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South Carolina Commission on Higher Education The History and Development of Performance Funding in South Carolina |
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Additional Preliminary Work in Performance Funding Planning & Assessment Steering Committee Reports
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Performance Funding in South Carolina for Higher Education Act
359 of 1996, commonly referred to as “Performance Funding,”
dramatically changed the responsibilities of the South Carolina Commission
on Higher Education (CHE) as related to determining how public
institutions of higher education are funded. The legislation
required that the CHE allocate state appropriations to South Carolina’s
public institutions of higher education based on their performance in nine
areas or “critical success factors.” The General Assembly
identified several performance indicators that could be used, if
applicable to a particular type of institution, in assessing
institutions’ successes in achieving performance in each of the areas.
In all, 37 performance indicators spread across the nine critical success
factors are specified. The CHE was assigned the responsibility of
developing and implementing a system for basing funding on institutional
performance and for defining how each of the specified indicators would be
measured. The General Assembly provided regulations
that allowed for a 3-year, phase-in period for implementing a system to
provide 100% of available state funding on institutional performance. In
compliance with its legislative mandate, the CHE, in cooperation with
South Carolina’s higher education institutions and other stakeholders in
the state’s public higher education system, has developed a system for
determining institutions’ funding based on performance across the nine
critical success factors using the 37 performance indicators as
applicable. For the current fiscal year, 1999-2000, the CHE has
determined institutions’ appropriations based fully on their
performance. During the preceding fiscal years, the CHE based only a
portion of institutions’ appropriations on institutional performance on
select indicators – 14 of the 37 indicators were used in determining a
portion of institutions’ funds for FY 1997-98 and 22 of the 37 were used
for FY 1998-99. The
system for determining funding has two major components: 1) a
determination of financial needs for the institution and 2) a process for
rating the institution based on performance across the indicators. The
second component, the performance rating, is determined by assessing
whether or not the institution meets or exceeds standards for each
indicator. Standards are set either for the individual institution
or for institutions within the same sector and are approved annually by
the CHE. Each year, the institution is rated on its success in
meeting the standards on each of the indicators. These ratings are
totaled and expressed as an average score for the institution. The
institution with the higher score receives a proportionally greater share
of available state funding. Currently,
the CHE is in its fourth year of implementation and is continually working
to refine and improve the performance measurement of South Carolina’s
public higher education institutions. As might be expected, in the three
years since the passage of Act 359 of 1996, the CHE has made revisions and
refinements to the overall system as well as to various measures as
strengths and weaknesses have been identified. Currently, a Legislative
Study Committee is reviewing the work that the CHE has done with the
process of performance funding. As
noted, the determination of the 1999-2000 appropriations was the first
year for which all funds were based on performance across all indicators.
The system employed to do so differed from that used in the first two
years of implementation. The CHE publishes a Performance Funding Workbook that outlines, in detail, all of the performance indicators, how they have been defined and to whom they apply. The workbook is provided as a guide to be used by institutions in the benchmarking and rating process and should also be useful to other interested in the performance funding system in South Carolina. For
additional information regarding the Performance Funding Process, contact This page last updated 11/28/2005 |
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