Funding and payments
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When funding Student Achievement Component (SAC) for provision at levels 1 and 2 on the New Zealand Qualifications Framework (NZQF), non-competitive allocation (for this website page, referred to as SAC(NC)), the TEC calculates a tertiary education organisation’s (TEO’s) consumed funding (up to 100% of the amount of SAC(NC) 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.
To calculate a TEO’s consumed SAC(NC) funding, we use the following elements:
Assign the qualification an EFTS value
A TEO’s “Certificate in Trades” has a value of 0.5 EFTS unit.
Disaggregate the qualification into courses
Calculate the EFTS factor of each course
Classify the courses
It comprises four courses.
The EFTS value of the qualification is disaggregated among the four courses. For this example, each course has an EFTS factor of 0.125 EFTS units.
The course classification prescription in the funding mechanism classifies this subject as number 22 (e.g. Trades 2).
Apply the funding category
The funding category alphabetic code in the funding mechanism gives the category of the course as P (trades, vocational training for industry).
The funding category numeric code in the funding mechanism gives the category of the course as 1 (non-degree course with no research requirement).
Apply funding rates
The funding rates table in the funding mechanism states that the rate for P1 courses is $9,938 (excl. GST) per EFTS unit.
Multiply the funding rate by the number of valid enrolments
For 100 students on each of the four courses, each course attracts SAC(NC) funding of $124,225 (excl. GST (0.125 x $9,938 x 100)).
Funding for fees-free delivery
In addition to the calculation of funding for qualifications and courses, we will pay additional funding to cover the cost of fees-free provision to students under the age of 25 years.
We will pay $3,000 per EFTS for trades provision, and $2,100 per EFTS for non-trades.
Special Supplementary Grant
Institutes of technology and polytechnics (ITPs) may also receive funding from us for the Special Supplementary Grant for special education. This funding, attached to specific qualifications, provides additional tutorial support for students with special needs or disabilities. As specified in Condition SACNC001, an ITP that receives the Special Supplementary Grant must report using the template specified by us, if requested by us.
We pay a TEO’s allocated SAC(NC) 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(NC) over-delivery and under-delivery
As the value of actual enrolments may vary from the dollar value of a TEO’s SAC(NC) 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(NC) funding is expected to manage its enrolments effectively and in accordance with its Investment Plan.
The tolerance band for over-delivery is 105%. A TEO is expected to deliver no more than 105% of its SAC(NC)-funded provision each year, except in cases where we have specifically agreed an exception.
However, we will only pay SAC(NC) 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(NC) 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.
If a TEO delivers less than 99% of its SAC(NC)-funded provision during the year, we will recover funding (see below for recovery details). We may also reduce SAC(NC) 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.
TEOs are expected to maintain sufficient cash reserves so they are able to repay any recoveries due on demand.
If a TEO has delivered less than 99% of its allocated SAC(NC) funding, we will recover the difference between the value of actual delivery and 99% of allocated SAC(NC) 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 SACNC029).
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 SACNC028). Again, we may arrange to off-set the amount against any funding payable to the TEO.