The rationale for optimization of higher education institutions’ allocation of available resources

Abstract

The funding models of higher education institutions’ activities were investigated. The regulatory practice in determining the resources levels used as a method of budget allocation was studied. The trends of changes in the budget expenditure on education were researched. Based on the time trend lines, the single-factor forecast models for the consolidated Ukrainian budget expenditure on education were built by using the Excel program. The methods of calculating the cost of tuition per student and budgetary programs formation based on essentially new funding mechanisms and given the new conditions in the labour market were defined. The problematic issues of funding higher education institutions in modern conditions were revealed. The main priorities of education and science funding reform were outlined; the need to implement the allocation of budgetary funds for higher education institutions was defined, with the core funding to be formed on the basis of calculating the average cost of one specialist training, and part of the formula to be used to encourage education institutions to achieve results. The methodological approaches to determining the cost of education services were offered given the international accounting standards and experience of post-socialist EU countries, a client-oriented model for determining tuition fees and the developments, including standard regulations for attractive credit resources which can be used by the private sector for training. In order to stimulate private investment in EU science, it is suggested using tax incentives for higher education institutions. Keywords—Budgetary funds, funding, education, scientific developments, budget, planning, trend, forecast model, costs. I. PROBLEM STATEMENT Inefficient use of budgetary funds and special funding, reluctance to transform management approaches in funding higher education institutions(HEIs) and this area commercialization, alack of willingness to offer educational products of high-quality and interest for business as well as relevant applied scientific developments, increased competition from foreign HEIs (especially those of Poland and the Czech Republic) are the most crucial factors affecting HEIs’ financial and physical conditions. The resolution of the above issues requires time and appropriate institutional and managerial support.