South Carolina Community Colleges

Contacts
Michael Smith
Director of Planning and Assessment
South Carolina Commission on Higher Education
(803) 737-2277

Phyllis R. Myers
Director of Institutional Research
Trident Technical College
Charleston, South Carolina
(843) 574-6234

Fad or Trend

After nearly a decade of performance reporting, ACT 359, passed by the South Carolina General Assembly in the 1996 legislative session, called for initial implementation of performance funding beginning with the 1997-98 fiscal year with full implementation in FY 1999-00. The legislators identified 37 Performance Indicators categorized into nine Critical Success Factors, though not all indicators apply to community colleges.

How Performance Funding Works

Initial legislation established a timeline indicating that by June 1999, 100 percent of the allocation for higher education would be based on the performance-based formula. The original plan consisted of two major components: (1) each institution’s financial need (Mission Resource Requirement [MRR]) and (2) a process for scoring each institution’s performance on each applicable indicator. The first phase of implementation resulted in definitions, methods of measurement, and a reporting method for each indicator. The indicators were to be phased in over a three-year period beginning in 1997-98, with 14 indicators by the first year, 26 by the second year, and as initially planned, all 37 by the third year. 

In fall 1998, a comprehensive review of the performance funding system led to recommendations for substantial changes to the system. In March 1999, the Commission approved changes in the following:  

• methods used to measure indicators  
• which indicators will be held to criterion-referenced standards and which will be benchmarked  
• when and how often indicators will be measured and reported  
• benchmarking guidelines  
• scoring system  
• allocation of funds 

The performance-funding system resulted in the distribution of $4.6 million in FY 1997-98 (performance on 14 indicators) and $14.5 million in FY 1998-99 (performance on 26 indicators). 

In March 1999, the commission approved an allocation process that will reward high performance with incentives and provide disincentives for poor performance. This process is designed to ensure reasonable stability and predictability of budgets from year to year in all sectors. In this new approach, performance dollars come from 1.75 percent of the MRR allocation plus half of all new dollars allocated by the legislature. 

For those institutions falling below a specified performance level, a performance improvement pool is derived from .25 percent of the MRR allocation to each institution. Each qualified institution is encouraged to write a proposal to obtain funds for improvement.

What Performance Level Is Expected

As of March 1999, the expected level of performance for some of the indicators is simply YES (compliance), while expected levels for other indicators are determined by criteria set by the commission staff. Individual institutions are allowed to set benchmarks for some indicators. The benchmarks, subject to CHE approval, are based upon historical data and guidelines provided by the CHE. In general, each institution is required to improve performance on each indicator, although sometimes the CHE allows an institution to set a lower benchmark if supported by a strong rationale.

Depending on actual performance, an institution can receive a 3 = Exceeds, 2 = Achieves, or 1 = Does Not Achieve for each criterion-referenced and benchmarked indicator. The institutional score is the sum of the scores for each scored indicator divided by the number of scored indicators. The final score determines whether or not the institution receives incentive funds and the amount received. Those institutions performing at or above the Achieves level receive incentive funds, whereas those who perform at or below Does Not Achieve Standards lose dollars to the Disincentive Funds. 

What Do Colleges Compete Against

Theoretically, the colleges compete against standards or benchmarks. The fact that 100 percent of sector allocations will be distributed across the colleges based on scores creates an air of competition. It is apparent to all players that there will be shifts in allocations based on outcomes.

Money Left on the Table

If dollars in the Performance Incentive Fund are not awarded, the residual amount is distributed to those colleges performing at or above the Achieves level.

Indicators

The Performance Funding Workbook, 2d edition, 1999, is available online at www.che400.state.sc.us/. The workbook provides an introduction to the performance funding process, definitions and explanatory notes to all indicators, detailed analyses of each indicator, guidelines for setting benchmarks, data collection requirements, reporting forms, and a performance funding calendar. The indicators below are for year four of performance funding.

1. Mission Focus  

• Expenditure of funds to achieve institutional mission  
• Curricula offered to achieve mission  
• Adoption of strategic plan to support the mission statement  
• Attainment of goals of the strategic plan 

2. Quality of Faculty  

• Academic and other credentials of professors and instructors  
• Performance review system for faculty to include student and peer evaluations  
• Compensation of faculty 

3. Instructional Quality  

• Class sizes and student/teacher ratios  
• Number of credit hours taught by faculty  
• Ratio of full-time faculty to other full-time employees  
• Accreditation of degree-granting programs  
• Institutional emphasis on quality teacher education and reform 

4. Administrative Efficiency  

• Percentage of administrative costs as compared to academic costs  
• Amount of general overhead costs 

5. Entrance Requirements  

• Postsecondary nonacademic achievement of student body  
• Priority on enrolling in-state students 

6. Graduates’ Achievements  

• Graduation rate  
• Employment rate for graduates  
• Employer feedback on graduates who were employed or not employed  
• Scores of graduates on employment-related examinations and certification tests  
• Number of graduates who continue their education  
• Credit hours earned of graduates 

7. User-Friendliness of Institution  

• Transferability of credits to and from the institution  
• Continuing education programs for graduates and others  
• Accessibility to the institution of all citizens of the state