## **Box 7. Funding model for Dutch universities**

<mark>The distribution of resources to individual institutions is constrained by a fixed macro-budget for the university sector. The allocation of the budget is based on the number of students who completed their program multiplied by the normative study duration (4.5 years) plus the number of students who drop out multiplied by an administratively set study duration of these dropouts (1.35 years). The total amount of funding is then calculated by multiplying calculated graduation numbers by a fixed reimbursement per student (i.e. 4,477 euro for Engineering students and 3,461 euro for students in other programs in 2001).</mark> _Source: CPH & CHEPS 2001_ The Dutch funding system provides a strong incentive to dismiss incapable students as soon as possible and to assist talented students in graduating without delay. The simple performance criterion makes it transparent to institutions how they will be evaluated and thereby facilitates the adoption of long-term strategies to reduce university dropouts. However, as is the case in the Danish and French tertiary funding system, the evaluation criterion does not by itself cater multiple objectives such as quality, relevance and equity.

# _Multiple criteria systems_

The US state of **Tennessee** applies multiple performance criteria to about 6 percent of the core budget for higher education. The funding system consists of four standards and ten indicators, each given a certain weight. Built into the system are provisions that allow institutions to be evaluated differently based on the type and duration of their degrees. An important characteristic of the funding system is that universities are competing against their own record. Hence, a university is not advantaged by the poor performance of another institution. The system is revised every five years and each revision gives the state as well as the universities a chance to decide on new policies and changes in the nature and number of indicators (Bogue 2002).

## **Box 8. Performance indicators used in the Tennessee funding formula**

<mark>The scorecard represents the weight assigned to each indicator and hence the relative priority given to the goal.</mark>

|**Indicat**|**or**||**2-year**<br>**campuses**|**4-year**<br>**campuses**|
|---|---|---|---|---|
|**Standar**|**d 1 – Aca**|**demic Testing and Program Review**|||
|•|Foundat|ion Testing of General Education Outcomes|15|15|
|•|Pilot Ev|aluations of Other General Education Outcome Measures|5|5|
|•|Program|Accountability|||
||1.|Program Review|5|10|
||2.|Program Accreditation|10|15|
||3.|Major Field Testing|15|15|
|**Standar**|**d 2 – Sati**|**sfaction Studies**|||
|•|Student/|Alumni/Employer Surveys|10<br>|10|
|•|Transfer|and Articulation|N/A|5|
|**Standar**|**d 3 – Plan**|**ning and Collaboration**|||
|•|Mission|Distinctive Institutional Goals|5|5|
|•|State Str|ategic Plan Goals|5|5|
|**Standar**|**d 4 – Stud**|**ent Outcomes and Implementation**|||
|•|Output|Attainment|||
||1.|Retention/Persistence|5|5|
||2.|Job Placement|15|N/A|
||3.|<br>Assessment Implementation|10|10|
|**Total P**|**oints**||100|100|

_Source: Bogue (2002)_ The implementation of the Tennessee model has been assured through the involvement of institutional and government officials in the funding procedure, thereby giving all levels a

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