UNIVERSITY OF COLORADO SYSTEM

Boulder • Colorado Springs • Denver • Health Sciences Center ,

Office of the President

Campus Box 35

Boulder, Colorado 80309

(303)492‑6201

FAX #: (303) 492‑6772

June 21, 2004

Rick O'Donnell

Executive Director

Colorado Commission on Higher Education

1380 Lawrence Street

Suite 1200

Denver, CO 80204

Dear Executive Director O'Donnell:

You requested an outline of the qualitative and quantitative outcomes higher education institutions would like to see in their performance contracts. I am encouraged that this dialogue has been initiated, and accordingly, I am presenting some very early views on how such a contract can and should be viewed as a means of reconstituting the partnership between the public higher education system and state government in meeting the needs of Colorado. The University of Colorado System stands ready to maintain and enhance our already broad and substantial role in serving Colorado's students and businesses, and improving the quality of life for our citizenry. Ultimately, our effectiveness in accomplishing our educational, research and public service missions will depend to a great extent on how the University is supported in this role by CCHE and others, particularly with regard to delegated management controls and financial resources. In as much as the November election may bring changes to the level of state spending available to higher education, it may be prudent to wait until we have a better sense of the resources that may be available, before we can commit to specific levels of performance.

In the meantime, I would like to contribute some of the University of Colorado's thoughts on the principles that can help shape an effective performance contract system.

Four State Objectives

As SB04‑189 makes clear, the state wants performance contracts to focus on four main objectives:

• Improving Colorado resident's access to higher education

• Improving quality and success in higher education

• Improving the efficiency of operations, and

• Addressing the needs of the state

We concur with these objectives as the basis of a performance contract, the tenets of which should be outcomes based. Contracts should also provide institutions with the support and management flexibility needed to obtain those expected outcomes. These four objectives are well established in the public higher education arena, dating back at least to the CCHE Master Plan from the mid 1980s. For quite a few years, they have appeared in institutional strategic plans, CCHE's policies and master plans, and in legislative initiatives. As a result, Colorado institutions do have experience with setting performance outcomes consistent with these goals and with measures to assess progress toward achieving them.

Role and Mission Differences

As you have already clearly stated, individual performance contracts and outcomes will need to recognize the variable roles and missions of Colorado institutions. Collectively, higher education institutions will need to meet the state's four objectives in the broadest of senses; but individually, institutions will fulfill the parts of these objectives that are congruent with their respective roles and missions. Given that SB04‑189 recognizes the diversity of role and mission among Colorado's institutions of higher education, each governing board's performance contract should be tailored to the legislatively recognized roles and missions of its institutions. In CU's case, this means that its very significant mission in graduate education and research will become prominent elements of the Board of Regents' performance contract. The strategic plans of institutions, as blueprints for furthering their roles and missions in an ever‑changing environment, will play a significant role in setting the outcomes identified in the performance contract.

Responsibility for Oversight

The governing board and the Department of Higher Education have joint responsibility for negotiating the performance contract with review and approval by CCHE. It is the responsibility of the governing board to make sure that its institutions meet the objectives spelled out in the performance contract. The Board of Regents will compare CU's performance to similar university systems. Internally, the Board will have agreements with each of its campuses to specify the campus's performance objectives. The Board of Regents and the other governing boards should make available the data collected and used to measure its institutions' progress toward the goals set forth in the performance contract, and report annually on our results.

Setting Performance Outcomes and Providing Support for Success

For the University of Colorado, outcomes should be established as system‑wide goals, Where available, measures of performance will be based on comparisons with similar university systems. Other measures may be evaluated based on state needs or improvement over time. For example, for each of the major areas outlined in SB189, some of the following outcomes could be selected to be articulated in a performance contract:

Access

•    Resident enrollment size as a percent of Colorado high school graduates, including ensuring admission for students with evidence of established preparation

•                 Numbers and success of transfer admissions from Colorado community colleges

•              Persistence and graduation rates relative to student preparation

•              Demographics of admitted and graduating students

•           Numbers of degrees awarded

•    Financial aid for low‑income students or measures of student debt

•    Non‑traditional delivery of coursework (on‑line etc.) to facilitate access for students (working, rural, handicapped, etc.)

Quality

·        Awards and recognitions of faculty and students

·        Student success on national examinations and licensure (a QIS measure)

·        Post‑graduation placement

·        Accreditation of programs

·        Research dollars per faculty

·        Alumni surveys of student satisfaction

Efficiency

•    Administrative costs: Institutional support as a % of total E&G expenditures or per student

•             Expenditures on instruction and research as a % of total current funds budget

•          Cost to produce a degree

Meeting State Needs

•    Programs that meet state workforce need in areas such as teacher education, telecommunications, nursing, engineering, etc.

•    Supporting the creation of new business and expanding economic resources through scientific and medical innovations, technology transfer activities, etc.

Whenever goals are established, there must be an explicit recognition of the resources needed to achieve them. If the University of Colorado is to continue providing substantial value to the citizens and businesses of Colorado, there must be a commitment to supporting the quality and breadth of programs necessary to achieve this. Accordingly, a long‑term resource plan for operating and capital funding, including the ability to manage entrepreneurially, should be a key part of the contract. In general, the University should be supported to attain resources, from all sources, at the average of our competitive peers. Otherwise, Colorado will be at a disadvantage compared to other states in maintaining a talented workforce and supporting a strong and sustainable economy.

Because public higher education institutions are becoming enterprises, with significant responsibilities for generating more of the resources needed for successful operation than in the past, CCHE and the legislature may need to consider waiving certain existing policies and regulations that might inhibit our ability to perform up to desired expectations. This need was anticipated and authorized in SB04‑189. (Section 3 (2)(a). Among the areas where management flexibility is needed to allow CU and other institutions to attain their objectives are:

•    Relief from state fiscal rules;.

•    Relief from academic degree program approval process. CCHE has already acted appropriately at a staff level to shift responsibility to the governing boards for these approval;

•    Simplifying the capital construction process (and reduced oversight of wholly cash-funded projects)

•            Relief from unnecessary reports;