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Integrating PerformanceBased Funding into New Mexicos Adult Basic Education Funding System PBF Task

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Title: Integrating PerformanceBased Funding into New Mexicos Adult Basic Education Funding System PBF Task


1
Integrating Performance-Based Funding into New
Mexicos Adult Basic Education Funding
SystemPBF Task Force MeetingAlbuquerque, NM
  • Michelle Tolbert
  • Kristen Kulongoski
  • MPR Associates, Inc.
  • June 17-18, 2009

2
Agenda Overview
  • Welcome and Introductions
  • Overview of PBF Project
  • Review of NMs PBF Work
  • Introduction to PBF
  • Identification of NMs Funding Priorities
  • Discussion of NMs Current Funding Structure
  • Formula Considerations

3
Project Background
  • Sponsored by the U.S. Department of Education
  • Provides support to states on developing PBF
    systems through national workshops and technical
    assistance opportunities
  • Technical Assistance to States
  • Develop technical assistance work plan
  • Provide 9-months of support

4
TA Work Plan and Timeline
  • Establish Technical Assistance Needs (April 2009)
  • Design PBF system for New Mexico that
  • Rewards local programs for outcomes
  • Is fair and transparent, simple and
    understandable
  • Includes both a base and performance components
  • Has built-in safeguards to ensure data quality
  • Review Current Funding System (May 2009)
  • Review PBF Basics and Define Funding Criteria
    (June 2009)
  • Conduct first task force meeting
  • Model Alternative Formulas (July-August 2009)

5
TA Work Plan and Timeline (Continued)
  • Refine Formula Operation (August/September 2009)
  • Conduct second task force meeting in early
    September
  • Revise funding models based on task force input
  • Complete Formula Development and Discuss
    Implementation Steps (October/November 2009)
  • Conduct second webinar in October
  • Make task force recommendation on adoption and
    brief key stakeholders
  • Transition project materials to NM Higher
    Education Department
  • Work and Timeline After Project
  • Resolve Remaining Issues (January-June 2010)
  • Implement New Formula (July 2010)

6
Task Force Roles and Responsibilities
  • Understand PBF system benefits and challenges
  • Identify NMs funding priorities
  • Select formula components and funding criteria
  • Review alternative funding models
  • Maintain transparent process
  • Recommend final funding formula
  • Support New Mexico Higher Education Department in
    introducing new funding system

7
NM ABE Funding Task Force Discussion
  • Incentivize all programs not just a few
  • Increasing emphasis on student transition
  • Unexpected consequences
  • Impact on annual allocations
  • Leading indicators of student success
  • Qualitative vs. quantitative measures
  • Weighting
  • Cost per student
  • Model review
  • Connection to assessment and data
    collection/reporting

8
PBF in New Mexico
  • State vision for PBF
  • Federal ABE formula
  • National PBF Workshop
  • Application for PBF project

9
What is Performance-Based Funding?
  • Performance-based funding (PBF) is an approach
    for rewarding providers who achieve state-defined
    performance outcomes.
  • Providers who achieve state-defined performance
    outcomes may qualify for additional resources
    (incentives), while those who fall short may face
    deductions from a previous years funding.

10
Components of a PBF System
  • Base Funding
  • Guaranteed resources allocated to providers
    irrespective of their program performance.
    Examples include
  • Institutional grant
  • Enrollment
  • Needs-based criteria
  • Performance-Based Funding
  • Resources that providers earn for achieving
    state-defined targets. Examples include
  • Number of outcomes achieved
  • Number of state performance targets achieved
  • Other state-defined criteria

11
Rationale for PBF
  • Equity
  • Fair share based on need and demand
  • Accountability
  • Increased emphasis on performance
  • Program Improvement
  • Tangible driver or incentive to improve program
    operations

To spur creativity and innovation and reward
exceptional results
12
Benefits of PBF
  • Improved Data Quality
  • Fiscal incentive to review accuracy and
    completeness of data
  • Increased System Effectiveness
  • Focuses attention on program performance
  • Aligns program incentives with statewide goals
  • Political Support
  • Bolsters credibility among state legislators and
    the public
  • Improve Program Accountability
  • Holds programs accountable for learner
    performance
  • Places an emphasis on staff development

13
Guiding Principles
  • Simple
  • Use existing data currently collected and
    reported
  • Ensure that the model is understandable by those
    who will use it
  • Transparent
  • Clearly explain how funding is allocated and why
  • Openly communicate system development process
  • Equitable
  • Treat all providers fairly
  • Adjust for provider, program, and learner
    characteristics that can affect relative program
    costs
  • Auditable
  • Monitor for data quality and compliance

14
New Mexico Considerations
  • Learner Characteristics
  • Demographics (e.g., special needs, ESL, hardest
    to serve)
  • Program Characteristics
  • Provider type (e.g., CBO, LEA, community college)
  • Program size
  • Program mix (e.g., ABE, ESL, ASE)
  • Location (rural vs. urban)
  • Other
  • Distance learning

15
Steps in Building a PBF System
  • Establish State Commitment to PBF
  • Convene State Task Force
  • Specify State Funding Goals and Priorities
  • Define Criteria for Allocating Resources
  • Base funding
  • Performance-based funding
  • Identify Appropriate Data Sources
  • Model Alternative Funding Formulas
  • Design Implementation Strategies

16
New Mexico Funding Goals
  • Step 1 Purposes of Adult Education in New Mexico
  • What are the state goals for providing services?
  • Are these goals realistic? Measurable?
  • State Mission and Goals
  • Research
  • Marketing
  • Integration of services
  • Learning gains and student outcomes
  • Program Performance Goals
  • Post-testing
  • Learning gains
  • GED
  • Student transition
  • Employment

17
New Mexico Funding Goals (Cont.)
  • Step 2 Classifying Goals and Assigning Priority
  • What goals should our funding system address?
  • Are all goals equally important?
  • How should funds be allocated to support goals?
  • Program Quality
  • Learning gains
  • Student Success
  • Transition
  • GED
  • Access
  • Increased funding

18
Discussion of NMs Funding Goals
  • Program Quality
  • Student Success
  • Access
  • Are there any missing elements?
  • Are these the goals that should be used as a
    framework for developing a PBF formula?

19
ABE Funding in New Mexico
  • State Funding Formula (see handout)
  • Formula Operation
  • Non-competitive grant
  • State funds distributed to institutions
  • Based on a base, head count and contact hours
  • Weighted toward most effort (CHs) at level
  • Providers
  • Funds allocated to 24 adult education programs
  • Mix of provider types (LEA, postsecondary)
  • State performance check and auditing process

20
ABE Funding in NM (Cont.)
  • Benefits and Alignment with State Goals
  • Weighted HC Equity, Effort
  • CH Access, Effort
  • R/UR Expenditures Access
  • Base Access
  • Challenges and areas for Improvement
  • Discourages quality for quantity
  • Incentivizes inputs not outcomes
  • Need measures for program quality and student
    success
  • Weighting, flexible vs. constant level weighting,
    base
  • One-year vs. three-year average HC

21
Activity NM Funding Allocation Tables
  • State Allocations
  • Enrollment
  • Performance Measures and Outcomes
  • Funding Allocation Table connecting funding,
    enrollment, and performance

22
Formula Considerations
  • Determine resource pool and allocation amount
  • Select funding formula criteria
  • Core formula funding
  • PBF
  • Address provider needs
  • Supplemental weighting
  • Discuss implementation issues
  • Model and revise alternative funding formulas

23
Resources
  • Determining funding source
  • Where is the money coming from?
  • Federal Title II funds
  • State ABE funds
  • Other
  • Determining an allocation amount
  • Is there a threshold level of PBF that is likely
    to motivate providers to improve?
  • Flat amount each year (e.g., 1,000,000)
  • of state formula (e.g., 25)

24
Resources State Examples
State Examples of PBF Allocations
25
Selecting Core Formula Criteria
  • Considerations
  • Should core formula funding be sufficient to
    operate programs irrespective of their
    performance? If not, how much is reasonable?
  • Should providers be guaranteed a level amount of
    funding irrespective of other factors? (e.g.,
    base)
  • Should need for services be accounted for?
  • How should provider characteristics be addressed?

26
Core Formula Criteria Options
  • Institutional grant
  • Grant can be a flat amount (base) given to every
    provider or tiered based on provider
    characteristics
  • Can establish a minimum threshold for grant
    eligibility
  • Enrollment allocation
  • Allocates funds to providers based on their total
    enrollment or an averaged enrollment over a
    certain number of years
  • Needs-based grant
  • Allocation size accounts for provider
    characteristics or population demographics
  • Historical allocations
  • Other?

27
Core Formula Criteria State Examples
  • Kansas
  • Core formula funding 12 percent state resources
  • Allocation criteria
  • Institutional grant evenly distributed among
    providers
  • Indiana
  • Core formula funding 95 percent state resources
  • Allocation criteria
  • Federal funds Qualify for 90 of previous years
    base funding
  • State funds Qualify for 90 of reimbursed
    expenses from previous year
  • Remaining funds distributed based on enrollment

28
State Examples (continued)
  • Oregon (proposed)
  • Core formula funding 85 percent state resources
    in first year (proposed to decrease to 75 percent
    by third year)
  • Allocation criteria
  • Institutional grant (flat base amount)
  • Regional need allocation (target population,
    poverty, and unemployment)
  • Enrollment allocation

29
Core Formula Criteria Data Sources
  • Where does it come from?
  • Who can get it for you?
  • How old is it?
  • Is it available across the state?
  • Is it reliable to use at both state and local
    levels?

30
Wrap Up and Looking Ahead
  • Tomorrow
  • Reviewing and identifying core formula and PBF
    criteria
  • Address provider needs supplemental weighting
  • Discuss Implementation issues
  • Discuss modeling alternative funding formulas
  • Wrap Up Thoughts, Questions, Comments

31
Formula Considerations
  • Select funding formula criteria
  • Core formula funding
  • PBF
  • Address provider needs
  • Supplemental weighting
  • Discuss Implementation issues
  • Model and revise alternative funding formulas

32
Core Formula Funding Activity
  • What makes sense to NM?
  • Core formula funding remain the same or revise?
  • Remain the same ensure state goals are aligned
    with funding criteria
  • Revise formula criteria to better align with
    state goals
  • Program quality
  • Student success
  • Access

33
Activity Selecting Core Formula Funding Criteria
  • Select formula criteria that align with state
    goals
  • Consider advantages and disadvantages of each
  • Provide justification for including them in your
    funding system
  • Identify data sources, availability, and
    reliability

34
Selecting PBF Criteria
  • Which performance measures will promote state
    goals?
  • Can all providers compete equally for resources,
    regardless of their size or location?
  • Are performance data representative of actual
    conditions?
  • Should funding eligibility be contingent on
    provider performance?

35
PBF Criteria Options
  • Number of Outcomes Achieved
  • Achieving Core NRS Measures
  • Achieving Secondary NRS Measures
  • Achieving other state-established measures
  • Process Indicators
  • Meeting state quality indicators
  • Evaluating performance on desk audits
  • Attaining other state-established measures
  • Performance Targets
  • Achieving state or local performance targets

36
PBF Criteria State Examples
  • Indiana core NRS secondary NRS
    state-negotiated performance targets
  • Kansas core NRS secondary NRS quality measures
  • Missouri select core NRS (educational gain and
    GED attainment)
  • Ohio desk review ratings core NRS
  • Oregon core NRS state-negotiated performance
    targets pre-and post-test rates

37
PBF Criteria Data Sources
  • Where does it come from?
  • Who can get it for you?
  • How old is it?
  • Is it available across the state?
  • Is it reliable to use at both state and local
    levels?

38
Activity Selecting Performance Funding Criteria
  • Select formula criteria that align with state
    goals
  • Consider advantages and disadvantages of each
  • Provide justification for including them in your
    funding system
  • Identify data sources, availability, and
    reliability

39
Provider Contexts
  • Do all learner populations achieve at the same
    rate?
  • Do providers serve different population bases?
  • Do providers face similar costs in delivering
    services?

40
PBF State Examples Supplemental Weighting
  • Indiana Core NRS measure outcomes weighted twice
    that of secondary NRS measures
  • Kansas Outcomes doubled for learners in the 2
    lowest ABE and 3 lowest ESL functioning levels of
    the NRS
  • Missouri Differential rates established for 7
    different ABE and ESL functioning levels of the
    NRS
  • Ohio Outcomes doubled for 2 lowest literacy and
    3 lowest ESL functioning levels, and GED
    attainment and PS placement
  • Oregon No weighting
  • Wyoming Outcomes doubled for 2 lowest literacy
    and 3 lowest ESL functioning levels Rural
    adjustment

41
PBF Implementation
  • Timeliness and quality of data
  • Harm limit
  • Formula rollout/phase-in
  • Stakeholder buy-in
  • Dynamic and evolving system
  • Other

42
Next Steps
  • MPR Develop funding models based on task force
    recommendations
  • New Mexico Provide additional data for models,
    if necessary
  • Task Force
  • Resolve remaining issues from first meeting
    during webinar meeting, late June (if needed)
  • Review models at second meeting, late August or
    early September
  • What is the effect of the selected measures on
    provider allocations as seen in the model
    results? Is the formula achieving its desired
    effect? What refinements need to be made?
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