Funding and payments
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When funding Student Achievement Component (SAC) provision at level 3 and above on the New Zealand Qualifications Framework (NZQF) (for this website page, referred to as SAC3+), the TEC calculates a tertiary education organisation’s (TEO’s) consumed funding 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 SAC3+ funding, we use the following elements:
Assign the qualification an EFTS value
A TEO’s Certificate in Communication Studies obtained through one full-time academic year’s study has a value of 1.0 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 0.25 EFTS units.
The course classification prescription in the funding mechanism (PDF, 971 Kb) classifies this subject as number 03 (e.g. arts, humanities, language).
Apply the funding category
The funding category alphabetic code in the funding mechanism gives the category of the course as A (arts and social sciences).
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 A1 courses is $6,014 (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 SAC3+ funding of $150,350 (excl. GST (0.25 x $6,014 x 100)).
We pay a TEO's allocated SAC3+ 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.
SAC3+ over-delivery and under-delivery
We approve SAC3+ funding as a total SAC3+ dollar value (not on EFTS volumes). This dollar amount is 100% of a TEO's SAC3+ allocation. As the value of actual enrolments may vary from the dollar value of a TEO’s SAC3+ funding approved by the TEC, 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 SAC3+ funding is expected to manage its enrolments effectively and in accordance with its Investment Plan.
Funding available for additional delivery
From 2016 we will fund SAC3+ delivery for additional enrolments above the amount the TEO has been approved to deliver. This will provide TEOs with flexibility to meet additional student demand.
Funding for additional delivery:
- is limited to 2% of a TEO’s approved funding allocation or 10 EFTS (whichever is greater)
- is payable for provision that the TEC has already agreed to fund
- does not mean the TEC has changed your TEO’s 2016 approved funding allocation
- is subject to the conditions that we have imposed on your funding.
To be eligible for additional SAC3+ funding, TEOs must:
- have a NZQA External Evaluation and Review (EER) rating of Category 1 or 2 (except for universities)
- be approved by the TEC to deliver a minimum of 20 funded EFTS in 2016
- have an average 2015 course completion rate of 70% or higher.
Additional funding for 2016 will be calculated using the December 2016 Single Data Return (SDR). Payments will be made in March 2017.
For private training establishments (PTEs), additional funding is above any unfunded EFTS that the TEC has approved.
These changes are included in a supplementary funding mechanism for 2016 for the major teaching and learning funds.
For more information, see Condition SAC3+032 or Condition SAC3+033.
Even though we will now fund over-delivery up to the amounts described above, the tolerance band for over-delivery remains at 105%. A TEO is expected to deliver no more than 105% of its SAC3+ funded provision each year, except in cases where we have specifically agreed an exception.
However, we will only pay SAC3+ funding up to the dollar amount agreed in the TEO’s funding approval letter, plus an additional 2% or 10 EFTS (as described above). This means that we will not pay for any over-delivery above these amounts.
If the value of a TEO’s enrolments exceeds the upper tolerance level, we may:
- revise the funding approval of the SAC3+ 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.
Please note that small TEOs will not be disadvantaged when we make future funding decisions if their funding for additional delivery up to 10 EFTS causes them to exceed the 105% 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 SAC3+ funded provision during the year, we will recover funding (see below for recovery details). We may also reduce SAC3+ 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 SAC3+ funding, we will recover the difference between the value of actual delivery and 99% of allocated SAC3+ 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 SAC3+027).
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 the TEC (see Condition SAC3+026). Again, we may arrange off-set the amount against any funding payable to the TEO.