RD115 - Annual Report on Certification of Institutions - Restructuring Higher Education Financial and Administrative Operations Act - May 17, 2011


Executive Summary:
Background Information/Summary of Major Elements:

The 2005 Higher Education Restructuring Act outlines educational, financial, and administrative goals for Virginia’s public colleges and universities. The Act further directs the Council to develop performance standards and annually determine the extent to which each institution meets these standards.

§ 23-9.6:1.01. Assessments of institutional performance.

C. The State Council shall annually assess the degree to which each individual public institution of higher education has met the financial and administrative management and educational-related performance benchmarks set forth in the Appropriation Act in effect. Such annual assessment shall be based upon the objective measures and institutional performance benchmarks included in the annual Appropriation Act in effect. The State Council shall request assistance from the Secretaries of Finance and Administration, who shall provide such assistance, for purposes of assessing whether or not public institutions of higher education have met the financial and administrative management performance benchmarks.

Institutions that meet the performance benchmarks are entitled to the following financial benefits:

§ 2.2-5005. Incentive performance benefits to certain public institutions of higher education.

Beginning with the fiscal year that immediately follows the fiscal year of implementation and for all fiscal years thereafter, each public institution of higher education that (i) has been certified during the fiscal year by the State Council of Higher Education of Virginia pursuant to § 23-9.6:1.01 as having met the institutional performance benchmarks for public institutions of higher education and (ii) meets the conditions prescribed in subsection B of § 23-38.88, shall receive the following financial benefits:

1. Interest on the tuition and fees and other nongeneral fund Educational and General Revenues deposited into the State Treasury by the public institution of higher education, as provided in the appropriation act;

2. Any unexpended appropriations of the public institution of higher education at the close of the fiscal year, which shall be reappropriated and allotted for expenditure by the institution in the immediately following fiscal year; and

3. A pro rata amount of the rebate due to the Commonwealth on credit card purchases of $5,000 or less made during the fiscal year.

4. A rebate of any transaction fees for the prior fiscal year paid for sole source procurements made by the institution in accordance with subsection E of § 2.2-4303, for using a vendor who is not registered with the Department of General Service's web-based electronic procurement program commonly known as "eVA", as provided in the appropriation act.

The 2011 Appropriation Act outlines the Council’s authority in assessing institutional performance:

§ 4-9.02 ASSESSMENT OF INSTITUTIONAL PERFORMANCE

[T]he State Council of Higher Education shall annually assess and certify institutional performance. Such certification shall be completed and forwarded in writing to the Governor and the General Assembly no later than June 1 of each year. Institutional performance … shall be evaluated year-to-date by the Secretaries of Finance, Administration, and Technology as appropriate, and communicated to the State Council of Higher Education before June 1 of each year. Financial benefits provided to each institution … be evaluated in light of that institution’s performance.

In general, institutions are expected to achieve their agreed upon targets and standards on all performance measures in order to be certified by SCHEV. However, the State Council, in working with each institution, shall establish a threshold of permitted variance from targets for each education-related measure, as appropriate. The Council shall review and, if in agreement, approve institutional targets and thresholds.

Further, the State Council shall have broad authority to certify institutions as having met the standards on education-related measures. The State Council shall likewise have the authority to exempt institutions from certification on education-related measures that the State Council deems unrelated to an institution’s mission or unnecessary given the institution’s level of performance.

Performance measures for each goal are outlined in the Appropriation Act. In addition to establishing targets for each measure, the Appropriation Act permits a variance from the target, known as a ‘threshold,’ for measuring acceptable institutional performance. Performance targets and thresholds for the 2009-10 academic year were developed by each institution and approved by the Council in January, 2009. The institutional performance targets and thresholds were based on an institution’s past performance Assessment of Institutional Performance Page 4 May 17, 2011 and set of negotiated targets and thresholds. Besides the educational-related performance standards, the Secretaries of Finance, Administration, and Technology evaluate the standards for the financial and administrative goals.

The "Preparing for the Top Jobs of the 21st Century: The Virginia Higher Education Opportunity Act of 2011 (TJ21)" passed earlier this year by the General Assembly, changed the schedule for the Assessment of Institutional Performance. The Council’s annual assessment is suspended for the next two years while the Higher Education Advisory Committee – created by TJ21 – reviews the current Institutional Performance Standards and recommends possible changes to the Council. The Council’s next assessment will be conducted by October 1, 2013.

Materials Provided:

• Educational Goals of the Restructuring Act – Code of Virginia
• Assessment of Institutional Performance – Code of Virginia
• Institutional Performance Measures – 2011 Appropriation Act
• 2011 IPS Assessment Tables
• Assessment of Finance and Administrative Measures

Resolution:

BE IT RESOLVED that the State Council of Higher Education for Virginia certifies for 2011-12 through 2013-14 that all public institutions have satisfactorily met the performance standards of the Higher Education Restructuring Act and Appropriation Act.