EDUCATION 22 March, 2019
Performance Audit of Higher Education Programs and Labor Market Compatibility
Period: 2017, 2016, 2015, 2014, 2013

Development of the education system is the state priority, where the emphasis is made on the higher education facilitation. In 2013, the government determined the priority directions of the higher education, which envisaged providing support to the particular fields of study, attracting youth interest in this direction and ensuring targeted use of the intellectual capital. Furthermore, according to the strategy of the Ministry, ensuring compatibility between the higher education programs and the needs of the labor market is the task of the high importance.

The State Audit Office has conducted the performance audit of the higher education programs and labor market compatibility, analyzed the process of determining and administering the higher education priority directions, also their relation to the labor market needs and revealed those shortcomings, which affected effective and efficient functioning of the system, in particular:

• While determining the priority directions the Ministry has not conducted respective researches. Correspondingly, compatibility of the selected directions with the needs of the country has not been researched;

• There are several cases observed when directions which are distinguished by a large number of students are recognized as the priority educational programs while the fields of study representing an actual challenge to the state having low number of students and are not considered as priorities, which is not compatible with the purposes of the program;

• Since 2017, Universities have been empowered to determine independently state-funded priority educational programs, however the Ministry does not have the mechanism developed according to which the priority programs presented by the university will be evaluated, in order to determine to what extent the chosen courses meet the country’s needs. Consequently, after the indicated change, the number of the priority educational programs has increased for 1,5 times, compared to the base year – for 3,5 times, which has not been justified by the respective researches yet.

• In the process of selecting, the priority directions and determining the number of students to be enrolled the Ministry and the HEIs do not consider the labor market trends, thus creating the risk of increasing the structural unemployment. In particular, as of July 2018, 41% of graduates of the priority directions have been employed, of which only half are employed with their profession.

• According to each direction, the need for a specialist with the higher education degree on the labor market is not assessed, which is caused by insufficient coordination between the responsible Ministries and other stakeholders. Consequently, the extent of compatibility between the number of funded students and the actual needs has not been studied.

• The Ministry distributes student admission limits unevenly between universities; under each direction, the Ministry does not envisage on time the indicator of the demand identified during previous educational years and the occupation of the allocated places. Consequently, there are cases when there is low activity of entrants in certain fields of study at particular universities while there is full use of places in the same fields of study at the other Universities. Nevertheless, the limits established for the following educational years remain intact. These circumstances cause inefficient utilization of the funding resources.

• The funding model is based on only one criterion – the number of students, different from the international practice, which also envisages the qualitative indicators. Furthermore, during 2013-2017, dual source of funding has been envisaged for the priority directions as a program funding in the amount of 129,534,325 GEL as well as the state educational grant in the amount of 15,960,438 GEL. The specified model has increased the unit price by 23% which is indicative of the inefficiency of the model;

• Students’ mobility for priority educational programs is on average 11% per year, from where the majority of students move to such programs, where the number of students is high. Also, only 53% of the students enrolled in 2013 completed education in the respective terms. Furthermore, when passing the national exams the students choose the priority educational programs on average as 11th priority, which indicates that the selected courses have not become popular. The number of those students who obtained state educational grant is decreasing each year. Laid out facts are incompatible with the objectives of the program and are indicative of the low level of effectiveness;

• The Ministry and the universities have not evaluated the results achieved in the scope of the program, which has led to the fact that for many years determined directions have not been adjusted in the light of existing challenges. Revealed circumstances and substantial shortcomings are indicative of the low efficiency and effectiveness of the program. In this regard the State Audit Office issued respective recommendations aimed at improving the system functioning.

Recommendation to the Ministry:

Recommendation N1: In order to make the priority directions of the higher education compatible with the country’s needs and existing challenges, it should be evaluated and renewed annually according to the respective criteria;

Recommendation N2: In order to avoid the risk of making the decision incompatible with the needs of the country, the Ministry should develop a mechanism through which HEIs shall select the priority educational programs only on the justified basis;

Recommendation N3: In order to reduce the risks of structural unemployment, it is important to increase coordination between the responsible Ministries 6 and stakeholders7 and per each trend, interrelation between the labor market and higher education programs shall be evaluated; Taking into consideration the labor market trends and other respective qualitative indicators, the number of students to be funded should be determined for each university in the scope of the priority direction;

Recommendation N4: In order to ensure efficient utilization of the resources, it is recommended to change the funding model. The criteria should be developed in accordance with international practice, which, shall be focused on the qualitative indicators, in addition to the number of students, when issuing funding to the HEIs;

Recommendation N5: The Ministry should introduce the monitoring system and develop assessment indicators to measure the results achieved by the HEIs in the framework of the program, the effectiveness and efficiency of spent resources, and, if necessary, provide timely feedback.