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UNC BOG finance committee proposes performance-weighted budget model

The C.D. Spangler Jr. Building, one of the buildings that houses administrative offices for the UNC System, as photographed on Sunday, Feb. 28, 2021.

The UNC Board of Governors Committee on Budget and Finance proposed a performance-weighted model that incentivizes institutions to focus on student performance and enrollment at its meeting Wednesday. 

What’s new?

  • Jennifer Haygood, senior vice president for finance and administration/chief financial officer for the UNC System, presented the budget proposal. 
  • The current funding model does not reward institutions for student success, BOG member Lee H. Roberts said.
  • The new model the committee proposed eliminates an institution's tuition as a factor in state funding allocations, Roberts said. The model also reduces institutional pressure to prioritize graduate instruction and gives equal recognition to undergraduate instruction.
    • The model allows for limited state resources to be directed to their best uses at individual institutions, Roberts said.
    • He said one goal of the model is to transparently link university policy goals to state funding. 
    • "Tuition continues to generally fund revenue that supports the System and campus overall," Roberts said.
  • Performance-weighting of student credit hours would be weighted using each UNC-System campus’s performance on BOG-defined metrics, according to the presentation. Credit hours are more valuable to the state if student outcomes — like enrollment and graduation rates — are improving. 
    • BOG-defined metrics are a sum of individual chancellor incentive compensation goals, which are System-wide and performance-based, and a strategic plan metric chosen by each campus.
  • While the current model does not fund credit hours during summer, the proposed model would fund residential credit hours completed during summer terms, as well as spring and fall terms, according to the presentation.
    • Under this model, students would pay regular per-credit hour tuition rates for all summer courses.
    • “A policy option would be that (institutions) cannot charge more than the normal rate,” Haygood said.
  • According to Haygood’s presentation, total state funding appropriations would be calculated by multiplying changes in performance-weighted student credit hours by the appropriation amount per credit hour.
    • Appropriations, or funds, per credit hour are based on national data from "The Cost Study" at the University of Delaware. 
    • "This a starting point, and we need to vote something through to move forward," Budget and Finance Chairperson James L. Holmes Jr. said. 
  • Haygood said the Budget and Finance Committee will continue to discuss the proposed funding model in February.

Who is on the BOG?

  • The Board consists of 24 voting members who are elected by the N.C. General Assembly to serve four-year terms.

Who is on the committee?

  • The Board has six standing committees. The Committee on Budget and Finance has four members.

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