UNC-system Board of Governors considers performance-based funding model

Joining a national discussion about ways to improve the performance of universities, the UNC-system Board of Governors has begun to take initial steps toward fulfilling its goal of graduating more students and preparing them for future jobs.

But the best means of achieving that goal was a point of contention for board members at a joint committee meeting Thursday.

The budget and finance committee and educational planning, policies and programs committee heard a presentation from UNC-system administrators about the board’s new performance-based funding model.

The model will allocate funding to schools based on their ability to meet targets for several measures — including retention, six-year graduation rates and degree efficiency — and represents a shift from the traditional enrollment funding model.

Charlie Perusse, vice president for finance for the system, said the model is designed to reward campuses for graduating more students and operating more efficiently. He cited a national report stating that the percentage of jobs requiring a postsecondary education is expected to reach 63 percent by 2018.

Board members Fred Eshelman and Brad Wilson raised concerns about schools’ ability to graduate more students with the lack of funding behind the model.

“The cost for campuses to do some of these things could far exceed the potential reward,” Wilson said. “I don’t think it’s enough money to give this enough juice to make this worthwhile.”

The UNC-system has requested $29 million in enrollment funding from the state legislature for the 2012-13 academic year, including $11.5 million for the performance-based funding model, Perusse said.

Although the legislature fully met the system’s request of $46.8 million for enrollment growth funding last year, system President Thomas Ross said other state funding cuts likely neutralized that money. The system absorbed a cut of $414 million, or 15.6 percent, in last year’s state budget.

Ross said shifting the system’s focus to performance will assist administrators in their efforts to lobby for more state funding. The N.C. General Assembly will make budgetary adjustments at a short session in May.

“The legislature is supportive of performance measures and accountability,” Ross said. “We need to help them understand the importance of applying the funding to that.”

UNC-CH Chancellor Holden Thorp agreed that administrators should work with the legislature to gradually implement the performance model.

“I take the point that there’s not enough money to make as big a difference as some of the people were looking for, but I also think it’s a change in the way we do things,” he said. “Trying to implement it abruptly might have a lot of consequences.”

The University already exceeds most of the new benchmarks and will not be greatly affected by the performance model, Thorp said.

But some of the system’s smaller institutions might be disproportionately affected by the performance standards, said N.C. Central University Chancellor Charlie Nelms.

Nelms said the board should take into account the fact that raising academic standards often results in lower graduation rates, especially among university populations with more low-income students.

“There’s a high correlation between the wealth status of the students and retention and graduation,” he said.

A work group, appointed by the board last summer, presented its findings concerning faculty workload in a discussion before the committee meetings. The average number of course sections taught per faculty member increased at 10 of the system’s 16 universities between fall 2008 and fall 2011.

Thorp said other universities outside the system have offered faculty more pay for less instruction, posing problems for the University’s faculty retention.

“There are some that are using reduced teaching loads as a way to raid other universities, and we try to come up with other ways to counter that rather than to lower teaching loads,” he said.

The board’s personnel and tenure committee briefly discussed a legislative proposal that has raised concern at campuses.

About 40 members of the Coalition for Workplace Democracy are expected to attend the full board’s meeting today in opposition to N.C. Senate bill 575, which would remove about 22,000 UNC-system workers from the State’s Personnel Act.

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