Performance-based financing in higher education and an evaluation for Turkey

In Turkey, discussions on efficiency and productivity related to the activities carried out in public institutions are in question in recent years. Especially, new methods have been developed for using the resources in accordance with the needs without wasting them. For being that the quality of higher education is an important indicator in evaluating the development level of countries, new ideas for measuring the performance levels of higher education institutions become a current issue on many platforms. When the developed countries are examined, it is observed that modern budgeting techniques are preferred for the transfer of public funds in higher education. The performance-based financing method is among the new techniques mentioned too. This method, which is generally confused with the performance-based budgeting, is directly related to the performances of higher education institutions. In practice, the appropriation transfer is provided to the institutions that achieve the performance goals in accordance with the formulas based calculations. The aim is to accelerate research and development (R&D) studies, increase competitive factors among universities and support cooperation development. By using this method which adopts the criteria of efficiency, efficiency and economy in its essence, it is desired to prevent both of the unconscious use of resources and not to remaining idle of resources in higher education. In Turkey, Performance-Based Budgeting method based on Strategic Planning has started to be implemented in all public agencies and institutions with the adoption of Public Financial Management and Control Law No. 5018 since 2006. However, the application of this budgeting method within the scope of higher education did not cause positive effects on the performance of the universities Although public higher education institutions determine their performance goals through strategic plans, appropriation transfer according to the traditional method is still continued. In other words, the performance levels of universities are not considered in practice, students' numbers are still accepted the primary criterion while financing is allocated. Also, the efficiency of performance auditing conducted by the Court of Accounts is another problem. For finding solutions to current problems, the performance based financing in higher education within the scope of this thesis study has been examined, and a new financing proposal for Turkey has been presented. The sequential mixed method was preferred as the method of the study. Firstly, a survey was applied to a group of 422 which consists of department heads and also academic personals who have administrative positions. In order to determine important performance indicators, explanatory factor analysis was applied to the questionnaire data. In the next stage, 11 individuals who are experts in the government budget field were interviewed with the semi-structured interview technique. Thus, a new financing proposal based on performance is designed. According to the new proposal, it is suggested that the all public higher education institutions in Turkey are subjected to the predetermined performance goals and indicators. If a higher education institution succeeds at least 80 % or better of the proportion of a performance indicator, it can deserve performance financing as much as the coefficient of the relevant performance indicator. An institution that achieves at least 80 % or better of all performance indicators/goals can receive maximum 5% additional performance appropriation. The total amount of performance appropriation is determined on the basis of maximum 5% of the amount found by dividing the treasury appropriation assigned to all public higher education institutions by the total public higher education institutions in relevant year. With this new financing proposal, it is expected that universities clearly identify their goals, that performance measurements and audits become more reliable, and that the service quality of higher education is increased. Keywords: Higher Education Financing, Performance-Based Financing, Performance-Based Budgeting, Performance Target, Performance Indicator