32 152.98 (46.77)  167. 35 1,582. 06 36. 10 119. 21 140. 80 423. 88  225.35 1,569.95 170.29 240.47 175.37 151.48  342.26 1,572.33 67.13 217.34 227.47 118.67  227.42 1,475.69 95.45 125.67 120.63 26.75  232.45 1,441.72 103.87 163.72 167.21 157.56  2,182.90  1,797.11  2,469. 40  2,532.91  2,545.20  2,071.61  2,266.53  1974: Administration Instruction Plant Operation Library Student Service Other TOTAL  TABLE XIII (continued)  YEAR ENDING MARCH 31 & CATEGORIES  AVERAGE CAMOSUN  CAPILANO  CARIBOO  DOUGLAS  C.N.C.  OKANAGAN  $  $  $  $  $  $  $ •  1975: Administration Instruction Plant Operation Library Student Service Other TOTAL  178. 64 1,550. 55 90. 51 151. 99 232. 74 158. 59  305. 47 1,377. 28 107. 72 165. 03 204. 52 231. 73  167.25 1 ,595.08 38.76 92.16 162.70 573.67  220.83 1,536.39 144.58 238.62 161.96 73.20  269. 53 2,060. 39 91. 17 223. 93 316. 64 152. 17  337.93 1,693.43 43.43 128.90 135.42 35.87,  246.61 1,635.49 86.03 166.77 202.33 204.21  2,363. 02  2,391. 75  2,629.62  2,375.40  3,113. 83  2,374.98  2,541.44  166. 06 2,343. 22 289. 94 168. 78 166. 65 226. 12  315. 56 1,403. 23 204. 23 199. 14 225. 40 194. 53  287.67 2,139.85 121.47 227.89 340.04 256.63  175.00 1,976.14 183.60 280.08 188.04 198.72  498. 58 2,555. 46 220. 92 332. 33 479. 60 62. 64  245.20 2,110.11 97.26 116.08 101.32 446.09  281.35 2,088.00 186.24 220.72 250.18 230.79  1976: Administration Instruction Plant Operation Library Student Service Other  TABLE XIV DISTRIBUTION OF COLLEGE OPERATING EXPENDITURES, 1973-1976  YEAR ENDING MARCH 31 & CATEGORIES  AVERAGE CAMOSUN  CAPILANO  CARIBOO  DOUGLAS  C.N.C.  OKANAGAN  %  %  %  %  %  %  %  5.6 59.0 3.6 4.9 7.9 18.9  11.4 53.4 3.9 10.7 8.3 12.3  13.2 51.9 1.6 4.8 5.0 23.5  9.6 62.0 6.7 8.8 5.9 6.9  13.7 64.7 2.4 9.1 9.8 0.3  10.7 66.8 4.7 5.9 6.8 5.0  10. 59. 3. 7. 7. 11.  99.9  100.0  100.0  99.9  100.0  99.9  100.0  6.1 63.9 3.8 5.3 8.5 12.4  16.7 58.8 9.5 9.1 8.5 (2.6)  6.8 64.1 1.5 4.8 5.7 17.2  8.9 62.0 6.7 9.5 6.9 6.0  13.4 61.8 2.6 8.5 8.9 4.7  11.0 71.2 4.6 6.1 5.8 1.3  10.5 63.6 4.8  100.0  100.0  100.1  100.0  99.9  100.0  100.0  1973: Administration Instruction Plant Operation Library Student Services Other TOTAL 1974: Administration Instruction Plant Operation Library Student Services Others TOTAL  TABLE XIV (continued)  YEAR ENDING MARCH 31 & CATEGORIES  AVERAGE CAMOSUN  CAPILANO  CARIBOO  DOUGLAS  C.N.C.  OKANAGAN  %  %  %  %  %  %  %  1975: Administration Instruction Plant Operation Library Student Services Other TOTAL  7.6 65.6 3.8 6.4 9.8 6.7  12.8 57.6 4.5 6.9 8.6 9.7  6.4 60.7 1.5 3.5 6.2 21.8  9.3 64.7 6.1 10.0 6.8 3.1  8.7 66.2 2.9 7.2 10.2 4.9  14.2 71.3 1.8 5.4 5.7 1.5  9.8 64.4 3.4 6.6 7.9 8.0  99.9  100.1  100.1  100.0  100.1  99.9  100.1  1976: Administration Instruction Plant Operation Library Student Services Other TOTAL  4.9( 6.1)* 69.7(64.6) 8.6( 5.0) 5.0( 5.4) 5.0( 7.8) 6.7(11.2) 99.9  12.4(13.3) 55.2(56.3) 8.0( 6.5) 7.8( 8.6) 8.9( 8.6) 7.7( 6.8) 100.0  Averages f o r the four years in parentheses.  8.5( 8.7) 63.4(60.0) 3.6( 2.1) 6.8( 5.0) 10.1( 6.8) 7.6(17.5) 100.0  5.8( 8.4) 65.8(63.6) 6.1( 6.4) 9.3( 9.4) 6.3( 6.5) 6.6( 5.7) 99.9  12.0(12.0) 7.9(11.0) 61.6(63.6) 67.7(69.2) 5.3( 3.3) 3.1( 3.6) 8.0( 8.2) 3.7( 5.3) 11.6(10.1) 3.3( 5.4) 1.5( 2.9) 14.3( 5.5) 100.0  100.0  8.6 63.9 5.8 6.8 7.5 7.4 100.0  58  TABLE XV  PERCEIVED STRENGTHS OF THE PRESENT METHOD OF DISTRIBUTING AVAILABLE GOVERNMENT FUNDS AMONG THE COLLEGES  RESPONSES TYPE OF STRENGTH  NUMBER  (N = 8 )  PERCENTAGE'  Flexibility  62.5  Development of Trusting Relationship between M i n i s t r y and Colleges  25.0  Other  25.0  None  25.0  Six college p r i n c i p a l s plus two M i n i s t r y  officials.  Percentages do not add up to 100 v e r t i c a l l y since respondents could i d e n t i f y more than one strength. These responses came from only college p r i n c i p a l s .  1  59  The most frequently i d e n t i f i e d s t r e n g t h , f l e x i b i l i t y , was i d e n t i f i e d by both o f f i c i a l s  of the M i n i s t r y of Education and three  of the s i x college p r i n c i p a l s .  They agreed that the f l e x i b i l i t y of  the method was a great advantage since i t made i t possible f o r unique problems of i n d i v i d u a l colleges to be considered i n the d i s t r i b u t i o n of funds.  One p r i n c i p a l and one M i n i s t r y o f f i c i a l  strength.  Two p r i n c i p a l s d i d not, however, see any strength i n the  present method.  i d e n t i f i e d the second  In f a c t , one of these p r i n c i p a l s expressed h i s doubts  as to the extent to which the uniqueness of the colleges were considered, i . e . , the strength of f l e x i b i l i t y .  Here are h i s words:  I hear the Department ( M i n i s t r y ) say they consider the uniqueness of i n d i v i d u a l colleges ( i n d i s t r i b u t i n g the funds) which i s an advantage. But I don't know, because I have stated that the Department ( M i n i s t r y ) operate on the basis of ignorance--what do they r e a l l y know about the uniqueness o f , say, t h i s college? Maybe they have some perception of i t , but t h e i r perception of our uniqueness may be quite d i f f e r e n t from ours--but we have very l i t t l e input into the method . . . Other strengths of the method were i d e n t i f i e d by one of the two M i n i s t r y o f f i c i a l s  and one p r i n c i p a l .  These are given below.  The sources of the strengths are given i n parentheses: a)  Unlike a formula by which colleges would tend to move towards operation that would take advantage of the formula ( i . e . , to increase t h e i r revenues), the present method provides more motivation f o r colleges to operate to the best advantage of the students ( M i n i s t r y of Education o f f i c i a l ) ;  b) Adjustments, a r i s i n g out of omission or any other reason, are easy and quick to make under the present method ( M i n i s t r y of Education o f f i c i a l ) ; c)  Because of the f l e x i b i l i t y , o f f i c i a l s can better insure a degree of equity ( M i n i s t r y of Education o f f i c i a l ) ;  d)  I t works (college p r i n c i p a l ) .  60  The weaknesses of the present method.  The weaknesses of the  method as perceived by the s i x p r i n c i p a l s and the two M i n i s t r y of Education o f f i c i a l s are contained in Table XVI. A large majority of the p r i n c i p a l s (67 per cent) f e l t that the absence of allowance f o r at l e a s t a medium-range academic planning was a weakness in the present method. t h i s as a major weakness.  None of the M i n i s t r y o f f i c i a l s saw  In f a c t , one of the M i n i s t r y  officials  pointed out that since colleges need only worry about marginal revenues from year to y e a r , there was s t i l l level.  room f o r some planning at the college  This statement from the o f f i c i a l  i s debatable, however, since  could be argued that knowledge of t h i s marginal revenue i s , in f a c t , the c r u c i a l element in any planning process at the college l e v e l . Three of the s i x college p r i n c i p a l s and one o f f i c i a l  of the  M i n i s t r y agreed that the present method was rather too s u b j e c t i v e . Other i d e n t i f i e d weaknesses are given below.  The sources of the weak-  nesses are given in parentheses: a)  Comparison of grants to colleges from year to year o r . between colleges becomes a f u t i l e exercise under t h e . present method ( M i n i s t r y o f f i c i a l ) . (This i s supported by evidence in t h i s study—see the section on "Performance of Individual Colleges in Terms of Government Grants Receipts and Internal Resource A l l o c a t i o n " in t h i s chapter.);  b)  Results in inequitable treatment of colleges (college principal).  c)  There i s no incentive to be e f f i c i e n t under the present method since surpluses a r i s i n g out of e f f i c i e n c y go to the M i n i s t r y , and also your e f f i c i e n t l e v e l becomes the base f o r determining the f o l l o w i n g y e a r ' s level of grant (college p r i n c i p a l ) ;  d)  A p r i n c i p a l has to be a good bargainer to be e f f e c t i v e in obtaining the funds he needs f o r his college under the present method (college p r i n c i p a l ) .  it  61  TABLE XVI t  PERCEIVED WEAKNESSES OF THE PRESENT METHOD OF DISTRIBUTING AVAILABLE GOVERNMENT FUNDS AMONG THE COLLEGES  RESPONSES TYPE OF WEAKNESS  NUMBER  (N = 8)1 PERCENTAGE  2  Does not allow f o r medium/ long-term academic planning  4'  50.0  Too subjective  4  50.0  Does not allow f o r consistent development of p r i o r i t i e s at the college l e v e l  25.0  Tends to create some uneasiness/ tension among the colleges  25.0  Lack of input from the colleges  25.0  Other  Six college p r i n c i p a l s plus two M i n i s t r y  5  62.5  officials.  Percentages do not add up to 1 0 0 ' v e r t i c a l l y since respondents could i d e n t i f y more than one weakness. These responses came from only college p r i n c i p a l s .  62  In s p i t e of a l l these perceived weaknesses of the present method, the majority of the p r i n c i p a l s (67 per cent) f e l t that they had e i t h e r been e f f e c t i v e or very e f f e c t i v e in obtaining the funds they needed to operate t h e i r colleges in the way they would l i k e to see.  One p r i n c i p a l , however, f e l t he had been e f f e c t i v e only occasion-  a l l y , while another f e l t he had not been e f f e c t i v e i n obtaining the required funds f o r his c o l l e g e . Government Controls over College Operating Funds The present study attempts to examine the nature and extent of government c o n t r o l s over s i x major areas of college operating funds: a)  Level of t u i t i o n fees the colleges charge;  b)  S a l a r i e s of the i n s t r u c t i o n a l  c)  S a l a r i e s of the members of the a d m i n i s t r a t i o n ;  d)  Sabbatical leaves and other leaves of absence;  e)  Transfer of funds between programmes ( i . e . , U n i v e r s i t y  staff;  Transfer and C a r e e r / T e c h n i c a l ) ; and f)  Transfer of funds between other d i f f e r e n t  expenditure  categories ( e . g . , a d m i n i s t r a t i v e vs. plant operations or l i b r a r y or student s e r v i c e s ) . Apart from the issue of the l e v e l of t u i t i o n fees charged by c o l l e g e s , an important question which faces a n a l y s i s in t h i s section is:  A f t e r funds have been a l l o c a t e d to a p a r t i c u l a r c o l l e g e , does i t  then go on to spend them as i t sees f i t ? The study did not only attempt to examine controls through l e g i s l a t i o n and regulations — i t also sought to i d e n t i f y other i n d i r e c t  63  and informal ways, e . g . , budget a l l o c a t i o n s and i n f l u e n c e , by which college operating funds were c o n t r o l l e d by the government. Level of t u i t i o n f e e s .  The l e g i s l a t i o n ( P u b l i c Schools A c t ,  1975) provides that the c o l l e g e council "determines the fees f o r  instruc-  t i o n to be paid by, or in respect o f , the students attending the College" (Section 258(d)) without any form of controls from the M i n i s t r y .  Both  o f f i c i a l s of the M i n i s t r y emphasized that t h i s , in f a c t , was the practice. However, only t w c o f the s i x p r i n c i p a l s agreed that there were no controls at a l l from the M i n i s t r y on the l e v e l of t u i t i o n fees charged.  The remaining four p r i n c i p a l s argued that even though there  were no formal c o n t r o l s , the M i n i s t r y might sometimes i n d i r e c t l y influence the l e v e l s of t u i t i o n fees since they could t i e additional grants to the c o l l e g e to increases in t u i t i o n f e e s . Asked whether they agreed with the e x i s t i n g c o n t r o l s , a l l  the  respondents ( i . e . , c o l l e g e p r i n c i p a l s and M i n i s t r y o f f i c i a l s ) answered in the a f f i r m a t i v e .  Hence, no matter how the p a r t i c i p a n t s perceived  the controls on l e v e l of t u i t i o n f e e s , they thought the e x i s t i n g p r a c t i c e was acceptable to them. Faculty s a l a r i e s .  The l e g i s l a t i o n gives the college councils  the power to f i x s a l a r i e s of the i n s t r u c t i o n a l s t a f f  (and other  staff).  Both o f f i c i a l s of the M i n i s t r y stated that in p r a c t i c e t h i s was the case.  One o f f i c i a l agreed with the p r a c t i c e , but the other  official  expressed some concerns as to the l e v e l of annual s a l a r y increases often granted the i n s t r u c t i o n a l s t a f f under the present p r a c t i c e .  64  Of the s i x p r i n c i p a l s , only one stated that he did not perceive any controls of f a c u l t y s a l a r i e s . The overwhelming majority (83 per cent) agreed that there were some l i m i t e d or i n d i r e c t controls over f a c u l t y s a l a r i e s , since any annual salary increases were highly influenced by the decision of the M i n i s t r y as to how much money was a l l o c a t e d to i n s t r u c t i o n in the budget. The one p r i n c i p a l who did not perceive any controls over f a c u l t y s a l a r i e s expressed disagreement with the present p r a c t i c e and stated that he would l i k e to see some c o n t r o l s .  Of the f i v e who per-  ceived c o n t r o l s , only one agreed with the present p r a c t i c e while a l l the remaining disagreed. salaries.  They wanted to see no controls over f a c u l t y  Some argued that under the present p r a c t i c e , true f r e e c o l l e c -  t i v e bargaining i n the college system i s greatly hampered. S a l a r i e s of members of the a d m i n i s t r a t i o n .  As i s the case with  s a l a r i e s of the i n s t r u c t i o n a l and other s t a f f , the l e g i s l a t i o n gives the college council the power to f i x s a l a r i e s of a l l members of the administration.  One o f f i c i a l of the M i n i s t r y stated that t h i s was, in  f a c t , the case in p r a c t i c e .  The o t h e r , however, denied t h i s and stated  that on occasion i f the M i n i s t r y f e l t that the request put forward by the college f o r administration was too unreasonable, the M i n i s t r y did reduce i t .  Both o f f i c i a l s , however, did agree on the e x i s t i n g p r a c t i c e  as contained in the l e g i s l a t i o n and as practiced in r e a l i t y . Only one of the s i x p r i n c i p a l s did not see any controls on s a l a r i e s of the members of the a d m i n i s t r a t i o n , and he agreed to t h i s practice.  The remaining large majority of the p r i n c i p a l s (83 per cent)  saw e i t h e r l i m i t e d d i r e c t controls or some form of i n d i r e c t controls  65  from the M i n i s t r y of Education.  The majority of these (three out of  the f i v e ) agreed with the e x i s t i n g p r a c t i c e since they f e l t the M i n i s t r y should have some control or at l e a s t some influence on how much of the college revenue was a l l o t t e d f o r administrative s a l a r i e s . remaining two p r i n c i p a l s f e l t  the  However, the  M i n i s t r y should not have any con-  t r o l s over s a l a r i e s of the administration since they f e l t such controls often led to personal judgements by M i n i s t r y o f f i c i a l s on whether or not college administrators deserved the level of s a l a r i e s they had been offered by the college c o u n c i l s . Sabbatical leaves and other leaves of absence.  The l e g i s l a t i o n  (Section 129-A) and the Regulation (Section 56) empower the Board of School Trustees (who may delegate such function to the college council) to grant sabbatical l e a v e s , maternity l e a v e s , or any acceptable purpose leave up to a period of s i x months with pay.  However, for such leaves  in excess of s i x months, they are subject to approval by the LieutenantGovernor-In-Council.  Other leaves of shorter periods of duration are  given at the d i s c r e t i o n of the Board (Regulation, Section 56). In p r a c t i c e , however, only one p r i n c i p a l saw no controls on sabbatical leaves.  The overwhelming majority of the p r i n c i p a l s (83 per  cent) saw the M i n i s t r y as having d i r e c t or i n d i r e c t controls on s a b b a t i cal leaves.  One of the o f f i c i a l s of the M i n i s t r y did agree with the  majority of college p r i n c i p a l s that there i s some control on sabbatical leaves in the sense t h a t , when such leaves appear in the budget as a l i n e item, the M i n i s t r y could decide to delete i t .  T h i s , he explained,  did not mean, however, that the Board/Council c o u l d n ' t grant such leaves; i t c o u l d , in f a c t , take money from elsewhere to support such leaves.  66  The one p r i n c i p a l who d i d n ' t see any controls on sabbatical leaves from the M i n i s t r y of Education indicated his desire to see a p r o v i n c i a l p o l i c y on the subject.  Of the f i v e p r i n c i p a l s perceiving  c o n t r o l s , three did agree with such p r a c t i c e , while two objected to it.  Both o f f i c i a l s of the M i n i s t r y supported the present p r a c t i c e s  on sabbatical leaves. A majority of the p r i n c i p a l s (67 per cent) did not perceive any M i n i s t e r i a l controls over other leaves of absence; an overwhelming majority of a l l the p r i n c i p a l s (83 per cent), including the three who perceived c o n t r o l s , agreed with the present p r a c t i c e s . Though one o f f i c i a l of the M i n i s t r y perceived an i n d i r e c t control over other leaves of absence, both did agree with the e x i s t ing p r a c t i c e s . Transfers of monies between programmes. four major programmes in almost a l l c o l l e g e s :  There a r e , t y p i c a l l y , University Transfer,  Career/Technical, V o c a t i o n a l , and Community Education Service.  Com-  munity Education Service i s generally s e l f - s u p p o r t i n g with the M i n i s t r y contributing a small proportion of the c o s t .  The government has recently  moved to a system of approving a net amount for the operation of t h i s programme.  By t h i s system, the government guarantees to pay a net  difference between revenues and expenditures. to spend as much as i t sees f i t ,  The college i s then free  so long as the difference between the  expenditures and the revenues i s equal to the guaranteed net amount to be paid by the government. The question then centres on transfers of funds between the three remaining programmes.  Vocational programmes are 100 per cent  67  supported by the government, hence there are s t r i c t d i r e c t government controls on Vocational funds.  There cannot be any t r a n s f e r of funds  between Vocational programmes and the other two programmes.  However,  colleges have d i s c r e t i o n a r y powers in t r a n s f e r r i n g funds between the remaining two programmes—University Transfer and C a r e e r / T e c h n i c a l . In f a c t , the M i n i s t r y has recently combined these two programmes f o r funding purposes. Perceptions of p r i n c i p a l s and M i n i s t r y of Education o f f i c i a l s on these controls were very much the same as described above.  The  majority of the p r i n c i p a l s (67 per cent) supported the e x i s t i n g c o n t r o l s . The remaining p r i n c i p a l s , however, expressed disagreement with t h e i r i n a b i l i t y to t r a n s f e r funds from Vocational programmes on a rather philosophical b a s i s .  They argued that the manner in which the Voca-  t i o n a l programmes (and students) were supported and the i n a b i l i t y of p r i n c i p a l s to t r a n s f e r some monies out of there when they saw f i t showed,or at l e a s t appeared to show, that society as a whole put higher value on these programmes than the other programmes.  They questionned  the r a t i o n a l e for such higher value placed on Vocational programmes. Both o f f i c i a l s of the M i n i s t r y of Education expressed agreement with the e x i s t i n g control p r a c t i c e s . Transfers of monies between other expenditure c a t e g o r i e s . other major expenditure categories in the c o l l e g e budgets are: i s t r a t i o n , Plant Operation, L i b r a r y , and Student S e r v i c e s .  The  Admin-  The question  i s , what d i s c r e t i o n does a c o l l e g e have over transfers of funds between these categories and from any of these categories to i n s t r u c t i o n , and vice versa.  68  A f t e r funds had been a l l o c a t e d to the d i f f e r e n t  categories in  the budget, no transfers were allowed without p r i o r approval from the Ministry.  U s u a l l y , transfers from any of the four categories mentioned  above to i n s t r u c t i o n or from administration to any of the other categories were allowed.  However, there were s t r i c t controls on any other  t r a n s f e r s , and approval of the M i n i s t r y was required for these. A l l the respondents ( i . e . , the s i x p r i n c i p a l s and the two M i n i s t r y o f f i c i a l s ) perceived the controls as described above to be, in f a c t , the p r a c t i c e ; and both M i n i s t r y of Education o f f i c i a l s agreed to the need for such c o n t r o l s .  The majority of the p r i n c i p a l s suggested  changes in the e x i s t i n g p r a c t i c e . Other.  Another major area which was i d e n t i f i e d by o n e . p r i n c i -  pal as a means used by the government to control college operation and hence operating budgets, e s p e c i a l l y in the Lower Mainland, was new programme development.  He argued that given the number of non-university  post-secondary i n s t i t u t i o n s  i n the a r e a , a programme which could come  to his c o l l e g e might be given to some other i n s t i t u t i o n - - t h i s  usually  being done without any consultation with the c o l l e g e . Conclusion.  Thus f a r , we have seen that under the present  system, a f t e r operating funds had been a l l o c a t e d to a c o l l e g e , i t not j u s t go ahead and spend such funds as i t saw f i t . controls as to how these funds were spent.  did  There were some  Very few of these controls  were d i r e c t or required by l e g i s l a t i o n or r e g u l a t i o n s ; many were i n d i r e c t , r e s u l t i n g from budget a l l o c a t i o n s , while a few were through informal influence.  69  There were differences in perceptions on some occasions between p r i n c i p a l s , on the one hand, and M i n i s t r y o f f i c i a l s , on the other, as to the extent of government controls over college operating funds.  Differ-  ences sometimes even existed among the p r i n c i p a l s themselves on t h e i r perceptions of the c o n t r o l s . The majority of the p r i n c i p a l s tended to support most of the existing controls.  Apart from one instance (controls over f a c u l t y  s a l a r i e s ) where one M i n i s t r y o f f i c i a l expressed some concern as to a seeming lack of c o n t r o l s , both o f f i c i a l s of the M i n i s t r y were in agreement with the present control p r a c t i c e s .  CHAPTER IV  CHANGES TO THE PRESENT METHOD OF FINANCING COLLEGE OPERATING COSTS ENVISAGED BY COLLEGE PRINCIPALS AND MINISTRY OF EDUCATION OFFICIALS This chapter presents changes that college p r i n c i p a l s and M i n i s t r y of Education o f f i c i a l s would l i k e to see in the present system of c o l l e g e financing in B r i t i s h Columbia.  Following the format  of the preceding chapter, t h i s chapter i s organized under three sections: Changes to sources of c o l l e g e operating revenues; Changes to the method of d i s t r i b u t i n g the a v a i l a b l e government funds among the c o l l e g e s ; and Changes to government controls over college operating funds. Envisaged Changes to Sources of College Operating Revenues This section attempts to determine what c o l l e g e p r i n c i p a l s and M i n i s t r y of Education o f f i c i a l s perceived as desirable sharing arrangements between P r o v i n c i a l Government g r a n t s , l o c a l p a r t i c i p a t i n g school board(s) tax c o n t r i b u t i o n , and student t u i t i o n fees toward college operating revenues. On the question of t u i t i o n f e e s , a l l s i x p r i n c i p a l s and one o f f i c i a l of the M i n i s t r y agreed that there ought to be some t u i t i o n f e e s . The majority of these respondents, however, did not agree that there  70  71  should be a f i x e d proportion of the operating revenue to be derived from t h i s source.  Many f e l t that a pre-set proportion would be  u n f a i r to some students since some programmes and colleges in some locations are more expensive to operate.  In other words, such p r a c t i c e  would contradict the p r i n c i p l e of equal access.  A l l of the seven r e s -  pondents agreed that t u i t i o n fees should be maintained at a minimum proportion of t o t a l college operating revenues.  The eighth respondent  declined to comment on the question of t u i t i o n f e e s .  Table XVII con-  t a i n s the summary of the responses. As to the sources of the remaining operating funds, the  majority  of the p r i n c i p a l s (67 per cent) f e l t that f o r the two major programmes under study, i . e . , U n i v e r s i t y Transfer and C a r e e r / T e c h n i c a l , a l l funds should come from the P r o v i n c i a l Government.  the  They emphasized that  the l o c a l control argument c a l l i n g for l o c a l contributions does not e x i s t any more s i n c e , in r e a l i t y , everything i s c o n t r o l l e d from the Ministry.  One of the p r i n c i p a l s argued that maybe in the area of  community education where he saw true l o c a l c o n t r o l s , there could be some shared costs o f , say, 50/50 or even 80/20 between the government and the l o c a l p a r t i c i p a t i n g school board(s). The two remaining p r i n c i p a l s and both o f f i c i a l s of the M i n i s t r y , however, f e l t that the present arrangement of shared costs between the P r o v i n c i a l Government and the l o c a l p a r t i c i p a t i n g school board(s) . should be maintained.  They a l l f e l t that t h i s was necessary to maintain  some l o c a l influence on the operation of the c o l l e g e .  The p r i n c i p a l s  among these respondents, however, argued that the l o c a l share could be reduced. The observations of a l l the respondents on these other sources of operating funds are summarized in Table XVIII.  72  TABLE XVII  OBSERVATIONS OF RESPONDENTS ON TUITION FEES AS A SOURCE OF COLLEGE OPERATING REVENUE  RESPONSES TYPE OF OBSERVATION  NUMBER  (N = 8) PERCENTAGE  Abolish T u i t i o n Fees Maintain T u i t i o n Fees at a minimum/nominal proportion of t o t a l operating revenue  7  87.5  1  12.5  8  100.0  Increase T u i t i o n Fees to r a i s e i t s share as a proportion of college operating revenue No response TOTAL  73  TABLE XVIII  OBSERVATIONS OF RESPONDENTS ON COLLEGE OPERATING COST SHARING ARRANGEMENTS BETWEEN THE PROVINCIAL GOVERNMENT AND LOCAL PARTICIPATING SCHOOL BOARD(S)  RESPONSES TYPE OF OBSERVATION  NUMBER  (N = 8) PERCENTAGE  P r o v i n c i a l Government Support Only  4  50.0  Shared c o n t r i b u t i o n between the P r o v i n c i a l Government and l o c a l p a r t i c i p a t i n g school board(s)  4  50.0  8  100.0  Local p a r t i c i p a t i n g school board(s) support only TOTAL  74  In c o n c l u s i o n , i t could be stated that respondents were in agreement on the continuing use of student t u i t i o n fees as a source of college funding.  However, respondents were s p l i t on the form of cost  sharing arrangements between the P r o v i n c i a l Government and local p a r t i c i p a t i n g school boards.  F i f t y per cent bf the respondents advocated  100 per cent P r o v i n c i a l Government support, while the remaining 50 per cent argued the case f o r shared contributions between the P r o v i n c i a l Government and l o c a l p a r t i c i p a t i n g school board(s). Envisaged Changes to the Method of D i s t r i b u t i n g A v a i l a b l e Government Funds Among the Colleges f o r Operating Purposes Granted that there i s going to be continuing P r o v i n c i a l Government grants toward c o l l e g e operating costs in the face of l i m i t e d government revenues, w i l l the present approach to d i s t r i b u t i n g government funds among the colleges be appropriate f o r the future? are c a l l e d f o r in the method? t r i b u t i o n c a l l e d for?  If not, what changes  Is a completely new system of fund d i s -  These are the questions t h i s section attempted  to explore. In summary, three major conclusions emerge from the responses of the p r i n c i p a l s and the o f f i c i a l s of the M i n i s t r y . 1)  These a r e :  College p r i n c i p a l s and M i n i s t r y o f f i c i a l s do not favour the introduction of a finance formula f o r the purpose of d i s t r i b uting a v a i l a b l e government funds among the c o l l e g e s ;  2)  College p r i n c i p a l s and M i n i s t r y o f f i c i a l s do not favour the use of an intermediary body ( e . g . , a c o l l e g e council) for the purpose of d i s t r i b u t i n g a v a i l a b l e government funds among the c o l l e g e s ; and  75  3)  Respondents ( p r i n c i p a l s and M i n i s t r y o f f i c i a l s )  fell  major groups on the desired approach to be used f o r  into two distribut-  ing a v a i l a b l e government funds among the c o l l e g e s : a)  Those who would l i k e to see continuing use of the present approach with c e r t a i n provisions incorporated (50 per cent of p r i n c i p a l s and one o f f i c i a l of the M i n i s t r y ) ; and  b)  Those who would l i k e to see a major r e v i s i o n in the present method (33.3 per cent of the p r i n c i p a l s ) .  The ideas of these two major groups would be presented under the f o l l o w i n g a)  titles:  A M o d i f i e d Form of the Present Approach to A l l o c a t i n g College Operating Funds; and  b)  A l t e r n a t i v e s to the Present Approach.  A modified form of the present approach.  Respondents who advo-  cated t h i s modified approach suggested several factors which could be incorporated in the present method to bring about the desired approach to a l l o c a t i n g future government funds among the c o l l e g e s . given below.  These are  The percentages.of respondents in t h i s group suggesting  the f a c t o r s are given in parentheses (the t o t a l number of respondents in t h i s group being f o u r ) : 1.  A basic cost u n i t , so as to be able t o : a)  estimate d i s p a r i t i e s among c o l l e g e s , and  b)  determine equitable treatment of colleges (75%).  2.  Increased input from the colleges (50.0%).  3.  Standardization of data from the colleges (50.0%).  76  4.  Possible t y i n g together of c a p i t a l budgets with the operating budgets (50.0%).  5.  Allowance f o r three to f i v e y e a r s ' academic planning (50.0%).  6.  Allowance f o r separate budgeting f o r new programmes at the i n i t i a l developmental stage (25.0%).  Addition of these factors was seen, by the respondents as going a l o n g , way toward improving the present method of fund a l l o c a t i o n among the c o l l e g e s . A l t e r n a t i v e s to the present approach.  Two p r i n c i p a l s suggested  two approaches which, i n the w r i t e r ' s o p i n i o n , are worth being presented separately by themselves.  The one to be presented f i r s t i s not, in f a c t ,  a complete a l t e r n a t i v e to the present method, since the present method can be revised to take care of the suggested ideas.  This method i s  c a l l e d "The Three-Element Approach to College Budgeting."  The second  approach being presented which incorporates ideas from P . P . B . S . i s c a l l e d "A Form of Programme Budgeting Approach." 1.  The Three-Element Approach to College Budgeting: Like several college p r i n c i p a l s , t h i s p r i n c i p a l saw the need to move to at l e a s t a medium range budgeting period of two to three years f o r the c o l l e g e s .  The framework he envisaged f o r such  medium range budgeting had three main elements: a)  A base budget which presents budgetary needs of the status quo s i t u a t i o n ;  b)  A set amount f o r contingencies and f o r expansion i n the e x i s t i n g programmes; and  c)  A set amount f o r new programme development.  77  As can be seen, these elements could be incorporated in a revised form of the present method. 2.  A Form of Programme Budgeting Approach: The p r i n c i p a l who suggested t h i s approach envisaged a scheme which would: a)  Allow colleges to do some advance planning in a.medi>um/ long-term b a s i s ; and  b)  Involve the M i n i s t r y of Education in the d i s t r i b u t i o n and control of funds only at the macro l e v e l of budget d e c i s i o n making.  In such a scheme, he argued, the M i n i s t r y would not have to make decisions on "whether a college gets an extra ten thousand d o l l a r s f o r an additional counsellor or not--a decision which should be made instead at the college l e v e l . " calls a)  His proposal  for:  Determination of a unit of cost measure for each college based on:  b)  .  The general objectives of the i n s t i t u t i o n ; and  .  The general programme mix.  Determination of cost adjustments f o r other general f a c t o r s , such a s : .  Geographical l o c a t i o n of the  .  Size of the i n s t i t u t i o n ; and  .  Age of the  institution;  institution.  From these f a c t o r s , the M i n i s t r y would make budget decisions on the basis of costs of operating the i n s t i t u t i o n as a whole, leaying the i n t e r n a l fund a l l o c a t i o n decisions to the college l e v e l officials.  78  Envisaged Changes to Government Controls over College Operating Funds Generally, the majority of the P r i n c i p a l s and both o f f i c i a l s of the M i n i s t r y expressed s a t i s f a c t i o n with the e x i s t i n g controls over college funds.  However, changes were suggested by some p r i n c i p a l s in  c e r t a i n s p e c i f i c areas of c o n t r o l s .  A l t o g e t h e r , the comments from the •  respondents can be put into four main c a t e g o r i e s : 1)  Questioning of controls over internal  allocations  (three p r i n c i p a l s ) ; 2)  Maintenance of the status quo (one p r i n c i p a l and the two Ministry  3)  officials);  Absence of framework f o r proper d e l i n e a t i o n of where controls ought to be (one p r i n c i p a l ) ; and  4)  Questioning of controls over surpluses (one p r i n c i p a l ) .  A b r i e f d i s c u s s i o n of each of these categories i s presented. Controls over i n t e r n a l a l l o c a t i o n s .  The concerns expressed  here centred on the i n a b i l i t y of college o f f i c i a l s to t r a n s f e r funds between d i f f e r e n t categories of expenditures without approval from the M i n i s t r y of Education.  This was not in reference to transfers  from Vocational to other areas, although one p r i n c i p a l , on p h i l o s o p h i cal grounds, believed that college o f f i c i a l s should be able to make such t r a n s f e r s . concerns:  S p e c i f i c comments by these p r i n c i p a l s i l l u s t r a t e  these  79  Respondent #1: There is° not that much d i r e c t controls [ s i c ] from the [ M i n i s t r y ] and that i s how I think i t ought to be. The only change I w i l l l i k e to see i s that when the government approves the budget, i t should not in turn approve of how i t i s a l l o c a t e d w i t h i n the col lege. Respondent #2: . . . maybe from c e r t a i n categories of expenditures, when there i s money a v a i l a b l e , the colleges should be allowed to t r a n s f e r i t to other needed areas. This should, however, be dependent upon i n d i v i d u a l s i t u a t i o n s . Respondent #3: . . . I f e e l that whoever provides the money, be they the government or the l o c a l school d i s t r i c t s , should have some say over the spending. Maybe some greater leeway over spending should be delegated to the colleges or at l e a s t to the c o u n c i l , e s p e c i a l l y as to the t r a n s f e r of monies from one area to the other, bearing in mind, of course, that whatever changes a college makes form the basis for the following y e a r ' s budget. Maintenance of the status quo.  Both o f f i c i a l s of the M i n i s t r y  of Education and one p r i n c i p a l f e l t that the e x i s t i n g controls need no changes at a l l . t h i s view.  Respondents had d i f f e r e n t  reasons, however, f o r holding  One o f f i c i a l of the M i n i s t r y s t a t e d :  I don't r e a l l y f e e l that the colleges are p a r t i c u l a r l y i n h i b i t e d in the way they spend t h e i r monies, so I don't think that they have to have any more d i s c r e t i o n than they have now. The p r i n c i p a l , on the other hand, put his p o s i t i o n i n t h i s way: I personally wouldn't want to see much more d i s c r e t i o n given to the c o l l e g e s . The only reason I say t h i s i s that the colleges haven't taken up t h e i r r e s p o n s i b i l i t i e s . I would l i k e a college to e s t a b l i s h i t s p r i o r i t i e s and then use the  80  funds a l l o t t e d i t to meet these p r i o r i t i e s , rather than get i t s budget and use i t to meet i t s commitments. The need f o r a framework f o r c o n t r o l s .  One p r i n c i p a l argued  that what was r e a l l y needed was a proper framework f o r the exercise of controls within which both the M i n i s t r y and the colleges would feel comfortable operating.  He expressed his point of view in the f o l l o w i n g :  If the M i n i s t r y s p e l l s out the objectives and p r i o r i t i e s i t wanted out of the c o l l e g e system, then each college could i n d i c a t e i t s objectives and p r i o r i t i e s . If these are c o n s i s tent with the objectives and p r i o r i t i e s of the t o t a l system, then the M i n i s t r y could deal only at the macro l e v e l in p r o v i d ing the monies, and leave the college c o u n c i l / c o l l e g e administ r a t i o n to operate with l i t t l e c o n t r o l s . The only element that would be required i s that of reporting and accounting f o r the use of the funds. The onus would be on the i n s t i t u t i o n to demonstrate that i t d i d , in f a c t , use the monies a l l o t t e d i t to meet the objectives and p r i o r i t i e s that i t had establ i s h e d ; and that these were consistent with the objectives and p r i o r i t i e s of the government. There wouldn't be any need f o r further c o n t r o l s . The absence of a framework f o r controls also led to other concerns, two of which were expressed by another c o l l e g e p r i n c i p a l . The f i r s t concern was that the M i n i s t r y sometimes exercised controls over areas where, i n the opinion of t h i s p r i n c i p a l , the M i n i s t r y d i d n ' t have any j u r i s d i c t i o n .  An example of such areas, he noted,  was college council expenditures f o r college council work.  He argued  that such control was even more d i f f i c u l t  didn't  to accept when i t  come from the p o l i t i c a l arena but, r a t h e r , from the c i v i l servants. The second concern expressed by t h i s p r i n c i p a l , which also appears to flow from the absence of framework f o r c o n t r o l s , was the lack of knowledge by the college council as to where they had d i s c r e t i o n and where they d i d n ' t .  81  Controls over surpluses.  One p r i n c i p a l argued that the e x i s t i n g  p r a c t i c e s in controls over surpluses d i d , in f a c t , encourage i n e f f i c i e n c y and suggested that the colleges be given complete control over t h e i r surpluses.  His argument was expressed in these words:  B a s i c a l l y , I think that i f a community college i s an autonomous i n s t i t u t i o n , then i f the council can show a good handling of resources, then the college should be rewarded by keeping the money saved, i . e . , i f by e f f e c t i v e management the college saves money, then by r i g h t that surplus should go to that c o l l e g e . Right now we don't have that r i g h t . If we have any s u r p l u s , i t goes to the government. Hence there i s no incentive to be efficient. In summary, then, i t could be stated that the only area where colleges in general would l i k e to see some changes was t r a n s f e r s of funds between the d i f f e r e n t expenditure categories.  Minority concerns  were expressed over controls on surpluses and on c e r t a i n areas perceived to be outside the a u t h o r i t y of the M i n i s t r y .  The w r i t e r , however,  shares the opinions expressed by some respondents that e x p l i c i t  state-  ment of objectives and p r i o r i t i e s of the college system p r o v i n c i a l l y and at college l e v e l which would lead to a provision of some framework for controls would go a long way in helping to a l l e v i a t e problems in the e x i s t i n g c o n t r o l s .  CHAPTER V  CONCLUSIONS AND RECOMMENDATIONS The f i r s t part of t h i s chapter w i l l attempt to bring together the major conclusions of the study.  This w i l l be followed by some  recommendations which, when implemented, i t i s hoped would help improve the method of financing the c o l l e g e s . Conclusions Sources of college funds.  The colleges in B r i t i s h Columbia  have been depending on three major sources f o r t h e i r operating revenues. These a r e :  the p r o v i n c i a l government grants, l o c a l school boards' con-  t r i b u t i o n s , and student fees.  Student fees as a proportion of college  operating revenues have c o n s i s t e n t l y been d e c l i n i n g over the f i v e - y e a r period under study--1972-76.  Since 1973, the proportion of college  operating funds derived from government grants has been r i s i n g while l o c a l school boards' contributions have been f a l l i n g ; however, t h i s trend changed s l i g h t l y in 1976 when the proportional  contributions  from l o c a l school boards rose s l i g h t l y r e s u l t i n g in a corresponding decline in government's proportional c o n t r i b u t i o n to c o l l e g e operating funds. There was no c l e a r cut view from t h i s study as to the d i r e c t i o n the government should go i n deciding on what should be the major sources of operating funds f o r the c o l l e g e s .  The only general agreement from  the respondents was that a reasonably low t u i t i o n fee should continue to be charged and that t h i s should not be a f i x e d proportion of the  82  83  operating revenue of the colleges since such pre-set proportion would be u n f a i r to some students given the f a c t that some programmes and colleges in some locations are more expensive to operate than others. Opinion was divided among the respondents on the place of local contributions in funding the two programmes, i . e . , U n i v e r s i t y t r a n s f e r and C a r e e r / T e c h n i c a l . The majority of the p r i n c i p a l s (representing 50^per cent of the respondents) f e l t that f o r these two programmes, there should be only two sources of operating funds, namely, government grants and t u i t i o n f e e s .  These respondents f e l t  that the l o c a l control argument, which was in the past used to support l o c a l c o n t r i b u t i o n s , was not r e a l l y v a l i d , since control was very much in the hands of the M i n i s t r y .  currently  Added to t h i s , they argued,  was the problem of unequal d i s t r i b u t i o n of f i n a n c i a l burden on d i f f e r e n t l o c a l i t i e s when such l o c a l school board contributions were required. Hence, l o c a l school board contributions to these programmes, they suggested, should be discontinued. The remaining 50 per cent of respondents including the two o f f i c i a l s of the M i n i s t r y f e l t that the e x i s t i n g arrangement f o r shared costs between the p r o v i n c i a l government and l o c a l p a r t i c i p a t i n g school boards should be maintained so as to ensure some l o c a l influence on the operation of the c o l l e g e s .  It was generally f e l t among them, how-  ever, that the l o c a l share as i t then existed could be reduced. Method f o r d i s t r i b u t i n g a v a i l a b l e government funds among c o l l e g e s . The e x i s t i n g method f o r d i s t r i b u t i n g operating funds among the colleges was in a developmental stage j u s t as the colleges themselves.  This  had given r i s e to a very f l e x i b l e approach to a l l o c a t i n g funds to the colleges.  The budget a l l o c a t i o n s to the colleges were done by the  84  M i n i s t r y of Education on an annual b a s i s .  B a s i c a l l y , the budget a l l o c a -  t i o n decisions were based on the professional judgement of the o f f i c i a l s of the M i n i s t r y of Education; no e x p l i c i t c r i t e r i a were u t i l i z e d in determining how much went to any c o l l e g e .  Attempts were made, however,  by the M i n i s t r y to get some inputs from the colleges before a r r i v i n g at the f i n a l decisions as to the amount of money that was to be given to i n d i v i d u a l c o l l e g e s .  Further, in a l l o c a t i n g funds,  priorities  tended to be given to approved new programmes, new f a c i l i t i e s ,  prior  y e a r ' s commitments and approved areas of growth. No formal avenues existed f o r appeals against budgetary decisions of the M i n i s t r y .  However, over the y e a r s , some mechanisms had eyolved  through which colleges could appeal for increase in t h e i r budgetary allocations.  These were p r i m a r i l y through informal discussions with  M i n i s t r y o f f i c i a l s responsible f o r the a l l o c a t i o n of c o l l e g e funds or by an appeal to the M i n i s t e r or his Deputy.  The l a t t e r avenue was  r a r e l y used since u s u a l l y some form of compromise was reached through the former avenue.  Under s p e c i a l circumstances, a college could apply  f o r over-run or increase t u i t i o n fees to supplement i t s budgetary allocation. It  i s at the moment d i f f i c u l t to o b j e c t i v e l y determine the  r e l a t i v e performance of the colleges in terms of government grant receipts because of several f a c t o r s including absence of e f f e c t i v e basic cost u n i t , d i f f e r e n t s i z e s of c o l l e g e s , and the existence of problems p e c u l i a r to only some c o l l e g e s . The f l e x i b l e nature of the e x i s t i n g method was recognized by a majority of the respondents as a strength they would l i k e to see retained in any mechanism for a l l o c a t i n g college funds.  The respondents,  85  however, saw two major weaknesses in the method.  These were, f i r s t , that  the method did not allow for medium- or long-range planning at the college l e v e l and, secondly, that i t was rather too s u b j e c t i v e . In s p i t e of the weaknesses, the majority of the p a r t i c i p a t i n g college p r i n c i p a l s f e l t that they had been able to obtain the necessary funds needed to operate t h e i r colleges in the way they would l i k e to see under the e x i s t i n g method. On the question of changes respondents would l i k e to see, there was consensus only on two i s s u e s .  These were, f i r s t , that no finance  formula be introduced as a means f o r a l l o c a t i n g college funds and, second, that no intermediary body such as a "Colleges C o u n c i l " be i n s t i t u t e d between the M i n i s t r y and the colleges f o r the purpose of d i s t r i b u t i n g a v a i l a b l e government funds among the c o l l e g e s . A majority of the respondents including one of the two M i n i s t r y o f f i c i a l s favoured the retention of the present method with the f o l l o w ing provisions incorporated, i f p o s s i b l e : establishment of a basic cost u n i t f o r determination, of minimum l e v e l of c o l l e g e operating revenue, increased input from the c o l l e g e , allowances f o r three to f i v e year academic planning, and standardization of data from the c o l l e g e . Lack of awareness more than anything e l s e , in the w r i t e r ' s o p i n i o n , prevented several of the respondents from looking at more complex but more equitable methods f o r a l l o c a t i n g college funds such as programme budgeting.  86  Government control over c o l l e g e operating funds.  The government  could exercise controls both formally through l e g i s l a t i o n and r e g u l a tions and informally through budget a l l o c a t i o n d e c i s i o n s , and through influence over several areas of college operating funds.  The present  study examined both of these controls over the f o l l o w i n g areas of college funding:  l e v e l of t u i t i o n fees colleges charge; s a l a r i e s of  i n s t r u c t i o n a l s t a f f and members of the a d m i n i s t r a t i o n ; sabbatical and other leaves of absence; and t r a n s f e r of funds between programmes and between d i f f e r e n t  expenditure c a t e g o r i e s .  On t u i t i o n fees and s a l a r i e s of s t a f f , i t was f e l t that the l e g i s l a t i o n gave colleges the r i g h t to determine these.  However, the «  majority of the p a r t i c i p a t i n g p r i n c i p a l s f e l t that the M i n i s t r y exerted informal c o n t r o l s .  With regard to t u i t i o n f e e s , i t was f e l t that the  M i n i s t r y by tying a d d i t i o n a l grants to increases in college fees under some circumstances did i n d i r e c t l y influence the l e v e l of t u i t i o n fees the college could charge. On the s a l a r i e s , i t was f e l t that the M i n i s t r y i n d i r e c t l y cont r o l l e d t h e i r determination since any annual s a l a r y increases to i n s t r u c t i o n a l s t a f f and to administrators were highly influenced by the d e c i s i o n of the M i n i s t r y on the amount of money a l l o c a t e d to  Instruc-  t i o n and Administration in the budget. As f a r as sabbatical leaves were concerned, an overwhelming majority of the p r i n c i p a l s and one of the two M i n i s t r y o f f i c i a l s agreed t h a t , although the l e g i s l a t i o n and regulations empowered the colleges to grant such leaves as they saw f i t ,  the M i n i s t r y did exert some  i n d i r e c t controls since they could refuse to approve budget a l l o c a t i o n s f o r them i f such leaves appeared in the budget as l i n e items.  There  were no such perceived c o n t r o l s , however, on the other leaves of absence.  87  The d i s c r e t i o n a r y powers of colleges existed f o r the t r a n s f e r of funds between only two programmes—University Transfer and Career/ Technical.  No transfers were allowed between any other programmes.  Further, a f t e r funds had been a l l o c a t e d to d i f f e r e n t c a t e g o r i e s , no transfers were allowed without p r i o r approval from the M i n i s t r y . M i n i s t r y tended to entertain t r a n s f e r s from any category to  The  Instruction;  and from Administration to Plant Operation, Library or Student S e r v i c e s . Respondents were generally f a i r l y s a t i s f i e d with whatever cont r o l s they perceived to be exercised by the M i n i s t r y except f o r one area in which some p r i n c i p a l s wanted to see changes.  This was in the  area of i n t e r n a l a l l o c a t i o n of college funds, i . e . , t r a n s f e r of funds between d i f f e r e n t expenditure c a t e g o r i e s .  F i f t y per cent of the p r i n -  c i p a l s f e l t that they should be given more d i s c r e t i o n in the i n t e r n a l a l l o c a t i o n of the funds once the government had approved the o v e r a l l college budget.  In other words, they f e l t that when there was a s u r -  plus in some categories of expenditure, the colleges should have the r i g h t t o ' t r a n s f e r those to needy areas without n e c e s s a r i l y seeking approval from the M i n i s t r y . M i n o r i t y concern was expressed over the M i n i s t r y ' s control over annual o v e r a l l budget surpluses.  A suggestion was made that colleges  which had annual budgetary surpluses should be allowed to keep them as a reward for e f f i c i e n t management of t h e i r f i n a n c i a l resources. To take such surpluses away, i t was argued, could encourage i n e f f i c i encies in f i n a n c i a l management.  88  Recommendations In the l i g h t of the findings of the present study and from my knowledge of college financing in other j u r i s d i c t i o n s , the  following  recommendations are made: Sources of college funds. 1.  That a reasonably low t u i t i o n fee continues to be charged by a l l colleges.  S c h o l a r s h i p s , bursaries and loans be extended  to needy and q u a l i f i e d students to ensure that no student i s deprived of a college education as a r e s u l t of f i n a n c i a l handicap. If the responses from the p r i n c i p a l s are a f a i r r e f l e c t i o n of the views of the people in whose l o c a l i t i e s the colleges are s i t u a t e d , then i t appears that the people are not yet ready to accept t o t a l government f i n a n c i a l support f o r c o l l e g e s .  Local c o n t r i b u t i o n  ensure some l o c a l control over c o l l e g e s .  i s seen to  Such controls may e x i s t more  on paper than in p r a c t i c e , but the knowledge that such controls  exist  which in times of c r i s i s can be evoked i s a good assurance to the community of i t s influence on the c o l l e g e .  Secondly, l o c a l  contribution  ensures local i d e n t i f i c a t i o n to the college as a whole and not only to a small portion of the college programme such as the community education programme.  A l l these are i n d i c a t i o n s that make the people not want the  government to take complete f i n a n c i a l support f o r the c o l l e g e s . Gradually, however, i t has to be accepted that l o c a l i t i e s have to be r e l i e v e d of the unwelcome f i n a n c i a l burden r e s u l t i n g from college funding f o r the simple reason that l o c a l i t i e s are not equally endowed financially.  Furthermore, a l l students, i r r e s p e c t i v e of t h e i r places of  89  residence, ought to be assured of equal access to college education.  For  these to happen,- i t i s important that in the long run college funds need only be derived from the government, supplemented by nominal student fees.  But t h i s can only be implemented when p u b l i c sentiment i s ready  for i t ;  hence the need f o r gradual annual reductions in the proportion  of c o l l e g e funds derived from l o c a l c o n t r i b u t i o n , culminating in the e n t i r e e l i m i n a t i o n of l o c a l c o n t r i b u t i o n i n the foreseeable f u t u r e . At t h i s time i t i s important to point out that complete government f i n a n c i a l support f o r colleges need not n e c e s s a r i l y lead to t o t a l government control of c o l l e g e s .  If colleges were to be t o t a l l y supported by  the government, a framework f o r governance could be developed through which l o c a l influence on the colleges could be assured.  As an example,  to ensure both e f f e c t i v e l o c a l influence and public a c c o u n t a b i l i t y in the a p p l i c a t i o n of funds, c o l l e g e councils could be made up of equal representation from the l o c a l i t i e s and appointees from the M i n i s t r y of Education with student representatives holding the balance of power. From the foregoing discussion i t 2.  i s recommended:  That l o c a l p a r t i c i p a t i n g school board contributions to c o l l e g e operating funds be gradually phased out.  3.  That in the long run operating funds f o r colleges be derived completely from the government supplemented by nominal student t u i t i o n fee charges. The method f o r d i s t r i b u t i n g a v a i l a b l e government funds among  the c o l l e g e s . concern:  The following recommendations are made f o r t h i s area of  90  1.  That the government explores the use of programme budgeting as the basis f o r preparing budget estimates of the c o l l e g e s .  2.  That any method to be used f o r d i s t r i b u t i n g operating funds t among the colleges makes room f o r at l e a s t three to f i v e years of academic planning at the college l e v e l .  3.  That the government takes steps to standardize f i n a n c i a l data from the c o l l e g e s .  4.  That the budgetary a l l o c a t i o n decisions continue to reside with the M i n i s t r y of Education and that no attempts be made to give such decisions to any intermediary body ( e . g . , a college council) which w i l l act between the M i n i s t r y and the c o l l e g e s .  5.  That the government attempts to present a basic cost unit f o r the colleges which w i l l be used for determining the minimum l e v e l of grant that should go to each c o l l e g e .  Additional  grants over and above t h i s minimum l e v e l grant should be determined by the unique needs of the i n d i v i d u a l c o l l e g e s . Government controls over c o l l e g e operating funds. 1.  That a machinery be established to enjoin the government to r e f r a i n from going beyond controls allowed i t under e x i s t i n g l e g i s l a t i o n and r e g u l a t i o n s , such as those i t recently exercised over sabbatical leave (Department of Education News Release, No. 71-75, October 31, 1975).  91  Even though only a minority expressed concern over the c o l l e g e s ' i n a b i l i t y to r e t a i n annual budgetary s u r p l u s e s , i t i s nonetheless important.  When budgetary surpluses cannot be c a r r i e d over to the next  f i s c a l y e a r , i t i s i n e v i t a b l e that colleges w i l l spend a l l a v a i l a b l e funds rather than turn any surpluses back to the government.  This i s  neither a wise nor a r a t i o n a l way of u t i l i z i n g p u b l i c funds.  It  is  f o r t h i s reason that the following two recommendations are made: 2.  That colleges be given the r i g h t to r e t a i n annual budgetary surpluses and that colleges holding such surpluses be held accountable f o r t h e i r use.  3.  Notwithstanding the above, that such budgetary surpluses held by colleges NOT be applied to projects that w i l l commit the government f o r f u r t h e r funds without p r i o r approval from the government.  APPENDIX I  INTERVIEW GUIDE FOR  OFFICIALS OF THE MINISTRY OF EDUCATION  92  93  PART A  THE METHOD OF ALLOCATING COLLEGE OPERATING FUNDS  When was the present method of a l l o c a t i n g operating funds among the c o l l e g e s introduced? Please, b r i e f l y i d e n t i f y the factors which led to the development of the present method of a l l o c a t i n g operational funds among the colleges. How does the present method of a l l o c a t i n g operating funds among the colleges work? S p e c i f i c a l l y : i) ii) iii) iv)  v)  what are the procedures followed? what factors are considered? are there p r i o r i t i e s assigned to these f a c t o r s ? are there occasional reviews of the f a c t o r s ? If there a r e , how often are they c a r r i e d out? Who gets involved i n such reviews? are there occasional reviews of the p r i o r i t i e s ? If there a r e , how often are they c a r r i e d out? Who gets involved in such reviews?  What channels of appeal does a college have i f i t f e e l s i t has not had a f a i r hearing in terms of l e v e l of grant a l l o t t e d i t for operational purposes? Has there been any precedent case of appeal? has i t had on the other colleges?  If s o , what e f f e c t  Looking at the present method of a l l o c a t i n g college operating funds as a whole, what in your o p i n i o n , are i t s strengths? What do you see as i t s weaknesses? For a l l p r a c t i c a l purposes, what would you l i k e to see in a method of a l l o c a t i n g a v a i l a b l e government funds among the colleges? What changes then, i f any, would you l i k e to see i n the present method of a l l o c a t i n g operating funds among the colleges?  94  PART B  SOURCES OF COLLEGE OPERATING REVENUES 1.  Given the d e c l i n i n g trend over the past f i v e years of student t u i t i o n fees as a proportion of college operating revenue, what do you think should be the place of t u i t i o n fees in college financing?  2.  In your o p i n i o n , from where should the remainder (or a l l ) of the college operating funds c o m e , . i . e . , as between the government and local d i s t r i c t s ?  PART C  GOVERNMENT CONTROLS OVER COLLEGE OPERATING FUNDS There are several ways that the government controls college operating funds, s p e c i f i c a l l y , through l e g i s l a t i o n and r e g u l a t i o n s . However, there are also i n d i r e c t and informal ways, i . e . , influence and budget a l l o c a t i o n s , by which college operating funds are c o n t r o l l e d by the government. In t h i s s e c t i o n , government controls should be viewed from a l l of these aspects. 1.  In what way(s), i f any, does the government now exercise control in the colleges over the f o l l o w i n g , and to what extent do you agree or disagree with such government controls? i) ii) iii) iv) v) vi) vii)  viii) 2.  level of t u i t i o n fees the colleges charge? s a l a r i e s of f a c u l t y members? s a l a r i e s of members of the  administration?  sabbatical leaves? other leaves of absence? transfers of monies between programmes, e . g . , t r a n s f e r and c a r e e r / t e c h n i c a l ?  university  t r a n s f e r s of monies between major expenditure categories e . g . , administration vs. student services or l i b r a r y or plant operation? other aspects of college expenditures?  (please s p e c i f y . )  What changes, i f any, would you l i k e to see in the d i s c r e t i o n a r y powers of the c o l l e g e over the spending of college operating funds?  APPENDIX  II  INTERVIEW GUIDE FOR  PRINCIPALS OF PARTICIPATING COLLEGES  95  96  PART A  OBSERVATIONS ON THE METHOD OF ALLOCATING OPERATING FUNDS  What opportunities do you have f o r input to the M i n i s t r y of Education with regard to the a l l o c a t i o n of operating funds to your college? How e f f e c t i v e have you been in obtaining the required fund f o r your college w i t h i n the present o p o r t u n i t i e s ? Are there any other channels open to you i f you f e e l you have not had a f a i r hearing? If s o , what are these channels? Could you give some examples as to the use of these channels? Looking at the present method of a l l o c a t i n g c o l l e g e operating funds as a whole, what in your opinion are i t s strengths? What do you see as i t s weaknesses? For a l l p r a c t i c a l purposes, what would you l i k e to see in a method of a l l o c a t i n g a v a i l a b l e government funds among the colleges? What changes then, i f any, would you l i k e to see in the present method of a l l o c a t i n g funds? PART B  OBSERVATIONS ON SOURCES OF COLLEGE OPERATING REVENUES  Given the d e c l i n i n g trend over the past f i v e years of student t u i t i o n fees as a proportion of c o l l e g e operating revenue, what do you think should be the place of t u i t i o n fees in c o l l e g e financing? In your o p i n i o n , from where should the remainder (or a l l ) of the college operating funds come?  97  PART C  OBSERVATIONS ON GOVERNMENT CONTROLS OVER COLLEGE OPERATING FUNDS  There are several ways t h a t the government c o n t r o l s c o l l e g e operating funds, s p e c i f i c a l l y , through l e g i s l a t i o n and r e g u l a t i o n s . However, there are a l s o i n d i r e c t and informal ways, i . e . , i n f l u e n c e and budget a l l o c a t i o n s , by which c o l l e g e operating funds are cont r o l l e d by the government. In t h i s s e c t i o n , government c o n t r o l s should be viewed from a l l of these aspects, when answering the f o l l o w i n g questions: 1.  In what way(s), i f any, does the government now e x e r c i s e c o n t r o l in your c o l l e g e over the f o l l o w i n g , and to what extent do you agree or disagree with such government c o n t r o l s ? i) ii) iii) iv) v)  s a l a r i e s of f a c u l t y members? s a l a r i e s of members of the sabbatical  administration?  leaves?  other leaves of absence?  vi)  t r a n s f e r s o f monies between programmes, i . e . , u n i v e r s i t y t r a n s f e r and c a r e e r / t e c h n i c a l ?  vii)  t r a n s f e r s of monies between d i f f e r e n t expenditure categ o r i e s , e.g., a d m i n i s t r a t i o n vs. p l a n t o p e r a t i o n , or l i b r a r y or student s e r v i c e .  viii) 2.  l e v e l of t u i t i o n fees the c o l l e g e charges?  other aspects of c o l l e g e expenditures?  (please s p e c i f y . )  What changes, i f any, would you l i k e to see in the d i s c r e t i o n a r y powers of the c o l l e g e over the spending of c o l l e g e operating funds?  

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