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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 .Ed . , Univers i ty of A lbe r ta , 1971 M.Ed., Univers i ty of A lbe r ta , 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 Admin is t ra t ive, Adult and Higher Education) We accept th is thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA Spr ing, 1982 © James D. Quarshie, 1982 In p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f the requirements f o r an advanced degree a t the U n i v e r s i t y o f B r i t i s h Columbia, I agree t h a t the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and study. I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e copying o f t h i s t h e s i s f o r s c h o l a r l y purposes may be grant e d by the head o f my department o r by h i s o r her r e p r e s e n t a t i v e s . I t i s understood t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be allowed without my w r i t t e n p e r m i s s i o n . Department o f Set* ct^/y'a^csj Jlc&m^/jpfco^'e^ The U n i v e r s i t y o f B r i t i s h Columbia 2075 Wesbrook P l a c e Vancouver, Canada V6T 1W5 ABSTRACT The present study was undertaken with three major ob jec t ives , namely: 1. to determine the revenue d i s t r i bu t ion c r i t e r i a employed by the B.C. Min is t ry of Education in a l l oca t ing operational funds to the co l leges ; 2. to ascerta in the types o f , and extent of government controls over col lege operational funds; and 3. to determine the adequacy of the revenue d i s t r i bu t i on c r i t e r i a and government controls over col lege operational funds. The study was car r ied out in three main phases. The f i r s t phase involved analysis of f inanc ia l records of the par t i c ipa t ing col leges for the period 1972-1976 to determine var ia t ions in sources and s ize of operational funds to ind iv idual co l leges. Using these data, interviews were held with Min is t ry of Education o f f i c i a l s res-ponsible for d i s t r i bu t i ng col lege operational funds to determine the method used for a l l oca t ing funds to each col lege and government controls over these funds. The f i n a l phase consisted of interviews with Min is t ry o f f i c i a l s and pr inc ipa ls of selected col leges to determine the strengths and weaknesses of the present system used for d i s t r i bu t i ng operational funds. Par t ic ipants were also asked what the l im i ta t ions of government controls over col lege funds are, and what changes they would l i ke to see take place. i i Analysis of the data indicated that the Min is t ry 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 for determining the level of operational funds that went to each co l lege ; p r i o r i t y was ; given, however, to such factors as approved new programmes, new f a c i l i -t i e s , p r io r year ' s commitments, and approved areas of growth. It was also found that the Min is t ry of Education exercised formal controls through l e g i s l a t i o n and regulat ion and informal controls through budget a l loca t ion decisions and through inf luence over several areas of col lege operational funds. Further, i t was found that the majori ty of respon-dents were general ly s a t i s f i e d with the ex is t ing method used by the Min is t ry of Education fo r d i s t r i bu t i ng col lege operational funds; minor changes were suggested which would improve the method. With respect to government controls over operational funds, concern was expressed for the lack of d iscret ionary power of col lege p r inc ipa ls in the internal a l l oca t ion (and rea l locat ion) of funds. TABLE OF CONTENTS Page ABSTRACT i i LIST OF TABLES v i i i LIST OF FIGURES x LIST OF CHARTS x i ACKNOWLEDGEMENTS x i i CHAPTER I: INTRODUCTION 1 Background to Issues in Financing Non-University Post-Secondary Ins t i tu t ions 1 Issues in the Financing of Non-University Post-Secondary Ins t i tu t ions in B r i t i s h Columbia - The Case of the Colleges 19 The col lege system in B r i t i s h Columbia 20 An overview of the f inancing arrangements for the col leges 21 Some basic issues in f inancing the col leges in B r i t i s h Columbia 22 The object ives of the study 23 CHAPTER I I : DESIGN OF THE INVESTIGATION 26 Par t ic ipants in the Study 26 Select ing the i ns t i t u t i ons for the study 26 Select ing the respondents 28 Research Method 29 Spec 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 bu t ion c r i t e r i a 31 i v The views of major const i tuent groups concerning the adequacy of ( i ) the present revenue d i s t r i bu t ion c r i t e r i a , and ( i i ) provisions for the i r modif icat ion The nature, extent and appropriateness of government controls over col lege operating revenues CHAPTER I I I : THE PRESENT SYSTEM OF FINANCING OPERATING COSTS OF THE COLLEGES IN BRITISH COLUMBIA 34 Sources of College Operating Revenues 34 The Present Approach to D is t r ibu t ing Avai lab le Government Funds among the Colleges for 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 General izat ions on the present approach to a l l oca t ing col lege operating funds 46 Performance of ind iv idual col leges in terms of government grant receipts and internal resource a l l oca t ion 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 on fees 63 Faculty sa la r ies 63 Salar ies of members of the administrat ion 64 Sabbatical leaves and other leaves of absence 65 Transfers of monies between programmes '66 Page 32 33 v Transfers of monies between other expenditure categories Other Conclusion 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 is t r ibu t ing Avai lab le Government Funds among the Colleges for Operating Purposes 74 A modified form of the present approach 75 Al ternat ives to the present approach 76 Envisaged Changes to Government Controls over College Operating Funds 78 Controls over internal a l locat ions 78 Maintenance of the Status Quo 79 The need for a framework for controls 80 Controls over surpluses 81 CHAPTER V: CONCLUSIONS AND RECOMMENDATIONS 82 Conclusions 82 Sources of col lege funds 82 Method for d i s t r i bu t ing ava i lab le government funds among col leges 83 Government control over col lege operating funds 86 Recommendations 88 Sources of col lege funds 88 Page 67 68 68 vi The method for d i s t r i bu t i ng ava i lab le government funds among the col leges Government controls over col lege operating funds APPENDIX. I: Interview Guide fo r O f f i c i a l s of the Min is t ry of Education APPENDIX I I : Interview Guide for P r inc ipa ls of Par t i c ipa t ing Colleges LIST OF TABLES TABLE I. Non-University Post-Secondary Full-Time Enrollment by Provinces for Selected Years, 1960-1975 TABLE II . Non-University Post-Secondary Percentage Increases in 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 for 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 is t r ibu t ion of Net General Expenditures of Prov inc ia l Governments, C l a s s i f i e d by Funct ion, 1952, 1961-62 and 1971-72 TABLE VI I I . Average Annual Proportion of Operating -Revenues Derived from Various Sources, 1972-1976 (The Six Par t i c ipa t ing Colleges) TABLE IX. Annual Total Number of Service Uni ts , 1972-1976 by College (For the Six P a r t i c i -pating Colleges) TABLE X. Government Operating Grants Per Service Un i t , 1972-1976 TABLE XI. Proportion of College Operating Revenues Derived from Government Grants, 1972-1976 v i i i Page TABLE XII. TABLE XI I I . TABLE XIV. TABLE XV. TABLE XVI. TABLE XVII. Average Annual Proportion of Total Operating Expenditures Devoted to the Di f ferent Expenditure Categories, 1973-1976 D is t r ibu t ion of College Operating Expenditures Per Service Un i t , 1973-1976 D is t r ibu t ion of College Operating Expenditures (Percentages), 1973-1976 Perceived Strengths of the Present Method of D is t r ibu t ing Avai lab le Government Funds Among the Colleges Perceived Weaknesses of the Present Method of D is t r ibu t ing Avai lab le Government Funds among the Colleges Observations of Respondents on Tui t ion Fees as a Source of College Operating Revenues 53 56 57 58 61 72 TABLE XVII I . Observations of Respondents on College Operating Cost Sharing Arrangements between the Prov inc ia l Government and Par t i c ipa t ing Local School Board(s) 73 ix LIST OF FIGURES Page FIGURE 1. Average Annual Proportion of Total College Operating Revenues Derived from Various Sources, 1972-1976 38 FIGURE 2. Average Annual Proportion of Total College Operating Expenditures Devoted to Instruct ion Adminis t rat ion, L ib ra ry , and Student Serv ices, 1973-1976 55 x LIST OF CHARTS CHART A. Selected Age Group Populations of Relevance to School Enrollment for Canada, 1961-2001 8 CHART B. Selected Age Group Population Approximately Relevant to School Enrollment, B .C . , 1961-2001 9 x i ACKNOWLEDGEMENTS The author wishes to express his indebtedness to Dr. Jamie H.A. Wall i n , Professor of Educational Administrat ion and his thesis super-v isor, for his enduring patience and useful advice at a l l phases of the study. Great appreciat ion is also expressed to Dr. John F. Newberry of the B r i t i s h Columbia Min is t ry of Education; Dr. Fred J . Speckeen, Pr inc ipa l of the College of New Caledonia; Dr. Lome W. Downey, Dr. John Dennison and Dr. Wil l iam L. Tetlow, Professors in the Department of Admin is t ra t ive, Adult and Higher Education, the Univers i ty of B r i t i s h Columbia, for the 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 col lege f inancing with him. College bursars and Min is t ry of Education o f f i c i a l s who f ree ly gave the i r time to discuss various aspects of col lege f i nanc ia l s ta te-ments need special mention. F i n a l l y , to the Div is ion of Educational Admin is t ra t ion, s p e c i f i -c a l l y , and the Univers i ty of B r i t i s h Columbia, as a whole, the wr i ter renders sincere thanks for funds made avai lab le to him through fe l low-ships and other forms of f i nanc ia l ass is tance, a l l of which went to make the study poss ib le . x i i CHAPTER I INTRODUCTION This chapter attempts to put the subject of the present study, i . e . , col lege f inanc ing , into i t s proper perspect ive. It does th is by f i r s t examining the col lege system (with other un ivers i ty post-secondary i ns t i t u t i ons ) in terms of enrollment and expenditure trends over the past decade and a ha l f , and future project ions in B r i t i s h Columbia and across Canada. Some of the issues in f inancing which re la te pa r t i cu la r l y to B r i t i s h Columbia flowing from the enrollment and expenditure analys is w i l l then be i d e n t i f i e d , a f ter which the object ives of the study w i l l be stated. Background to Issues in Financing Non-University Post-Secondary  Ins t i tu t ions H i s t o r i c a l l y , post-secondary education in Canada has commonly meant un ivers i ty education. However, wi th in the las t decade and a ha l f , the once l i t t l e known sector , the non-universi ty post-secondary sector , has shown such great expansion a l l across the country that i t s v i s i b i l -i t y i s quick ly increasing. In the 1960-61 academic year , there were 51,484 fu l l - t ime students enrol led in th is 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 , th is f igure had r isen to 168,878 ( I b i d . ) , representing an increase of 228 per cent over the 1960-61 f u l l - t ime 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 in enrollment in th is 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 fu l l - t ime students in 1960-61 to 13,256 in 1970-71 (S ta 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 de ta i l s of the growth in e n r o l l -ments in th is 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 fu l l - t ime enrollment f igures the part-t ime ones, which have also of la te been on the r i s e , and the expansion in the non-universi ty post-secondary sector becomes more astronomical. More recent ly , there has been a steady but lower annual increase in enrollments in the sector. For example, fo r the nation as a whole, enrollment increased by only 4.6 per cent between the 1973-74 and 1974-75 academic years , that i s , from 201,920 in 1973-74 to an estimated 211,260 in 1974-75. The largest prov inc ia l enrollment increase (over 10 per cent) fo r th is period occurred in B r i t i s h Columbia and Newfoundland. Not only have the enrollments increased in absolute terms, but the par t i c ipa t ion rates ( i . e . , the proportion of the relevant age group) at the non-universi ty post-secondary level s p e c i f i c a l l y and at the post-secondary level general ly have been increasing in several provinces over the past decade and a ha l f , though l a te l y they have gradual ly been l e v e l l i n g o f f . Table III contains the de ta i l s of th is t rend. The rapid r i se in enrollments for the sector has resulted from several f ac to rs , among which are: (1) the general acceptance by the TABLE I NON-UNIVERSITY POST-SECONDARY FULL-TIME ENROLLMENTS BY PROVINCES FOR SELECTED YEARS, 1960-1975 YEARS NF PEI NS NB QUE ONT MAN SASK ALTA BC CANADA 1960-61 509 242 1,677 1,338 22,415 16,671 1,764 2,568 2,486 1 ,814 51,484 1965-66 1,003 203 2,014 2,495 29,436 21,665 1,932 1,756 4,624 3,225 68,353 1970-71 1,431 354 2,966 2,734 74,550 55,478 3,691 2,365 12,051 13,256 168,876 1971-72 1,548 584 2,893 2,506 84,210 50,345 3,808 2,436 12,610 12,823 173,763 1972-73 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: S t a t i s t i c s Canada, Financial S t a t i s t i c s of 1 Education, 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. Ib id. TABLE II NON-UNIVERSITY POST-SECONDARY PERCENTAGE INCREASES IN ENROLLMENT, BY PROVINCES, 1960-61 TO 1970-71 (A DECADE) PROVINCE PERCENTAGE INCREASE ENROLLMENTS NEWFOUNDLAND 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 YEAR Newfoundland P .E . I . Nova Scot ia New Brunswick Quebec Non-Univ Univ Total Non-Univ Univ Total Non-Univ Univ Total Non-Univ Univ Total Non-Univ 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 (continued) Ontario Manitoba Saskatchewan Alberta British Columbia Canada YEAR Non-Univ Univ Total Non-Univ Univ Total Non-Univ Univ Total Non-Univ Univ Total Non-Un1v Univ Total Non-Unlv Univ Total 1965-66 3.2 8A9 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 Post-Secondary  Education 1967-75 (B r i t i sh Columbia Post-Secondary Enrollment Forecasting Committee, Vancouver) Report #20, 1976. CTl 7 publ ic that education in a democratic society i s a r ight and not a p r i v i l e g e , and therefore a publ ic service to be provided by the gov-ernment to a l l those who are able and w i l l i n g to make use of i t ; (2) the baby boom of the 19401s which has led to an increase in the relevant age group in the 1970's; and (3) the recognit ion of la te that education i s a l i f e - l o n g enterpr ise and therefore should not be res t r i c ted to a given age group, hence encouraging the older per-sons who would not normally enro l l in post-secondary i ns t i t u t i ons to begin to do so, espec ia l l y at the non-universi ty post-secondary l e v e l . What does the future hold in terms of post-secondary and non-un ivers i ty post-secondary enrollment trends? Charts A and B contain demographic trends for Canada and B r i t i s h Columbia. Analys is of these trends indicates that the age group 18-24, the relevant age group for post-secondary education, w i l l continue to grow for the nation as a whole un t i l about 1981 when i t w i l l begin to f a l l , and then r i se again in 1996. In B r i t i s h Columbia, th is age group w i l l continue to r i se unt i l about 1985 when i t w i l l begin to f a l l , and then begin to r i se again in 1991. The possible impl icat ions of these population t rends, as seen by S t a t i s t i c s Canada, are that wi th in the next f i ve to twenty-f ive years , post-secondary enrollments in Canada w i l l grow, reaching i t s f i r s t peak of about 670,000 students in the ear ly 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 fol lows the national demographic trends very c l ose l y , would l i k e l y fo l low these future national enrollment trends. Relat ing the demographic trends to enrollments in post-secondary i ns t i t u t i ons and to the recent trends in non-universi ty post-secondary 8 CHART A Selected Age Group Populations of Relevance to School Enrolment, for Canada, 1961-2001. Population par groupe d'tges spgci f ique corres-pondant aux e f f e c t i f s s c o l a i r e s , Canada, 1961-2001. A M i l l i ons 4.4 4.2 4.0 3.8 3.6 3.4 3.2 3.0 2.6 2.6 2.4 2.2 2.0 i.e 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0 \ A Agp h-/ / / / / \ (K indergart< Age 5-aternelle •n-grade 8 13 -8e annfiej ) / / / / \ / » Age 18-24 ( ""XAge 18-24 ( Post-seco Postsecon idary) Jaire) / / \ VI / / / Tote pof Populatic du 1 Canada mlation >n totale Canada^ ''Age 0-99 Age 0-99 3 and over et plus J / y > \ / - ^ Age Age 14-1 Y A 14-17 (6r 7 (9e anne ade 9 and e e?^plus' Act ual Key assum Medium pr ptions: Djection -1 - Fertil 1 I Projection moyenne ity rate: 2.20 Obs erv§ Taux de teconcnte: 2 - Net annual migration: 60 Migration annuel le nette 60 ,000 (+) ,000 (+) 1 1 1 1 I f 1 1 t i l l t i l l 1 II 1 II 1 1 1 1 1 1 1 1 1 1 B M i l l i o n s 44.0 42.0 40.0 38.0 • 36.0 34.0 • 32.0 30.0 - 28.0 26.0 - 24.0 22.0 - 200 18.0 - 16.0 14.0 - 12.0 10.0 - 8.0 6.0 -4.0 20 -00 1961 1966 1971 1976 1981 1986 1991 1996 ZOO I Source: Z. Zsigmond, "Patterns of Demographic Change Af fect ing 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 speci f iques correspondant approximativement aux e f f e c t i f s s c o l a i r e s , Colombie-Br i tannique, 1961-2000. A '000 600 550 500 450 H 400 S50 H B M i l l i ons 6.0 soo —t 250 H 200 I50-H 100 1961 1966 1971 1976 1981 • 986 1991 1996 2C0I Source: Z. Zsigmond ( Ib id . :17) . 10 education sector , S t a t i s t i c s Canada concludes that: In the next few years , national non-universi ty 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 an t i c Provinces and B r i t i s h Columbia. Quebec, Ontar io, Manitoba and Alberta w i l l have smal ler , but steady gains. A s l i gh t decrease i s ant ic ipated for Saskatchewan's technical i ns t i tu tes because of the continued Grade 12 decl ine ( I b i d . , p. 30). The f i nanc ia l impl icat ions of the expansion in the non-univers i ty post-secondary education s p e c i f i c a l l y , and in post-secon-dary education general ly , have been and continue to be enormous. In 1961, expenditures on non-universi ty post-secondary education in Canada amounted to $58,428,000, of which $49,030,000 and $6,942,000 were a l l o t ted to operating and cap i ta l expenditures respect ive ly . By 1971, the national expenditures on non-universi ty 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 cap i ta l expenditures to ta l l ed $84,149,000.(Review of Educational Po l i c i es in Canada, Foreword and Introduct ion). The growth in expenditures on non-universi ty post-secondary education in B r i t i s h Columbia for the same per iod, 1961-71, was s im i -l a r l y large. In 1961, B r i t i s h Columbia spent $1,999,000 on th is sector . By 1971, th is had grown to $31,945,000, representing an increase of 1498 per cent over the 1961 expenditures. The proportion of the to ta l expenditure a l l o t t ed to cap i ta l cost became much larger in the l a t t e r 1960's through the ear ly 1970's as a resu l t of increasing construct ion of several new f a c i l i t i e s wi th in that period ( I b i d . ) . It i s estimated that, by 1976, the national expenditures on post-secondary education would have grown to $3,961,940,000 and those for 11 B r i t i s h Columbia to $355,176,000. The non-universi ty sector expendi-tures alone would have increased to $1,009,947,000 nat iona l ly and $91,259,000 for 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 (univers i ty and non-universi ty) across Canada for selected years from 1956 to 1973; and Table V shows the percentage increases in the expenditures for the period 1961-1971. It should be pointed out, however, that the expenditures are a l l in current do l l a r values and they contain some in f la t ionary fac to rs . The growth in post-secondary educational spending in B r i t i s h Columbia i s fur ther depicted in a recent study by Dennison and others (1975). Among other th ings, they compared the growth rates of the economy, government spending and educational spending over a ten-year per iod. Table VI contains the de ta i l s of the i r f indings which, unl ike those c i ted e a r l i e r , are corrected for i n f l a t i o n using 1973 do l la rs as the base. From Table VI , i t could be seen that: Expenditures in post-secondary education have shown the greatest increase among the areas shown, averaging a 10.5% annual compound growth ra te . Total education expenditures in B.C. given at a rate of 8.2% which i s considerably fas ter than the 6.3% annual growth rate of the prov inc ia l economy (Dennison et a l . , 1975:125) Dennison and others ' de f i n i t i on of "post-secondary education" does not include ins t i t u t i ons which give t ra in ing for nurses' diplomas, i . e . , hospi ta ls which are included in the c i ted references from S t a t i s t i c s Canada and the Council of Ministers of Education Reports. This does not, however, undermine the point the table attempts to get across. In f ac t , adding these i ns t i t u t i ons would most l i k e l y increase TABLE IV EXPENDITURES ON POST-SECONDARY EDUCATION, PROVINCES AND CANADA BY TYPE OF EDUCATION FOR SELECTED YEARS Cin thousands of do l lars) TOTAL U N I V E R S I T Y NON - U N I V E R S I T Y (University Non-Unlv.) Operating Capital Departmental and Others Subtotal Operating 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 1,881 5,563 18,229 24,664 29,246 27,482 1,543 17,849 2,181 6,991 1,125 1.000 169 783 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 63 65 500 29 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 - - - - - 9 _ 139 1,335 749 300 50 1,099 209 _ 27 2.586 1,809 412 96 2.317 269 7.114 4,560 177 1,243 5,980 1,102 _ 32 8.686 4,696 1,569 787 7.052 1.447 90 97 10,383 4.976 2,855 500 1,066 8,897 1,285 95 106 9,413 4,777 1.015 6.292 2.503 500 118 151 236 269 1,134 1,634 1,486 3,121 TABLE IV (continued) TOTAL U N I V E R S I T Y NOM - U N I V E R S I T Y (University Departmental Departmental Non-Untv.) Operating Capital and Others Subtotal Operating Capital and Others Subtotal NOVA SCOTIA 1956 _ - 989 - 45 1,034 1961 11.940 8,311 • 956 167 9.434 1,740 687 79 2,506 1966 48,422 23,024 20,707 1,194 44,925 90.918 3,112 7,155 160 225 3,497 1970 99,160 51.460 33,191 6,267 607 480 8,242 1971 94.936 58,748 16,247 8.705 83,700 8,022 895 2,319 11,236 197Z 82.018 59,616 2,952 9,564 72,132 7,374 700 1.812 9.886 1973 86,003 63,788 2,500 9.890 76,178 7,675 - 2,150 9,825 NEW BRUNSWICK 1956 1961 1966 1970 1971 1972 1973 8,983 29,849 46.658 51.847 49.180 51.817 5,394 13,040 29.405 33,569 38.486 42.122 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 2,933 262 160 286 382 250 109 68 215 359 781 855 953 953 1.636 3,114 5.052 6,151 5.486 3.886 QUEBEC 1956 43.751 24.184 6.796 1.612 32,592 11.053 - 106 11.159 1961 124.697 68.082 27,706 4,976 100,767 18.932 4,117 881 23.930 1966 253,314 154.338 36.734 22.207 213,279 364,597 36.569 118.180 2.006 1.460 40,035 142,238 1970 506,835 256,846 61,093 46,658 8,625 14,172 15,433 1971 534,419 283,033 34,103 32,497 46,469 355,633 390,714 149,609 15,005 15,966 178.786 1972 620,228 308,707 35,538 194,593 18,955 229,514 1973 710,120 343.839 40,000 48,919 432,758 239,514 20.000 17.848 277,362 TABLE IV (continued) TOTAL U N I V E R S I T Y N O N - U N I 1 V E R S I T Y (University Non-Unlv.) Operating Capital Departmental and Others Subtotal Operating Capital Departmental and Others Subtotal ONTARIO 1956 1961 1966 1970 1971 1972 1973 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 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 25.554 234 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 MANITOBA 1956 1961 1966 1970 1971 1972 1973 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 24.000 390 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 7,466 155 206 300 300 55 88 83 163 1,963 2,130 2,375 1,398 2,313 3,050 6,177 9,312 9,376 9.841 SASKATCHEWAN 1956 1961 1966 1970 1971 1972 1973 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 6.000 340 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 38 257 320 680 1,200 10 55 73 363 867 943 1,052 1,668 2,343 3.004 4,328 6,239 7,244 8,032 TABLE IV (continued) TOTAL U N I V E R S I T Y N O N - U N I V E R S I T Y (University Departmental Departmental Non-Unlv.) Operating Capital and Others Subtotal Operating Capital and Others Subtotal ALBERTA 1956 - - - 2,133 - 25 2,158 1961 26.797 14,924 7,347 1.138 23.409 2,646 714 28 3.388 1966 104.340 47.476 41.308 3,548 92.332 6,380 5.463 165 12,008 1970 203.426 111.840 49,374 14.620 175.834 24.267 2.675 650 27,592 1971 219.864 121.003 53.004 13.798 187,805 29.075 600 2.384 32,059 1972 215.359 124.000 40,445 14.557 178,602 33.525 600 2.632 36.757 1973 229.734 138,682 30,000 15.526 184,108 41,191 1.500 2.935 45,626 BRITISH COLUMBIA 1956 - - - - - 1.468 - 58 1.526 1961 31,728 22.250 6,851 628 29,729 1.982 17 1,999 1966 104,838 63.710 26.459. 2.877 93,046 4.895 6.696 203 11.792 1970 174,888 116.153 19,167 10.428 145,748 22,889 5.626 625 29,140 1971 196,048 125.518 29.809 8.776 164,103 24.379 4.030 3.536 31.945 1972 188,886 132,606 14.479 8.907 155,992 25,965 ' 3i043 3,886 4.333 32,894 1973 206.669 147.162 15,000 9.370 171.532 30,804 - 35,137 CANADA 1956 148.295 90,119 21.034 4.956 116.109 31.503 - 683 32.186 1961 369.057 211,330 85,008 14.291 310,629 991.647 49.030 6.942 2,456 58.428 1966 1,116,612 582.295 324.466 84.886 96.570 19.949 8,446 124.965 1970 2.257.909 1,223,947 392.243 213.414 1.829.604 316,946 67.707 43,652 428.305 1971 2,387,223 2.377,751 1,441.231 316.153 194,219 1.888,123 1,885,506 368.061 84,149 46,890 499.100 1972 2.443.190 235.448 208.829 433,371 74.334 49.979 557,684 1973 2.662,218 1,596,860 240.000 217.700 2,054.560 503.699 48,054 55,905 607.658 Source: Derived from Review of Educational P o l i c i e s in Canada, Foreword and  Introduction (The Secretary of S ta te , Ottawa), 1975, pp. 66-68. 16 TABLE V PERCENTAGE INCREASES IN EXPENDITURES ON POST-SECONDARY EDUCATION BY PROVINCES AND CANADA, 1961 TO 1971 PERCENTAGE INCREASES IN EXPENDITURES PROVINCE UNIVERSITY NON-UNIVERSITY TOTAL Newfoundland 846 711 828 Prince Edward Island 542 592 551 Nova Scot ia 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 . 518 CANADA 507 754 546 17 TABLE VI 1965-1974 GROWTH RATES1 OF THE ECONOMY, GOVERNMENT SPENDING AND EDUCATION SPENDING (PERCENTAGES) NEW GROWTH 1965-75 TEN-YEAR TOTAL ANNUAL RATE CANADA Gross National Product Federal Government Expenditures 67 117 5.3 8.1 BRITISH COLUMBIA Gross Prov inc ia l Product Prov inc ia l Government Expenditures Total Educational Expenditures Min is t ry of Education Expenditures Post-Secondary Education Expenditures 84 158 119 112 172 6.3 10.0 8.2 7.8 10.8 1 Corrected for i n f l a t i o n using 1973 do l la rs 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 in post-secondary education and more so in non-universi ty post-secondary education, giv ing r i se to increasing expenditures, is 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 add i t ion , expenditures in other publ ic services such as heal th , welfare and other aspects of education (pa r t i cu la r l y elementary and secondary) have s im i l a r l y been on the r i se (see, for example, the growth in per capi ta expenditures of prov inc ia l governments on various services provided in Table VI 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 % Growth 1952-72 Education 15.3 45.8 193.8 1 .166 .7 Health 13.4 32.8 136.4 917 .9 Social Welfare 6.6 15.0 69.9 959 .1 Transportation & Communications 25.5 36.0 51.3 101 .2 National Resources 6.5 11.0 26.1 301 .5 General Government 3.3 7.4 26.7 709 .1 Protect ion of Persons & Property 4.7 7.7 26.3 459 .6 Debt Charges 3.9 4.4 47.5 1 .117 .9 Other Expenses 4.6 9.3 54.9 1 .093 .5 Source: J . E . Hodgetts and O.P. Dwived. Prov inc ia l Governments as Employers (McGi11-Queen's Univers i ty Press, Montreal and London), 1974:5. 19 The publ ic has thus, of l a t e , begun to ra ise questions regard-ing the way expenditures on publ ic se rv i ces , including those on post-secondary education, have been r i s i n g . Well a r t i cu la ted demands for increasing control of these expenditures have not been uncommon l a t e l y . Hence, the dilemma in post-secondary education—an ever- increasing demand for higher education with resu l t ing increases in expenditures and, at the same time, publ ic demand for control of these expenditures. This sect ion of the d isser ta t ion have provided the reader with the general state of a f f a i r s in non-universi ty post-secondary education in terms of enrollments and expenditure trends in B r i t i s h Columbia and across Canada. The next sect ion w i l l address i t s e l f to some of the basic issues which have ar isen in B r i t i s h Columbia s p e c i f i c a l l y with regard to f inancing the col leges and, f i n a l l y , object ives of the study w i l l be stated. Issues in 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 in expenditures on education genera l ly , and on non-universi ty post-secondary education s p e c i f i c a l l y , coupled with increasing demands on government funds from other publ ic services such as health and soc ia 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 appl ied. To th is end, i t has become more urgent for a careful analysis of the manner by which the major publ ic se rv ices , including co l leges , are f inanced. In th is sect ion of the chapter some of the basic issues in f inancing col leges in B r i t i s h Columbia giv ing r i se to the object ives of the study are discussed. Before doing t h i s , a b r ie f discussion of 20 the col lege system in B r i t i s h Columbia and the nature of col lege finance are presented. The col lege system in B r i t i s h Columbia. The col lege system forms the largest component of non-universi ty post-secondary education in B r i t i s h Columbia in terms of enrollments and expenditures (Dennison et a l . , 1975). The other components are the B r i t i s h Columbia Ins t i tu te of Technology ( B . C . I . T . ) , vocational schools (or vocational cent res) , and a l imi ted number of hospital Schools of Nursing. The f i r s t col lege in B r i t i s h Columbia, V i c to r i a Col lege, was founded in 1903, but th is col lege became a un ivers i ty col lege of the Univers i ty of B r i t i s h Columbia in 1945 and a fu l l - f l edged Univers i ty of V i c to r i a in 1963. The h is tory of the present col lege system began with the founding of Vancouver Community College in 1965 fo l lowing a Government of B r i t i s h Columbia Royal Commission on Education (1960) and the MacDonald Report (1962). By the end of that decade, f i ve more col leges had been founded. Eight more were founded in the 1970's. A l l the col leges 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 Min is t ry of Education. Hence, the governance of each col lege i s vested in a College Council whose members are appointed by the par t i c ipa t ing school boards, by the Min is ter of Education, and by the Prov inc ia l Cabinet. The col leges are a l l comprehensive i ns t i t u t i ons of fer ing programmes ranging from univers i ty t ransfer through technical and vocational to extensive community service type programmes. This aspect of the col lege system introduces some complexit ies into the f inancing arrangements, since the various programmes are financed d i f f e ren t l y . 21 An overview of the f inancing arrangements for the co l leges. In terms of cap i ta l expenditures, the Prov inc ia l Government pays 100 per cent of the pr inc ipa l and in terest on debt for a l l approved costs . However, for operating expenditures there are three main sources of col lege funding in B r i t i s h Columbia. These are the Prov inc ia l Govern-ment grants, local property tax , and students' t u i t i on fees. The Prov inc ia l Government contributes not less than 60 per cent of approved operating expenses, except for vocational programmes where the govern-ment pays 100 per cent of the operating cost . The remaining cost i s covered through school board contr ibut ions and t u i t i on fees (Dennison et a l . , 1975; Department of Education, 1976). Dennison and others (1975) estimate that for the 1973-74 academic year, 63 per cent of col lege funds was derived from government grants, 24 per cent from local property tax , and 13 per cent from tu i t i on fees. 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 col lege funding be increased. For example, a commission set up to study the col lege system in B r i t i s h Columbia in 1974 recommended a 100 per cent prov inc ia l support toward col lege operating costs (see The Task Force on Community Col lege, 1974). They also recommended that there be no local property tax support, and only a nominal students' fee toward col lege funding ( I b id . ) . The commission found th is funding arrangement to be the pract ice in a l l the col lege systems across Canada. Dennison (1976) also speculates that in the foreseeable future th is would be the pract ice in B r i t i s h Columbia. It should be pointed out that , as of now, Prov inc ia l Government grants to the col leges have a federal component under the Federal-22 Prov inc ia l F isca l Arrangements Act of 1967 (extended and revised in 1972). Under the Act , an equivalent of 50 per cent of operating costs of col leges (and other post-secondary i ns t i t u t i ons ) are funded by the Federal Government, subject to a minimum of $15 per capi ta of prov inc ia l population to each province and a maximum of 15 per cent annual increase in the to ta l federal support (Review of Educational Po l i c i es in Canada, 1976:26; Univers i ty A f f a i r s , September 1976; Dennison et a l . , 1975). Some basic issues in f inancing the co l leges. The huge growth in expenditures of the col leges has inev i tab ly resul ted in the govern-ment's i n a b i l i t y to meet to ta l budget requests from the co l leges. Th is , in tu rn , has given r i se to a need fo r a mechanism by which the a v a i l -able funds could be equitably d is t r ibu ted among the co l leges. This need would become even more pressing i f the government's share of the co l leges ' funding should increase as ant ic ipated. In 1975, a s im i la r need became apparent at the un ivers i ty level when large government cutbacks in funds led o f f i c i a l s of the un ivers i t i es in 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 located to the un i ve r s i t i e s . The resu l t of th is exercise was the establishment by the government of a Un ivers i t ies Council in 1975 whose envisaged functions would inc lude, among other th ings, the a l loca t ion of government funds to the indiv idual un ivers i ty i ns t i t u t i ons on the basis of need. The a l loca t ion of funds to the col leges s t i l l resides with the government's M i n i s t r y of Educat ion,.as i t has always been. How has the Min is t ry of Education been a l l oca t ing the ava i lab le funds among the col leges? Considering the trend of increasing enrollments and 23 expenditures in the co l leges , coupled with pressure on the government to cut back on educational spending (see, for example, Edward Carr igan's a r t i c l e in The Sun, September 21, 1976), a fur ther question now a r i ses : would the present approach to a l loca t ing funds among the col leges be appropriate in the future? These are questions which deserve some hard examination before we can begin thinking of a l te rnat ive approaches to f inancing the co l leges. Further, the study would be l imi ted to the f inancing of the two major programmes of Univers i ty Transfer and Career/Technical where the present cost-shar ing arrangements between the Prov inc ia l Govern-ment and the loca l par t i c ipa t ing school board(s) i s a 60-40 s p l i t . The object ives of the study. A number of questions emerge from the discussion in the preceding sect ions. Examination of some of these w i l l form the major object ives of the present study. Those to be examined f a l l into the fol lowing areas: 1. Revenue D is t r ibu t ion C r i t e r i a : To determine the revenue d i s t r i bu t ion c r i t e r i a employed by the B.C. Min is t ry of Education to a l locate operational funds to the co l leges ; 2. Modi f icat ion of the Revenue D is t r ibu t ion C r i t e r i a : To determine how the revenue d i s t r i bu t i on c r i t e r i a become modif ied; 3. Government Controls over College Expenditures: To ascer-ta in the types and extent of government controls over the way col leges spend the i r monies; and 24 4. Adequacy of the Present Revenue D is t r ibu t ion C r i t e r i a ,  Provisions for the i r Mod i f i ca t ion , and Government Contro ls : To s o l i c i t the views of the major const i tuent groups in the col lege system with regard to the adequacy of the ex is t ing revenue d is t r i bu t ion c r i t e r i a , the provis ions for the i r modi f ica t ions, and of government controls over co l lege expenditures. The meeting of the object ives in the aforementioned four areas should provide a basis for the development of a l te rnat ive model(s) for the d i s t r i bu t i on of col lege operating funds. Hence, the study w i l l go a step fur ther to include the fo l lowing f i f t h ob jec t ive : 5. The Development of Recommendations for Improvement of  College Financing: To develop h e u r i s t i c a l l y some a l te rna-t i v e models for the d i s t r i bu t i on of col lege operating funds, test the a l ternat ives for robustness with the major cons t i tu -ent groups of the col lege sector and, having done so* make some recommendations fo r considerat ion. This chapter has provided the reader with background to issues in f inancing co l leges . Some of these issues giv ing r i se to the objec-t ives of the study were discussed and, f i n a l l y , the object ives of the study were i d e n t i f i e d . Chapter II presents a discussion of the Design of the Invest igat ion. Par t ic ipants 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 object ives of the study w i l l be presented. Chapter III presents a descr ipt ion of the current arrangements in col lege f inancing in B r i t i s h Columbia, and Chapter IV 25 i den t i f i es the changes which col lege pr inc ipa ls and Min is t ry of Educa-t ion o f f i c i a l s would l i k e to see in these arrangements. Chapter V presents the Conclusions and Recommendations. CHAPTER II DESIGN OF THE INVESTIGATION In th is chapter, par t ic ipants to be involved in the study are i den t i f i ed . This i s fol lowed 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. Par t ic ipants in the Study This part of the study w i l l be discussed under two main sub-headings: Select ing the Ins t i tu t ions for the Study and Select ing the Respondents for the Study. Select ing the ins t i t u t i ons for the study. B r i t i s h Columbia has three main types of non-universi ty post-secondary i n s t i t u t i o n s . These are: 1. The B r i t i s h Columbia Inst i tu te of Technology ( B . C . I . T . ) , 2. The Community College System (also referred to in the study as the College System) comprising fourteen publ ic and two pr ivate co l leges , and 3. Vocational Centres. In addi t ion to the above, there i s also a l imi ted number of Hospital Schools of Nursing. For the purposes of th is study, i t was found that these types of non-universi ty post-secondary i ns t i t u t i ons could not be studied 26 27 together, for at least two reasons. The f i r s t reason i s lack of common-a l i t i e s in programme o f fe r ings . The col leges are t y p i c a l l y comprehen-sive ins t i t u t i ons of fer ing programmes which range from univers i ty t rans fe r , through technical and vocat iona l , to extensive community service-type programmes. B .C . I .T . j on the other hand, provides tech-n ica l t ra in ing programmes to a much higher level of prof ic iency than i s usual ly provided at the col lege l e v e l . F i n a l l y , the vocational centres o f fer vocational courses aimed at developing lower level or f i r s t entry s k i l l s . The resu l t of these d i f fe rent programme of fer ings i s that we have a d i f fe rent 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 ind iv idual i ns t i t u t i ons from the d i f fe rent 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 inanc ing, i t would be more appropriate to compare ins t i t u t i ons having s im i la r programmes. In add i t i on , the very fact that the pub l i c l y funded col lege system consists of fourteen ins t i t u t i ons makes the a l l oca t ion of ava i lab le funds among them a very complex problem. For these reasons, the present study was l imi ted to the f inancing aspects of only the pub l ic ly funded col lege system. As has been pointed out, there are fourteen pub l i c l y funded col leges in B r i t i s h Columbia. Because of the nature of the study, however, i t i s important that only i ns t i t u t i ons which have had a reasonable number of years of experience with the method of f inancing be included in the study. I t was therefore considered that only col leges in existence before 1972 would be included. It was also decided that Vancouver Community College and Se lk i rk College would 28 not be included for the fol lowing reasons: Vancouver Community College i s a t y p i c a l , not only in terms of i t s s i z e , but also i t s uniqueness and long h is to ry ; Se lk i rk College was excluded for lack of cont inui ty of p r inc ipa lsh ip in the period under study, 1972-1976. As a r e s u l t , seven col leges founded before 1972 were i n i t i a l l y included in the study. These were: Camosun Col lege, founded in 1971 Capilano Col lege, founded in 1968 Cariboo Col lege, founded in 1970 Douglas Col lege, founded in 1970 Malaspina Col lege, founded in 1969 College of New Caledonia, founded in 1969 Okanagan Col lege, founded in 1968. Malaspina College was unable, however, to par t i c ipa te in the study; hence the f i na l number of col leges included in the study was s i x . Select ing the respondents. The choice of respondents for the study was based on two main fac to rs : proximity to issues in those aspects of col lege f inancing under study and expert ise in the aspects of col lege f inancing under study. Based on these two fac to rs , f i ve major const i tuent groups in the col lege system were considered for pa r t i c ipa t ion in the study. These were: 1. O f f i c i a l s of the Min is t ry of Education, 2. College P r i n c i p a l s , 3. Chairmen of College Counc i ls , 4. Presidents of College Faculty Assoc ia t ions , and 5. O f f i c i a l ( s ) of the B.C. Associat ion of Col leges. 29 In the Min is t ry of Education, two respondents were selected from among the o f f i c i a l s who were responsible for deciding how much money would be a l located to ind iv idual col leges for operating purposes. These were the Ass is tant Superintendent of Post-Secondary Programmes and an Audit Accountant. One o f f i c i a l of the B.C. Associat ion of Colleges ( B . C . A . C . ) , the Executive Di rec tor , was inv i ted to par t i c ipa te in the study. However, i t was la te r discovered that chairmen of col lege counc i l s , presidents of facu l ty assoc ia t ions , and the executive d i rec tor of the B.C.A.C. would not be read i ly access ib le . Thus they were not f i n a l l y included in the l i s t of pa r t i c ipan ts , leaving two groups: minist ry o f f i c i a l s and p r i nc i pa l s . Fortunately, they are the persons most c lose ly associated with the f inancing of co l leges. Research Method The major technique employed in gathering data for the study was interv iewing. Several factors were behind the choice of th is technique. In the f i r s t p lace, the fact that the study attempted to tap information and experience of the respondents made i t necessary for a more f l e x i b l e approach to quest ioning. This could better be done in an interview s i tua t ion than through a mailed quest ionnaire. Secondly, i t was f e l t that the interview technique would permit fol low-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 read i ly 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 in f inancing col leges in B r i t i s h Columbia, and to seek suggestions for the i r improvements, 30 interviews were held with two o f f i c i a l s of the Min is t ry of Education and pr inc ipa ls of the s i x par t i c ipa t ing co l leges. These interviews were conducted from March 22 to May 4, 1977. Except for one interview conducted by telephone, which lasted for approximately 30 minutes, the interview time usual ly ranged from approximately one hour to two hours. The interview guides for the col lege p r inc ipa ls and for o f f i c i a l s of the Min is t ry 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 note-taking in the course of the interviews unnecessary. Af ter the in te r -views were completed, the data were transcr ibed from the tapes and summarized by the invest igator for ana lys is . The interview technique was supplemented by review of the Publ ic Schools Act (1975), Publ ic Schools Act Regulations (1975), and other appropriate l i t e ra tu re on B.C. col lege f inance. Spec i f i c Questions, Research A c t i v i t i e s and Data Requirements This sect ion i den t i f i e s the spec i f i c research questions studied in the areas i den t i f i ed in the "Objectives of the study", the types of research a c t i v i t i e s undertaken toward answering these quest ions, and the research data gathered. To do t h i s , the broad object ive areas (stated in the "Objectives of the study") are set f o r th , a f te r each of which the spec i f i c quest ions, research a c t i v i t i e s and data require-ments are discussed. The revenue d i s t r i bu t i on c r i t e r i a (Objective #a). In prepara-t ion for interviews with the col lege pr inc ipa ls and o f f i c i a l s of the Min is t ry of Education to determine the revenue d i s t r i bu t i on c r i t e r i a 31 employed by the B.C. Min is t ry of Education to a l loca te operating funds to the co l l eges , two prel iminary studies were undertaken. The f i r s t of these attempted to answer the fo l lowing spec i f i c quest ion: What proportion of col lege operating revenues over the f i ve-year per iod, 1972-1976, was derived from each of the fo l lowing sources: Government grants? Local par t i c ipa t ing school board(s) contr ibut ion? Student t u i t i on fees? Other, e . g . , donations? The second prel iminary study examined the fol lowing quest ion: What d i f fe rences, i f any, existed among the col leges in the proportion of operating revenues devoted to d i f fe rent expenditure categories over the f ive-year per iod, 1972-1976? The f i r s t prel iminary study made use of the c e r t i f i e d f inan-c i a l statements over the f ive-year period from each of the p a r t i c i -pating co l leges. Where necessary, these data were supplemented by other f i nanc ia l data ava i lab le at the Min is t ry of Education. Tables and graphs were developed to show changes in the proportions of funds derived from each of the four sources over the f i ve-year period for a l l the col leges considered and for each par t i c ipa t ing co l lege. The second prel iminary study involved the fo l lowing research a c t i v i t i e s . Working from the programme enrollments and the f inanc ia l statements from each col lege for the f ive-year per iod, f i r s t , the operating costs per service unit (a service unit was defined as one fu l l - t ime student or 3.5 part-t ime students) for the selected pro-grammes (Univers i ty Transfer and Career-Technical) were ca lcu la ted. Then the level of expenditure per service unit for the d i f ferent 32 expenditure categories (administ rat ion, i ns t ruc t i on , plant operat ion, 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 uni t was also determined. The data obtained from these prel iminary studies revealed d i s - -crepancies in the areas surveyed from year to year, as well as from col lege to co l l ege , and therefore provided a basis for ascerta in ing the c r i t e r i a which underlay the budget dec is ions , 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 oca t ion of funds among the col leges in B r i t i s h Columbia. The interviews in th i s object ive area thus attempted to get at the fo l lowing spec i f i c questions: a) What are the procedures followed by the Min is t ry of Education as i t a l locates operating funds to the col leges? b) What spec i f i c factors or c r i t e r i a are considered in the a l l oca t ion of operating funds among the col leges? 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 col lege input into the method of a l loca t ing operating funds among the col leges? The views of major const i tuent groups concerning the adequacy  of ( i ) the present revenue d i s t r i bu t i on c r i t e r i a and ( i i ) provis ions  for the i r modi f icat ion (Objective #b and the f i r s t part of objective" #d). In addi t ion to ident i fy ing c r i t e r i a imp l i c i t in the f inancing arrange-ments, the interviews with the col lege p r inc ipa ls and the Min is t ry 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 sse r ta t i on : the adequacy of the present c r i t e r i a and the adequacy of the present p rov is ions , i f any, for the i r modi f ica-t i o n . With regard to these areas, the fo l lowing spec 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 bu t ion 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 in such reviews? d) What changes, i f any, should be made with respect to review procedures? The nature, extent , and appropriateness of government controls  over col lege operating revenues (Objective #c and the l as t part of #d). With respect to th is subject , the interviews with the col lege p r inc ipa ls and Min is t ry o f f i c i a l s also probed the fol lowing spec i f i c questions: a) In what way(s), i f any, does the government presently exercise control over: . the level of t u i t i on fees a col lege charges? sa la r ies of facu l ty members and members of the administrat ion? . sabbatical leaves and other leaves of absence? . other aspects of col lege expenditures? b) What should be the extent of government controls over the operating funds of the col leges? CHAPTER III THE PRESENT SYSTEM OF FINANCING OPERATING COSTS OF THE COLLEGES IN BRITISH COLUMBIA The descr ip t ion of the present system of f inancing col leges in 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 Div is ion of the Min is t ry of Education and pr inc ipa ls of the s i x par t i c ipa t ing co l leges , on careful examination of the relevant sect ions of the Publ ic Schools Act (1975) and Publ ic Schools Act Regulations (1975), and on review of relevant l i t e ra tu re on the subject , pa r t i cu la r l y Dennison, 1976; Beinder, 1976; the Min is t ry of Education News Release No. 71-75, 1975; and The Task Force on the Community College Report, 1974. The descr ipt ion i s presented under three main sub-headings, v i z . , Sources of College Operating Revenues; The Present Approach to D is t r ibu t ing Avai lab le 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, unl ike any other province in Canada where col lege operating revenues are derived mainly through government grants and in some j u r i sd i c t i ons supplemented by nominal student t u i t i on fees, there are three major sources of col lege operating revenues. These are: 1. Government grants, 2. Local par t i c ipa t ing school board(s) tax cont r ibut ions, and 3. Student t u i t i on fees. 34 35 The t u i t i on fee port ion of the revenues, however, tends to be as low as in other provinces where fees are charged. The l e g i s l a t i o n (Publ ic Schools' Ac t , 1975) provides that the Prov inc ia l Government contributes in each f i s c a l year an amount of grant not less than 60 per cent of each co l lege 's approved operating expenditures. The remaining 40 per cent is covered by local p a r t i c i -pating schools board(s) tax contr ibut ion and student t u i t i on fees, the amount of the Board's contr ibut ion being equal to the 40 per cent less amount of t u i t i on fees accruing to the co l lege. Thus, expressed a lgeb ra i ca l l y : LC - 100 - (60 + X) where: LC is Local (par t i c ipa t ing school board(s)) Contr ibut ion, and X i s the proportion of revenue raised through student t u i t i on fees. Hence, the higher the proportion of revenue derived from tu i t i on fees, the lower the local par t i c ipa t ing school board(s) cont r ibu t ion , and vice versa. The f i na l proportions of the to ta l revenue contr ibuted by the government and by the local par t i c ipa t ing school board(s) are tempered by adjustments resu l t ing from surpluses or d e f i c i t s from the immedi-ate ly preceding f i s c a l year , and from amounts of any miscellaneous revenues accruing to the col lege in the current f i s c a l year . For the s ix col leges par t i c ipa t ing in the study, the average annual proportion of operating revenue derived from the various sources 36 for the period 1972-76 are contained in Table VI I I . Figure 1 presents the same data graph ica l ly . It should be pointed out that in the Tables the reported gov-ernment contr ibut ion may be s l i g h t l y understated while the local par t i c ipa t ing school board(s) contr ibut ion may be s l i g h t l y overstated. This i s due to the fact 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. S ince, in p rac t i ce , a small f rac t ion of the Debt Services Charges was con-t r ibuted by the loca l school boards, such amounts should have been deducted from the local par t i c ipa t ing school board(s) contr ibut ions. This was not possible because the data was not obtainable - they were con f i den t i a l . Examination of Table VIII indicates that as a proportion of the tota l operating revenue, government grants have ranged from a low of 55 per cent in 1973 to a high of 62 per cent in 1975. Local p a r t i -c ipat ing school board(s) contr ibut ions have ranged from a low of 25 per cent in 1972 to a high of 32 per cent in 1973 and 1976. It could be seen from the Table that even though the government contr ibut ion in 1976 (57 per cent) was much higher than that of 1973 (55 per cent ) , both years had a high loca l contr ibut ion of 32 per cent. This could be explained by the fact that the proportion of the revenue derived from tu i t i on fees was s i g n i f i c a n t l y higher in 1973 (13 per cent) than in 1976 (10 per cent) . Tu i t ion fees as a proportion of to ta l col lege oeprating revenues have been decl in ing over the f i ve-year period 1972-76, having decl ined from a high of 13 per cent in 1972 and 1973 to a low of 10 per cent in 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 C E 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 general ly contr ibu-ted a very small proportion to the to ta l revenues. The Present Approach to D is t r ibu t ing Avai lab le Government Funds Among  the Colleges for Operating Purposes In th is sec t ion , the present approach to d i s t r i bu t i ng ava i lab le government funds among the col leges 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 ra tu re on th is aspect, the presentation here i s 38 FIGURE 1 AVERAGE ANNUAL PROPORTION OF COLLEGE OPERATING REVENUES DERIVED FROM VARIOUS SOURCES, 1972-1976 39 large ly based on the resu l ts of the interviews held with o f f i c i a l s of the Min is t ry of Education and the col lege p r i nc i pa l s . Development. The present approach to d i s t r i bu t i ng operating funds among the col leges had been in operation (at the time of the interviews) for approximately four years , evolving gradual ly over that span of time. In the Univers i ty 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 fact that the col leges have been in a developmental phase, thus making i t d i f f i c u l t for any method (such as a more mechanistic one) other than the one in use now. The second i s the fact that the Min is t ry of Education has not had the capacity in terms of s ta f f and other resources to r ea l l y attempt to develop an a l ternat ive method that may probably be a more sophist icated system of resource a l l o ca t i on . Procedures in the present approach. To best explain the pro-cedures, one o f f i c i a l of the Min is t ry described the process by which the 1977-78 f i s c a l year budget for the col leges were developed. The fol lowing i s the descr ip t ion . During the period August-September 1976, a team of f i ve o f f i -c i a l s consis t ing of the Assis tant Superintendent, Post-Secondary Programmes, an Audit Accountant, both from the Min is t ry (and both of whom were respondents in the study), the Bursar of B . C . I . T . , and two other o f f i c i a l s of the Min is t ry v i s i t ed each col lege and met with o f f i c i a l s of the col leges to discuss col lege budgets for the 1977-78 f i s c a l year. At each of these meetings, the fol lowing topics were discussed: 40 . the operation and performance of the col lege in the current year , . the co l l ege ' s educational plans for the fol lowing f i s c a l year , and . any relevant issues pecul iar to the co l lege. No request was made by the Min is t ry of Education for the submission of provis ional budgets from the col leges at these meetings. However, some col leges did submit something l i k e provis ional 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 col lege in which everything was costed out. These, together with s im i la r documents prepared on the other non-universi ty post-secondary i n s t i t u t i o n s , served as bases for a budgetary presenta-t ion to the Min is te r . The f igure f i n a l l y submitted by the Min is ter to the Treasury Board thus represented the to ta l amount of funds requested for the operation of a l l the non-universi ty post-secondary i ns t i t u t i ons for the 1977-78 f i s c a l year. The process to th is point was completed by November, 1976. The col leges then submitted the i r f i n a l budgets for 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 col lege was t y p i c a l l y broken into l i n e - b y - l i n e categories of : . admin is t rat ion, . i ns t ruc t ion : Univers i ty Transfer Career/Technical Vocational Non-credi t , 41 . plant operat ion, . repairs and maintenance, . l i b r a r y , and student serv ices . On receipt of these f i n a l budgets from the co l leges , the team gave some prel iminary considerat ion to them. However, i t was not un t i l the budget speech was read and the Min is t ry knew how much money i t had to d is t r ibu te that serious considerat ion was given to the budgets. When the Min is t ry knew the amount of money voted for the non-un ivers i ty post-secondary sector , an i n i t i a l breakdown was made in gross terms between the various areas of the sector (Vocational Tra in ing , B . C . I . T . , Univers i ty Transfer and Career/Technical) . Three major documents served as bases for der iv ing each co l lege 's budget for the 1977-78 " f i sca l year. These were: 1. each co l l ege ' s budget for the 1976-77 f i s c a l year , 2. each co l lege 's budget request for the 1977-78 f i s c a l year , and 3. the notes developed by the team during i t s v i s i t s to the col leges in August-September 1976. To ar r ive at a budget for the 1977-78 f i s c a l year , each co l lege 's budget for the 1976-77 f i s c a l year was taken as given. To that was added or deleted (but general ly added) some base adjustments so that a revised budget base was obtained. To th is was then added a factor to cover increased costs—this fac tor being 6.8 per cent for the 1977-78 f i s c a l year. The fac tor was arr ived at by applying a cer ta in percentage point against s a l a r i e s , and a d i f fe rent percentage point against non-sa la r ied categories of the expenditures. These percentage points appl ied to the d i f fe rent categories were c l a s s i f i e d as con f iden t ia l . The budget struck at th is point fo r each col lege was a recommended one. 42 Once the recommended budget for each col lege had been struck, i t was presented for discussion before the Deputy-Minister and the Min is ter . Af ter th is d iscuss ion , the Assis tant Superintendent of Post-Secondary Programmes and the Audit Accountant went back to each col lege for budget reviews with the col lege o f f i c i a l s . This occurred in March, 1977. At each of these meetings, the Min is t ry o f f i c i a l s indicated the budget fo r . the col lege for the 1977-78 f i s c a l year they were preparing to recommend to the M in i s te r , and discussed some spec i f i c items with the col lege o f f i c i a l s , al lowing them to give the i r views. Back in V i c t o r i a , some few adjustments a r i s ing from the meet-ings were made to the budgets. The new, revised budgets for the 1977-78 f i s c a l year were submitted to the col lege counc i ls . Each col lege council then had to pass a resolut ion to the ef fect that the budget was acceptable. Upon the passing of the reso lu t ion , the Min is ter then approved the budgets. The col leges were then o f f i c i a l l y informed in Apr i l 1977 as to what the i r budgets for the 1977-78 f i s c a l year were. From the discussion of the procedures above, the fol lowing s i x major steps can be i den t i f i ed in the present approach used by the Government for a l loca t ing operating funds: 1. Consul tat ion: This takes place in August-September when o f f i c i a l s for the Department of Education v i s i t each col lege to confer with the col lege o f f i c i a l s . 2. Development of col lege system budget by the Min is t ry of . Education: This i s submitted to the Min is ter and i t i s upon th is that the Min is ter puts in his request to the Treasury Board. 3. Submission of ind iv idual col lege budgets to the Min is t ry of Education. 43 4. L ine-by- l ine review of indiv idual col lege budget. This takes place a f te r the Department has learned from the Treasury Board how much money had been a l located to the non-universi ty post-secondary sector . 5. Approval of indiv idual col lege budget by col lege counc i ls . 6. Approval of the budget by the Min is te r . Factors and p r i o r i t i e s considered. The Min is t ry does not have a l i s t of spec i f i c factors which i t considers when i t attempts to d i s -t r ibu te the ava i lab le funds among the co l leges. Budget decisions are bas i ca l l y the professional judgement of the o f f i c i a l s of the Min is t ry . Hence, there are no defined c r i t e r i a . The judgement of the Min is t ry o f f i c i a l s i s based on the i r knowledge of the col lege system and the i r sense of fa i rness or equity. However, i t should be pointed out that during the i r v i s i t s to the col leges in August and September, the o f f i c i a l s gather information on: programme o f fe r ings : - ex is t ing programmes - expansion in ex is t ing programmes - approved new/emerging programmes expectations of changes in enrollments new f a c i l i t i e s demonstrated/ identi f ied specia l needs, e . g . , deplet ion of inventory, new personnel needs, e tc . In addi t ion to th is information, the budget requests from the col leges submitted by December 1, 1976 were given serious considerat ion in the development of each co l lege 's f i na l budgets. F i n a l l y , during the 44 budget review t ime, the col leges were given a further 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 Min is t ry places overa l l top p r i o r i t y on ins t ruc t ion . From time to t ime, however, the Min is ter assigns some p r i o r i t i e s to spec i f i c areas. For example, for the present he has indicated that the "Outreach" programme functions of the col leges have to be protected. In add i t ion , the fo l lowing areas tend to receive high p r i o r i t y : approved new programmes, new f a c i l i t i e s , p r io r year 's commitments, and approved areas of growth. There are no formal mechanisms for review of e i ther the factors or p r i o r i t i e s . However, by the maintenance of c lose l i a i s o n with the co l leges , the Min is t ry 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 Min is t ry l e v e l . This i s done through consultat ions with the Min is ter and the Deputy Min is ter on c r i t i c a l areas to be s t ressed, , or what are perceived as areas of p r i o r i t y . Channels of appeal. This sect ion examines the avenues open to col leges who feel they have not had a f a i r hearing in terms of the leve ls of grants a l l o t t ed them for operational purposes through the usual establ ished procedures. In the f i r s t p lace, there are no provisions in e i ther the l e g i s -la t ion or regulat ions fo r any such appeals. However, an overwhelming majority of the p r inc ipa ls and both o f f i c i a l s of the Min is t ry admitted 45 to the existence of rather informal mechanisms by which such appeals could be made. Two major leve ls of appeal were i den t i f i ed by the respondents. The f i r s t of these was the Min is t ry o f f i c i a l s ' level o r , ra ther , the administrat ive l e v e l . This usual ly involved an appeal to the Ass is tant Superintendent of Post-Secondary Programmes and his o f f i c i a l s who are d i r ec t l y involved in the d i s t r i bu t i on of funds. The majori ty of the respondents f e l t that usual ly some form of compromise was reached at th i s l e v e l . The other level which was least often used was the p o l i t i c a l level by which a col lege council did appeal to the Deputy Min is ter or the Min is ter for more funds a f ter channels at the administrat ive level had been exhausted. The majori ty of the col lege p r inc ipa ls f e l t that local M.L .A . ' s could be used only i nd i rec t l y to inf luence budget a l l o c a t i o n s ; and th is was even more so in cap i ta l requests, e . g . , bu i ld ings , equipment, etc. There were other means, however, which col leges could use to obtain more funds i f they f e l t the funds avai lab le to them were too smal l . For example, there i s a provis ion in the l e g i s l a t i o n which allows a co l lege , which cannot cope with the funds made ava i lab le to i t , to request for over-run. For such over-run to be approved by the M in i s te r , there has to be unanimous consent of the par t i c ipa t ing school boards. F i n a l l y , the Min is ter has also indicated that i f a col lege cannot support i t s e l f , at least to i t s level of a c t i v i t i e s in the p r io r f i s c a l year with the funds a l l o t t ed to i t , i t can increase i t s t u i t i on fees. The amount of money thus raised would be 40 per cent and the Min is t ry would contr ibute the remaining 60 per cent. 46 General izat ions on the present approach to a l l oca t ing col lege  operating funds. From the discussions above on the various aspects of the present approach to a l loca t ing col lege operating funds, the fo l low-ing general izat ion could be deduced: 1. Budget a l l oca t ion decisions are based on professional judgement of the Min is ter of Education o f f i c i a l s , derived from: . knowledge of the system, and . fa i rness. 2. There are no e x p l i c i t c r i t e r i a in use for the a l l oca t ion of funds. 3. Colleges are general ly guaranteed the i r previous year 's level of revenue. 4. The major concerns of Min is t ry of Education o f f i c i a l s and col lege p r inc ipa ls in the budgets are the marginal amount of annual revenues. Performance of ind iv idual col leges in terms of government grant  receipts and internal resource a l l o c a t i o n . How have the col leges fared in terms of government grant receipts under the present approach to a l loca t ing col lege operating funds? Two ways were employed to determine the level of grant per service un i t , a service uni t being defined as one fu l l - t ime student or 3.5 part-t ime students. Table IX contains the annual to ta l number of serv ice units for each of the s i x par t i c ipa t ing col leges for the period 1972-76. The annual to ta l serv ice units for each col lege was then divided into the amount of government grants for the year to obtain the government operat-ing grants per serv ice uni t contained in Table X. TABLE IX COLLEGE ANNUAL NUMBER OF SERVICE UNITS, 1972-1976 YEAR C 0 L L E G E S ENDING AVERAGE 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 TABLE X GOVERNMENT OPERATING GRANTS PER SERVICE UNIT, 1972-1976 YEAR ENDING MARCH 31 CAMOSUN $ CAPILANO $ CARIBOO $ DOUGLAS $ C.N.C. $ OKANAGAN $ MEAN (x) $ 1972 609.00 - 1,349.00 1,078.00 1 ,324.00 1,125.00 1,097.00 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 that , on the average, the government grant per service unit to the col leges has been r i s i ng 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 igu re . The table also i n d i -cates that the government grant per service unit tends to vary widely from col lege to col lege even wi th in the same year. If we rank the col leges in terms of performance in government grants per service unit from 1 to 6, with 1 ind icat ing the col lege with the highest level of government grant per service unit and 6 the col lege with the least level on the i r averages fo r the f i ve-year per iod, we get the fo l lowing rankings (as derived from Table X , bottom l i n e ) : College Average Rank (on government grant per serv ice uni t ) College of New Caledonia Cariboo College Douglas College Okanagan College Capilano College Camosun College 1 2 3 4 5 6 It can be seen, then, that the College of New Caledonia and Cariboo College have general ly tended to receive much higher government grants per service uni t than the other co l leges , and Camosun and Capilano Colleges have fared poorly over the f i ve-year per iod, in terms of government grants per service un i t . There are several factors which could account for such var ia t ions in receipts of government grants per service un i t . Among these are: 50 the .size of the co l l ege , the geographical locat ion of the co l lege , and the geographical region served by the co l lege. Experience has shown that the smaller the co l lege , the higher the per service uni t cos t , since at a larger col lege the overhead i s spread over a greater number of students. S i m i l a r l y , col leges s i tuated in iso la ted regions, e . g . , the College of New Caledonia in the north, w i l l tend to have higher costs because of t ransportat ion and other related costs . F i n a l l y , where a col lege has programmes spread over a large geographical region, 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 factors have contributed toward the wide var ia t ions among the col leges in government grants per serv ice un i t . The second approach employed to determine the level of perfor-mance was to measure what proportion of the col lege tota l operating revenue was derived from government grants. This is shown in Table XI . It can be seen from the table that , in terms of contr ibut ions from gov-ernment grants, the best year for the col leges was 1975, when an average of 62 per cent was obtained from th is source. How is the var ia t ion among the col leges in terms of proportion of revenue derived from government grants? This can be determined by ranking the col leges on the i r f i ve-year averages. The ranking derived from the bottom l i ne of Table XI i s as fo l lows: 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 govern-ment grant rece ip ts , while Okanagan College and Camosun College have not fared quite as wel1. Idea l l y , a l l col leges should receive the same proportion of revenue from government grants. Th is , however, assumes equal f i s c a l a b i l i t y among col lege d i s t r i c t s and also an e f fec t i ve basic cost un i t , both of which are , in p rac t i ce , absent. Another fac tor which helps to bring about in some small way such a var ia t ion i s the contr ibut ion toward Debt Service Charges. And, of course, under the present method, the a b i l i t y of the p r inc ipa l to bargain ( i . e . , how convincingly he puts his case before the o f f i c i a l s of the Min is t ry of Education) inf luences the level of grant he receives for his co l lege. In th is sec t ion , we also take a look at how the col leges have a l located the i r revenues ( in th is case the to ta l operating revenues) among the various expenditure categor ies. Table XII indicates that , on the average, ins t ruc t ion receives the highest proportion of col lege expenditures. The proportion taken by th is 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 isen from 60 per cent in 1973 to 64 per cent in 1976--the average for the four-year period was 63 per cent. On the other hand, the proportion of the expenditures devoted to administrat ion has been decl in ing over the 1973-76 per iod, from i t s highest of 11 per cent in 1973 to i t s lowest of 9 per cent in 1976. The proportions spent in l i b ra ry and student services have remained re l a t i ve l y stable at 7 per cent and 8 per cent, respect ive ly . Expenditures on Plant Operation have r isen from 4 per cent in 1973 to 6 per cent in 1976. Figure 2 shows graphica l ly some of these trends. Tables XIII and XIV show the d i s t r i bu t i on of expenditures fo r ind iv idual col leges on Per Service Unit and proportion of to ta l expen-di ture bas is . From both of these tab les , i t could be seen that Capilano College and College of New Caledonia tend to spend much higher propor-t ions of t he i r revenues on administrat ion than the other co l l eges , while Camosun College spent the least proportion on administrat ion fo r the f i ve years under study. At Capilano Col lege, the tables indicate that the high expenditures on administrat ion were achieved at the expense of i ns t ruc t i on , while at the College of New Caledonia they were achieved at the expense of plant operat ion. The strengths of the present method. Respondents ( i . e . , the s ix col lege p r inc ipa ls and the two Min is t ry of Education o f f i c i a l s ) were asked to ident i fy what they perceived as the strengths of the present approach to d i s t r i bu t i ng ava i lab le government funds among the co l leges. Table XV contains the summary of the i r responses. 1. Because of lack of uniformity in the. format used for report ing expenditures fo r 1972 by the co l leges , i t was not possible to determine the averages for that year. 55 % 60 U 70 h 2§1 xzx oeo «860 h So L AO L 30 20 L 10 h 0 -x Instruction Administration Student Services Library 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 AVERAGE & CATEGORIES CAMOSUN CAPILANO CARIBOO DOUGLAS C.N.C. OKANAGAN $ $ _ $ $ $ $ $ 1973: Administrat ion Instruct ion Plant Operation Library Student Service Other 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. 1,515. 46. 140. 146. 687. TOTAL 1,852.53 1,935.57 2,921. 1974: Administrat ion Instruct ion Plant Operation Library Student Service Other 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. 1,582. 36. 119. 140. 423. TOTAL 2,182.90 1,797.11 2,469. 57 229.83 371.84 282.09 265.71 98 1,479.00 1 ,752.07 1 ,754.57 1,438.25 24 160.87 65.34 124.54 89.87 81 210.75 245.70 154.41 174.83 84 140.06 265.70 178.11 172.98 06 164.47 8.72 131.27 263.20 50 2,384.98 2,709.37 2,624.99 2,404.84 35 225.35 342.26 227.42 232.45 06 1,569.95 1,572.33 1,475.69 1,441.72 10 170.29 67.13 95.45 103.87 21 240.47 217.34 125.67 163.72 80 175.37 227.47 120.63 167.21 88 151.48 118.67 26.75 157.56 40 2,532.91 2,545.20 2,071.61 2,266.53 TABLE XIII (continued) YEAR ENDING MARCH 31 AVERAGE & CATEGORIES CAMOSUN CAPILANO CARIBOO DOUGLAS C.N.C. OKANAGAN $ $ $ $ $ $ $ • 1975: Administrat ion 178. 64 305. 47 167.25 220.83 269. 53 337.93 246.61 Instruct ion 1,550. 55 1,377. 28 1 ,595.08 1,536.39 2,060. 39 1,693.43 1,635.49 Plant Operation 90. 51 107. 72 38.76 144.58 91. 17 43.43 86.03 Library 151. 99 165. 03 92.16 238.62 223. 93 128.90 166.77 Student Service 232. 74 204. 52 162.70 161.96 316. 64 135.42 202.33 Other 158. 59 231. 73 573.67 73.20 152. 17 35.87, 204.21 TOTAL 2,363. 02 2,391. 75 2,629.62 2,375.40 3,113. 83 2,374.98 2,541.44 1976: Administrat ion 166. 06 315. 56 287.67 175.00 498. 58 245.20 281.35 Instruct ion 2,343. 22 1,403. 23 2,139.85 1,976.14 2,555. 46 2,110.11 2,088.00 Plant Operation 289. 94 204. 23 121.47 183.60 220. 92 97.26 186.24 Library 168. 78 199. 14 227.89 280.08 332. 33 116.08 220.72 Student Service 166. 65 225. 40 340.04 188.04 479. 60 101.32 250.18 Other 226. 12 194. 53 256.63 198.72 62. 64 446.09 230.79 TABLE XIV DISTRIBUTION OF COLLEGE OPERATING EXPENDITURES, 1973-1976 YEAR ENDING MARCH 31 AVERAGE & CATEGORIES CAMOSUN CAPILANO CARIBOO DOUGLAS C.N.C. OKANAGAN % % % % % % % 1973: Administrat ion 5.6 Instruct ion 59.0 Plant Operation 3.6 Library 4.9 Student Services 7.9 Other 18.9 TOTAL 99.9 1974: 11.4 53.4 3.9 10.7 8.3 12.3 100.0 13.2 51.9 1.6 4.8 5.0 23.5 100.0 9.6 62.0 6.7 8.8 5.9 6.9 99.9 13.7 64.7 2.4 9.1 9.8 0.3 100.0 10.7 66.8 4.7 5.9 6.8 5.0 99.9 10. 59. 3. 7. 7. 11. 100.0 Administrat ion Instruct ion Plant Operation Library Student Services Others TOTAL 6.1 63.9 3.8 5.3 8.5 12.4 100.0 16.7 58.8 9.5 9.1 8.5 (2.6) 100.0 6.8 64.1 1.5 4.8 5.7 17.2 100.1 8.9 62.0 6.7 9.5 6.9 6.0 100.0 13.4 61.8 2.6 8.5 8.9 4.7 99.9 11.0 71.2 4.6 6.1 5.8 1.3 100.0 10.5 63.6 4.8 100.0 TABLE XIV (continued) YEAR ENDING MARCH 31 AVERAGE & CATEGORIES CAMOSUN CAPILANO CARIBOO DOUGLAS C.N.C. OKANAGAN % % % % % % % 1975: Administrat ion 7.6 12.8 6.4 9.3 8.7 14.2 9.8 Instruct ion 65.6 57.6 60.7 64.7 66.2 71.3 64.4 Plant Operation 3.8 4.5 1.5 6.1 2.9 1.8 3.4 Library 6.4 6.9 3.5 10.0 7.2 5.4 6.6 Student Services 9.8 8.6 6.2 6.8 10.2 5.7 7.9 Other 6.7 9.7 21.8 3.1 4.9 1.5 8.0 TOTAL 99.9 100.1 100.1 100.0 100.1 99.9 100.1 1976: Administrat ion 4.9( 6.1)* 12.4(13.3) 8.5( 8.7) 5.8( 8.4) 12.0(12.0) 7.9(11.0) 8.6 Instruct ion 69.7(64.6) 55.2(56.3) 63.4(60.0) 65.8(63.6) 61.6(63.6) 67.7(69.2) 63.9 Plant Operation 8.6( 5.0) 8.0( 6.5) 3.6( 2.1) 6.1( 6.4) 5.3( 3.3) 3.1( 3.6) 5.8 Library 5.0( 5.4) 7.8( 8.6) 6.8( 5.0) 9.3( 9.4) 8.0( 8.2) 3.7( 5.3) 6.8 Student Services 5.0( 7.8) 8.9( 8.6) 10.1( 6.8) 6.3( 6.5) 11.6(10.1) 3.3( 5.4) 7.5 Other 6.7(11.2) 7.7( 6.8) 7.6(17.5) 6.6( 5.7) 1.5( 2.9) 14.3( 5.5) 7.4 TOTAL 99.9 100.0 100.0 99.9 100.0 100.0 100.0 Averages fo r the four years in parentheses. 58 TABLE XV PERCEIVED STRENGTHS OF THE PRESENT METHOD OF DISTRIBUTING AVAILABLE GOVERNMENT FUNDS AMONG THE COLLEGES TYPE OF STRENGTH RESPONSES NUMBER (N = 8 ) 1 PERCENTAGE' F l e x i b i l i t y 62.5 Development of Trusting Relat ionship between Min is t ry and Colleges Other None 25.0 25.0 25.0 Six col lege p r inc ipa ls plus two Min is t ry o f f i c i a l s . Percentages do not add up to 100 v e r t i c a l l y since respondents could ident i fy more than one strength. These responses came from only col lege p r i nc ipa l s . 59 The most frequently i d e n t i f i e d strength, f l e x i b i l i t y , was id e n t i f i e d by both o f f i c i a l s of the Ministry of Education and three of the six 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 for unique problems of individual colleges to be considered in the d i s t r i b u t i o n of funds. One principal and one Ministry o f f i c i a l i d e n t i f i e d the second strength. Two principals did not, however, see any strength in the present method. In f a c t , one of these principals expressed his doubts as to the extent to which the uniqueness of the colleges were consid-ered, i . e . , the strength of f l e x i b i l i t y . Here are his words: I hear the Department (Ministry) say they consider the uniqueness of individual colleges (in 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 (Ministry) operate on the basis of ignorance--what do they r e a l l y know about the uniqueness of, say, th i s college? Maybe they have some perception of i t , but th e i r perception of our uniqueness may be quite different 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 Ministry 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 in 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 for colleges to operate to the best advantage of the students (Ministry 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 (Ministry 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 (Ministry of Education o f f i c i a l ) ; d) It 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 inc ipa ls and the two Min is t ry of Education o f f i c i a l s are contained in Table XVI. A large majority of the p r inc ipa ls (67 per cent) f e l t that the absence of allowance for at least a medium-range academic planning was a weakness in the present method. None of the Min is t ry o f f i c i a l s saw th is as a major weakness. In f a c t , one of the Min is t ry o f f i c i a l s pointed out that since col leges need only worry about marginal revenues from year to year , there was s t i l l room for some planning at the col lege l e v e l . This statement from the o f f i c i a l is debatable, however, since i t could be argued that knowledge of th is marginal revenue i s , in f a c t , the c ruc ia l element in any planning process at the col lege l e v e l . Three of the s ix col lege p r inc ipa ls and one o f f i c i a l of the Min is t ry agreed that the present method was rather too subject ive. Other i den t i f i ed weaknesses are given below. The sources of the weak-nesses are given in parentheses: a) Comparison of grants to col leges from year to year o r . between col leges becomes a f u t i l e exercise under t he . present method (Min is t ry o f f i c i a l ) . (This i s supported by evidence in th is study—see the sect ion on "Performance of Individual Colleges in Terms of Government Grants Receipts and Internal Resource A l l oca t i on " in th is chapter . ) ; b) Results in inequitable treatment of col leges (col lege p r i n c i p a l ) . c) There i s no incent ive to be e f f i c i e n t under the present method since surpluses a r i s ing out of e f f i c iency go to the M in i s t r y , and also your e f f i c i e n t level becomes the base for determining the fo l lowing year 's level of grant (col lege p r i n c i p a l ) ; d) A pr inc ipa l has to be a good bargainer to be e f fec t i ve in obtaining the funds he needs for his col lege under the present method (col lege p r i n c i p a l ) . 61 TABLE XVI t PERCEIVED WEAKNESSES OF THE PRESENT METHOD OF DISTRIBUTING AVAILABLE GOVERNMENT FUNDS AMONG THE COLLEGES TYPE OF WEAKNESS RESPONSES NUMBER (N = 8)1 PERCENTAGE2 Does not al low for medium/ long-term academic planning Too subject ive Does not al low for consistent development of p r i o r i t i e s at the col lege level Tends to create some uneasiness/ tension among the col leges Lack of input from the col leges Other 4' 4 5 50.0 50.0 25.0 25.0 25.0 62.5 Six col lege p r inc ipa ls plus two Min is t ry o f f i c i a l s . Percentages do not add up to 100 ' ve r t i ca l l y since respondents could ident i fy more than one weakness. These responses came from only col lege p r i nc ipa l s . 62 In sp i te of a l l these perceived weaknesses of the present method, the majority of the p r inc ipa ls (67 per cent) f e l t that they had e i ther been e f fec t i ve or very e f fec t i ve in obtaining the funds they needed to operate the i r col leges 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 fec t i ve only occasion-a l l y , while another f e l t he had not been e f fec t i ve in obtaining the required funds fo r his co l lege. Government Controls over College Operating Funds The present study attempts to examine the nature and extent of government controls over s i x major areas of col lege operating funds: a) Level of t u i t i on fees the col leges charge; b) Sa lar ies of the ins t ruc t iona l s t a f f ; c) Sa lar ies of the members of the adminis t rat ion; d) Sabbatical leaves and other leaves of absence; e) Transfer of funds between programmes ( i . e . , Univers i ty Transfer and Career /Technical ) ; and f ) Transfer of funds between other d i f fe rent expenditure categories ( e . g . , administ rat ive vs. plant operations or l i b ra r y or student se rv ices ) . Apart from the issue of the level of t u i t i on fees charged by co l leges , an important question which faces analysis in th is sect ion i s : A f ter funds have been a l located to a par t i cu la r co l l ege , 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 eg i s l a t i on and regulat ions — i t also sought to ident i fy other ind i rec t 63 and informal ways, e . g . , budget a l loca t ions and in f luence, by which col lege operating funds were contro l led by the government. Level of t u i t i on fees. The l eg i s l a t i on (Publ ic Schools Ac t , 1975) provides that the col lege council "determines the fees fo r ins t ruc-t ion to be paid by, or in respect o f , the students attending the Col lege" (Section 258(d)) without any form of controls from the M in is t ry . Both o f f i c i a l s of the Min is t ry emphasized that t h i s , in f a c t , was the prac-t i c e . However, only t w c o f the s ix p r inc ipa ls agreed that there were no controls at a l l from the Min is t ry on the level of t u i t i on fees charged. The remaining four p r inc ipa ls argued that even though there were no formal con t ro ls , the Min is t ry might sometimes i nd i r ec t l y inf luence the leve ls of t u i t i on fees since they could t i e addi t ional grants to the col lege to increases in t u i t i on fees. Asked whether they agreed with the ex is t ing con t ro ls , a l l the respondents ( i . e . , col lege p r inc ipa ls and Min is t ry o f f i c i a l s ) answered in the a f f i rmat ive . Hence, no matter how the par t ic ipants perceived the controls on level of t u i t i on fees, they thought the ex is t i ng pract ice 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 col lege counci ls the power to f i x sa la r ies of the ins t ruc t iona l s ta f f (and other s t a f f ) . Both o f f i c i a l s of the Min is t ry stated that in pract ice th is was the case. One o f f i c i a l agreed with the p rac t i ce , but the other o f f i c i a l expressed some concerns as to the leve l of annual sa lary increases often granted the ins t ruc t iona l s ta f f under the present p rac t i ce . 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 facu l ty sa la r i es . The overwhelming majority (83 per cent) agreed that there were some l imi ted or ind i rec t controls over facu l ty s a l a r i e s , since any annual salary increases were highly inf luenced by the decis ion of the Min is t ry as to how much money was a l located to ins t ruc t ion in the budget. The one pr inc ipa l who did not perceive any controls over facu l ty sa la r ies expressed disagreement with the present pract ice and stated that he would l i k e to see some cont ro ls . Of the f i ve who per-ceived con t ro l s , only one agreed with the present pract ice while a l l the remaining disagreed. They wanted to see no controls over facu l ty s a l a r i e s . Some argued that under the present p rac t i ce , true f ree c o l l e c -t i ve bargaining in the col lege system is great ly hampered. Sa lar ies of members of the administ rat ion. As is the case with sa la r ies of the ins t ruc t iona l and other s t a f f , the l eg i s l a t i on gives the col lege counci l the power to f i x sa la r ies of a l l members of the administ rat ion. One o f f i c i a l of the Min is t ry stated that th is was, in f ac t , the case in p rac t i ce . The other, however, denied th is and stated that on occasion i f the Min is t ry f e l t that the request put forward by the col lege for administrat ion was too unreasonable, the Min is t ry did reduce i t . Both o f f i c i a l s , however, did agree on the ex is t ing pract ice as contained in the l eg i s l a t i on and as pract iced in r e a l i t y . Only one of the s i x p r inc ipa ls did not see any controls on sa la r ies of the members of the adminis t rat ion, and he agreed to th is p rac t i ce . The remaining large majority of the p r inc ipa ls (83 per cent) saw e i ther l imi ted d i rec t controls or some form of ind i rec t controls 65 from the Min is t ry of Education. The majority of these (three out of the f ive) agreed with the ex is t ing pract ice since they f e l t the Min is t ry should have some control or at least some inf luence on how much of the col lege revenue was a l l o t t ed for administrat ive s a l a r i e s . However, the remaining two pr inc ipa ls f e l t the Min is t ry should not have any con-t r o l s over sa la r ies of the administrat ion since they f e l t such controls often led to personal judgements by Min is t ry o f f i c i a l s on whether or not col lege administrators deserved the level of sa la r ies they had been offered by the col lege counc i ls . Sabbatical leaves and other leaves of absence. The l eg i s l a t i on (Section 129-A) and the Regulation (Section 56) empower the Board of School Trustees (who may delegate such function to the col lege counci l ) to grant sabbatical leaves, maternity leaves, or any acceptable purpose leave up to a period of s i x months with pay. However, for such leaves in excess of s ix months, they are subject to approval by the Lieutenant-Governor-In-Council . Other leaves of shorter periods of duration are given at the d iscre t ion of the Board (Regulat ion, Section 56). In p rac t i ce , however, only one pr inc ipa l saw no controls on sabbatical leaves. The overwhelming majori ty of the p r inc ipa ls (83 per cent) saw the Min is t ry as having d i rec t or ind i rec t controls on sabbat i -cal leaves. One of the o f f i c i a l s of the Min is t ry did agree with the majority of col lege p r inc ipa ls that there i s some control on sabbatical leaves in the sense that , when such leaves appear in the budget as a l i ne item, the Min is t ry could decide to delete i t . Th i s , he explained, did not mean, however, that the Board/Council couldn' t grant such leaves; i t cou ld , in f a c t , take money from elsewhere to support such leaves. 66 The one pr inc ipa l who d idn ' t see any controls on sabbatical leaves from the Min is t ry of Education indicated his desire to see a prov inc ia l po l icy on the subject. Of the f i ve p r inc ipa ls perceiving con t ro ls , three did agree with such p rac t i ce , while two objected to i t . Both o f f i c i a l s of the Min is t ry supported the present pract ices on sabbatical leaves. A majori ty of the p r inc ipa ls (67 per cent) did not perceive any M in i s te r i a l controls over other leaves of absence; an overwhelm-ing majority of a l l the p r inc ipa ls (83 per cent), including the three who perceived con t ro ls , agreed with the present prac t ices . Though one o f f i c i a l of the Min is t ry perceived an ind i rec t control over other leaves of absence, both did agree with the ex i s t -ing p rac t i ces . Transfers of monies between programmes. There are, t y p i c a l l y , four major programmes in almost a l l co l leges: Univers i ty Transfer , Career/Technical , Vocat ional , and Community Education Serv ice. Com-munity Education Service is general ly sel f -support ing with the Min is t ry contr ibut ing a small proportion of the cost . The government has recent ly moved to a system of approving a net amount for the operation of th is programme. By th is system, the government guarantees to pay a net di f ference between revenues and expenditures. The col lege i s then free to spend as much as i t sees f i t , so long as the di f ference 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 rec t government controls on Vocational funds. There cannot be any t ransfer of funds between Vocational programmes and the other two programmes. However, col leges have d iscret ionary powers in t ransfer r ing funds between the remaining two programmes—University Transfer and Career/Technical . In f ac t , the Min is t ry has recent ly combined these two programmes for funding purposes. Perceptions of p r inc ipa ls and Min is t ry of Education o f f i c i a l s on these controls were very much the same as described above. The majori ty of the p r inc ipa ls (67 per cent) supported the ex is t ing cont ro ls . The remaining p r i n c i p a l s , however, expressed disagreement with the i r i n a b i l i t y to t ransfer funds from Vocational programmes on a rather phi losophical bas is . They argued that the manner in which the Voca-t iona l programmes (and students) were supported and the i n a b i l i t y of p r inc ipa ls to t ransfer some monies out of there when they saw f i t showed,or at least appeared to show, that society as a whole put higher value on these programmes than the other programmes. They questionned the rat ionale for such higher value placed on Vocational programmes. Both o f f i c i a l s of the Min is t ry of Education expressed agreement with the ex is t ing control p rac t ices . Transfers of monies between other expenditure categor ies. The other major expenditure categories in the col lege budgets are: Admin-i s t r a t i o n , Plant Operation, L ib ra ry , and Student Serv ices. The question i s , what d isc re t ion does a col lege have over t ransfers of funds between these categories and from any of these categories to i ns t ruc t i on , and vice versa. 68 After funds had been a l located to the d i f ferent categories in the budget, no t ransfers were allowed without p r io r approval from the Min is t ry . Usua l ly , t ransfers from any of the four categories mentioned above to ins t ruc t ion or from administrat ion to any of the other categor-ies were al lowed. However, there were s t r i c t controls on any other t rans fe rs , and approval of the Min is t ry was required for these. A l l the respondents ( i . e . , the s ix p r inc ipa ls and the two Min is t ry o f f i c i a l s ) perceived the controls as described above to be, in f a c t , the p rac t i ce ; and both Min is t ry of Education o f f i c i a l s agreed to the need for such cont ro ls . The majority of the p r inc ipa ls suggested changes in the ex is t ing p rac t i ce . Other. Another major area which was i den t i f i ed by one .p r inc i -pal as a means used by the government to control col lege operation and hence operating budgets, espec ia l l y in the Lower Mainland, was new programme development. He argued that given the number of non-universi ty post-secondary i ns t i t u t i ons in the area, a programme which could come to his col lege might be given to some other i n s t i t u t i o n - - t h i s usual ly being done without any consul tat ion with the co l lege. Conclusion. Thus f a r , we have seen that under the present system, a f ter operating funds had been a l located to a co l lege , i t did not jus t go ahead and spend such funds as i t saw f i t . There were some controls as to how these funds were spent. Very few of these controls were d i rec t or required by l e g i s l a t i o n or regulat ions; many were i nd i r -ec t , resu l t ing from budget a l l oca t i ons , while a few were through informal inf luence. 69 There were di f ferences in perceptions on some occasions between p r i n c i p a l s , on the one hand, and Min is t ry o f f i c i a l s , on the other, as to the extent of government controls over col lege operating funds. D i f f e r -ences sometimes even existed among the p r inc ipa ls themselves on the i r perceptions of the cont ro ls . The majori ty of the p r inc ipa ls tended to support most of the ex is t ing cont ro ls . Apart from one instance (controls over facu l ty sa la r ies ) where one Min is t ry o f f i c i a l expressed some concern as to a seeming lack of con t ro ls , both o f f i c i a l s of the Min is t ry were in agree-ment with the present control p rac t ices . 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 col lege p r inc ipa ls and Min is t ry of Education o f f i c i a l s would l i ke to see in the present sys-tem of col lege f inancing in B r i t i s h Columbia. Following the format of the preceding chapter, th is chapter i s organized under three sect ions: Changes to sources of col lege operating revenues; Changes to the method of d i s t r i bu t i ng the ava i lab le government funds among the co l leges ; and Changes to government controls over col lege operating funds. Envisaged Changes to Sources of College Operating Revenues This sect ion attempts to determine what col lege p r inc ipa ls and Min is t ry of Education o f f i c i a l s perceived as desirable sharing arrangements between Prov inc ia l Government grants, loca l pa r t i c ipa t ing school board(s) tax cont r ibu t ion , and student t u i t i on fees toward col lege operating revenues. On the question of t u i t i on fees , a l l s ix p r inc ipa ls and one o f f i c i a l of the Min is t ry agreed that there ought to be some tu i t i on fees. The majority of these respondents, however, did not agree that there 70 71 should be a f ixed proportion of the operating revenue to be derived from th is source. Many f e l t that a pre-set proportion would be unfa i r to some students since some programmes and col leges in some locat ions are more expensive to operate. In other words, such pract ice would contradict the p r inc ip le of equal access. A l l of the seven res-pondents agreed that t u i t i on fees should be maintained at a minimum proportion of to ta l col lege operating revenues. The eighth respondent decl ined to comment on the question of t u i t i on fees. Table XVII con-ta ins the summary of the responses. As to the sources of the remaining operating funds, the majori ty of the p r inc ipa ls (67 per cent) f e l t that for the two major programmes under study, i . e . , Univers i ty Transfer and Career/Technical , a l l the funds should come from the Prov inc ia l Government. They emphasized that the local control argument c a l l i n g for local contr ibut ions does not ex is t any more s ince , in r e a l i t y , everything i s contro l led from the Min is t ry . One of the p r inc ipa ls argued that maybe in the area of community education where he saw true local con t ro ls , there could be some shared costs o f , say, 50/50 or even 80/20 between the government and the local pa r t i c ipa t ing school board(s). The two remaining pr inc ipa ls and both o f f i c i a l s of the M in i s t r y , however, f e l t that the present arrangement of shared costs between the Prov inc ia l Government and the loca l par t i c ipa t ing school board(s) . should be maintained. They a l l f e l t that th is was necessary to maintain some local inf luence on the operation of the co l lege. The pr inc ipa ls among these respondents, however, argued that the loca 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 (N = 8) TYPE OF OBSERVATION NUMBER PERCENTAGE Abol ish Tui t ion Fees Maintain Tui t ion Fees at a minimum/nominal proportion of to ta l operating revenue 7 87.5 Increase Tui t ion Fees to ra ise i t s share as a proportion of col lege operating revenue No response TOTAL 1 8 12.5 100.0 73 TABLE XVIII OBSERVATIONS OF RESPONDENTS ON COLLEGE OPERATING COST SHARING ARRANGEMENTS BETWEEN THE PROVINCIAL GOVERNMENT AND LOCAL PARTICIPATING SCHOOL BOARD(S) RESPONSES (N = 8) TYPE OF OBSERVATION NUMBER PERCENTAGE Prov inc ia l Government Support Only 4 50.0 Shared contr ibut ion between the Prov inc ia l Government and loca l pa r t i c ipa t ing school board(s) 4 50.0 Local pa r t i c ipa t ing school board(s) support only TOTAL 8 100.0 74 In conclus ion, i t could be stated that respondents were in agreement on the continuing use of student t u i t i on fees as a source of col lege funding. However, respondents were s p l i t on the form of cost sharing arrangements between the Prov inc ia l Government and local p a r t i -c ipat ing school boards. F i f t y per cent bf the respondents advocated 100 per cent Prov inc ia l Government support, while the remaining 50 per cent argued the case for shared contr ibut ions between the Prov inc ia l Government and local par t i c ipa t ing school board(s). Envisaged Changes to the Method of D is t r ibu t ing Avai lab le Government Funds  Among the Colleges for Operating Purposes Granted that there i s going to be continuing Prov inc ia l Govern-ment grants toward col lege operating costs in the face of l imi ted govern-ment revenues, w i l l the present approach to d is t r ibu t ing government funds among the col leges be appropriate fo r the future? If not, what changes are ca l led fo r in the method? Is a completely new system of fund d i s -t r ibu t ion ca l led for? These are the questions th is sect ion attempted to explore. In summary, three major conclusions emerge from the responses of the p r inc ipa ls and the o f f i c i a l s of the Min is t ry . These are: 1) College pr inc ipa ls and Min is t ry o f f i c i a l s do not favour the introduct ion of a f inance formula for the purpose of d i s t r i b -ut ing ava i lab le government funds among the co l leges ; 2) College pr inc ipa ls and Min is t ry o f f i c i a l s do not favour the use of an intermediary body ( e . g . , a col lege counci l ) for the pur-pose of d i s t r i bu t ing ava i lab le government funds among the co l leges ; and 75 3) Respondents (pr inc ipa ls and Min is t ry o f f i c i a l s ) f e l l into two major groups on the desired approach to be used for d i s t r i bu t -ing ava i lab le government funds among the co l leges : a) Those who would l i ke to see continuing use of the present approach with cer ta in provisions incorporated (50 per cent of p r inc ipa ls 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 rev is ion 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 fo l lowing t i t l e s : a) A Modi f ied Form of the Present Approach to A l loca t ing College Operating Funds; and b) A l ternat ives to the Present Approach. A modified form of the present approach. Respondents who advo-cated th is modified approach suggested several factors which could be incorporated in the present method to bring about the desired approach to a l loca t ing future government funds among the co l leges. These are given below. The percentages.of respondents in th is group suggesting the factors are given in parentheses (the to ta l number of respondents in th is group being four ) : 1. A basic cost un i t , so as to be able to : a) estimate d i spa r i t i es among co l leges , and b) determine equitable treatment of col leges (75%). 2. Increased input from the col leges (50.0%). 3. Standardizat ion of data from the col leges (50.0%). 76 4. Possible ty ing together of capi ta l budgets with the operating budgets (50.0%). 5. Allowance for three to f i ve years ' academic planning (50.0%). 6. Allowance for separate budgeting for new programmes at the i n i t i a l developmental stage (25.0%). Addit ion of these factors was seen, by the respondents as going a long , way toward improving the present method of fund a l l oca t ion among the co l leges. A l ternat ives to the present approach. Two pr inc ipa ls suggested two approaches which, in the w r i t e r ' s op in ion, 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 te rnat ive to the present method, since the present method can be revised to take care of the suggested ideas. This method is ca l led "The Three-Element Approach to College Budgeting." The second approach being presented which incorporates ideas from P . P . B . S . i s ca l led "A Form of Programme Budgeting Approach." 1 . The Three-Element Approach to College Budgeting: Like several col lege p r i n c i p a l s , th is pr inc ipa l saw the need to move to at least a medium range budgeting period of two to three years for the co l leges. The framework he envisaged for 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 for contingencies and for expansion in the ex is t ing programmes; and c) A set amount for 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 pr inc ipa l who suggested th is approach envisaged a scheme which would: a) Allow col leges to do some advance planning in a.medi>um/ long-term bas i s ; and b) Involve the Min is t ry of Education in the d i s t r i bu t i on and control of funds only at the macro level of budget dec is ion-making. In such a scheme, he argued, the Min is t ry would not have to make decisions on "whether a col lege gets an extra ten thousand do l la rs for an addi t ional counsel lor or not--a decis ion which should be made instead at the col lege l e v e l . " His proposal c a l l s f o r : a) Determination of a unit of cost measure for each col lege based on: . The general object ives of the i n s t i t u t i o n ; and . The general programme mix. b) Determination of cost adjustments for other general f ac to rs , such as : . Geographical locat ion of the i n s t i t u t i o n ; . S ize of the i n s t i t u t i o n ; and . Age of the i n s t i t u t i o n . From these fac to rs , the Min is t ry 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, leay-ing the internal fund a l l oca t ion decisions to the col lege level o f f i c i a l s . 78 Envisaged Changes to Government Controls over College Operating Funds General ly , the majority of the Pr inc ipa ls and both o f f i c i a l s of the Min is t ry expressed sa t i s fac t i on with the ex is t ing controls over col lege funds. However, changes were suggested by some pr inc ipa ls in cer ta in spec i f i c areas of cont ro ls . Al together, the comments from the • respondents can be put into four main categor ies: 1) Questioning of controls over internal a l locat ions (three p r i n c i p a l s ) ; 2) Maintenance of the status quo (one pr inc ipa l and the two Min is t ry o f f i c i a l s ) ; 3) Absence of framework for proper del ineat ion 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 br ie f d iscussion of each of these categories i s presented. Controls over internal a l l oca t i ons . The concerns expressed here centred on the i n a b i l i t y of col lege o f f i c i a l s to t ransfer funds between d i f ferent categories of expenditures without approval from the Min is t ry of Education. This was not in reference to t ransfers from Vocational to other areas, although one p r i n c i p a l , on ph i losophi -cal grounds, bel ieved that col lege o f f i c i a l s should be able to make such t rans fers . Spec i f i c comments by these pr inc ipa ls i l l u s t r a t e these concerns: 79 Respondent #1: There is° not that much d i rec t controls [ s i c ] from the [Min is t ry ] 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 is a l located wi th in the col lege. Respondent #2: . . . maybe from cer ta in categories of expenditures, when there i s money ava i l ab le , the col leges should be allowed to t ransfer i t to other needed areas. This should, however, be dependent upon ind iv idual s i tua t ions . Respondent #3: . . . I feel that whoever provides the money, be they the government or the loca 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 col leges or at least to the counc i l , espec ia l l y as to the t ransfer of monies from one area to the other, bearing in mind, of course, that whatever changes a col lege makes form the basis for the fol lowing year 's budget. Maintenance of the status quo. Both o f f i c i a l s of the Min is t ry of Education and one pr inc ipa l f e l t that the ex is t ing controls need no changes at a l l . Respondents had d i f fe rent reasons, however, fo r holding th is view. One o f f i c i a l of the Min is t ry s tated: I don't r e a l l y fee l that the col leges are pa r t i cu la r l y inh ib i ted in the way they spend the i r monies, so I don't think that they have to have any more d iscre t ion than they have now. The p r i n c i p a l , on the other hand, put his posi t ion in th is way: I personal ly wouldn't want to see much more d iscre t ion given to the co l leges. The only reason I say th is i s that the col leges haven't taken up the 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 col lege to es tab l ish 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 ed 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 for a framework for cont ro ls . One pr inc ipa l argued that what was rea l l y needed was a proper framework for the exercise of controls wi thin which both the Min is t ry and the col leges would feel comfortable operat ing. He expressed his point of view in the fo l lowing: If the Min is t ry spe l l s out the object ives and p r i o r i t i e s i t wanted out of the col lege system, then each col lege could indicate i t s object ives and p r i o r i t i e s . If these are cons is-tent with the object ives and p r i o r i t i e s of the tota l system, then the Min is t ry could deal only at the macro level in provid-ing the monies, and leave the col lege counc i l / co l lege adminis-t ra t ion to operate with l i t t l e cont ro ls . The only element that would be required i s that of reporting and accounting for the use of the funds. The onus would be on the i ns t i t u t i on to demonstrate that i t d i d , in f ac t , use the monies a l l o t t ed i t to meet the object ives and p r i o r i t i e s that i t had estab-l i s h e d ; and that these were consistent with the object ives and p r i o r i t i e s of the government. There wouldn't be any need for fur ther cont ro ls . The absence of a framework for controls also led to other concerns, two of which were expressed by another col lege p r i n c i p a l . The f i r s t concern was that the Min is t ry sometimes exercised controls over areas where, in the opinion of th is p r i n c i p a l , the Min is t ry d idn ' t have any j u r i s d i c t i o n . An example of such areas, he noted, was col lege counci l expenditures for col lege council work. He argued that such control was even more d i f f i c u l t to accept when i t d idn ' t come from the p o l i t i c a l arena but, rather, from the c i v i l servants. The second concern expressed by th is p r i n c i p a l , which also appears to flow from the absence of framework fo r con t ro ls , was the lack of knowledge by the col lege council as to where they had d i sc re -t ion and where they d idn ' t . 81 Controls over surpluses. One pr inc ipa l argued that the ex is t ing pract ices in controls over surpluses d i d , in f a c t , encourage ine f f i c iency and suggested that the col leges be given complete control over the 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 col lege 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 col lege should be rewarded by keeping the money saved, i . e . , i f by e f fec t i ve management the col lege saves money, then by r ight that surplus should go to that co l lege. Right now we don't have that r igh t . If we have any surp lus, i t goes to the government. Hence there is no incent ive to be e f f i c i e n t . In summary, then, i t could be stated that the only area where col leges in general would l i k e to see some changes was t ransfers of funds between the d i f fe rent expenditure categor ies. Minori ty concerns were expressed over controls on surpluses and on cer ta in areas perceived to be outside the author i ty of the M in is t ry . The wr i t e r , however, shares the opinions expressed by some respondents that e x p l i c i t s ta te -ment of object ives and p r i o r i t i e s of the col lege system p rov inc ia l l y and at col lege level which would lead to a provision of some framework for controls would go a long way in helping to a l l ev i a te problems in the ex is t ing cont ro ls . CHAPTER V CONCLUSIONS AND RECOMMENDATIONS The f i r s t part of th is 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 f inancing the co l leges. Conclusions Sources of col lege funds. The col leges in B r i t i s h Columbia have been depending on three major sources fo r the i r operating revenues. These are: the prov inc ia l government grants, local school boards' con-t r i bu t i ons , and student fees. Student fees as a proportion of col lege operating revenues have cons is tent ly been decl in ing over the f i ve-year period under study--1972-76. Since 1973, the proportion of col lege operating funds derived from government grants has been r i s i n g while local school boards' contr ibut ions have been f a l l i n g ; however, th is trend changed s l i g h t l y in 1976 when the proportional contr ibut ions from loca l school boards rose s l i g h t l y resu l t ing in a corresponding decl ine in government's proportional contr ibut ion to col lege operating funds. There was no c lear cut view from th is study as to the d i rec t ion the government should go in deciding on what should be the major sources of operating funds for the co l leges. The only general agreement from the respondents was that a reasonably low tu i t i on fee should continue to be charged and that th is should not be a f ixed proportion of the 82 83 operating revenue of the col leges since such pre-set proportion would be unfa i r to some students given the fact that some programmes and col leges in some locat ions are more expensive to operate than others. Opinion was divided among the respondents on the place of local contr ibut ions in funding the two programmes, i . e . , Univers i ty t ransfer and Career/Technical . The majority of the p r inc ipa ls (rep-resenting 50^per cent of the respondents) f e l t that for these two programmes, there should be only two sources of operating funds, namely, government grants and t u i t i on fees. These respondents f e l t that the local control argument, which was in the past used to support local cont r ibut ions, was not r ea l l y v a l i d , since control current ly was very much in the hands of the Min is t ry . Added to t h i s , they argued, was the problem of unequal d i s t r i bu t i on of f i nanc ia l burden on d i f ferent l o c a l i t i e s when such local school board contr ibut ions were required. Hence, local school board contr ibut ions to these programmes, they suggested, should be discont inued. The remaining 50 per cent of respondents including the two o f f i c i a l s of the Min is t ry f e l t that the ex is t ing arrangement for shared costs between the prov inc ia l government and local pa r t i c ipa t ing school boards should be maintained so as to ensure some local inf luence on the operation of the co l leges. It was general ly f e l t among them, how-ever, that the local share as i t then existed could be reduced. Method for d i s t r i bu t i ng ava i lab le government funds among co l leges. The ex is t ing method for d i s t r i bu t i ng operating funds among the col leges was in a developmental stage jus t as the col leges themselves. This had given r i se to a very f l e x i b l e approach to a l loca t ing funds to the co l leges. The budget a l loca t ions to the col leges were done by the 84 Min is t ry of Education on an annual bas is . B a s i c a l l y , the budget a l l o c a -t ion decisions were based on the professional judgement of the o f f i c i a l s of the Min is t ry 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 co l lege. Attempts were made, however, by the Min is t ry to get some inputs from the col leges before a r r i v ing at the f i na l decisions as to the amount of money that was to be given to ind iv idual co l leges. Further, in a l loca t ing funds, p r i o r i t i e s tended to be given to approved new programmes, new f a c i l i t i e s , p r io r year ' s commitments and approved areas of growth. No formal avenues existed for appeals against budgetary decisions of the Min is t ry . However, over the years , some mechanisms had eyolved through which col leges could appeal for increase in the i r budgetary a l l oca t i ons . These were pr imar i ly through informal discussions with Min is t ry o f f i c i a l s responsible f o r the a l l oca t ion of col lege funds or by an appeal to the Min is ter or his Deputy. The l a t t e r avenue was rare ly used since usual ly some form of compromise was reached through the former avenue. Under special circumstances, a col lege could apply for over-run or increase tu i t i on fees to supplement i t s budgetary a l l oca t i on . I t i s at the moment d i f f i c u l t to ob ject ive ly determine the re la t i ve performance of the col leges in terms of government grant receipts because of several factors including absence of e f fec t i ve basic cost un i t , d i f fe rent s izes of co l leges , and the existence of problems pecul iar to only some co l leges. The f l e x i b l e nature of the ex is t ing method was recognized by a majori ty of the respondents as a strength they would l i k e to see retained in any mechanism for a l l oca t ing col lege 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 col lege level and, secondly, that i t was rather too subject ive. In sp i te of the weaknesses, the majority of the par t i c ipa t ing col lege p r inc ipa ls f e l t that they had been able to obtain the necessary funds needed to operate the i r col leges in the way they would l i k e to see under the ex is t ing method. On the question of changes respondents would l i ke to see, there was consensus only on two issues. These were, f i r s t , that no f inance formula be introduced as a means fo r a l loca t ing col lege funds and, second, that no intermediary body such as a "Colleges Counci l " be ins t i tu ted between the Min is t ry and the col leges fo r the purpose of d i s -t r i bu t ing ava i lab le government funds among the co l leges. A majori ty of the respondents including one of the two Min is t ry o f f i c i a l s favoured the retent ion of the present method with the fo l low-ing provisions incorporated, i f poss ib le : establishment of a basic cost uni t fo r determination, of minimum level of col lege operating revenue, increased input from the co l lege , allowances for three to f i ve year academic planning, and standardizat ion of data from the co l lege. Lack of awareness more than anything e l s e , in the w r i t e r ' s op in ion, prevented several of the respondents from looking at more complex but more equitable methods for a l loca t ing col lege funds such as programme budgeting. 86 Government control over col lege operating funds. The government could exercise controls both formally through l eg i s l a t i on and regula-t ions and informal ly through budget a l loca t ion dec is ions, and through inf luence over several areas of col lege operating funds. The present study examined both of these controls over the fo l lowing areas of col lege funding: level of t u i t i on fees col leges charge; sa la r ies of ins t ruc t iona l s ta f f and members of the admin is t ra t ion; sabbatical and other leaves of absence; and t ransfer of funds between programmes and between d i f ferent expenditure categor ies. On t u i t i on fees and sa la r ies 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 col leges the r ight to determine these. However, the « majority of the par t i c ipa t ing p r inc ipa ls f e l t that the Min is t ry exerted informal cont ro ls . With regard to t u i t i on fees, i t was f e l t that the Min is t ry by ty ing addi t ional grants to increases in col lege fees under some circumstances did i nd i rec t l y inf luence the level of t u i t i on fees the col lege could charge. On the s a l a r i e s , i t was f e l t that the Min is t ry i nd i r ec t l y con-t r o l l ed the i r determination since any annual salary increases to ins t ruc t iona l s ta f f and to administrators were highly inf luenced by the decis ion of the Min is t ry on the amount of money a l located to Instruc-t ion and Administrat ion in the budget. As far as sabbatical leaves were concerned, an overwhelming majority of the p r inc ipa ls and one of the two Min is t ry o f f i c i a l s agreed that , although the l eg i s l a t i on and regulat ions empowered the col leges to grant such leaves as they saw f i t , the Min is t ry did exert some ind i rec t controls since they could refuse to approve budget a l loca t ions for them i f such leaves appeared in the budget as l i ne items. There were no such perceived con t ro ls , however, on the other leaves of absence. 87 The d iscret ionary powers of col leges existed fo r the t ransfer of funds between only two programmes—University Transfer and Career/ Technical . No transfers were allowed between any other programmes. Further, a f ter funds had been a l located to d i f fe rent categor ies , no t ransfers were allowed without p r io r approval from the M in is t ry . The Min is t ry tended to entertain t ransfers from any category to Ins t ruc t ion ; and from Administrat ion to Plant Operat ion, Library or Student Serv ices. Respondents were general ly f a i r l y s a t i s f i e d with whatever con-t r o l s they perceived to be exercised by the Min is t ry except for one area in which some pr inc ipa ls wanted to see changes. This was in the area of internal a l loca t ion of col lege funds, i . e . , t ransfer of funds between d i f fe rent expenditure categor ies. F i f t y per cent of the p r i n -c ipa ls f e l t that they should be given more d isc re t ion in the internal a l loca t ion of the funds once the government had approved the overal l col lege budget. In other words, they f e l t that when there was a sur-plus in some categories of expenditure, the col leges should have the r ight to ' t rans fe r those to needy areas without necessar i ly seeking approval from the M in is t ry . Minor i ty concern was expressed over the M in i s t r y ' s control over annual overal l budget surpluses. A suggestion was made that col leges 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 the i r f inanc ia 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 nanc ia l management. 88 Recommendations In the l i gh t of the f indings of the present study and from my knowledge of col lege f inancing in other j u r i s d i c t i o n s , the fol lowing recommendations are made: Sources of col lege funds. 1. That a reasonably low tu i t i on fee continues to be charged by a l l co l leges. Scholarships, bursaries and loans be extended to needy and qua l i f i ed students to ensure that no student is deprived of a col lege education as a resu l t of f inanc ia l handicap. If the responses from the p r inc ipa ls are a f a i r r e f l ec t i on of the views of the people in whose l o c a l i t i e s the col leges are s i tua ted , then i t appears that the people are not yet ready to accept to ta l gov-ernment f i nanc ia l support fo r co l leges. Local contr ibut ion is seen to ensure some loca l control over co l leges. Such controls may ex is t more on paper than in p rac t i ce , but the knowledge that such controls ex is t 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 inf luence on the co l lege . Secondly, local contr ibut ion ensures local i den t i f i ca t i on to the col lege as a whole and not only to a small port ion of the col lege programme such as the community education programme. A l l these are indicat ions that make the people not want the government to take complete f i nanc ia l support fo r the co l leges. Gradual ly, however, i t has to be accepted that l o c a l i t i e s have to be re l ieved of the unwelcome f inanc ia l burden resu l t ing from col lege funding for the simple reason that l o c a l i t i e s are not equally endowed f i n a n c i a l l y . Furthermore, a l l students, i r respect ive of the i r places of 89 residence, ought to be assured of equal access to col lege education. For these to happen,- i t i s important that in the long run col lege funds need only be derived from the government, supplemented by nominal student fees. But th i s can only be implemented when publ ic sentiment i s ready for i t ; hence the need for gradual annual reductions in the proportion of col lege funds derived from local cont r ibu t ion , culminating in the ent i re e l iminat ion of loca l contr ibut ion in the foreseeable fu ture. At th is time i t i s important to point out that complete government f i nanc ia l support fo r col leges need not necessar i ly lead to to ta l govern-ment control of co l leges. If col leges were to be t o t a l l y supported by the government, a framework for governance could be developed through which local inf luence on the col leges could be assured. As an example, to ensure both e f fec t i ve local inf luence and publ ic accountabi l i ty in the appl icat ion of funds, col lege counci ls could be made up of equal representation from the l o c a l i t i e s and appointees from the Min is t ry of Education with student representatives holding the balance of power. From the foregoing discussion i t i s recommended: 2. That local par t i c ipa t ing school board contr ibut ions to col lege operating funds be gradually phased out. 3. That in the long run operating funds for col leges be derived completely from the government supplemented by nominal student t u i t i on fee charges. The method fo r d i s t r i bu t i ng ava i lab le government funds among  the co l leges. The fol lowing recommendations are made for th is area of concern: 90 1. That the government explores the use of programme budgeting as the basis for preparing budget estimates of the co l leges. 2. That any method to be used fo r d i s t r i bu t ing operating funds t among the col leges makes room for at least three to f i ve years of academic planning at the col lege l e v e l . 3. That the government takes steps to standardize f i nanc ia l data from the co l leges. 4. That the budgetary a l l oca t ion decisions continue to reside with the Min is t ry of Education and that no attempts be made to give such decisions to any intermediary body ( e . g . , a col lege counci l ) which w i l l act between the Min is t ry and the co l leges. 5. That the government attempts to present a basic cost unit fo r the col leges which w i l l be used for determining the minimum level of grant that should go to each co l lege. Addit ional grants over and above th is minimum level grant should be determined by the unique needs of the indiv idual co l leges. Government controls over col lege operating funds. 1. That a machinery be establ ished to enjoin the government to re f ra in from going beyond controls allowed i t under ex is t ing l eg i s l a t i on and regulat ions, such as those i t recent ly exer-c ised over sabbatical leave (Department of Education News Release, No. 71-75, October 31, 1975). 91 Even though only a minori ty expressed concern over the co l leges ' i n a b i l i t y to reta in annual budgetary surpluses, i t i s nonetheless important. When budgetary surpluses cannot be car r ied over to the next f i s c a l year , i t i s inev i tab le that col leges w i l l spend a l l ava i lab le funds rather than turn any surpluses back to the government. This i s neither a wise nor a ra t ional way of u t i l i z i n g publ ic funds. It i s fo r th is reason that the fo l lowing two recommendations are made: 2. That col leges be given the r ight to reta in annual budgetary surpluses and that col leges holding such surpluses be held accountable fo r the i r use. 3. Notwithstanding the above, that such budgetary surpluses held by col leges NOT be applied to projects that w i l l commit the government for fur ther funds without p r io 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 oca t ing operating funds among the col leges introduced? Please, b r i e f l y ident i fy the factors which led to the development of the present method of a l loca t ing operational funds among the co l leges. How does the present method of a l loca t ing operating funds among the col leges work? S p e c i f i c a l l y : i ) what are the procedures followed? i i ) what factors are considered? i i i ) are there p r i o r i t i e s assigned to these factors? iv) are there occasional reviews of the factors? If there a re , how often are they car r ied out? Who gets involved in such reviews? v) are there occasional reviews of the p r i o r i t i e s ? I f there are , how often are they carr ied out? Who gets involved in such reviews? What channels of appeal does a col lege have i f i t fee ls i t has not had a f a i r hearing in terms of level of grant a l l o t t ed i t for operational purposes? Has there been any precedent case of appeal? If so , what e f fec t has i t had on the other col leges? Looking at the present method of a l loca t ing col lege operating funds as a whole, what in your op in ion, are i t s strengths? What do you see as i t s weaknesses? For a l l p rac t ica l purposes, what would you l i k e to see in a method of a l l oca t ing ava i lab le government funds among the col leges? What changes then, i f any, would you l i k e to see in the present method of a l l oca t ing operating funds among the col leges? 94 PART B SOURCES OF COLLEGE OPERATING REVENUES 1. Given the dec l in ing trend over the past f i ve years of student t u i t i on fees as a proportion of col lege operating revenue, what do you think should be the place of t u i t i on fees in col lege f inancing? 2. In your op in ion, from where should the remainder (or a l l ) of the col lege 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 col lege operating funds, s p e c i f i c a l l y , through l eg i s l a t i on and regulat ions. However, there are also ind i rec t and informal ways, i . e . , inf luence and budget a l l o c a t i o n s , by which col lege operating funds are contro l led by the government. In th is sec t ion , 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 col leges over the fo l low ing , and to what extent do you agree or disagree with such government controls? i ) level of t u i t i on fees the col leges charge? i i ) sa la r ies of facu l ty members? i i i ) sa la r ies of members of the administrat ion? iv) sabbatical leaves? v) other leaves of absence? v i ) t ransfers of monies between programmes, e . g . , un ivers i ty t ransfer and career / technica l? v i i ) t ransfers of monies between major expenditure categories e . g . , administrat ion vs. student services or l i b ra r y or plant operation? v i i i ) other aspects of col lege expenditures? (please spec i fy . ) 2. What changes, i f any, would you l i k e to see in the d iscret ionary powers of the col lege over the spending of col lege operating funds? APPENDIX II INTERVIEW GUIDE FOR PRINCIPALS OF PARTICIPATING COLLEGES 95 96 PART A OBSERVATIONS ON THE METHOD OF ALLOCATING OPERATING FUNDS What opportunit ies do you have for input to the Min is t ry of Education with regard to the a l l oca t ion of operating funds to your col lege? How e f fec t i ve have you been in obtaining the required fund for your col lege wi th in the present oportuni t ies? Are there any other channels open to you i f you feel you have not had a f a i r hearing? If so, what are these channels? Could you give some examples as to the use of these channels? Looking at the present method of a l loca t ing col lege 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 rac t i ca l purposes, what would you l i k e to see in a method of a l l oca t ing ava i lab le government funds among the col leges? What changes then, i f any, would you l i k e to see in the present method of a l l oca t ing funds? PART B OBSERVATIONS ON SOURCES OF COLLEGE OPERATING REVENUES Given the dec l in ing trend over the past f i ve years of student t u i t i on fees as a proportion of col lege operating revenue, what do you think should be the place of t u i t i on fees in col lege f inancing? In your op in ion, from where should the remainder (or a l l ) of the col lege operating funds come? 97 PART C OBSERVATIONS ON GOVERNMENT CONTROLS OVER COLLEGE OPERATING FUNDS There are several ways that 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 con-t 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 ) l e v e l of t u i t i o n fees the c o l l e g e charges? i i ) s a l a r i e s of f a c u l t y members? i i i ) 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 ? i v ) s a b b a t i c a l leaves? v) other leaves of absence? v i ) 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 ? v i i ) t r a n s f e r s of monies between d i f f e r e n t expenditure cate-g o r i e s , e.g., a d m i n i s t r a t i o n vs. plant 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 . v i i i ) other aspects of c o l l e g e expenditures? (please s p e c i f y . ) 2. 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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