"No public university receives 60% of the money it needs to educate a student"
It is over a week since the country’s leading public university was closed following lecturers’ strike over a 100% pay rise. The University Council closed the institution three days to the opening of the new academic year. Prof. Abdu Kasozi, the former director of the National Council for Higher Education, puts down how best public universities in the country can be funded
Neither Makerere’s academic staff, the council nor the Government should be blamed for the current financial problems of public universities.
Makerere and other public universities are running on huge deficits because insufficient funds come to their coffers. No public university receives more than 60% of the money it needs to educate a student.
To operate well, a university needs to get 100% of the cost of educating a student like the “first world schools”.
Blaming one another and giving ultimatums will not solve the problem of financing in public universities.
The current staff strike at Makerere is a symptom of a much larger structural problem.
It is not only the state’s budgetary constraints and consequent low funding of public universities, one indicator of which is low pay in comparison to their counterparts in the region that causes unrest in many public universities.
Even if the state was to increase the salaries of Makerere staff by 100%, as per their demand, this would be a temporary relief.
As the cost of living escalates, Makerere and staff of other public universities will keep knocking on the door of the state for salary increments to match the rate of inflation.
Besides, the treasury cannot be expected to treat and fund public universities differently from other Government institutions.
The quality of a university is determined by the quality of its academic staff. Academic staff and other education inputs need assured and sufficient financial flows.
These institutions will remain dependent on the state, which, as is the case internationally, cannot fully afford to sufficiently fund universities.
Public universities must, therefore, move from depending on the state for funding to a multiple, but institutionally-free model with inbuilt accountability mechanisms if we are to reduce financially-driven strikes.
Kenya and other states in Africa have abandoned the Government-centred one for a multiple and state-detached model for financing their public universities.
The current funding model was carried over from the 1970 Makerere Act and was not amended by the Universities and Other Tertiary Institutions Act.
Public universities should be chartered, their relations with the state articulated and their responsibilities and privileges defined.
A new model for funding public universities will thus be needed to establish that relationship. This will only involve revising the current act or drawing a new one like Kenya and Tanzania have done.
Autonomy and Accountability
The new model must preserve the mission of public universities, while at the same time ensuring their autonomy and accountability to the public.
In this model, the state and other players contribute funds to higher education through independent agencies. These agencies then remit funds to institutions after certifying the accountability of benefiting institutions.
The state alone cannot provide all the money a good public university needs. It can only be one of the major funders.
Because higher education is a public good, which serves the public and private sectors, an effective system of getting funds from citizens and the private sector to support the higher education sector is acceptable.
The Government, as the main guard of the state, must, therefore, work out a system of generating funds for universities.
The Government must contribute its part and the private sector must do likewise. The private sector is eventually repaid, for the public sector uses higher education institutions as a conduit to supply human capital to the private sector and the rest of society.
The provision of quality higher education is thus not only everybody’s responsibility, but also ultimately, a state duty.
The funding reforms suggested are based on the above assumptions. They are intended to increase revenue to universities, while at the same time reducing pressure on the Government.
Public universities, whether individually or as a group, should be encouraged to negotiate a new relationship with the state through a charter or other forms of agreements that are consistent with the public missions of those universities.
Public universities in Tanzania have gone through this process. The Universities Act was recently assented to in Kenya.
If this model is adopted, more funds should come to universities. Intermediary bodies will also assess the needs of institutions and collect and distribute resources to universities on behalf of the nation.
These intermediaries will protect the state from being seen as an immediate giver and denier of funds by staff and students.
They will also protect universities from Government political micro-management and budgetary fluctuations.
The accountability mechanism that will ensure that public money is used for its intended purpose.
The funding sources will include the state represented by the Government. The state will continue supporting public universities for identified development, recurrent research and training funding based on realistic unit costs, not arbitrary figures.
State contributions will not go directly to institutions, but through a University Grants Committee, the Loans Board, and the National Research Foundation on conditions agreed by all parties.
Hopefully, the Government contribution as a percentage of GDP will be increased to the levels that Kenya, Tanzania and Rwanda contribute to their public university systems.
Parents who may wish to buy education insurance starting at, say, five years of age for their children should be able to do so. But the insurance should be used only for fees at tertiary institutions at ages 18 to 25.
The third source of funding is a national education lottery specifically for universities and colleges organised by the state or its agencies.
The fourth source of funding suggested is donations by philanthropic organisations, whether local or foreign. These can pay directly to specific institutions or through the University Grants Committee.
The fifth window of funding is income-generating activities that many universities, private and public, are already using.
Each university will organise various income-generating activities and should not be required to remit the collected money to the Government.
As another option, public universities will be encouraged to start endowments. Some private universities, like Islamic University in Uganda, Mbale, have endowments, as do most famous American universities.
The other source is the households.
They should continue to contribute to higher education through fees, tuition and welfare components of education based on realistic unit costs.
Students who cannot afford university education, but are qualified can, and should, access education by taking up a loan from the proposed Student Loans Board.
Lastly, the private sector should be encouraged to donate to education through a tax waiver on donations and other incentives to higher education as it is done elsewhere in the world. All funds from these sources should be exempt from taxation and spent only on higher education.
For purposes of coordination on a macro level, the state and other sources of income should remit funding through three intermediary bodies whose roles are described below.
All Government contributions, some philanthropic organisations that may wish to do so, some endowment monies and some private sector contributions should be remitted to the universities.
This should be done through the University Grants Committee, the Loans Board and the National Research Foundation whose roles and functions are described below.
The education insurance funds, students’ fees, money from institutionally-owned endowments and some donations from the private sector should go directly to the targeted university.
The Government and financial institutions will contribute to student loan schemes, which should be established by law.
Universities should receive funds directly from various sources. First, they should be eligible to get funds from the University Grants Committee and the National Research Foundation, according to the allocations made by the intermediary bodies.
unding decisions will be made on agreed criteria procedures, rules and regulations. All remittances should be based on unit costs except for research, which should depend on the research capacity of a given institution, the projects advanced and the researchers.
However, institutions will also be able to get funds directly from fees, endowments, donations made directly to universities, education insurance fund (for individual student fees) and through other institution-specific fund-raising activities.
Both the universities and Government operate in different ways although both serve the public good. Universities operate freely in search of truth whereas governments follow strict regulated guidelines to maintain law and order, and deliver services.
University products take time to become “truth”, but the civil servant deals with black-and-white and true or not true scenarios.
The two institutions cannot be guided by the same regulations, procedures or system of funding. A buffer body is, therefore, necessary to delink the two entities.
A University Grants Committee is a buffer body between the state treasury and public institutions of higher learning that has been in place in many countries: Pakistan, the UK and East Africa (before 1970).
Its role is to scrutinise the needs of universities, to seek funds from multiple sources and to distribute it to universities according to agreed-on criteria. Few people normally staff it and its members often include representatives of the subject universities, Government and the private sector.
Since the University Grants Committee will be only a conduit for transmitting funds, it will be required to remit funds within a specified period of receiving it and will be accountable to the Government through the Auditor General.
Membership should include representatives of the ministries of finance, education, labour, trade and tourism, all public universities, the National Council for Higher Education, for Science and Technology, the Planning Authority, Investment Authority, UMA and Uganda Chamber of Commerce and Industry.
All these institutions have a stake in what universities produce and should, therefore, be involved in financing them.
Because universities receive public funds, they must be accountable to the public. In this model, public interest will be protected by a strict accountability mechanism that will be integrated into the funding mechanism.
For an institution to get funding for any financial year, the Auditor General must certify that the accounts of the previous academic year were impeccable; the National Council for Higher Education must certify that the academic processes were well-conducted.
Each university council should be required to produce annually a financial and academic audit to assure the public that funds were well used.
This model prohibits the committee from granting funds to an underperforming university. Any university that fails for two consecutive years to receive its grants will see its earmarked funds forfeited for return to source or for disbursement to compliant institutions.
The model does not prescribe new functions, but merely reinforces existing ones.