Study of student costs using activity based costing methodology - aair

Relative Funding Model: Relative teaching costs matrix 7
Cluster
1
1.0
1.4
2 1.3
2.0
3
4
5
Undergraduate
1.6
2.2
2.7
Discipline Weights
Other Postgraduate
1.8
3.0
Research Degree
4.7
Operating grants for the 1991-93 triennium were calculated by summing the institution’s teaching load
(which, in Australia, is expressed in Equivalent Full-Time Student Units - EFTSUs) in each cell of the
matrix after multiplying the load in each cell by the relative weighting factor. DEET has advised
institutions that the formula would be used on a once only basis, for determining 1991-93 operating grants
and thereafter would determine grants on an historical basis.
With the exception of special funding for students on industrial experience, given a weighting of 0.2
EFTSU, the model does not attempt to cover institution-specific cost factors, such as, remoteness of
campus, smallness of scale, etc. Furthermore, the RFM provides for a discretionary element to be allocated
to institutions on an annual basis. In publishing the RFM the Government noted that the weightings were
consistent with the bands established for funding purposes by the UK Department of Education and
Science and the New Zealand Ministry of Education. 8
During the development of the model there were several steps taken to consult with institutions and to
seek feedback on critical attributes of the model. In November 1989, at an early stage in the development
of the model, there were many suggestions presented at a seminar held in Canberra, including comments
that the development of the model should be open and objective, the model should be simple, and should
contain real costs rather than ideal inputs. In relation to this latter comment it was stated:
The model should relate directly to current patterns of institutional expenditure rather than costs based on
ideal inputs, and differentiate reliably between institutions with different educational profiles. 9
In this context, some Vice-Chancellors argued that the costs of administering part-time students and the
industrial component of co-operative education or sandwich courses should be fully recognised.
Subsequently, a special loading was acknowledged for administering the industrial component of
co-operative education courses but hard data was sought on the cost of administering part-time students.
This paper reports on a study undertaken for the University of Technology, Sydney (UTS) by the
consultants, Ernst and Young on the cost of pan-time study. UTS is the largest national provider of
part-time education, with almost 9,000 students enrolled under this mode in 1990 (46% of total
enrolments), although all thirty-six public institutions of higher education in Australia reported a
proportion of their total students enrolled in pan-time study in 1990. The study focused on pan-time,
internal students not external or continuing education students.
Whereas pan-time students were for many years counted by the Commonwealth Government as
equivalent to half a full-time student and this served also as the basis for funding institutions, in 1982 the
Government adopted EFTSU as a student load measure and counted part-time students as students
undertaking 0.75 or less of a full-time student load. As the principal basis for determining institutional
operating grants has been reported student load, the claim of institutions committed to pan-time
education has been that, for most if not all, administrative and support activities, a pan-time student
incurs at least the same administrative load and cost as a full-time student, not one-half or three-quarters
of the load and cost.
7 Ibid., p. 13.
8 Ibid., p. 21.
9 Relative Funding Model: A Draft Proposal. Department of Employment, Education and Training, National Board of
Employment, Education and Training, June 1990, p. 6.