Examining Budgeting and Fund Allocation in Higher Education

This study assesses the factors influencing the discontinuance of the norm-based and incremental budgeting approaches in higher education in Ghana. The National Council for Tertiary Education (NCTE – the coordinating body for tertiary education in Ghana) and the Ministry of Education of Ghana established norms in the early 1990s to assist higher education institutions in planning and ensuring efficiency of their operations and foster performance monitoring and evaluation. The norms also serve as standardized input factors for budgeting and allocating public funds for higher education. During the past years, budgetary allocation to higher education institutions for recurrent expenditure has fallen short of the norm-based costs. Indeed, the difference between the norm-based costs of university education and resources made available to the institutions by the Government was 28.9% in 2005/06 and 23.4% in 2009/10. It was also argued that the bases for funding tertiary education were not planned outputs of tertiary education. The fund allocation model was not programme-linked as initially thought. The consequence of the inability of the state to provide funds to meet the norm-based costs of higher education is the breakdown of norm-based budgeting, which was instituted in the early 1990s and a reversion to incremental and ad-hoc budgeting without due regard the volume of activities performed by the institutions. it is proposed that the Government of Ghana acting in concert with the National Council for Tertiary Education and tertiary institutions should regularly assess the developments in the tertiary education system and determine mission and purposes of tertiary education in Ghana as the basis for allocating public funds tertiary education institutions. The afore-made recommendations impose responsibilities on the Ministry of Education, the National Council for Tertiary Education and tertiary education institutions. This development has had grave consequences for higher education equity and efficiency in fund management.