R00I0001 - Maryland Higher Education Commission by winstongamso

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									                                                            RI.00.01
                            Maryland Higher Education Commission


Operating Budget Data
                                                    ($ in Thousands)

                                       FY 00         FY 01            FY 02                 % Change
                                       Actual       Working         Allowance    Change     Prior Year

    General Fund                         $47,994       $57,215         $62,930     $5,715         10.0%
    Special Fund                             930         5,530           5,576         46          0.8%
    Federal Fund                             825         3,137           2,690      (447)       (14.2%)
    Reimbursable Fund                         89           272             172      (100)       (36.8%)
    Total Funds                          $49,839       $66,153         $71,368     $5,215          7.9%

    !       Most of the additional fiscal 2002 funding will provide the formula-driven increase of $4.4 million
            for aid to the nonpublic institutions. Additionally, general funds for the Educational Grants
            program increase $303,000. Although it appears as a small overall increase, there have been
            significant changes in the grant program to reflect the Office for Civil Rights (OCR) Agreement.

    !       $500,000 in general funds is requested for a new office location.



Personnel Data
                                                   FY 00               FY 01           FY 02
                                                   Actual             Working        Allowance            Change

    Regular Positions                                       81.00          82.60            83.60             1.00
    Contractual FTEs                                         4.00           3.00             5.00             2.00
    Total Personnel                                         85.00          85.60            88.60             3.00

    Vacancy Data: Regular

    Budgeted Turnover: FY 02                                 6.69          8.00%
    Positions Vacant as of 12/31/00                         10.80         13.08%

!        There are three new positions in the allowance. One is a permanent position for OCR activity, and
         two are federally supported contractual positions.




    Note: Numbers may not sum to total due to rounding.
    For further information contact: Terri Bacote-Charles                                   Phone: (410) 946-5530
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                          RI.00.01 - Maryland Higher Education Commission

Analysis in Brief
Issues
New State Plan: The Maryland Higher Education Commission (MHEC) approved the new State Plan
in June 2000. The plan outlines the statewide priorities for higher education. The Secretary should
comment on the agency’s capacity to oversee and assist institutions' efforts at attainment of the State’s
higher education agenda.


Next Steps Emerge for Guideline Implementation: With a second year of experience in establishing the
operating funding guidelines, circumstances have arrisen which raise the need to review and evaluate the
current processes for peer adjustments and to complete the vital reporting link between performance
accountability and funding. The Secretary should discuss the actions to be taken to continue the
implementation of the operating funding guidelines.


State’s Grade on Higher Education Report Card: The first national report card on how states deliver
higher education was recently released. Although Maryland was among the top performers in many
categories, the report identified areas for improvement. The Secretary should discuss plans, if any, to
improve the State’s performance in future years.


Partnership Agreement Signed with the Office for Civil Rights: In December, an agreement was
reached with the Office for Civil Rights on how to remove the remaining vestiges of segregation in
Maryland’s public colleges. The Secretary should brief the committees on the plans to implement the
agreement and monitor compliance.


Recommended Actions

                                                                                     Funds Positions
 1.    Reduce funding for training and administrative services.                     $ 6,000
 2.    Reduce funding for the special payments payroll.                             10,000
 3.    Reduce funding for applications software maintenance.                        40,000
 4.    Reduce funding for systems software maintenance.                             10,000
       Total Reductions                                                           $ 66,000




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                           RI.00.01 - Maryland Higher Education Commission

Updates

MHEC Assumes Oversight of State Funding for Regional Higher Education Centers: As required by
Chapter 542, Acts of 2000 MHEC assumed oversight responsibility for regional higher education centers
receiving State support. This update will discuss the development of policies to govern the establishment
and funding of the centers.


Capital Funding Guidelines: As charged in 1999 legislation, MHEC studied the feasibility of establishing
a capital funding guideline that would be similar to the operating funding guideline (based on peers). This
update provides the recommendations adopted by MHEC which forego the establishment of a formula.


MHEC’s Advisory Council on Educational Technology Develops Strategic Plan: The Education
Technology Policy Council submits a strategic information technology plan. This update provides
information on the four major components of the plan.


Work Begins on the Task Force to Study College Readiness for Disadvantaged and Capable Students:
The task force began its work on developing a comprehensive strategy. This update will briefly summarize
the interim report.




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                                                RI.00.01
                      Maryland Higher Education Commission

Operating Budget Analysis
Program Description

    The Maryland Higher Education Commission (MHEC) is the State's postsecondary coordinating body
for the 13 campuses of the University System of Maryland (USM), Morgan State University, St. Mary's
College of Maryland, 16 community colleges, the State's private colleges and universities, and over 100
professional schools. The Secretary of Higher Education is the head of the agency and serves at the
pleasure of the 12-member commission. MHEC has important responsibilities for fulfilling the goals
specified in the 1988 legislation which reorganized the governance structure of Maryland's higher
education system and developing the State Plan for higher education authorized in statute by Chapter 515,
Acts of 1999. The agency also administers over 20 State and federal financial aid programs, three-
formula-based grants to Baltimore City Community College (BCCC), the State's other community
colleges, and the independent colleges, and develops the capital budget requests for the community
colleges. The scholarship program administered by MHEC are presented in a separate analysis.


Governor’s Proposed Budget

    The fiscal 2002 allowance for MHEC is $71.4 million, an increase of $5.2 million (7.9%) over the
fiscal 2001 working appropriation. Exhibit 1 shows that the increase in general funds accounts for the
total budgeted increase. Much of the general fund increase has been targeted at enhancing funding of the
existing aid programs and MHEC’s Educational Grants Program. Additionally, general funds are
increased for miscellaneous operational expenses including personnel and rent for a new office location.
Among the existing aid programs with increases are the Private Donation Incentive Program, which
increases by $10,000, and the aid to nonpublic institutions, based on the Sellinger formula, which increases
by 11% or $4.4 million. (Appendix 2 provides the allocation of general funds to the private institutions.)

    The Educational Grants Program provides funding for special initiatives related to higher education
and is awarded to various State, local, and private entities. Although the program’s overall general fund
increase is minimal ($303,000), three existing grants receive large increases which are partially offset by
deleting one-time grants to Coppin State College, University of Maryland Baltimore County (UMBC),
and St. Mary’s College and eliminating funds for the Maryland Higher Education Investment Program
(MHEIP). The existing grant for the Southern Maryland Higher Education Center increases three-fold
to $268,000. The increase provides both operating expenses and noncapital equipment for the new
classroom building. The Henry Welcome Grant increases by 33% or $40,000. The Welcome awards are
provided to institutions to assist in the recruitment and retention of a diverse faculty. Funding for the
Access and Success Grants increases by 75% or $1.5 million due to the Office for Civil Rights (OCR)
agreement. With this funding, the four historically black institutions (HBI) can each receive a grant
equaling $1.125 million (up from $750,000 in fiscal 2001) to support efforts to increase retention and
graduation rates. Also, as a result of OCR, two new grants totaling $600,000 are to be provided for a


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                                     RI.00.01 - Maryland Higher Education Commission

                                                                Exhibit 1
                                                   Governor's Proposed Budget
                                    Maryland Higher Education Commission
                                                            ($ in Thousands)
                                                     General             Special            Federal          Reimbursable
 How Much It Grows:                                   Fund                Fund               Fund               Fund                 Total
 2001 Working Appropriation                          $57,215                $5,530            $3,137                $272            $66,153
 2002 Governor's Allowance                             62,930                5,576              2,690                 172            71,368
     Amount Change                                     $5,715                  $46            ($447)              ($100)             $5,215
     Percent Change                                     10.0%                0.8%            (14.2%)            (36.8%)               7.9%
 Where It Goes:
  Personnel Expenses
     One new position for OCR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            $37
     Fiscal 2002 general salary increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 98
     Increments, fiscal 2001 increase phase-in and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       171
     Employee and retiree health insurance rate change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         69
     Retirement contribution rate change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               (32)
     Deferred Compensation Match . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    4
     Turnover adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        (18)
     Other fringe benefit adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (50)
  Operations
     Two new contractual positions (federal funds) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     108
     DBM telecommunication charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  51
     Printing costs to reflect fiscal 2000 actuals and a federal supported increase . . . . . . . . . . .                                133
     Office supplies related to federal grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 45
     Installment payments for new mailroom inserter, mini-mainframe, PCs and telephone system                                              86
     Rent for new office location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          500
     Completed one-time purchase of various IT items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (83)
  Grants
     Sellinger program for aid to nonpublic institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   4,433
     College Prep Intervention (federal funds) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 175
     Private Donation Incentive program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 10
  Changes in the Educational Grants Program
     Access to Success increase due to OCR agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        1,500
     OCR-related studies for Coppin, Bowie, and the HBI's . . . . . . . . . . . . . . . . . . . . . . . . . . .                           600
     Henry Welcome Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             40
     Southern Maryland Higher Education Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        183
     One-time grants discontinued for Coppin, UMBC, St. Mary's, and MHEIP . . . . . . . . . . . .                                     (2,020)
     Federal fund adjustment due to carry-over from fiscal 2000 . . . . . . . . . . . . . . . . . . . . . . .                           (687)
     Other Changes                                                                                                                      (138)
  Total                                                                                                                                $5,215
Note: Numbers may not sum to total due to rounding.


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                           RI.00.01 - Maryland Higher Education Commission

strategic plan to revitalize Coppin, a best practices study for HBI’s, and a master plan for Bowie State
University.

   The special fund increase is due to the creation of a budgeted Guaranteed Student Tuition Fund. The
fund is set up to reimburse students for tuition costs of defunct private career schools. Currently, the
funds are nonbudgeted and are derived from an annual assessment on private career schools.

    Although the exhibit shows a decrease in federal funds, the difference is not due to a loss in federal
grant monies for fiscal 2002 but rather represents the addition of federal funds to fiscal 2001 through a
carryover amount provided through a budget amendment. Similarly, the decline in reimbursable funds
reflects the carryover of funds into fiscal 2001 to support implementation of the Workforce Investment
Act (with the Department of Labor, Licensing, and Regulation) rather than a decline in funds available for
fiscal 2002.


   Personnel

    Personnel expenses increase the budget by $279,000. In addition to the fiscal 2002 general salary
increase ($98,000) and other personnel related expenses, there is one new regular position and two
contractual positions. The permanent position is a staff position to monitor the Office for Civil Rights
agreement. The contractual positions (shown under operations) are federally funded and will support
GEAR-UP and the Eisenhower Mathematics and Science Program. MHEC's turnover rate has been
increased slightly to reflect actual vacancy rates.


Performance Analysis: Managing for Results

     As the lead planner and coordinating body for higher education, it is commendable that the Managing
for Results performance measures chosen represent the wide range of activities that are overseen by or
fall within the agency’s purview. However, the one exception is quite notable. In the assessment of the
actual administration of financial aid, there are no performance measures that relate directly to how well
this pivotal function is performed. MHEC should develop performance measures to assess the
important and growing function of administering the State's financial aid programs since an
inefficiently managed program presents real barriers to a potential recipient.

    In general, the measures selected will adequately express achievement; however, there are some
instances where the format for a measure could be expanded to provide context on each segments
performance. An example of an effective performance measure format is how the agency intends to
report the percent of community colleges, four-year public institutions or nonpublic institutions that
achieve a particular benchmark rate. Reporting in this format helps to prompt the agency to work
diligently to identify those institutions that are lagging and work with them to develop strategies to
improve the performance. In contrast, the use of a measure such as to report on the number of courses
offered on-line or new academic programs does not provide context as to who is or is not the major
contributor to the reported activity. Thus an observer would have to ask a series of basic questions to
get at what the reported statistic is trying to convey.

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                               RI.00.01 - Maryland Higher Education Commission

    Exhibit 2 presents a sample of the wide range of performance indicators included in MHEC's
Managing for Results submission. As the data shows, MHEC estimates an accelerating rate of increase
in the number of students receiving financial aid. That also suggest that MHEC plans to positively
influence the percentage of accountability benchmarks achieved by the different segments of higher
education.

                                                    Exhibit 2


                                          Program Measurement Data
                              Maryland Higher Education Commission
                                              Fiscal 1999 through 2002

                                                                                           Ann.     Ann.
                                                 Actual        Actual    Est.     Est.     Chg.     Chg.
                                                  1999          2000     2001     2002     99-00    00-02

 Number of students receiving financial aid       33,481        34,684   36,125   38,000    3.6%      4.7%

 Number of courses offered on-line                  300            453     600      800    51.0%     32.9%

 % of community colleges achieving four-
 year transfer graduation goals                     25%           38%      50%     100%    52.0%     62.2%

 Percent change in number of IT graduates            n/a           n/a    8.6%     9.3%       n/a      n/a

 % of accountability benchmarks achieved:
 community colleges                                 28%           30%      40%      45%     7.1%     22.5%
 four-year public                                   32%           35%      40%      45%     9.4%     13.4%

 Number of graduates in academic
 programs in work shortage areas                     n/a           n/a      n/a      n/a      n/a      n/a

 % increase in the number of facilities
 classified as Condition Code 1                     49%           50%      50%      52%     2.0%      2.0%

 Number of GEAR-UP students admitted to
 college                                             n/a           n/a      n/a      n/a      n/a      n/a

 % of computer degrees in high demand
 areas awarded by State-aided independents        32.8%         32.4%    29.8%       n/a    -1.2%      n/a


 Note: n/a denotes not available.
 Source: Maryland State Budget Book




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                           RI.00.01 - Maryland Higher Education Commission

Issues
1. New State Plan

    In June 2000, MHEC approved the State plan entitled “The Maryland State Plan for Postsecondary
Education 2000." The plan was required as a result of Chapter 515 of 1999. The plan contains eight State
priorities for higher education which can be summarized as follows:

!   provide a high quality system of higher education;

!   provide affordable and equitable access to higher education;

!   contribute to Maryland’s economic health;

!   encourage basic and applied research;

!   strengthen teacher preparation;

!   develop high quality programs for a diverse student population;

!   establish Maryland as one of the advanced states in the use of information technology to improve
    access and learning; and

!   provide greater accountability in higher education.

     The priorities suggest that MHEC will need to, in practical terms, monitor institutions efforts in a
broad range of areas and activities including: the recruitment and retention of quality faculty; rate of
tuition growth; access to student financial aid; access to regional facilities; expansion of technology;
ensuring programs meet industry's need for a trained workforce; and participation in K-16 efforts. Since
this is an aggressive agenda that will require collaborative partnerships and strategic reallocation
of resources, MHEC should brief the committees on how it intends to successfully operationalize
the document. This discussion should include an assessment of the agency's authority to implement
and capacity to oversee and assist institutions’ efforts at attaining the State Plan's extensive goals.


2. Next Steps Emerge for Guideline Implementation

    As with most new policies after the initial implementation, there may be a need for a review of the
policy and recommendations for refinements to the policy. Fiscal 2002 marks that year for it is the second
year that the funding guidelines influenced the allocation of State resources.




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                           RI.00.01 - Maryland Higher Education Commission

   Assessing Peer Adjustments

    With the experience of this year, MHEC and other affected entities have to acknowledge a need for
a formalized process to refine or enhance the current funding guideline methodology. During the
development of the fiscal 2002 guidelines, a revision in the peer grouping for the University of Maryland
Eastern Shore occurred. The peer institutions were changed to reflect the decline in enrollment. This
revision was initiated and completed by USM. Also, MHEC worked with Morgan State University to
complete the development of a funding guideline. The proposed guideline provides a financial aid
adjustment. The appropriateness of that adjustment and its applicability to other historically black
institutions is currently under discussion.

    Currently, there is no formal process for reviewing and assessing the appropriateness of changes in
peers. Moreover, the funding methodology does not include a requirement to conduct routine peer
analysis review to determine if an update is warranted.

    MHEC should comment on its plans to establish a formalized process for reviewing and
assessing the circumstances that appropriately require an adjustment to a peer grouping. This
process must include input from the institutions and result in a written analysis that includes the
impact on the funding guideline and/or performance data.


   Linking Quality and Accountability to Peers

    Currently, four-year public institutions report their performance within their Managing for Results
(MFR) submission. The MFR is formatted in such a way that allows primarily for trending the campus
performance for a particular measure overtime. The present format does not readily lend itself to peer
comparisons.

    With the recent increases in funding, based on the operating guidelines which are derived from peer
comparisons, the expectation is that performance would also be based on peer comparisons in order to
provide the vital link between funding and performance. To that end, the General Assembly in 2000 asked
MHEC to work on creating a single report that incorporates the elements of the Performance
Accountability Report (former higher education annual accountability data) and MFR for the public four-
year institutions. Although some work has been initiated to identify both standard and individual
performance measures to include, a performance report with peer comparisons is not available at this time.


    MHEC should comment on the status of the annual report it is required to prepare on each
institution’s performance relative to its current peers. Moreover, it should brief the committees
on its plan to ensure that the integral component of performance accountability is implemented
within funding guidelines.




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                           RI.00.01 - Maryland Higher Education Commission

   Integrating Aspirational Peers for Funding

     MHEC developed the funding guidelines based on comparisons with current peers for appropriate
factors. In a few years, institutions will want to integrate or add aspirational peers to their current peers
to enhance their funding guidelines. In order to be eligible to do this, the institution must show
achievement of performance (a number of performance objectives) on key accountability factors based on
its current peers.

    To date, MHEC has not approved the USM selected institutions for accountability peers and
aspirational peers. The accountability peers are to be a subset of each institution’s current funding peers
(ten or so) and represent peers the institution wants to be compared to for performance purposes.
Moreover, MHEC has not developed the performance accountability factors which are supposed to be
outcome oriented and consistent with MFR and the old performance accountabilityreports. USM recently
presented a proposal to MHEC for review. That proposal identifies a process to follow in developing
accountability factors and the conditions under which institutions would be eligible to have aspirational
peers integrated into their funding guideline

    In the absence of a formalized process, funding decisions can not be based on performance, and
institutions will be prohibited from adding aspirational peers to enhance the funding guideline. MHEC
should comment on the development of a process to assess performance for the integration of
aspirational peers.


3. State’s Grade on Higher Education Report Card

    The first national report card on how states deliver higher education revealed that although Maryland
is among the top states, there are some key areas needing improvement. The report was conducted by
the National Center for Public Policy and Higher Education, an independent research group. The study
examined undergraduate institutions and ranked each state in five categories. Every state received an
incomplete in the area of student learning due to a lack of national data.

    As with most states, Maryland’s worst grade, a "D", was in affordability. That grade was heavily
influenced by the State’s tuition rates and the State’s significant use of merit-based aid programs.
However, unlike most other states (28 received a "B" or better), Maryland did not score its best in college
completion, a "B-." This category assesses how well colleges retain and then graduate students.
Maryland's score was impacted by the use of a five-year graduation rate which does not recognize the
growing body of part-time students who take more than fives years to finish. Maryland’s best grades can
be found in the categories of Participation, Benefits, and Preparation. In fact, Maryland's performance was
recognized for the economic and civic benefits provided by graduates of higher education.

    Although the report has some methodological issues regarding the calculation of grades, the
assessment provides a forum to evaluate the State on some key measures. MHEC should comment on
how it intends to make use of the information gained through the report card to develop better
policies to improve the State’s grade in the future.


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4. Partnership Agreement Signed with the Office for Civil Rights

    In December the Maryland Higher Education Commission signed an agreement with the U.S.
Education Department’s Office for Civil Rights to remove the remaining vestiges of segregation from our
public colleges. The agreement, includes proposals in nine general areas to bolster the four public
historically black institutions, and to improve college opportunities for African American students. The
agreement is set to end in 2005. The full budgetary impact of the agreement is not known. The
commitments are to:

!   improve academic and teacher preparation programs;

!   enhance existing K-16 partnerships;

!   increase efforts to recruit black students;

!   improve retention and graduation rates of black students;

!   improve campus climates for black students at predominantly white institutions;

!   increase diversity among faculty and staff members at all institutions;

!   improve and expand 2+2 Partnerships and Articulation;

!   avoid unnecessary program duplication; and

!   provide funding to enhance the historically black institutions in the areas of admissions management,
    administration of student financial aid, and public and governmental relations (includes an increase
    in the match for the private donation incentive program to a $2 State match for every $1 raised by
    the historically black university up to a certain level for the next five years).

The fiscal 2002 allowance provides for the following OCR related items:

!   $1.5 million increase for Access and Success;

!   $600,000 to fund two studies (best practices and Coppin Revitalization Study);

!   $37,000 for new OCR position; and

!   $3 million to increase need-based scholarships (educational excellence and part-time grant program).

    Implementation of this agreement is a substantial task for MHEC who is responsible for reporting on
the strategies, activities, and programs reflected in the commitments, including methods of implementation,
the standards for determining the success or need for adjustment of each strategy, and performance data.
MHEC should brief the committees on its plans for implementing the commitments contained in
the OCR agreement and for monitoring compliance.

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Recommended Actions

                                                              Amount             Position
                                                             Reduction          Reduction
1.   Reduce funding for training, employee awards, and           $ 6,000   GF
     administrative service. The remaining allowance will
     more than double the fiscal 2000 actuals for these
     expenses.
2.   Reduce funding for the special payments payroll to         $ 10,000   GF
     better align with actual expenditures. The remaining
     allowance provides a 13% increase over fiscal 2000
     actuals and the fiscal 2001 working appropriation.
3.   Reduce funding for applications software maintenance.      $ 40,000   GF
     The remaining allowance provides a 12% increase over
     fiscal 2000 actuals.
4.   Reduce funding for systems software maintenance.           $ 10,000   GF
     The remaining allowance provides a 22% increase over
     the fiscal 2001 working appropriation and more than
     doubles fiscal 2000 actual expenditures.
     Total General Fund Reductions                              $ 66,000




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                            RI.00.01 - Maryland Higher Education Commission

Updates
1. MHEC Assumes Oversight of State Funding for Regional Higher Education
   Centers

    As required during the 2000 legislative session by Chapter 542, Acts of 2000 MHEC on July 1, 2000,
assumed oversight responsibility for regional higher education centers receiving State support and not
governed by USM. Specifically, MHEC is charged with reviewing all State fund requests for new or
existing centers. To accomplish that review, MHEC developed both capital and operating request
guidelines. The capital request guidelines are based on existing Program Academic Analysis policies for
the public four-year institutions. Each center is required to submit a strategic plan for review. The plan
contains basic information about the center's mission, academic programs, enrollment projections,
faculty/staff needs, and projects. MHEC will review the strategic plan to determine whether it is
consistent with the State Plan.

    The operating request guidelines were developed in conjunction with USM and the executive directors
of the existing regional higher education centers. The guidelines are consistent with the Department of
Budget and Management (DBM) requirements. For example, each center will provide a statement of why
the funds are being requested, how the funds will assist in attaining stated goals, and details on the current
and future costs including personnel. MHEC will use this document to analyze each center’s budget
requests. Each center will annually submit by August 1 their budget request.

    State supported operating grants to each regional higher education center from MHEC will count as
part of that participating institutions overall funding guideline amount. The apportionment calculation will
be determined by MHEC and is based on the participating institutions enrollment at the regional higher
education center. Consequently, each regional higher education center will need to annually report fall
enrollment data to MHEC by October 1. However, those funds provided from MHEC for start-up and/or
incentive funds will not be counted towards the participating institutions’ funding guideline amount.
MHEC is currently working on guidelines to better determine appropriate levels of State support and
accountability measures for regional higher education center.


2. Capital Funding Guidelines

    MHEC, as charged in the 1999 legislation, assembled a committee to study the need for developing
guidelines or a formula to make capital funding decisions. The committee conducted a capital needs
assessment of Maryland’s higher education institutions which revealed over $3.1 billion in capital
construction needs. These needs include a backlog of deferred facility renewal projects and new projects
to accommodate projected enrollment increases.

    The committee determined that there is no simple formula that can be applied to higher education
capital budgeting. An institution’s need for capital projects fluctuates yearly. Therefore, the appropriate
method to determine capital funding is through the submission and review process of the Ten-year
Facilities Master Plans (FMP) and Five-year Capital Improvements Programs (CIP). The committee

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identified and recommended ways to enhance the current process including changes such as submission
dates and requiring annual updates of project cost estimates.

    The committee also recommended the development of a new facility renewal funding model.
Currently, there is no uniform process to evaluate and fund facility renewal. USM uses 2% of a building’s
replacement value as its standard measure. To facilitate the development, MHEC will prepare an annual
report on facility inventory. In addition, MHEC will prepare a report on innovative capital financing for
capital renewal and other projects. The report will be used as a tool for exploration of alternative funding
strategies beyond the typical State funds.


3. MHEC’s Advisory Council on Educational Technology Develops Strategic Plan

    The Educational Technology Policy Council, MHEC's advisory council, comprised of representatives
from postsecondary education, State agencies, and public education has produced a long-range
intersegmental strategic information technology plan entitled "Connecting With Tomorrow." The plan
contains four major recommendations:


    Connect All Educational Institutions to net.work. Maryland

    The plan recommends State funds to expand the University of Maryland Academic
Telecommunications System (UMATS) to connect all of higher education to net.work. Maryland, the
State's network backbone.


    Coordinate Distance Education

    The plan recommends expanding access to on-line courses and programs by developing a collaborative
Internet portal. The plan recommends that both MarylandOnline and Maryland Community College
Teleconsortium collaborate to accomplish this.


    Develop a Maryland Digital Library

    The plan recommends expanding on-line access to electronic databases, journals, specialized library
collections, and traditional library materials in digital form for students, researchers, the general public and
business and industry. This can be accomplished by the development of a statewide digital library.


    Develop Technology Training for Faculty

    The plan recommends accelerating multimedia instruction training for faculty. Faculty should be
trained to be proficient in basic computer skills, use of multimedia, and instructional techniques.


                                                      15
                           RI.00.01 - Maryland Higher Education Commission

4. Work Begins on the Task Force to Study College Readiness for Disadvantaged
   and Capable Students

    The 29 appointed members of the task force to Study College Readiness for Disadvantaged and
Capable Students which is chaired by the Secretary of Higher Education, have begun work, as prescribed
in Chapter 664, Acts of 2000. These legislators and members representing primary, secondary, and post-
secondary education are working on developing a comprehensive strategy to ensure that disadvantaged
and capable students have an adequate opportunity to successfully matriculate and graduate from higher
education institutions.

    As documented in the task force interim report, dated January 2001, the strategy will be developed
out of the work of three subcommittees. The subcommittees are: College Readiness, chaired by the State
Superintendent of Schools; Teacher Preparation, chaired by the University of Maryland Chancellor; and
Financial Aid, chaired by the Chairman of House Committee on Appropriations. In general, each
subcommittee will examine current practices, review the findings and recommendations contained in Miles
to Go: Maryland and The Road Taken, and make recommendations to enhance existing programs and/or
implement new programs.

    The interim report contains both short-term recommendations and outlines the scope of work to be
completed for development of long-term recommendations. Among the short-term recommendations put
forth are:

!   exploring ways to make the Maryland Partnership for Teaching and Learning K-16 more effective
    (particularly in ensuring alignment with K-12 content standards and two-year and four-year
    institutions’ admission standards), in developing a seamless system of education between all
    educational entities; and

!   providing additional funds for the Educational Assistance Grant Program and exploring ways to
    distribute information outlining the full range of educational opportunities to students and parents no
    later than the beginning of the students’ junior year of high school.

    The final report from the task force is due December 1, 2001.




                                                    16
                           RI.00.01 - Maryland Higher Education Commission

                                                                                          Appendix 1


Current and Prior Year Budgets
                                      Current and Prior Year Budgets
                           Maryland Higher Education Commission
                                             ($ in Thousands)


                       General           Special            Federal       Reimb.
                        Fund              Fund               Fund          Fund          Total
     Fiscal 2000

Legislative
Appropriation             $47,433             $350              $1,383              $0       $49,166
Deficiency
Appropriation                  495                 0                  0              0            495

Budget
Amendments                       67            580                560              172           1,379
Reversions and
Cancellations                     0                0           (1,118)         (82)          (1,200)

Actual
Expenditures              $47,995             $930               $825              $89       $49,839


     Fiscal 2001


Legislative
Appropriation             $57,180           $5,530              $1,507              $0       $64,217

Budget
Amendments                       35                0             1,630             272           1,937

Working
Appropriation             $57,215           $5,530              $3,137         $272          $66,154


Note: Numbers may not sum to total due to rounding.




                                                       17
                           RI.00.01 - Maryland Higher Education Commission

    Fiscal 2000 expenditures were $49.8 million, which is approximately $673,300 more than the
legislative appropriation. The additional $562,000 in general funds were provided through a deficiency
appropriation to cover operating expenses for the Maryland Higher Education Investment Program and
through two budget amendments to cover personnel costs related to the 401 deferred compensation
program.

   Special fund expenditures, through budget amendments, increased by nearly $580,000 over the
appropriation. Most of the monies were made available from the IT Investment Fund to support projects
such as the Maryland Digital Library and web-based financial aid administration.

    Additionally, the commission received over $560,000 in federal funds to continue Maryland’s College
Preparation/Intervention program. The timing of the receipt of federal funds, including GEAR-UP and
Eisenhower grants, resulted in the need to carry forward $1.1 million into the next fiscal year.
Reimbursable funds are attributable to funds from the Department of Labor, Licensing, and Regulations
(DLLR) and the Workforce Investment Act.

    In fiscal 2001, federal funds increased approximately$1.6 million, representing both carryover and new
federal monies. The reimbursable funds continue the Workforce Investment Act activity with DLLR and
the general funds provide an adjustment due to the general salary increase and annual salary review.




                                                   18
                                            State Aid to Maryland Independent Colleges and Universities
                                                     Fiscal 1999 Actual - Fiscal 2002 Allowance
                                                                                                                                      Allow.
                    Eligible                          Fall 1998     FY 2000    Fall 1999     FY 2001       Fall 2000      FY 2002       %
                    Independent Institution             FTES         Actual     FTES          Actual        FTES         Allowance    Change
                    Baltimore International College       497.63      $583,187     461.67      $596,403         474.73      $663,152      11%




                                                                                                                                                             RI.00.01 - Maryland Higher Education Commission
                    Capitol College                       487.67       571,514     509.53        658,239        499.07        697,143      6%
                    Goucher College                     1,353.10     1,585,737   1,411.13      1,822,968     1,506.07       2,103,816     15%
                    Hood College                          990.10     1,160,327     999.70      1,291,460        960.80      1,342,136      4%
                    Johns Hopkins University           13,206.80    15,477,428 13,686.20     17,680,478     13,858.47     19,358,810       9%
                    Loyola College                      4,393.23     5,148,552   4,500.00      5,813,312     4,481.47       6,260,134      8%
                    Maryland Institute of Art           1,284.67     1,505,542   1,346.60     1,739,601      1,403.13      1,960,029      13%
                    Mount St. Mary's College            1,344.67     1,575,857   1,359.20      1,755,879     1,455.93       2,033,785     16%
                    College of Notre Dame               1,464.60     1,716,407   1,453.80      1,878,087     1,429.33       1,996,627      6%
19




                    Sojourner-Douglass College            528.60       619,482     675.93        873,203        823.27      1,150,016     32%
                    St. John’s College                    571.53       669,792     592.93        765,979        620.73        867,099     13%
                    Villa Julie College                 1,717.73     2,013,057   1,782.27     2,302,416      1,932.83      2,699,963      17%
                    Washington College                  1,194.47     1,399,834   1,224.80      1,582,254     1,309.47       1,829,186     16%
                    Western Maryland College            2,169.07     2,541,995   2,209.73      2,854,638     2,209.50       3,086,437      8%
                    Total                                 31,204   $36,568,711 32,214.00    $41,614,917     32,965.00    $46,048,333     11%
                    Grant per FTES                                   $1,171.93                $1,291.85                    $1,396.89       8%
     Note: Numbers may not sum to total due to rounding.
     Source: Maryland Higher Education Commission




                                                                                                                                                Appendix 2
                                                                 Object/Fund Difference Report
                                                              Maryland Higher Education Commission
                                                                                        FY01
                                                                     FY00              Working                    FY02           FY01 - FY02      Percent
                          Object/Fund                                Actual          Appropriation              Allowance       Amount Change     Change
     Positions
     01   Regular                                                           81.00                 82.60                83.60              1.00         1.2%
     02   Contractual                                                        4.00                  3.00                 5.00              2.00        66.7%
     Total Positions                                                        85.00                 85.60                88.60              3.00         3.5%




                                                                                                                                                                           RI.00.01 - Maryland Higher Education Commission
     Objects
     01   Salaries and Wages                                         $ 4,061,647           $ 4,688,286            $ 4,966,907        $ 278,621         5.9%
     02   Technical & Spec Fees                                          338,508               311,142                342,391           31,249        10.0%
     03   Communication                                                  208,485               254,621                312,430           57,809        22.7%
     04   Travel                                                          78,979                80,619                 69,655         (10,964)      (13.6%)
     07   Motor Vehicles                                                   (316)                 1,086                    686            (400)      (36.8%)
     08   Contractual Services                                           655,587               606,803                705,266           98,463        16.2%
     09   Supplies & Materials                                            79,062                85,535                128,432           42,897        50.2%
20




     10   Equip - Replacement                                             21,605                47,604                106,000           58,396       122.7%
     11   Equip - Additional                                              62,530                93,269                 10,706         (82,563)      (88.5%)
     12   Grants,Subsidies,Contr                                      44,111,858            59,767,628             64,002,359        4,234,731         7.1%
     13   Fixed Charges                                                  217,086               216,886                723,294          506,408       233.5%
     14   Land & Structures                                                3,827                     0                      0                0         0.0%
     Total Objects                                                  $ 49,838,858          $ 66,153,479           $ 71,368,126       $ 5,214,647        7.9%
     Funds
     01   General Fund                                              $ 47,994,450          $ 57,215,287           $ 62,930,458       $ 5,715,171       10.0%
     03   Special Fund                                                   929,773             5,530,000              5,576,207            46,207        0.8%
     05   Federal Fund                                                   825,320             3,136,598              2,689,867         (446,731)     (14.2%)
     09   Reimbursable Fund                                               89,315               271,594                171,594         (100,000)     (36.8%)




                                                                                                                                                              Appendix 3
     Total Funds                                                    $ 49,838,858          $ 66,153,479           $ 71,368,126       $ 5,214,647        7.9%
     Note: Full-time and contractual positions and salaries are reflected for operating budget programs only.
                                                                      Fiscal Summary
                                                            Maryland Higher Education Commission
                                                                              FY01              FY01
                                                              FY00          Legislative        Working         FY00 - FY01      FY02         FY01 - FY02
                          Unit/Program                        Actual       Appropriation     Appropriation      % Change      Allowance       % Change
     01 General Administration                               $ 5,706,606       $ 5,978,587       $ 6,385,851          11.9%    $ 7,365,767          15.3%
     02 College Prep/Intervention Program                        541,624         1,050,000         1,925,400         255.5%      2,100,400           9.1%
     03 Joseph A. Sellinger Program for Aid to Nonpublic     36,568,711        41,614,917        41,614,917           13.8%     46,048,333          10.7%
     07 Educational Grants                                     6,281,171        13,514,170        14,167,811         125.6%     13,784,126         (2.7%)
     08 Eminent Scholars Program                                 278,473                 0                 0       (100.0%)              0             0%




                                                                                                                                                                         RI.00.01 - Maryland Higher Education Commission
     19 Physician Assistant - Nurse Practitioner Training         79,500            79,500            79,500             0%         79,500             0%
     30 Private Donation Incentive Grants                              0         1,630,000         1,630,000                     1,640,000           0.6%
     39 Health Manpower Shortage Incentive Grant                 382,773           350,000           350,000         (8.6%)        350,000             0%
     Total Expenditures                                     $ 49,838,858      $ 64,217,174      $ 66,153,479         32.7%    $ 71,368,126          7.9%
     General Fund                                           $ 47,994,450      $ 57,180,240      $ 57,215,287         19.2%    $ 62,930,458          10.0%
     Special Fund                                                929,773         5,530,000         5,530,000        494.8%       5,576,207           0.8%
     Federal Fund                                                825,320         1,506,934         3,136,598        280.0%       2,689,867        (14.2%)
21




     Total Appropriations                                   $ 49,749,543      $ 64,217,174      $ 65,881,885         32.4%    $ 71,196,532          8.1%
     Reimbursable Fund                                          $ 89,315               $0         $ 271,594         204.1%       $ 171,594        (36.8%)
     Total Funds                                            $ 49,838,858      $ 64,217,174      $ 66,153,479         32.7%    $ 71,368,126          7.9%




                                                                                                                                                            Appendix 4

								
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