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Critical Success Factor 5 (2nd_ed)

Critical Success Factor 5 (2nd_ed)

(5) ADMINISTRATIVE EFFICIENCY

(5A) PERCENTAGE OF ADMINISTRATIVE COSTS AS COMPARED TO ACADEMIC COSTS

MEASURE
The ratio of administrative costs to the amount ofacademic costs expressed as a percentage.

Academic and Administrative costs include restricted and unrestricted funds for the research sector; unrestricted funds for all other sectors; and exclude funds transfers for all institutions.

DEFINITIONS / EXPLANATORY NOTES

Administrative costs are defined as institutional support.

Academic costs are defined as expenditures for instruction, research, academic support, and scholarships.

The calculation for this variable is Administrative Costs divided by Academic Costs.

Major Data Source: Calculated by CHE from each institution's annual Integrated Post-Secondary Educational Data System (IPEDS) Finance Survey. Applicable To: All Four Sectors. As noted above, however, the dollars, restricted and unrestricted, included in calculations vary by sector.

Type Indicator: Benchmarked Indicator

Expected Trend: Downward

Sector Benchmark: To be adjusted to reflect the most recent national data.

For the 1999-00 Performance Year:

Research = 0.103

Teaching = 0.242

Regional = 0.317

Technical = 0.317

NOTES: This measure was revised effective with Performance Year 1999-00. In prior, years, this measure included two parts that were each benchmarked, the percentage of academic costs to total E&G and the percentage of administrative costs to total E&G. (5B) USE OF BEST MANAGEMENT PRACTICES MEASURE The extent to which the institution demonstrates the best management practices (see the following pages).

NOTE: Subject to approval by the Commission, this indicator will be measured every 2 years beginning with the 1998-1999 Performance Year.

DEFINITIONS / EXPLANATORY NOTES

Criteria based on checklist of best management practices agreed upon by CHE and the institutions. See the information below for an outline of the Best Management Practices.

Performance is measured as the percent of items for which the institution reports compliance.

Performance to be reported in the format found for this indicator in Section VI.

Examples of Best Management Practices may extend three years in the past.

Major Data Source: Institutions will report and document compliance with the approved list, and submit annually for evaluation by CHE.

Applicable to: All Four Sectors

Type Indicator: Benchmarked Indicator

Expected Trend: Upward

Sector Benchmark: 100%, All Sectors

PROPOSED CHECKLIST FOR DETERMINING HIGHER EDUCATION INSTITUTIONS USE OF 'BESTMANAGEMENT PRACTICES' Institutions will report on application of each of the following identified 'Best Management Practices.' A reporting form is included in Section VI (Rating Data Instructions and Forms). Each institution will be required to provide narrative and other substantiation that explain its efforts in each of the following areas during the past three years. The Commission on Higher Education will determine whether each institution has applied each management practice consistently during the past three years.

Management Practices Identified for Performance Indicator 5B

1.) Integration of Planning and Budgeting: The institution has employed a multi-year strategic planning process that links the planning process with the annual budget review.

2.) Internal Audit: The institution has utilized an active internal audit process that includes: (a) programmatic reviews along with fiscal reviews; (b) consistent follow-up on audit findings; and (c) reporting of the internal audit function to the institutional head or to the governing board. (NOTE: The smaller institution that cannot afford a separate internal audit staff should demonstrate internal reviews in place that serve the same function as an internal auditor.)

3.) Collaboration and Partnerships: The institution has demonstrated financially beneficial collaborative efforts with other public entities in performance of business functions including, but not limited to, financial management, energy production and management, printing and publications, mail service, procurement, warehousing, public safety, food service, space utilization, and parking.

4.) Outsourcing and Privatization: The institution has examined opportunities for contracting out various business functions, has performed cost analyses, and has implemented, where economically feasible, cost saving contracts.

5.) Process Analysis: The institution has made a critical examination of its business processes in an effort to increase productivity, reduce waste and duplication, and improve the quality of services provided to its internal customers.

6.) Use of Automation and Technology: The institution has developed a long range plan for improved use of technology to enhance student learning and business processes and has taken deliberate efforts to implement this technology within budget constraints.

7.) Energy and Other Resource Conservation and Management: The institution has approved and implemented a plan to conserve energy and other resources and has demonstrated positive results from the plan.

8.) Preventive and Deferred Maintenance: The institution has developed and implemented, subject to budget constraints, a regular program of preventive maintenance to preserve its physical assets and had developed a plan to address deferred (overdue) maintenance needs for its campus.

9.) Alternate Revenue Sources: The institution has made substantial efforts to identify and secure alternate revenue sources (excluding categorical grants for specific functions) to supplement funds available from state appropriations and student fees.

10.) External Annual Financial Audit Findings: The institution has minimized or avoided all management letter and single audit findings in the annual audit performed or supervised by the State Auditor, especially violations of state law, material weaknesses, and single audit 'findings' and questioned costs.'

11.) External Review Findings: The institution has minimized or avoided all non-compliance findings related to its business practices in external reviews and audits including, but not limited to, NCAA, accreditation, federal financial aid reviews, and direct federal audits.

12.) Long Range Capital Plan: The institution has approved a long range (minimum three to five years) capital improvement plan for major capital requirements for its campus and has, subject to fund availability, begun implementation of the plan.

13.) Risk Management: The institution has an active risk management program in place to minimize its losses.

(5C) ELIMINATION OF UNJUSTIFIED DUPLICATION OF AND WASTE IN ADMINISTRATIVE AND ACADEMICPROGRAMS MEASURE

The institution's demonstration of effective elimination of unjustified duplication of and waste in:

  • Administrative Programs, and
  • Academic Programs.

NOTE: Subject to Commission approval, this indicator will be measured every 3 years beginning with the 1999-2000 Performance Year.

DEFINITIONS / EXPLANATORY NOTES

Administrative Programs include costs for institutional support and operation and maintenance of physical plant.

Academic Programs include costs for instruction, research, and academic support.

The best example(s) of sharing which has eliminated duplicate costs or services should be submitted. (See Section VI for reporting format.)

Major Data Source: Institutional reporting of one exemplary example in each of the noted categories.

Applicable to: All Four Sectors

Type Indicator: Criterion-referenced (Yes/No)

Expected Trend: Compliance

Sector Benchmark: 'YES,' All Sectors

(5D) AMOUNT OF GENERAL OVERHEAD COSTS MEASURE General overhead cost per FTE student. DEFINITIONS / EXPLANATORY NOTES General overhead costs are defined as institutional support expenditures, including restricted and unrestricted funds for the Research Sector and unrestricted funds for all other sectors.

FTE students are defined as total fall full-time equivalent students. Fall enrollment as reported to CHEMIS that corresponds with the fiscal year is considered.

For Technical Colleges, continuing education students are included in the FTE student calculations.

Institutional support expenditures are defined by IPEDS Finance Survey

Major Data Source: Calculated from the annual IPEDS Finance Survey and CHEMIS enrollment data. Applicable to: All Four Sectors

Type Indicator: Benchmarked Expected Trend: None, with understanding that it is desirable to keep institutional support as low as possible. Sector Benchmark: To be revised to reflect the most recent available national data.

For 1999-00 Performance Year:

Research = $1,624
Teaching =  $1,326
Regional =   $1,124
Technical =  $1,124