Legislative Advocacy Archives
March 14, 2005
Next Steps for the Restructured Higher Education Financial and Administrative Operations Act
The Restructured Higher Education Financial and Administrative Operations Act passed both houses and is awaiting the Governor's signature and possible amendments. The legislation provides for three levels of graduated autonomy from state rules and regulations in capital outlay, financial management, human resources, and procurement for all public institutions of higher education.
Level 1 of the restructuring initiative requires the institutions to commit to ten different state goals in exchange for greater flexibility in designated operational areas. In addition, if the institutions meet certain performance measures they will receive financial benefits including interests earnings, charge card rebates, and unexpended appropriations. Each institution is responsible for developing and submitting to the State Council of Higher Education a six year institutional plan which includes separate plans in financial management, academic planning, and enrollment.
Level 2 allows the institutions to negotiate a Memorandum of Understanding with the Administration for further decentralization in areas designated by the Governor.
Level 3 requires meeting all the requirements in Level 1, but also sets up an entirely new management model for the institutions where all operations are managed locally by the Board of Visitors and central reporting is limited to meeting designated performance measures as negotiated through a management agreement between the institution and the Commonwealth. The provisions in Level 3 are similar to what was originally sought in the charter initiative.
Work will soon begin on six-year institutional plans, which are due October 1. The State Council of Higher Education is charged with developing the templates for these plans.
Virginia Tech is most interested in Level 3 and negotiating a management agreement, which must be done by November 15.
The bill's passage through the General Assembly was due in large part to the tremendous support of the university's friends and alumni. Thank you for your help with this initiative and for conveying your support to legislators around the state. We were fortunate to also have a number of key legislators who served as advocates to ensure the legislation passed both houses.
The General Assembly reconvenes on April 6 to vote on the Governor's amendments. Another update will follow the reconvene session.
Thomas C. Tillar, Jr.
Vice President for Alumni Relations
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