Cost and Financing in Open Schooling/Effiency and Effectiveness of ODL/Cost-Effectiveness of ODL Institutions/Case study

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Introduction | What is the Difference between Efficiency and Effectiveness | Efficiency | Cost-Effectiveness | Cost-Effectiveness of ODL Institutions | Making the Case for ODL

Cost-Effectiveness of ODL Institutions

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Case Study

Shortly after Namibia gained its independence in 1990, a decision was taken to establish a para-statal institution to be called the Namibian College of Open Learning (NAMCOL). NAMCOL aims to provide study opportunities for adults who never had the chance to complete secondary school under the previous dispensation as well as for young people who cannot be accommodated in State-supported secondary schools. Considerable preparatory work was required to realise this goal, but the College was finally launched as an autonomous institution in 1998, which took over responsibility for the Alternative Secondary Education Programme which had previously been provided by different units in the Ministry. Learner enrolments in the ASEP have grown from just over 6,000 in 1991 to more than 28,000 in the 2007 academic year. Over a quarter of all learners who enter for the Junior Secondary Certificate examination and close to half of those who sit the Senior Secondary Certificate examination each year have prepared themselves through ODL studies with the College.

In 2005, the World Bank published a report by a team of consultants (Marope et al.) which examined the efficiency and cost-effectiveness of the Namibian education system as a whole, including NAMCOL’s ASEP. This document purported to show that the cost per full-time equivalent learner with the College in 1998 was higher than providing comparable education in a State-run secondary school (efficiency ratio of 1.05). The report concluded that: “[i]mproving the quality and coverage of regular secondary schooling may be a more cost-effective option than NAMCOL” (paragraph 6.32, page 84). Given these findings, continued funding for the College’s ASEP was called into question.

However, there were a number of problems with the World Bank Report. In the first instance, the figures for expenditure on secondary education reproduced in the report did not correspond with the amounts recorded for either estimated expenditure in the Ministry of Education’s budget books or with actual expenditure in the Ministry’s accounts. Second, the World Bank consultants reported only the direct, operational costs of secondary schools, but did not include any of the Ministry’s overheads or capital expenditure on school buildings. In addition, no attempt was made to account for the hidden subsidies from other branches of government, in the form of staff benefits, financial management and other professional services, which benefit the Namibian education system. The World Bank consultants also made significant errors in calculating the number of FTE students with NAMCOL.

Two years after the World Bank report was published, another consultant was employed to re-examine these issues. This report (Du Vivier 2007b) found that the World Bank consultants had under-reported the full costs of school-based secondary education by an average of 46%. When this and other errors in their calculations had been corrected, the average efficiency ratio for NAMCOL’s ASEP was found to be 0.65 for the period 1999-2005. When the Systems Approach was used to determine the average cost per examination subject pass, the average cost-effectiveness ratio for the ODL Programme was 0.27 for the same period. If the operational costs of hostel accommodation had been taken into account, the cost-effectiveness ratio for the ASEP would have been even more favourable when compared with conventional secondary education.

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Other Resources

Hülsmann, T. 2004. Costing Open and Distance Learning. Section 4: ‘Cost Effectiveness of ODL’, pages 21-26.

Rumble, G. 1986. Planning and Management of Distance Education. Chapter 4: "The Economic Perspective', pages 63-85.

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