SAC levels 1 and 2 (competitive)

Funding and payments

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Calculating funding

When funding Student Achievement Component (SAC) for provision at levels 1 and 2 on the New Zealand Qualifications Framework (NZQF), competitive allocation (for this website page, referred to as SAC(C)), the TEC calculates a tertiary education organisation’s (TEO’s) consumed funding (up to 100% of the amount of SAC(C) funding approved by the TEC) using:

  • the number of valid domestic student enrolments, measured by equivalent full-time students (EFTS)
  • the qualifications, and their component courses, in which a valid domestic student is enrolled.

As part of the competitive process, TEOs submit an application form that specifies the rate for providing the qualification.  Therefore, to calculate a TEO’s consumed SAC(C) funding, we use the price per EFTS of each qualification, and student enrolments. 

Example:

Step

Funding calculation 

Example

1

Assign the qualification an EFTS value

A TEO’s “Certificate in Learning” has a value of 0.5 EFTS unit.

2

Apply the funding rate (price per EFTS)

The TEO has specified the funding rate for this qualification as $7,500 per EFTS, for 20 EFTS of provision.

3

Multiply the funding rate by the number of valid enrolments

Forty students enrol in the qualification.  The qualification attracts SAC(C) funding of $150,000 (excl. GST (0.5 x $7,500 x 40)).

 

Payments

The TEC pays a TEO’s allocated SAC(C) funding in monthly instalments.  To account for the government's financial year that runs from July to June, the payment amounts are equal from January to June, and equal from July to December.  

 

SAC(C) over-delivery and under-delivery

As the value of actual enrolments may vary from the dollar value of a TEO’s SAC(C) funding approved by us, there is a tolerance band for over-delivery and under-delivery. This band is currently set at 99% to 105% of each year’s funding.

A TEO that receives SAC(C) funding is expected to manage its enrolments effectively and in accordance with its Investment Plan.  

Over-delivery

The tolerance band for over-delivery is 105%. A TEO is expected to deliver no more than 105% of its SAC(C)-funded provision each year, except in cases where we have specifically agreed an exception.

However, we will only pay SAC(C) funding up to the dollar amount agreed in the TEO’s funding approval letter. This means that we will not pay for over-delivery.

If the value of a TEO’s enrolments exceeds the upper tolerance level, we may:

  • revise the funding approval of the SAC(C) provision of the TEO's Investment Plan for future years, or
  • take no action if there is a good reason for exceeding the tolerance band.

It is the TEO's responsibility to notify us of actual or anticipated over-delivery above agreed levels at the earliest possible opportunity. 

Under-delivery

If a TEO delivers less than 99% of its SAC(C)-funded provision during the year, we will recover funding (see below for recovery details). We may also reduce SAC(C) funding to the level of actual delivery within the Investment Plan period by making a significant Plan amendment, or by revoking or suspending some funding. 

We will also consider the level of delivery achieved when determining future funding allocations. 

Funding recoveries

TEOs are expected to maintain sufficient cash reserves so they are able to repay any recoveries due on demand. 

Under-delivery

If a TEO has delivered less than 99% of its allocated SAC(C) funding, we will recover the difference between the value of actual delivery and 99% of allocated SAC(C) funding.

Recoveries will be based on delivery volume data at the course level, submitted through the December SDR process and will occur early in the following year. 

Repayment of over-funding

If we consider that a TEO has received funding that was greater than it should have been, or that it was not entitled to receive, the TEO must repay the money to us.  We may off-set the amount against any funding payable to the TEO. See Condition SACC027.

Revocation of funding

If a TEO has its funding approval revoked in accordance with section 159YG of the Education Act 1989, the unspent portion of funding is repayable to us (see Condition SACC026).  Again, we may arrange to off-set the amount against any funding payable to the TEO.
  • Last changed: 29 March 2016
  • Last verified: 29 March 2016