Budgeting and Fund Allocation in Higher Education in Ghana

The National Council for Tertiary Education (NCTE) the coordinating body for tertiary education in Ghana) and the Ministry of Education established norms in the early 1990s to assist higher education institutions in planning and ensuring efficiency of their operations and foster performance monitoring and evaluation. The norms also serve as standardised input factors for budgeting and allocation of public funds for higher education. During the past years, budgetary allocation to higher education institutions for recurrent expenditure has fallen short of the norm-based costs. Indeed, the difference between the normbased costs of university education and resources made available to the institutions by the Government were 28.9% in 2005/06 and 23.4% in 2009/10. The consequence of the inability of the state to provide funds to meet the norm-based costs of higher education is the breakdown of norm-based budgeting which was instituted in the early 1990s and a reversion to incremental and ad-hoc budgeting without due regard to the volume of activities performed by the institutions. This development has had grave consequences for equity and efficiency in fund management in higher education. This work assesses the factors behind the discontinuance of the norm-based budgeting approach and the use of the incremental budgeting approaches in higher education in Ghana.