Documentof The World Bank Public Disclosure Authorized
Report No. 15498-IND
STAFF APPRAISAL REPORT
INDONESIA Public Disclosure Authorized
HIGHER EDUCATION SUPPORT PROJECT: DEVELOPMENT OF UNDERGRADUATE EDUCATION
NAY 22, 1996 Public Disclosure Authorized Public Disclosure Authorized East Asia and Pacific Regional Office Country Department III Population and Human Resource Division CURRENCY EQUIVALENTS (as of February 1996)
Currency Unit = Rupiah (Rp)
US$1.00 = 2,246 Rp Rp 1 million= US$445
ACADEMIC YEAR
July 1 - June 30
ABBREVIATIONSAND ACRONYMS
BAN NationalBoard of Accreditation BHE Board of Higher Education CAS Country Assistance Strategy CPCU Central Project CoordinatingUnit DGHE Directorate-Generalof Higher Education HEDP I Higher Education DevelopmentI Project HEDP II Higher Education DevelopmentII Project ICB IntemationalCompetitive Bidding JuCs Inter-UniversityCenters LPIUs Local Project ImplementationUnits MOEC Ministryof Education and Culture NCB National CompetitiveBidding Si Degree equivalentto Bachelor's Degree S2 Degree equivalent to Master's Degree S3 Degree equivalent to Ph.D. Degree SOE Statement of Expenditure UMPTN NationalUniversity Entrance Examination URC UniversityResearch Council URGE UniversityResearch for Graduate Education -1-
INDONESIA HigherEducation Support Project: Developmentof UndergraduateEducation
Loan and Project Summary
Borrower: Republicof Indonesia
Implementing Agency: DirectorateGeneral of HigherEducation (DGHE), Ministryof Educationand Culture(MOEC)
Beneficiaries: Sixtarget universities;students and teachers
Poverty Category: Not applicable
Amount: US$65.0million
Terms: Repayablein 20 yearsincluding five years of graceat the Bank's standardvariable interest rate for currencypool loans
Commitment Fee: 0.75percent on undisbursedloan balances, beginning 60 days aftersigning, less anywaiver
Financing Plan: See Table4.2
EconomicRate About24% for the UniversitiesDevelopment Component; of Return: not applicablefor other components
Staff Appraisal Report: No. 15498-IND
Project Identification Number: ID-PA-4004
Map: MBRDNo. 27823
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INDONESIA Higher Education SupportProject: Development of UndergraduateEducation
BASIC DATA General (1993-94)
Population 187.2 million Adult Literacy Rate % of adults, 1990 77.2 % of females, 1990 68.0 GNP per capita (US$) (1994) 880.0 Central GovemmentExpenditure on education as % of GNP 2.7 as % of total central governmentexpenditure 14.4
Education (1993-94)
Primary Junior Secondary Senior Secondary Higher Grades 1-6 7-9 10-12 13+ Enrollment ('000) 29,700 7,121 4,192 1,900 Gross EnrollmentRate(%) 110.8 53.8 33.9 10.5
Types of HighterEducation Institutions (1994)
Private (%) Public (%) Total (%) Academy 380 (32.8) 2 (2.6) 382 (30.9) Polytechnic 8 (0.7) 27 (34.6) 35 (2.8) SekolahTinggi 476 (41.0) 4 (5.1) 480 (38.8) Institute 47 (4.0) 14 (18.0) 61 (4.9) University 248 (21.4) 31 (39.7) 279 (22.6) Total 1159 (100.0) 78 (100.0) 1237 (100.0)
Note: Acaderny:A three-year,professronal diploma-granting institution; Polytechnic:A three-yearprofessional diploma-granting institution,primafily in engineering,agriculture and some business fields; SekolahTinggi: A one-facultyinstitution grantingacademic degreesup throughS3 (Ph.D.);Institute: An institutionwhich grantsacademic degrees up throughS3 (Ph.D.)but in only onediscipline, i.e. Instituteof Engineering.Institute of Agriculture:University: An institutionwhich grantsacademic degrees up throughS3 (Ph.D.)and hasmultiple facultiesand disciplines
Source: Indonesia Educational Statistics in Brief 1993'1994, MOEC, 1995. World Development Report, The World Bank, 1995. The Universityof Indonesia.
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TABLE OF CONTENTS Page
LOAN AND PROJECT SUMNMARY...... i BASIC DATA...... ii
I. ECONOMICCONTEXT AND HIGHER EDUCATIONIN INDONESIA .. A. Economic Context .. B. The Education Sector in Indonesia .I C. The Higher Education Subsector .I D. Issues in Higher Education .. 4 E. Issues Affecting Less-EstablishedPublic Universities .6 F. GovemrnmentStrategy for Higher Education .7
II. BANK INVOLVEMENT& LESSONSLEARNED ...... 10 A. Previous Bank Involvement ...... 10 B. Lessons Learned...... 11 C. Bank Strategy and Rationale for Bank Involvement...... 12
III. THE PROJECT...... 13 A. Project Objectivesand PerformanceIndicators ...... 13 B. Project Description...... 14 C. Alternative Project Designs and EconomicAnalysis ...... 16 D. Project Managementand Implementation...... 20 E. Monitoring and Evaluation...... 20 F. Status of Project Preparation...... 23
IV. PROJECT COSTSAND FINANCING ...... 23 A. Costs...... 23 B. FinancingPlan ...... 24 C. ProcurementArrangements ...... 25 D. Disbursement...... 28 E. Accounts and Audits ...... 29
This report is based on the findings of an appraisal mission which visited Indonesia in January/February1996 comprisingLauritz Hohm-Nielsen(Higher Education and Scienceand TechnologySpecialist, Task Manager),David Klaus(Human Resources Specialist), Christopher Smith (Operations Officer), and Mieko Masuda(Operations Analyst). John Newman(Economist) assisted in reportpreparation. Project preparation benefited from the contributionsof Robin De Pietro-Jurand(Higher Education Specialist) and Luisa Masutti(Education Specialist) ), supportedby a PHRDgrant. Peer reviewers were Donald Winkler (LATAD), Cecilia Valdivieso (PSP), and William Experton (LAIHR). MarianneHaug, Director, EA3DR, and SamuelLiebernan, Acting Division Chief, EA3PH, have endorsedthe report. - iv -
Page
V. BENEFITSAND RISKS...... 30 A. Benefits...... 30 B. Risks...... 30 C. Sustainability...... 31 D. EnvironmentalImpact ...... 31 E. Impact on Women...... 31
VI. AGREEMENTSTO BE REACHED& RECOMMENDATION...... 32
TABLES IN TEXT 1.0 Selected Regional ComparativeEducation Expenditures ...... 4 4.1 Summary of Project Costs by Component...... 23 4.2 Financing Plan...... 24 4.3 Procurement...... 25 4.4 Disbursements...... 28
ANNEXES 1. Data on the Higher Education Sector . . .35 1.1 Student Enrollmentin Higher Education by Type of Institution, 1984-1994.. 35 1.2 ProjectedEnrollment Data on IndonesianHigher Education 2000-2020.. 35 1.3 Public and Private Resourcesand Unit Costs for 51 Public Higher EducationInstitutions .. 36 1.4 Twenty-SixPublic Polytechnics .. 38 1.5 Qualificationsof Teaching Staff at Public and Private Universities . .39 1.6 Employmentby level of Education .. 40 2. Bank Group-FinancedEducation and Training Projects . . .41 3. Less-EstablishedUniversities . . .42 3.1 Identificationand Selectionof Less-EstablishedUniversities . .42 3.2 Pre-proposalSubmission Process .. 45 3.3 Informationon 17 Less-EstablishedUniversities .. 46 3.4 Origin of Incoming Students by High SchoolAttended . .47 3.5 Parental Income of New Studentsat the Less-EstablishedUniversities, 1995.. 48 3.6 Summariesof Full Proposals submittedby the Six Selected Universities.. 49 4. The Board of Higher Education .. 58 5. The National AccreditationBoard ...... 60 6. Calculationof Economic Rate of Return...... 62 7. Project ImplementationPlan ...... 69 8. Monitoringand Evaluation...... 80 9. SupervisionPlan ...... 89 10. TechnicalAssistance Summary...... 91 11. Project Cost Summary,Expenditure Accounts by Components, ExpenditureAccounts by Years, and Project Componentsby Year...... 92 12. Estimated Schedule of Disbursements...... 98 - v -
13. Technical Audit Terms of Reference...... 99 14. Selected DocumentsAvailable in the Project File ...... 105 15 Project ImplementationPlan (PIP): availableupon request
CHART 1. OrganizationalChart ...... 106
MAP: IBRD No. 27823
1. ECONOMIC CONTEXT AND HIGHER EDUCATION IN INDONESIA
A. ECONOMIC CONTEXT
1.1 After a quarter century of rapid economic structural transformation, Indonesia has become more diversified, less dependent on oil, more industrialized, more urbanized, increasingly driven by private initiative and more integrated into the global economy. Since 1970, the Indonesian economy has grown at an average real rate of over 6% per year, significantlyfaster dtan the average rate of population growth, which has steadily declined and which is presently estimated at 1.70/op.a. As a result, income per capita has increased rapidly and is expected to surpass US$1,000 equivalent by the turn of the century. The benefits of such growth have been felt by a growing proportion of the population, reflected in a decrease in the number of people living below the poverty level from 70 million in 1970 to 26 million in 1994 (60% and 14% of the total population in the respective year). With higher incomes has come an increased demand for education from both consumers (i.e., children and their parents) and from users (i.e., employers).
B. THE EDUCATION SECTOR IN INDONESIA
1.2 A contributing factor both to rapid economic growth and to the decline in poverty was the country's early success, at a time when per capita income levels were still low, in universalizing primary education. By the early 1980s, the country had attained a net enrollment rate of over 900/.in primary education and is now making efforts to improve the quality of primary education, through improvementsin teacher training and universal provisionof textbooks. Girls account for almost 50% of primary enrollments. Having virtually achieved universal primary education, the Government set the goal of achievinguniversal lower-secondaryeducation by the Year 2010, and has requested the help of the Bank and others in achievingthis goal. In addition,it intends gradually to increase access to upper- secondary education. With these efforts to expand and improve secondary education, the demand for higher education can be expected to grow rapidly. Indonesia presently has a well-balanced education system, with 1993-94 gross enrollment rates of 111%, 54%, 34%, and 11% in primary, lower- secondary, upper-secondary, and higher education, respectively. These participation rates compare favorably with those of other countries at a similar level of GDP per capita and are also respectable relative to those in the wealthier,newly industrializedeconomies of East Asia.
C. THE HIGHER EDUCATION SUBSECTOR
1.3 At Independence in 1945, Indonesia's higher education institutions enrolled approximately 2,000 students. Currently, the higher education sector consists of about 2.5 million students enrolled in 77 public institutionsand over 1,200 private institutions,representing approximately eleven percent of the 18-24 age group. During the 1960s, and continuinginto the 1980s, the Government's strategy was to expand access to public higher education. It accomplishedthis partly through establishing at least one university in each province. This policy not only ensured some measure of regional equity,
For example,1992 gross enrollments in tertiaryeducation were 7% in Malaysia,19% in Thailand,20% in HongKong, 28% in the Philippines,and 42% in the Republicof Korea. but also provided all provinces with a local source of teachers, civil servants, professionals, technical specialists,and managers. The expansion was planned and managed from the center, in response to (a) the need for nation-buildingover a vast territory composed of many different ethnic and linguistic groups, (b) social demand for education services from the regions, and (c) the lack of adequate implementationcapacity at local levels. The period between 1960 and 1990 was witness to an increase in demand for higher education, from both consumers and users, at a much faster rate than the public sector was willing or able to provide. This resulted in phenomenalgrowth in the private provision of higher education with the number of private institutionsincreasing from 17 to over 900.
1.4 In the mid 1980s, when the present system of public universitieswas in place, and the private sector had become a major provider of higher education, there was a gradual shift in the Government's higher education policy to an increased emphasis on quality improvement. Investments in public universities focused on the provision of quality-upgrading. Government investment remained important in disciplineswith large investment costs (engineering,natural sciences) in which the private sector was reluctant to invest. Over time, as the relative importanceof the public sector as the primary provider of higher education has decreased, the relative importanceof the public sector as the primary employer of university graduates has also declined, and that of the private sector has increased. Althoughthe Government's policy is to let the private sector respond to most of the increasing demand, the Government is also aware that higher educationprovides social as well as private benefits and that the public institutionsof higher educationprovide externalitiessuch as research and communityservice which are not currentlyprovided by private-sectorinstitutions.
1.5 The current higher education system consists of approximately 1,400 institutions of higher education, of which over 1,200 are private, about 100 are service academies belonging to other Ministries, and 77 are public institutions operated by the Directorate-General of Higher Education (DGHE) within the Ministry of Educationand Culture (MOEC). Althoughthey account for only about 5% of the total number of institutions, the public institutions account for about 35% of total enrollments, with the remaining 65% enrolled in private institutions and service academies (Annex 1, Tables I and 2, sets forth student enrollmentby type of institution).
1.6 The 77 public institutionsof higher education (Annex 1, Tables 3 & 4) are considered superior in quality and performance to the private institutions. Of these, four--the University of Indonesia in Jakarta, the Bandung Institute of Technology, the Bogor Agricultural University, and Gajah Mada University in Yogyakarta--arerecognized to be the country's premier institutionsof higher education with large, established graduate and undergraduate programs. Of the remaining institutions, six (including three teacher training institutes) offer graduate programs, seven are teacher training institutes with no graduate programs, 26 are considered less-established universities and were established within the last 30 years, 26 are polytechnic institutes, two are technical teacher training colleges, five are institutesof the arts, and one is an open university.
1.7 The over 1,200 private institutionscomprise a wide variety of academies, schools of religion, colleges, institutes, and universitiesand cater to some 1.5 million students. Many of these institutions are quite small, offering only one or a few programs. Course offerings tend to be limited to law, religion,the humanities,and the social sciences. Most private institutionsserve as second-best options for universitystudents who have been unsuccessfulin obtaining a place in one of the public institutions and most suffer from a lack of facilities, materials, qualified teaching staff, and resources for investment. Less than 100 of the private institutions operate at a level comparable in quality to the average public institution. 1.8 Regional equity in access to higher education has largely been attained due to the Government's decision in the 1960s to have at least one public institution in each of the 27 provinces. Gender equity is steadily improving. In 1992, women constituted 36% of undergraduates and 46% of diploma-programstudents, with increasing proportions of women among the new intake every year. Social equity has been much more difficult to achieve. Higher education is expensive: tuition fees in the public institutions range from US$100 equivalent to US$400 equivalent per year; in private institutions,fees range from US$100 equivalent to US$1,000 equivalent per year. To these tuition fees must be added laboratory and other fees; off-campus living expenses; books; and transportation between the university and home. Tuitionmay, in fact, account for only 15-20% of the total direct cost of higher education to the student. Even without any calculation of opportunitycosts, the total direct cost of higher education in Indonesia may amount to US$500 to US$5,000 per year, whereas the per capita income in 1994 was only US$880 equivalent, indicating that most tertiary students, in both public and private institutions, come from Indonesia's better-off families. Various student support schemes exist, such as scholarships,tuition waivers, and work-study programs, but these benefit only 2-3% of the total number of students. A student loan scheme was tried several years ago but was abandoned because it was difficult to recover the loans. Given the perceived urgency and importance of the benefits to society of a greater number of high-quality graduates in priority areas, the Government now provides scholarships, through a variety of targeted programs, to some 50,000 students annually,accounting for only about three percent of the total number of students. The overall efficacy of efforts within the higher education subsector to provide greater access to children from poorer families is constrained by the fact that most children from poorer families presently do not complete secondary school.2 In addition, it has proved virtually impossible to target scholarships to those few childrenfrom poorer familieswho do complete secondaryschool.
1.9 Indonesia's higher-education system is characterized by levels of cost-recovery which are among the world's highest and continue to rise. Private financing constitutes over half of total expenditures on higher education. In public institutions,cost recovery from student fees has risen by over 200%/oin real terms in the past five years, and the universitiescontinue to raise them on an annual basis. Tuition fees in public institutions, although generally much less than those charged by private institutions, are still significant. Public universities differentiate fees among the various disciplines, charging more for those disciplineswhich require laboratorywork. In the schoolyear 1993/94, almost 2 00/ of recurrent costs were recovered through student tuition and fees, while an additional 5% was generated by other income-generatingactivities within the individual institutions. The share of higher education within total governmentexpenditures on education has declined from 17% in 1989 to about 13% at present. The annual unit recurrent cost for students in Indonesia's public higher education system is US$870,3 which is lower than those of countries such as Thailand (US$2,210) and the Philippines(US$ 975). The overallaverage cost per graduate is US$5,470.
2 The Government'slong-term strategy for overcomingthis problemis, as statedin para. 1.2,to universalize lower-secondaryeducation and graduallyto increaseaccess to upper-secondaryeducation. The lower- secondary-educationprogram includes special efforts to attractand retainchildren from poorer families. 3 Thisunit recurrentcost was calculated taking into account both public expenditures (government budget) and privateexpenditures (student fees) but doesnot includeother direct costs to the student. The averageannual unit recurrentcost for studentsin Indonesia'sprivate institutions of higher educationis about USS250 equivalent, - 4 - Table 1. Selected Regional ComparativeEducation enditures Country Public Expenditure on % of Government Education Education as % of GDP Expenditures for Higher Education Malaysia 5.6 14.9 Philippines NA 15.1 Singapore 3.4 30.7 Thailand 3.2 14.6 Indonesia 3.4 13.1 Source: Albrecht, 1994. These figures are for 1993. A more recent World Bank estimate for public expenditure on educationas a percent of GDP in Indonesia is 2.7/o.
D. ISSUES IN HIGHER EDUCATION
1.10 Although Indonesia's system of higher education has come to exhibit many desirable features, such as active private-sector participation and high levels of cost recovery, its institutions are sfill developing, and there are still important problems in both public and private universities relating to quality, efficiency,relevance, and management.
1.11 Quality. The Government is concemed with raising the quality of higher education so that Indonesia may compete in the internationalmarketplace. There are several factors which constrain improvements in quality. One is the generally low level of qualificationof teaching staff. Only 30 percent of staff in public institutionsand eleven percent of staff in private institutionshold S2 and S3 degrees4 (see Annex 1, Table 5). As recently as 1995, the large majority of new teaching staff held only S I degrees. At present, many institutionsof higher education,both public and private, are actively trying to recruit new teaching staff who hold advanced degrees. In part, the problem is one of supplv: only a few institutionsof higher education in Indonesia offer graduate programs, and the domestic production of graduates with advanced degrees is low. However, the problem is also one of demand. since salaries of teaching staff are low, relative to salaries for employmentin other economicsectors.
1.12 The base-pay level of teachers' salaries in public institutionsis set by civil service guidelines. A few of the best public institutions supplement their teachers' civil service salaries with income generated by the institution itself, but most institutions, particularly the less-established ones, have limited resources for this purpose. As part of its dialogue with the Bank, the Government has been examining the possibility of raising salaries for teachers in public institutions, in order to make such positions more attractive and more competitivewith jobs in the private sector. However, if salaries are increased for teachers, then other civil servants who are not teachers but who have similar qualifications would also expect to receive higher salaries. In private institutions, teachers are, in general, hired by the hour, at rates which are similar to those paid in nearby public institutions which are usually the source of the teaching staff in private institutions. Due to their low levels of remuneration, most teaching staff cannot focus full-time on teaching or research at their home universities, but must find additional ways of supplementingtheir incomes. It is estimated that well over half of teaching staff in public institutionstake on secondjobs as teachers at private institutions,as workers in private companies, or as independent consultants, or accept offers of employment from other government agencies. The time taken up by the job outside the home university, whether public or private, leaves little time for teaching, maintainingor enhancing skills, or providing guidance to
4 The SI degreeis equivalentto a Bachelor's,the S2 to a Master's,and the S3 to a Ph.D. students. Because of second and third jobs, the number of hours teaching staff spend per week teaching students, in both public and private institutions, is low. All of the above factors impact negatively on quality.
1.13 Several other problems with teaching staff which have a negative impact on quality should be mentioned. Fir in degree programs, critically important disciplines for economic growth, in both public and private institutions,tend to be understaffed,with the humanities and social sciences typically far better staffed than the sciences and engineering. Second since the deployment of teaching staff in public universitiesis still govemed by national civil service regulations, staff positions are line budget items, and as a consequence,university managers have litde autonomy or flexibilityin determining the profile of their staff. University managers cannot easily reallocate staff intemally from low- priority/low-demandfields to high-priority/high-demandfields. The only room for maneuver comes from new recruitment,and even those are tied to specific fields. Third, since the total number of staff in public universitiesis determined by the center instead of by the university,there is litde incentive for universities to reduce the number of staff. Fourth, the level of funding for research, although increasing and in principle available to support research at both public and private universities, is in fact still very limitedin public universitiesand practicallynon-existent in private universities. In public universities,although competitionfor research funds has been introduced in recent years, some small research grants are still often distributed among all faculty without competition or based on qualificationsor the quality of their research proposals. Finally,staff are not always held accountable for their actions. For example, regulations exist governing the number of student contact hours per week staff are supposed to have, but they are difficultto enforce and are often ignored.
1.14 In addition to these problems with teaching staff, several other factors have a negative impact on the quality of undergraduate education. Laboratory facilities are inadequate in most institutions, particularly in private institutions, and library holdings, even in the best institutions, are limited. Still another factor impacting on the poor quality of undergraduate education is the poor quality of secondary school graduates a problem which the Government (with assistance from the Bank and others) is presently trying to address. Except for in a few elite institutions,quality problems are more serious in the private sector, which have fewer resources, are dependent on part-time staff, primarily from public institutions,have few incentivesto invest in additionalfacilities and equipment, and attract lower-qualityentrants.
1.15 Efficiency. Although the undergraduate program should be completed in four years, typical undergraduates in both public and private institutions take from five to six years to complete their studies. While this is an improvement over earlier years, efficiency gains could be made by encouraging students to complete the cycle more quickly. In addition, low student-teacher ratios of about 12 to 1, limited utilizationof physical space, and the low number of student/staff contact hours per week (para. 1.12) also contributeto low internalefficiency. Efficiencygains could also be achieved by consolidating programs in areas like the social sciences, where the bulk of students tend to be studying.
1.16 Relevance. The Government is concerned that the present higher-educationsystem is not providinggraduates in the fields which will be most needed by an economy that is growing rapidly and changing structurally. One indicator of this mismatch between the output of the higher-education system and the needs of the economy is the long waiting period between graduation and employment. A recent tracer study of graduates from ten universities confirmed that many, particularly those who studied humanities and social sciences and those from universitieslocated in regions where economic developmenthas been slower, find it difficultto find employmentand may face long waiting periods of up to three years before they obtain formal employment.
1.17 There are several reasons for the poor match between universities' output and employers' needs. In the private sector, private demand for degrees in law, teacher training, and humanities is still strong enough that private institutionsdo not have to change their course offerings to attract students. In the public sector, there are structural rigidities whichhinder better adaptation to market needs. First although administrators at public universities are gaining more experience in academic planning, linkages to demand are still weak. Second the present centralized decision-making structure gives individual universities little opportunity in their academic planning to create programs of study to reflect local students' or employers' needs. Third. many universitiesare saddled with a large stock of permanent staff who do not teach the subjects or disciplinesneeded for employmentin the new growth fields. Finally until now, most institutions, both public and private, have had little interest in the placement of their students and few, if any, institutionalmechanisms to keep track of where graduates have found jobs or assist their graduates in finding employment. For all these reasons, students often receive an education which is not relevant to the constantlychanging needs of the economy.
1.18 Management. The way the system is presently managed has had negative impacts on the quality, efficiency, and relevance of higher education in Indonesia. There are problems both at the central level, where managers lack knowledge of local needs and conditions, and in the institutions themselves, where managers lack capacity and experience. Management problems are primarily responsible for mismatches between needs and the ways investment funds are actually spent. For example, many universities exhibit excessive physical capacity in some disciplines and shortages in others. Universityadministrators complain of books selected and procured by the center which arrive at the university and are not needed or used. Similarly, they complain of equipment selected and procured by the center which arrives at the university and is found to be incompatiblewith existing equipment, lacks accessories, and cannot be serviced locally. It is clear that these imbalances result both from the fact that investment decisions were made by the center, with inadequate knowledge of local needs, and from unrealistic investmentproposals prepared at the university level by managers and staff possessing limited capacity. Decision-makingpatterns have encouraged university administrators to blame the center for their problems and to attribute suboptimal results to the lack of local power rather than to their own lack of capacity and experience.
1.19 A lack of autonomy and local responsibility has resulted in a lack of accountability and transparency at the institutionallevel. In many universities,planning and administrationare top-down, with teaching staff and department administrators not adequately consulted or informed. Teaching staff and lower-leveladministrators complain that they have little informationon the sources or use of the university's budget, particularly for maintenance. It is not easy to hold university managers accountable,since the same constraintswhich apply to the hiring and deploymentof teaching staff also affect the selectionof universitymanagers.
E. ISSUES AFFECTING LESS-ESTABLISHED PUBLIC UNIVERSITIES
1.20 Of the 77 public institutionsof higher education,the older, more established universitieshave reached a level of maturity and development where they compare well with universities in other East Asian developingcountries. The 26 younger, less-establishedpublic universities,however, are still in the pioneer phase of their development. Some of these were established for reasons of regionalequity (19 are located in the Outer Islands, which are defined as islands other than Java, Sumatra, and Bali), while others were established in secondary towns in heavily populated provinces where there was an un-met demand for higher education and where the Government hoped to promote regional poles of development (three on Java and four on Sumatra). The issues described in the preceding section- quality, efficiency, relevance, and management--althoughto some extent a problem for all public universities, are particularly pronounced at these 26 less-established universities. The 26 have the potential to play an importantrole in regionaldevelopment, both in human resource development and in applied research, to meet the needs of the local public and private sectors. For these institutions, the most pressing issues are (1) to define realistic missions and goals which focus on selective development responsive to local needs, and (2) to channel available resources to the highest-priority programs to ensure minimum levels of qualifiedteaching staff, library materials, and laboratories.
1.21 In the 1980s, many of these less-establisheduniversities began ambitious campus development plans involvinglarge amounts of civil works and equipment. These programs have by in large not yet been completed.Often, the originalMaster Plan was overly ambitious and not based on good academic planning.5 The consequence of this may be unrealistically generous space allocations for those faculties and administrativeoffices that already have their buildings and the inabilityto fund adequate facilitiesfor the rest. There have been complaintsthat generous administrativeoffice space has been at the sacrifice of adequate office space for teaching staff which is needed for interaction with students, class preparation and private study to maintain and upgrade personal skills. Although private institutionshave since developednear these 26 public universities,they are for the most part, staffed by teachers from the public universitiesand would not be able to survive without them. The academic qualificationsof the teaching staff in the public and private institutionshas not yet reached adequate levels. Over the longer term, the 26 newer institutionsmust demonstrate that they have an important role to play in their respective locales, or risk losingtheir accreditation.
F. GOVERNMENT STRATEGY FOR HIGHER EDUCATION
1.22 Indonesia has embarked on a comprehensivereforn of the higher education sector aimed at reducing the role of the state and decentralizing the financing of public higher education. The government realizes the need to (i) train a highly skilled labor force to compete internationallyin the production of high value-added products and services, which requires constant technologicalprogress; and (ii) ensure greater efficiency of the university sector in the use of public resources and create financial incentives for improvement. The Government has requested Bank support in designing structural reforms in this sector.
1.23. The Director General of Higher Education took the first step in the reform process with the establishment of The Higher Education Strategy Task Force in February 1995. Its task was to conceptualize the strategy for higher education in Indonesia for the coming decade. The result was a concept paper entitled The New Paradigm, which (a) redefines the roles of the center and of the individual institutionsof higher education, (b) focuses on educational outcomes, and (c) provides new mechanisms to enhance university-level, decentralized planning and performance-based resource allocation.Under the New Paradigm, the role of the central Government will be reduced in scope, if not in importance. The central Government's role will be to set the rules of the game, direct resources to high-priority areas, encourage both public and private institutions to raise their standards, and provide funds for those purposes where there is a marketfailure. The main themes of the emerging role for the public sector include (a) greater decentralizationof management for the public system, (b) a
5 Someuniversities are awareof thisand havemodified the MasterPlan to betterreflect their realities. - 8 - continuing role as direct provider of higher education in less-developed regions and in high priority fields, (c) an increased emphasis on economic considerationsin deternining where public funds should be invested, and (d) an importantrole in enhancingquality in both public and private institutions
1.24 To implement the New Paradigm, the Government plans to strengthen institutional capacity both at the center and at individualuniversities. At the central level, the Government has established a new Board of Higher Education (BHE),6 supported by a permanent Secretariat, to which key personnelhave been assigned. The BHE is composed of various stakeholders includingrepresentatives of private-sector employers, the Ministry of Education, the National Planning Board, the academic community (both public and private institutions), the National Research Council and the National AdvisoryBoard on Education. The BHE has the responsibilityto assist the DGHE in four areas: (a) overseeing the higher education system by making recommendations on higher education policies, identifying local and national needs and new programs to be financed, and providing a medium- to long-term perspective to the DGHE; (b) providing competitive funding for research and graduate educationthrough the existingUniversity Research Council (URC), which was establishedto assist the implementationof the Bank-supported URGE Project (para. 2.5) and which is to be merged into the BBE; (c) establishingcompetitive funding mechanismsfor undergraduateeducation and implementing projects (including the proposed project) which support such activities; and (d) providing technical assistance and training to institutionsof higher education to strengthen their capacity for decentralized academicplanning and management.
1.25 While recognizing that public and private institutionsface different problems, the Government sees that both types of institutionsneed an incentive to raise quality. One important step to this end is the recent establishment of a National Accreditation Board (Badan Akreditasi Nasional--BAN)7 which will, for the first time, periodicallyinspect and accredit programs of study and institutionsof higher education, both public and private, and make the results public. BAN is intended to increase transparencyin the Indonesianhigher education system, to guide users, to ensure accountability,and to strengthen incentives for individualuniversities to increase quality standards, efficiency and relevance. The decree named BAN's chairman,secretary, and 17 other members, who are recognized individuals representing a variety of stakeholders including private-sector employers, the academic community (both public and private institutions), and the Government. BAN's Board meets twice a month. BAN's Secretariathas also been established,with office space in the MOEC and several professional and support staff. BAN's mandate was reviewed by Indonesia's Parliament in mid-February 1996 and given approval to proceed. At the national level, the Board is to grow to 36 members (12 subject panels of three members each). Twelve regionaltask forces throughout the country will be responsible for carrying out actual evaluations. These regional task forces will be staffed by individualssimilar in background to those on the nationalpanels. They will be appointedfor two-year terms, with half being replaced each year. At full operation, the task forces will consist of some 100 people. By February 1996, BAN had developed accreditationinstruments in fields including medicine, law and engineering and has pre-tested them in several public and private universities. Over the next five years (the period of the proposed project), BAN will establish accreditationmechanisms and will conduct accreditation for the more than 1,400 institutionsof higher education,both public and private, and for the more than 13,000 programs of study through sector-wide desk evaluationsand site visits.
6 In Indonesian,Dewan Pendidikan Tinggi (DPT). DPT/BHEwas establishedby MinisterialDecree No. 0121/U/1996on May6, 1996.
7 BANwas established by MinisterialDecree No. 0326/U/1994 on December15, 1994. 1.26 Under the New Paradigm, individual public institutionsof higher education will be given the power and the responsibility to behave more as if they were private-sector institutions. To obtain investment funds from the center, they will be required to undertake self-evaluation, prepare institutional development plans tailored to their own specific needs, and develop budgets based on projected resources and priority needs. Hand in hand with this new autonomy will come greater local responsibilityand accountability: the universitieswill no longer be able to blame their problems on the center. In the medium to long term, the Governmentexpects to grant financialand academic autonomy to all public institutions of higher education. It plans to implement this policy gradually, however, beginning with the less-established universities which, precisely since they are less established, are more innovativeand more open to change. In the first phase of implementationof the New Paradigm, the Government has encouraged the less-established universities to compete among themselves for limited investment funds. Over time, this competition will be extended to all institutions of higher education, private as well as public.
1.27 By establishing a clear framework for accountability, the New Paradigm also encourages private institutions of higher education to become more efficient and improve their quality. The accreditation process will publicize informationpertaining to the quality of individualstudy programs and institutions, both public and private, and consumers (potential students and their parents) will be able to make their own judgments as to the value offered for the price. In a competitive environment, both public and private institutionswill either have to demonstrate to students and their parents that they offer a relevant, high-quality education worth paying for and leading to good employment prospects or else lose "customers" and, ultimately, disappear. The Government has explicitly recognized that competitionentails losers as well as winners, and that in the long run, some public as well as private institutionsmay prove economicallyunjustified and may not survive.
1.28 In short, the Government is in the midst of a paradigm shift intended to improve the quality, efficiency, relevance, and management of the country's institutions of higher education. The implementationof the New Paradigm will entail substantial changes in the mode of operation within individual universities and in the overall legal, regulatory, and financial controls on universities heretofore set by the center. Although it is realized that such changes will require substantial capacity- building, including upgrading the academic qualificationsof the teaching staff, as well as commitment and involvementat all levels, the Higher Education Strategy Task Force recognizes that in the context of the New Paradigm, the individual institutionscan make many quality and efficiency improvements without significantnew investments. The proposed project is the first step in the reform process. - 10-
2. BANK INVOLVEMENT AND LESSONS LEARNED
A. PREVIOUSBANK INVOLVEMENT
2.1 With 22 education projects approved in Indonesia since 1970, of which 15 have been completed and seven are under implementation,the Bank has a long-standingand varied experience in supporting all levels of education in Indonesia (Annex 2). The present education portfolio of seven projects with the MOEC includes projects in primary education, secondary education, higher education and non-formal education. Bank assistance to higher education in Indonesia has supported the Government's strategy for higher education as it has changed and developedover the years in response to the changing needs of the society and the economy: initially, Bank-supported higher education projects supported the expansion of higher education, particularly in selected fields of high national priority,then focused on quality improvement. Of ten past and two ongoing projects supported by the Bank which had at least some components related to higher education, the five projects described below have the greatest relevance for the proposed project.
2.2 The First and Second University Development Projects. The First University Development Project (Loan 1904-IND), approved in 1980, supported investments to raise the quality and quantityof graduates in selected fields at three public universities,to develop graduate programs, and to strengthen university management. The project was successful in achieving its targets, but it was recognized that a project of such narrow scope could have only a very limited impact on both quantity and quality of output. The Second University Development Project (Loan 2547-IND), approved in 1985, supported the establishmentof new graduate-level programs in selected fields of study and research through the establishmentof 16 new Inter-UniversityCenters (IUCs) in emerging scientific and technologicalfields. The project also initiatedfive undergraduateprograms in fields of study which were unavailable in Indonesia at the time. This project was successful in meeting its targets, and most of the IUCs have become centers of excellence in Indonesia. A 1995 Project Performance Audit Report prepared by OED states that "achievementsin institution building have been substantial; the new IUCs could become the focus of future efforts to upgrade the entire university system."
2.3 The First and Second Higher Education Development Projects (HEDP I and II). The second wave of Bank-supportedhigher education projects were the First and Second Higher Education DevelopmentProjects (Loan 2944-IND and Loan 3311-IND), which were approved by the Board in 1988 and 1991, respectively. These two projects financed three-year time slices of broad-based sectoral programs to address a wide range of issues, including expansion of access in selected fields, interventions to improve quality, university teaching staff development, and capacity-building in universitymanagement. The preparation and supervisionof these projects enabled the Bank to carry on a continuous dialogue with the Government, both on policy issues and implementationproblems. One successful outcome of these sectoral interventions was the development of a pilot competitive grant scheme to support university research activities. This experience led to the Government establishinga larger multi-yearresearch grant program with its own resources.
2.4 The First and Second University Development projects and HEDP I and II have been completed. With the completion of these projects, the next cohort of Bank projects in higher education in Indonesia will reflect the movement of government away from direct management of universities - 11 - toward a more decentralized management approach. Bank support for movement in this direction in fact began with the University Research for Graduate Education Project.
2.5 University Research for Graduate Education Project (URGE). The URGE project (Loan 3754-IND), approved by the Board in 1994, seeks to (i) increase competitive funding for domestic graduate education and university research activities,(ii) strengthen the procedures for selecting grant and fellowship proposals, (iii) integrate university research with graduate training in universities, (iv) strengthen research capacity and dissemination of research findings in universities, and (v) attract highly qualified candidates for domestic graduate education. Successful outcomes of this ongoing project have been the developmentof competitivegrant and fellowship programs, which increase the attractiveness of domestic graduate programs, and the development of the University Research Council, whose functions are to administer all DGHE grant and fellowship programs for graduate education and research as well as to provide policy advice on the development of graduate education and research capacity.
B. LESSONS LEARNED
2.6 The first twenty years of Bank lending in Indonesia for education were reviewed in a 1991 OED report entitledIndonesian Education and the World Bank: An Assessment of Two Decades of Lending. While the report does not focus specificallyon higher education,there are valuable lessons to be drawn from it. In addition, the recent 1995 Performance Audit report on the Second University Development Project (Loan 2547-IND) provides guidance on improving higher education projects in Indonesia The Bank Best Practice paper for higher education, approved by the Board in 1994, entitled Higher Education: The Lessons of Experience, has a number of relevant recommendationsfor this project. Finally, there are lessons to be learned from the experience with higher education projects described in supervisionand project completon reports.
2.7 OED Report. The OED report from 1991 had nine conclusions: (1) education should be relevant to the labor market, (2) fellowship programs could be made more effective, (3) national capacities should be created and strengthened, (4) sector work should be the basis of policy discussions, (5) successful sector lending rests on a solid empirical base, an effective policy dialogue, consistencybetween Bank and Governmentobjectives, and satisfactoryimplementation procedures, (6) the pursuit of equity should not lead to an attempt to spread benefits too widely, (7) projects should be compact and uncomplicated, (8) the Government should increase its financial commitment to the education sector, and (9) private education will continue to play an important role and warrants Bank support. The proposed project (1) seeks to make the programs at the selected universities more relevant to the labor market, (2) builds on and enhances existing natonal capacities, (3) is based on a number of studies carried out under HEDP II, (4) has some aspects of a sector loan which are based on the four criteria mentioned above, (5) focuses its most expensive interventions on needy, less- developeduniversities, and (6) is compact and coherent. The project is not being used as a vehicle for increasing the Government's financial commitment to the education sector. Finally, although private universitieswould not be targeted for investments under the proposed project, they would be covered through the project's quality-enhancinginterventions and through the introduction of competitive funding mechanisms in the context of the New Paradigm. In addition, the ongoing URGE Project (para. 2.5) allows private institutionsto competefor funds under the project.
2.8 Project Performance Audit Report. The 1995 Project Performance Audit Report cited above (para. 2.2) on, the Second University Development Project recommended that quality improvement - 12 - efforts be extended to other universitiesrather than continuingonly with the 16 included in that project. It also reiterated the 'heed to shun complexity in large projects, specificallywhen they have a strong element of innovation." Finally, it suggested that a system where institutions of higher education would compete for funding might be the future of efforts to enhancethe quality of higher education in Indonesia All of these findingshave been reflected in the design of the proposed project.
2.9 Bank Best Practice Paper for Higher Education. While recognizing the difficulty of generalizing from the experience of very diverse experiences from throughout the developing world, this paper contains four broad recommendations: (1) encourage greater differentiationof institutions, (2) provide incentives for public institutions to diversify sources of funding, and link government funding closely to performance, (3) redefine the role of government in higher education, and (4) introduce policies explicitly designed to give priority to quality and equity objectives. The proposed project (1) encourages individual institutions to specialize according to their perceived strengths and local needs, (2) provides incentivesfor competing institutionsto maximize self-generated income, and links central-government grants to performance under agreed development plans, (3) supports a redefinition of the role of government in higher education (the New Paradigm), and (4) includes specific incentives designed to improve quality. Although the proposed project has been designed to support less-established universitiesin underserved regions, it does not include specific measures to improve social equity, in recognition of the fact that this problem first needs to be addressed at the lower levels of education, as is being done in ongoing Bank-supported projects and in the proposed Bank-supportedprojects in lower-secondaryeducation being prepared concurrently.
2.10 Previous Bank Experience with Higher Education Projects in Indonesia. Past Bank assistance in higher education operated within the existing paradigm and hence focused on supply-driven and input-based investments that were sector-wide in application. This sector-wide approach had some positive results. Both HEDP I and HEDP II were successful in providing universities with better- trained staff and more adequate facilities as well as in developingimplementation capacity, including capacity to undertake major procurement. Still, it has become evident that providing inputs does not necessarily lead to their effective use; merely designing an information system or training university managers is not sufficientto build a planning and management culture in a university. The proposed project therefore moves away from sector-wide investments towards focused investments in those universitieswhich have demonstratedtheir worthiness through open competition,while simultaneously changing the government's role and sector framework in which universitieswill operate.
C. BANK STRATEGY AND RATIONALE FOR BANK INVOLVEMENT
2.11 Bank Strategy. The design of the proposed project is consistent with the Country Assistance Strategy (CAS) discussed by the Board on March 21, 1995. The CAS supported some important trends which were emerging within Indonesia's developmentstrategy, most notably, a shift towards a more decentralized,participatory approach to development in which the Government's role would be to provide an enabling and regulatoryframework but move away from direct provision of services. In addition, the CAS welcomed the Government's continued emphasis on human resource development to promote continued economic growth, competitiveness,and structural transformation. Finally, the CAS emphasized the importance of more selective, efficient use of public resources. The design of the proposed project is also consistent with the Bank's strategy of balanced assistance to the education sector, which includes ongoing and proposed assistance for (a) improving the quality of primary education, including possible additional interventions in early childhood development, (b) expansion and quality improvement of lower-secondaryeducation, (c) quality improvement of upper-secondary - 13 - education,(d) selective interventionsin higher education, and (e) an active policy dialogue designed to redefineand refocus the Government's role in the education sector.
2.12 In the higher educationsector, specifically,the Bank's strategy is to support the Government's introduction of the New Paradigm, which means a change from the previous supply-driven, centrally managed, sector-wide approach towards a more demand-driven, decentralized, focused approach. Future Bank-supported investments in higher education would be based on the further applicationof competitive principles intended to encourage institutions (both public and private), departments, and individualsto function more efficientlyand effectively.In addition,projects would be carefullytargeted to those regions and disciplines where the private sector is not providing, and is not expected to provide, the mix of graduates required for the economy's continued growth, development and transformation. The proposed project would include a domestic graduate fellowship component for teaching staff developmentas a bridging measure.
2.13 Foflow-up Operations. The Government of Indonesia has expressed a strong interest in developing a series of projects of similar design. A possible DUE HIwould invite proposals from a selected group of less-established universities and possibly teacher training institutes and technical training teacher colleges. Concurrently, the Government may seek Bank support for a Quality for Undergraduate Education (QUE) Project, under which departments and faculties in selected priority fields from any university could compete for funding to improve their educational processes and outcomes in undergraduate programs. Additionally,the DGHE has suggested that a follow-up project to URGE be considered if the mid-term review of the ongoing project indicates that it is achieving its objectives.
2.14 Rationale for Bank Involvement. The Bank is a trusted partner in higher education in Indonesia and has substantialexperience working with the Indonesian Government in this sector. The proposed project represents the culminationof a dialogue, which has taken place over the last several years, on the appropriate role of the Governmentin higher education. This dialogue led, first, to the URGE Project (para. 2.5), for which the Government articulated a competitive and decentralized strategy for supporting graduate research, and, secondly, to the development of the New Paradigm which redefines the role for the central government,emphasizes competition,and encourages greater autonomy for individual institutions. The Govemment has expressed its desire that the Bank aid this reform with financialand technicalassistance.
3. THE PROJECT
A. PROJECT OBJECTIVES AND PERFORMANCE INDICATORS
3.1 The project has three objectives: (a) to improve the quality of undergraduate education, as indicated by an increase of 10% in the mean score on the Benchmark Test and an increase of five percent on the NationalUniversity Entrance Examinationscore of students at the six target universities; (b) to improve the efficiency of the educationalprocess, as indicated by a decrease from the current average time to graduate of 5.75 years to 5.25 years at the six target universities;and (c) to improve the relevance of the study programs offered, as indicated by a decrease in the mean job search time of graduates from the estimated current average waiting time to employmentof 1.75 years to 1.5 years for the graduates of the six target universities. Achievingthese three objectives would lead to increased - 14 - earnings for graduates of the six target universities. The project would seek to achieve these three objectives by supporting the first phase of the implementationof the New Paradigm, which redefines the role of the central government in higher education, decentralizing responsibility to individual institutions.
B. PROJECT DESCRIPTION
3.2 The project will support (a) a first phase of activities at the institutional level as well as (b) supportingactivities at the sector level. Proposed interventionsat the institutionallevel would focus on six of the less-establishedpublic universities,where the needs for improved quality, efficiency, and relevance, as well as improved managerial capacity, are greatest, and which, because of their location, are seen as potential contributors to regional economic development. Proposed interventions at the sector level would support the central government's new role in (i) overseeing the higher-education system, (ii) regulating quality,and (iii) enhancingthe qualityof universityteaching staff.
3.3 Component 1: Universities Development Program (US$63.3 million, not including contingencies). Under the project, block grants would be provided to six universitiesto enable them to cany out their development programs to strengthen undergraduate education. During negotiations, the Government agreed to provide grants to the target universities in accordance with proceduresand on conditions agreed with the Bank. The grants would finance fellowships for teaching staff, training for teaching and administrative staff, teaching and research grants, technical assistance through visiting scholars, books, journals, teaching materials, equipment, and limited civil works for the rehabilitationand upgrading of facilities. Investments under this componentare targeted at consolidating existing educational capacity with individual universities' strategic plans and would provide resources enabling universities to plan new investments while capitalizing on earlier investments. Each eligible university was asked to establish a Task Force chaired by the university's First Vice Rector and staffed by young academics, to ensure their involvement in the planning and preparation process. To obtain support, each eligible university was required to evaluate its existing programs and resources and then to prepare a viable five-yearplan including: (i) specific proposals to improve the qualityof teaching and to increase the efficientuse of instructionalinputs; (ii) the relevance of institutional missions and objectives to regional development needs; (iii) the feasibility of institutional priorities in light of social demand and staffing profile, as reflected in applicants and enrollments,class size, and staff work load; (iv) consolidatedbudget plans that show a commitmentto the use of self-generated discretionary resources to maintain and operate new investments; and (v) a commitmentto reward staff for their teaching, particularlythose individualsreceiving fellowshipsfrom project funds.
3.4 The universitiesto benefit under this componentwere selected through a competitiveselection process, reviewed and approved by the Bank, described in Annex 3. Under this selection process, 17 of the 26 less-establisheduniversities were invitedto prepare and submit funding pre-proposals on the basis of clearly defined criteria which were reviewed and approved by the Bank. The 17 pre-proposals were reviewed and evaluated by an independent peer panel appointed by the Director-General of Higher Education, and ten were pre-selected. The pre-selection process, includingthe development of guidelines for self-evaluation,was highly participatoryand included policy dissemination workshops and training seminars with all potentiallyinvolved universities. The ten pre-selected universities were then asked to submit full-fledged proposals in accordance with the detailed guidelines and selection criteria reviewed and approved by the Bank. Proposals were received on February 10, 1996. The peer panel completed the evaluation process, which included site visits to all ten universities, in March 1996. The DGHE provided the Bank with the results of the final evaluation,including (a) the names of - 15 - the selected institutions,"(b) a revised implementationplan for this component, (c) revised costs for this component, and (d) draft grant agreements with the selected universities. During negotiations the Government (a) agreed to implement the Universities Development component according to the implementation plan, (b) provided assurance that there would be a clause in the grant agreement that the selected universities must have established both their indicator baselines and their final targets, and (c) agreed to monitor each of the indicators throughout the project implementation period.
3.5 Stakeholderparticipation has been, and will continue to be, ensured at all levels of the selection process--from the identificationof selection criteria, which was caried out by a Task Force whose membership included representatives from the universities, to the actual implementation of the investment plans, which would be carried out individuallyby the selected universities. While the DGHE has the overall responsibilityfor approvingthe new regulatoryframework and for reviewingthe funding proposals by the individual universities,project design and implementationarrangements have been completely decentralized. This approach enables individual universities to determine their own needs and targets, but will also hold the universitiesfully accountable for their performance and for achieving their stated objectives and targets. In particular, each university's progress in implementing its proposal will be reviewed annuallyby BHE and DGBE, and a grant agreement for the upcoming year will be renewed only if progress has been satisfactory.
3.6 Component 2: Institutional Capacity-Building in Higher Education (US$6.4 million, not including contingencies). The development of the capacity of the recently created Board of Higher Education (para. 1.24) would be supported under the project through the provision of technical assistance, staff training, policy studies, equipment for the BHE Secretariat, incremental operating costs, and workshops and technical assistance at individualinstitutions of higher education (Annex 4). The BHE will use an existing management information system for monitoring higher education. Lessons learned from the implementationand evaluation of the proposed project will be applied to future higher education policies and practices. The Governmenthas provided the Bank with the formal Ministerial decree establishing the BHE, including its chairman (the Director-General of Higher Education), members, and functions, the operating guidelines for BHE, and the implementationplans and costing of BHE activities. The Government has also allocated sufficientoffice space to the BHE Secretariat within the MOEC, devised a suitable plan for re-assigning sufficient number of qualified, full-time staff to the BIHE Secretariat, and issued terms of reference for these staff. During negotiations, assurances were obtained that the Government will maintain the BHE and its Secretariat in accordance with terms of reference, staffing, and resources acceptable to the Bank. Furthermore, it was agreed that grant agreements with the selected universities would designate the BHE as the body responsible for monitoring and evaluating progress against the targets specified by each universityand recommend to DGHE any ameliorative actions.
3.7 Component 3: Implementation of a National Accreditation System for Higher Education (UJS$10.0million, not including contingencies). The project would support the consolidationof BAN from its present initial state to full operation, strengthening its capacity to establish accreditation mechanismsand carry out the accreditationof institutionsof higher education and of study programs in such institutions. Technical assistance, short-term staff training in administration and program evaluation,training of peer reviewers, equipment,renovation of office space, and incrementalrecurrent costs including funding for site visits would be provided under this component. Cost recovery will be
The followingsix institutionswere selected: UNILA (Lampung), UNRI (Riau), UNS (Sebelas Maret), UNIB (Bengkulu),UNEJ (Jember), and UNDANA (Nusa Cendana). - 16- introduced when the first round of accreditation has been completed (Annex 5). The DGHE has prepared. and provided to the Bank, BAN operating guidelines, a workplan for the BAN, terms of reference and a staffing plan for the BAN Secretariat, and a plan detailing how and over what time period BAN would evolve to its full operational capacity. During negotiations, assurances were obtained that the Government will implement the BAN component according to the guidelines, plans, and terms of reference provided to the Bank.
3.8 Component 4: Competitive Domestic Fellowship Program (US$9.9 million, not including contingencies). A key qualityissue in Indonesian higher education is the low qualificationsof teaching staff. This component would address the issue of quality by supporting a competitive fellowship program enabling 1,000 recent SI graduates, or present teaching staff with SI qualifications,to pursue Master's degrees at Indonesianuniversities. Fellowship recipients would be bonded to teach in the 27 less-established public universities. In the longer run, the Government intends to re-examine the incentives for attracting and retaining highly qualified people as teachers. During negotiations, the Government agreed to carry out a comparative analysis of the remuneration and incentives structure for university teaching staff, with a view to determining the best combination of fellowships, increased remuneration, and/or other incentives for attracting and retaining qualified, effective people as university teachers. Not later than October 30, 1997, the recommendations of the comparative analysis will be furnishedto the Bank for comments, and promptly thereafter, the Government will prepare and carry out an action plan taking into account the comments of the Bank on the recommendations.
3.9 Component 5: Project Administration (US$2.4 million). This componentfinances the Central Project CoordinatingUnit (CPCU). The CPCU will be responsible for monitoring and assisting the LPIUs in implementingtheir respective projects and for collectingand analyzing data from the target universities. During negotiations, the Government agreed to maintain the CPCU throughout project implementation.
C. ALTERNATIVE PROJECT DESIGNS AND ECONOMIC ANALYSIS
3.10 During project preparation, a number of issues related to the design and effectivenessof this project were reviewed. These included: (a) the appropriatenessof the Government's priorities in the education sector; (b) investment altematives,and the criteria used to choose among them; (c) expected economic returns; and (d) the appropriatenessof the incentive structure built into the project design for achievingthe project's objectives.
3.11 Government Priorities in the Education Sector. The Government of Indonesia's policies seem to be broadly appropriate. Indonesia first focused on the universal provision of primary education, where economic retums were the greatest. It is now focusing on universalizing access to junior secondary education, where there is also a strong economicjustification for expansion.9 The Indonesian economy is also exhibiting,however, a strong demand for higher education, evidenced by substantialwage differentialsbetween tertiary and non-tertiarygraduates. Most of the demand is being
9 The Bank is supportingthe expansionof junior-secondaryeducation with a seriesof projects,of whichthe firstis expectedto be approvedin FY96. - 17 - met by the private sector". Recent Govemment policy in the higher education sector is undergoing a shift toward high levels of institutionalautonomy and self reliance and toward quality and relevance of study programs in public universities. Regional comparisons suggest that Indonesia lags behind in terms of overall investmentsin education and that other countries in the region are approaching OECD qualitystandards.
3.12 Investment Alternatives. (i) The possibilityof a sector-wide program of inputs, similar to those used under HEDP I and HEDP It, was considered--andrejected--in view of the need to shift the focus away from inputs and towards outputs and impact. (ii) A second altemative considered was to assist the Government of Indonesia to undertake an overall reform of the higher education financing system, as suggested in a Bank-commissionedpaper on financing higher education in Indonesia" This approach was, however,judged to be unimplementableat present because it would require reform of the entire civil-service system. (iii) Another alternative discussed was to subsidize individual demand by providing fellowships, loan schemes, or vouchers to needy students, rather than making block grants to institutions. This alternative was considered inferior to the chosen alternative, for several reasons. In the first place, most needy students in Indonesia drop out of the educationalsystem well before they reach the university, so an intervention of this sort in higher education is not yet warranted. In the second place, whereas there may be some rationale for fellowships, subsidizing demand without efforts to improve the attractivenessof the regional universitiescould result in a brain drain towards Java, with none of the positive extemalities for regional development accruing from efforts to upgrade the regional universities. In the third place, recent research12 concludes that before emphasizingfunding mechanismssuch as vouchers, there needs to be improvement in the broad policy environmentin which universitiesoperate. A fourth reason for rejecting the option of loan schemes is the weakness of the financial system and the difficultiesin ensuring repayment. (iv) The possibilityof includinga larger number of universitiesin the pilot phase was considered and rejected on grounds of cost and absorptive capacity.
3.13 Based on discussionswith the Government,three changes in the original project conceptfor an BEDP II follow-upproject were made. It was agreed: (i) to move beyond what was done in HEDP I and to introduce a competitive fellowship program for recent SI graduates to enhance the quality of university teaching staff; (ii) not to include the accelerated engineering program, mainly because the thrust of the proposed project is to encouragelocal institutionsto make their own investment decisions, rather than promoting expansion to meet nationally planned targets;'3 (iii) for the reasons cited in paragraph (ii) above, not to include, in this project, support for the nationwide university library network.
10 Althoughmost of the incrementaldemand for highereducation is beingmet by the privatesector, most of the incrementaldemand for scienceand engineeringis beingmet by the publicsector. SeeAlbrecht, 1994.
12 A recentpublication by Zidermanand Albrecht,1995, Financing Universities in DevelopinaCountries concludedthat beforeemphasizing funding mechanisms such as vouchersand costrecovery to increasethe efficiencyof higher education,there needsto be improvementin the broadpolicy environment in which universitiesoperate. 13 It is alsoimportant to notethat at thistime, implementation of an AsianDevelopment Bank-financed project to supportengineering education in Indonesiahas begun. SubsequentBank-supported projects in higher educationmight also fund improvements in engineeringeducation, if needed. - 18 - 3.14 Economic returns. The major quantifiable benefits from the project result from the investments made in the universities that are selected for funding. Until the selection process is completed, it will not be possible to provide estimates of the economic retums based on the finalized investmentprogram. However, indicativereturns that are likely to be close to the final retums can be calculated, based on the informationcontained in the final proposals submitted by the ten universities on the short list (Annex 3F).
3.15 Based on the information provided in these ten proposals, the estimated economic return is 24%. The details of the calculations and an analysis of the sensitivity of the estimates to the assumptionsare provided in Annex 6.
3.16 As no estimates of the positive extemalities from public investment in higher education are available, the increase in earnings resulting from the investment is taken as a measure of the social benefits of the investment. This increase is obtained through three effects: (a) a reduction in the time students take to graduate; (b) a reduction in the waiting time for a job once they graduate; and (c) increased eamings once they are employed.The largest contributionto total benefits arises from the increased salary after employment (81 percent), followed by the benefits from reducing the time to graduate (11 percent) and the benefits from having fewer graduates waiting for employmentat any one time (8 percent). Even though the effect of the project on the monthlyeamings of any one graduate are small (US$10), there are many graduates who would benefit. Moreover, the benefits would be received for many years. Reducing the time needed to graduate makes a significant difference to the total number of students who pass through the system. In 20 years, roughly seven percent more students would graduate if the mean time to graduate were to decline from 5.75 to 5.25 years, with no change in the number enrolled at any given time. Reducing the number of graduates waiting for employmentgenerates a large per graduate savings because the opportunitycost of having a potential worker idle is substantial(roughly $1,460 per year).
3.17 System-wide effects can be expected if project investmentsincrease not only the absolute level of quality of the universities selected for funding, but also their quality relative to other public and private universities. In the short run, more qualified students from less-establishedregions may then go to local universitiesinstead of to universitiesin Java. The expansion of their choice set results in an unambiguous gain for the more qualified students in the less-established regions. Since places in universitiesare rationed in Java, this would free up more positions for students from Java who would otherwise have gone to private universities. Their retums to education would be expected to rise as well, since econometricanalysis suggests that the retums to public university education are roughly nine percent higher than for private university education. Provided the reduction in time to graduate allows the more qualified students to be absorbed into the less-established universities without displacing students, there would be no groups that lose with the investments. However, if, because of the rationing in public universities, less-qualifiedstudents from less-established regions must attend private less-establisheduniversities, they would be expected to receive lower retums.
3.18 In the short to medium term, there is likelyto be a supply response from the private universities as they improve their quality in response to the improvementsin quality in public universities. Part of the improvementin quality of the private university would be obtained virtuallyautomatically. Because the private universitieshire most of their staff as part-time lecturers drawn from public universities, increases in the quality of public university faculty will result in increases in quality of private school faculty. - 19 - 3.19 Incentive Structure. The changes to the investment allocationprocess being introduced in the New Paradigm and implemented in this project introduce incentivesto improve quality and efficiency that, heretofore,have been lacking. The process being followed is described in detail in Annex 3, but the important features are described below:
1. Universitiesmust compete for investmentfunds. 2. Investment proposals are prepared after a self-evaluationthat must include a discussionof program relevance, academic atmosphere,intemal management,sustainability and efficiency. The self-evaluationalso discusses the institution's strengths, weaknesses, opportunitiesand threats. 3. The investmentproposals must meet standards set by the Board of Higher Education. 4. Universities must contributesome of their own discretionaryfunds to the proposed activities. 5. The Board of Higher Education and the Universitieswill agree on specific performance indicators against which progress will be measured. The amount, timing and conditionsof future funding decisions will depend upon performance.
3.20 The beneficial effects of the incentives are heavily dependent upon the criteria which will be used to evaluate the investment proposals and on what happens to the flow of funds from altemative sources. Technicalassistance on setting evaluation criteria and evaluating proposals has been provided during project preparation and will continue under the project. Funding allocations from all sources would be carefully monitoredduring the project to ensure that the universities that win the competition receive more than they would have in the absence of the competition.
3.21 Althoughthe Bank considers the institutionalchanges to be important, it is difficult to provide ex ante an estimate of the expected net benefits. However, it is worth noting that any improvementsin the allocation process could have sizable retums since the total investment budget (DIP budget) for public universities in 1995/1996 was roughly US$ 202 million. It is also worth noting that the measures being introduced parallel some of the initiativespromoted by the Bank in its own efforts to improve the design of projects and to ensure that the investmentsachieve their desired impacts.
3.22 The introduction of an accreditation system is also expected to lead to positive net benefits, although again it is difficult to quantifythem. The benefits would come through two effects. First, the threat of not being accredited would induce both public and private universities to improve their quality. Second, the information provided from the accreditation system could help prospective students avoid making poor investments.
3.23 The BIHE and the BAN will pay close attention to the relation between the phasing of the accreditation and investment programs. If standards for accreditation are set without regard for the investments that are required to reach the standard, an excessive number of universities could be declared substandard. This could induce students to leave or not apply to universities declared substandard and could, thereby, harm the developmentof the less-establishedpublic universities. - 20 - D. PROJECT MANAGEMENT AND IMPLEMENTATION
3.24 OrganizationalStructure. The Directorate General of Higher Education (DGHE) under the Ministry of Education and Culture (MOEC) will have overall responsibilityfor overseeing project implementation. The National AccreditationBoard (BAN) and the Board of Higher Education (BHE) will be responsible for implementing their respective parts of the project. At the level of the six individualtarget institutions,implementation responsibility will lie with Local Project Implementation Units (LPIUs) which have evolved out of the University Task Forces which prepared the individual universities' proposals. At the central level, a small Central Project CoordinatingUnit (CPCU) located within the BIHESecretariat within DGHE will be responsiblenot for implementingthe project, as in the past, but only for providing training, monitoring,and technicalassistance to the LPIUs. The CPCU is de facto already established in the form of the existing Project Preparation Team within DGHE (see Annex 7). The main relationsbetween the DGHE and other implementingbodies are shown in Chart 1. Project implementationarrangements are described in detail in the Project Implementation Plan, which is being circulatedseparately.
3.25 Implementation Schedule. The project would be implemented over about five and one half years, as shown in Annex 7. For the six target universities, the five-year plan presented in each winning university's proposal will be set forth in a five-year grant agreement between DGHE and the individual university. The implementationperformance of each target university would be monitored frequently and evaluated annually,on the basis of the agreed proposal and the university's own targets as set forth in the proposal, to determine whether the grant could be continued or even expanded, or whether it should be delayed, reduced, or revoked, depending on the implementationperformance in the respectiveyear.
E. MONITORING AND EVALUATION
3.26 A key feature of the project is that failure to achieve performance targets in any one year, influences both the development strategy and the level of investment in subsequent years for each university. As it will take some time for the investmentsto have an impact, over the first three years the performance targets appearing in the grant agreements will be process indicators included to track whether the investments are being carried out as planned. Targets will be set for each of the major categories of activitiesfinanced under the UniversitiesDevelopment Program--civil works, equipment, libraries, staff development, technical assistance, research grants, teaching grants, and project management. The particular values of the targets can only be set once the universitiesto be funded are selected and investmentplans are finalized.
3.27 For the fourth and fifth years of the project, the performance targets that could trigger a response are either directly related to impact or expected to be highly correlated with impact. Four key project performance indicatorswould be used to monitor and evaluate the overall impact of the project. To monitor quality, the BIE has developed an Institutional Benchmark Test which would be administered annuallyto all students in the priorityprograms at the six target universities.It is expected that by the fourth year of the project, the mean score of students taking the Benchmark Test will have increased by 10% over the scores at the beginning of the project. To measure changes in the relative attractivenessof the university,the scores on the NationalUniversity Entrance Examination(UMFTN) of those students enrollingin the six target universitieswill be compared to the scores of all students in the respective province who take the UMPTN. If the universities could attract the relatively better students from their own province, this would suggest that the relative attractiveness of the university has increased.. By the end of the fourth year, the ratio of enrolled students test scores to those of all - 21 - students from the province should have increased by 5 percent. To monitor efficiencv, the target universitiesand the CPCU would monitorthe average time to graduate and the extent of dropouts. By the fourth year of the project, the mean number of years required to graduate would be expected to decline from 5.75 to 5.25 years. Dropouts would be measured as the percentage of those who begin the academicyear but do not complete it. By the fourth year of the project , the percentage of students who drop out should decrease by five percent. Finally,to measure relevance, the target universities and the CPCU will monitormean job search time of graduates. By the fourth year, average waiting time to employmentwill decline from 1.75 years to 1.5 years. Baseline informationis being collected and will be available when the universities' final proposals have been evaluated. Monitoring would be done through the existingeducation monitoringsystem.
3.28 The time required to graduate and the waiting time to a job are directly related to the economic rate of return (para. 3.15). Monitoringthe time required to graduate is relatively inexpensive as the data are already being collected. Monitoringthe waiting time to a job is more expensive for it requires tracer studies of graduates. The monitoring of the waiting time is justified not because it has particularlylarge effect on the overall economicrate of return of the project, but because it is expected to be correlated with the quality and relevance of the education. Previous tracer studies in Indonesia have found that graduates in the more highlypaid fields, who went to universitiesgenerally considered higher quality,had shorter-waitingtimes to employment.
3.29 The major determinant of the economic rate of return is the effect of the project on earnings once employed. The project does not use an effect on earnings as a performance target for several reasons. First, there is no reliable way of estimatingwhat earnings of the graduates of the university would be in the absence of the project. In contrast to investmentsmade in secondary education where other schools that do not receive the investment may serve as an adequate control group, in this case there is no adequate control group. Using the earnings of university graduates of previous years as a control group is only legitimate if there are no significant changes in the socioeconomic conditions. Second, even if an adequate counterfactual estimate could be constructed, the impact could not be measured soon enoughto serve as a performancetarget for the fourth and fifth years of the project. As the effect of the project on earnings must be achieved through improvements in quality of the students and improvements in allocative efficiency,the project uses the two quality indicators and the waiting time to employmentas proxies.
3.30 The performance indicators have been selected so as to minimize any possible adverse incentive effects. For example, using the time to graduate alone as a performance indicator provides the incentive to pass students through the system quickly, without regard to quality. Specifying performance indicators related to quality provides a check on this incentive. Similarly, using performance indicators based on quality alone provides an incentive to restrict entry to the university, perhaps to the point where there would be excess capacity. The check on this incentive is that universitieswould lose tuition revenue, an important source of discretionaryrevenue.
3.31 The performance indicatorsused by the Bank to monitor impact will also be used by the Board of Higher Education and the six target universities to monitor satisfactoryprogress in the investment programs. In addition, a larger number of indicators, set forth in Annex 8, would be used during project supervision by the CPCU and the LPIUs as well as by the Bank to monitor project implementation performance. At the six target universities, both physical indicators (civil works completed, equipment procured, number of fellowshipsawarded, etc.) and education indicators (mean student grade point average, percent of faculty with advanced degrees, etc.) would be monitored, as would financial and management indicators. Other indicators would be used to monitor progress in - 22 - establishingthe BBE and making it operational, as well as following its output (e.g., production of a long-term strategy for the higher education sector). Similarly,progress in establishing the BAN and making it operational would be monitored, as would the number of study programs and universities evaluated and accredited.
3.32 Annual Progress Report. The CPCU will prepare, with the support of the BHE Secretariat, the BAN Secretariat, and the LPIUs, annual reports at the end of every Government fiscal year, summarizing: (a) the status of the programs being implemented by the selected less- established universities based on the agreed indicators; (b) the activities of the BAN based on the agreed input, process, and output indicators; (c) summaiy activities of the BIHE,including information on the agreed indicators; (d) implementationprogress and problems during the preceding year; and (e) a revised implementationplan for the followingyear, setting out the measures recommended to ensure the efficient carrying out of the Project and the achievementof project objectives during the following year. During negotiations,the Government agreed to prepare such annual reports under terms of reference satisfactory to the Bank and to furnish them to the Bank by June 30 of each year, beginningJune 30, 1997, and until completion of the project.
3.33 Mid-Term Review. In addition to the annual reports, the Secretariat of the BHE, assisted by the CPCU, would prepare a mid-term review of the project. This review would integrate the results of project monitoringand evaluationactivities, including progress achieved in implementingthe project, and would set out the measures recommendedto ensure the efficientcarrying out of the project and the achievement of project objectives during the remaining life of the project. The Mid-Term Review would include, inter alia, (a) an assessment of the effectivenessof the BAN and its activities and (b) the progress of the six target universities in carrying out their individual proposals. During negotiations, the Government agreed to carry out, under terms of reference satisfactory to the Bank, such a mid-term review, to prepare and furnish to the Bank a report on the review on or about June 30, 1999, to review the report with the Bank on or about September 30, 1999, and to take all measures required to ensure the efficient completion of the Project and the achievement of project objectives, based on the conclusion and recommendations of the report and the Bank's views on the matter.
3.34 Implementation Completion Report. At the completionof the project, the Secretariat of the BIE, assisted by the CPCU and the LPIUs, would compile an Implementation Completion Report within six months of the closing date of the loan. This report will summarize, among other things, (a) program activities in terms of input, process and output indicators for all project components; (b) assessment of BAN effectiveness;(c) the project financial status; and (d) implementationissues and recommendations.
3.35 Supervision Plan. The proposed supervision plan is set forth in Annex 9. Bank Resident Staff in Indonesia (RSI) would provide day-to-day liaisonwith the CPCU and LPIUs and would help resolve problems requiring immediate Bank action. Bank supervision missions from headquarters, with RSI participation, would be conducted twice a year. It is anticipated that Bank involvement in supervision will be straightforward because the CPCU will undertake continuous and detailed supervision of the LPIUs' activities, which will include frequent site visits, training, and technical assistance. Bank supervision missions will review this process, with visits to each of the six less- establisheduniversities once a year. - 23 - F. STATUS OF PROJECT PREPARATION
3.36 At the central level, the Project Preparation Team consists of faculty members from selected public universitiesand is headed by the Dean of the Faculty of Computer Sciences at the University of Indonesia. The team includes several officials who have had extensive experience in previous Bank- assisted projects; these people have been selected to occupy key implementationposts in the CPCU for the proposed project. At the university level, each of the six target universities has designated key members of its Task Force to be the core of the university's LPIU. University administrators,teaching staff, and students, as well as provincialand local governmentofficials and other stakeholders are fully aware of the shift in higher education policy, due to their participationin workshops conducted during project preparation.
4. PROJECT COSTS AND FINANCING
A. COSTS
4.1 The total cost of the project is estimated at US$102.1 million equivalent (Rp 229.2 billion), including physical and price contingencies. Table 4.1 summarizes the estimated cost by project component. Detailed costs by year, purpose and componentare provided in Annex 11.
Table 4.1: Summary of Project Costs by Component % °/ Total Rp billion USS nillion Foreign Baseline Component Local Foreign Total Local Foreign Total Exchange Cost
UniversitiesDevelopmnent Program 61.1 81.0 142.1 27.2 36.1 63.3 57 69 InstitutionalCapacity Building in HigherEducation 10.5 3.7 14.2 4.7 1.7 6.4 26 7 Imnplementationof National AccreditationSysten for 19.4 3.0 22.4 8.7 1.3 10.0 13 11 HigherEducation CompetitiveDomestic Fellowship 20.1 2.2 22.3 8.9 1.0 9.9 10 11 Program ProjectManagement 5.0 0.5 5.5 2.2 0.2 2.4 9 3
TotalBaselineCostsa/ 116.1 90.4 206.5 51.7 40.3 92.0 44 100
PhysicalContingencies 1.9 2.6 4.5 0.9 1.1 2.0 57 2 PriceContingencies 14.0 4.2 18.2 6.2 1.9 8.1 23 9
Total ProjectCosts a/ 132.0 97.2 229.2 58.8 43.3 102.1 42 III
a/ Includes identifiable duties and taxes of USS4.4 million equivalent.
4.2 Bases of Cost Estimates. Baseline costs are estimated at February 1996 prices. Costs for international and domestic consultants are in line with recent education projects for appropriately qualified experts. Unit costs for domestic fellowships range from US$4,000 to US$5,400 per staff- year for long-term programs. Costs of overseas training and fellowships range from US$12,500 per visit for short-term training to US$27,000 per staff-year for long-termprograms. Operationalcosts are consistent with current governmentpractices and recent educationprojects. The size of each university development grant program was estimated based on the grant proposals submitted by target universities,which were based on individualuniversities' strategic plans. - 24 -
4.3 Contingency Allowances. Project costs include a contingency allowance of US$10.1 million equivalent, 11 percent of the baseline costs, for unforeseenphysical conditionsand for estimated price increases. Physical contingencies (US$2.0 rnillion equivalent) represent about 2 percent and price contingencies(US$8.1 million equivalent) about 9 percent of baseline costs. Price contingencieshave been calculated at 6 percent per year for local costs and at 2.4 percent for foreign costs for all categories.
4.4 Foreign Exchange Costs. Foreign exchange costs are estimated at US$43.3 million equivalent, representing 42 percent of total project costs and are based on the following percentages: (a) internationalconsultants and visiting scholars, overseas training and fellowships, equipment, and books and journals - 80 percent; (b) civilworks - 30 percent; (c) local consultants and visiting scholars, and local training and fellowships- 10 percent; and (e) recurrent costs - 0 percent.
4.5 Taxes and Duties. Identifiable taxes and duties are estimated at Rp. 9.2 billion (US$4.4 million equivalent) based on the current 10 percent value added tax on all contracts for goods and works.
B. FINANCING PLAN
4.6 The total project cost of US$102.1 millionequivalent would be financedby a proposed loan of US$65.0 million equivalent, covering 67 percent of total project costs excluding taxes (100 percent of foreign and 37 percent of local expenditures) as shown in Table 4.2 below. The Government would finance from its annual budget the remaining costs of US$37.1 million equivalent including taxes (36 percent of total project costs includingtaxes or 33 percent of total project costs excludingtaxes).
Table 4.2: FinancingPlan (US$ million) Government IBRD of IBRD Total Share Categoryof Expenditure Indonesia (%)
UniversitiesDevelopment Grants 17.3 50.8 68.1 75 CivilWorks 0.1 0.4 0.5 80 Equipment 0.2 0.7 0.9 80 DomesticFellowships 5.6 5.6 11.2 50 Non-DegreeTraining: Overseas 0.0 1.8 1.8 100 Domestic 0.8 0.8 1.6 50 Studies 0.0 1.6 1.6 100 Consultants'Services 0.3 1.1 1.4 80 Project Management 1.1 1.1 2.2 50 IncrementalRecurrent Costs 10.6 0.0 10.6 0 Unallocated 1.1 1.1 2.2
Total 37.1 65.0 102.1 64 - 25 - 4.7 Incremental Recurrent Costs. Incremental recurrent costs are additional costs associated with the BHE, the BAN, the Secretariats to the two bodies, and the new or enlarged study programs at the target universities,which are expected to continuetheir functions beyond the project lifetime.It is expected that incrementalrecurrent costs will account for less than 70/o of total investment costs and that they will be easily sustainable from the MOEC's budget. All the project-related incremental recurrent costs would be financedby the Governmentin order to ensure sustainability.
C. PROCUREMENT ARRANGEMENTS
4.8 Procurementof goods, services and works under the proposed project would be carried out by the Central Project Coordination Unit (CPCU) located within the Directorate General of Higher Education (DGHE) and by the individual Local Project Inplementation Units (LPIU) located in the target universities. In the CPCU; three experienced staff would be in charge of implementing procurement activities. The loan proceeds would be used to finance the Universities Development Grants and procurement of works, goods and services under the project. Procurement of works and goods would be done in accordance with the Bank's 'Guidelines for Procurement under IBRD Loans and Credits" (dated January 1995 and revised in January 1996). Procurement arrangements are summarized in Table 4.3 and described below:
Table 4.3: Procurement (US$ million) Total Cost Category of Expenditure Procurement Procedures Including NCB Other /a NBF Contingencies
Universities Development Grants 70.1 70.1 (51.9) (51.9)
Degree and Non-degree Training 14.7 14.7 (8.2) (8.2)
Consultants' Services and Studies 3.0 3.0 (2.7) (2.7)
Office Equipment 0.7 0.3 1.0 (0.5) (0.2) (0.7)
Civil Works 0.5 0.5 (0.4) (0.4)
Project Management 2.2 2.2 (1.1) (1.1)
Incremental Recunent Costs 10.6 10.6 (0.0) (0.0)
Total 1.2 90.3 10.6 102.1 (0.9) (64.1) (0.0) (65.0)
Note: Figures in parentheses are the respective amounts fuianced by the Bank. N.B.F. - Not Bank Financed.
/a Includes selection of Universities Development Grant awardees in accordance with the criteria and procedures agreed with the Bank, selection of fellows and their placement following the criteria and procedures agreed with the Bank, selection of consultants in accordance with the Bank's guidelines, national shopping for office equipment, and project management following the goverunent's administrative procedures acceptable to the Bank. The Universities Development Grants may incur procurement of goods through ICB, NCB, shopping, and direct contracting. - 26 -
(a) Universities Development Grants (estimated total value: US$70.1 million equivalent, including contingencies). The grant proposals submitted by the eligible universities have been evaluated by an independent peer panel appointed by the DGHE and the selection was made on a competitive basis, in accordance with the procedures and selection criteria agreed by the Bank. The format of the draft grant agreements has been reviewed and agreed by the Bank. Separate grant agreements would be signed between CPCU and the target universities.Each grant agreement would specify that the target university shall comply with any applicable procurement guidelines of the Bank for the procurement of works, goods and services, and shall at all times exercise such responsibility. The grant agreements could cover the financing of civil works, management, overseas and domestic fellowships, overseas and domestic visiting scholars, equipment, scientific literature and consumables. Each target university would be responsiblefor the procurementof all goods, services and works included in its grant agreement with CPCU. To the extent practicable, contracts for equipment shall be grouped in bid packages estimated to cost US$250,000 equivalent or more each. Target universities would submit procurement plans for goods, services and works to be purchased as part of their annual review. These procurement plans would be reviewed by the CPCU specialists/panelof experts. The CPCU would provide guidance and advice, monitor the procurement activities periodically at target universities, and ensure that the agreed procurement procedures are adhered to by the target universities. In addition, technical audits (para. 4.13) will be carried out by independent experts annually to ensure that the agreed procurement procedures are adhered to by the target universities,and the findings of these technical audits will be reported to the Bank.
(b) Fellowshipsand Training (estimated total value: US$14.7 million equivalent, including contingencies). Fellowshipswould be awarded to candidates on the basis of individual applications as evaluated by CPCU/BHE in accordance with the criteria and procedures agreed with the Bank. Training contracts with local training providers would be in accordance with Government administrative procedures acceptable to the Bank.
(c) Office Equipment (computers, copying machines, etc.) for the National Accreditation Board, the Board of Higher Education, and Project CoordinationUnit (estimated total value: US$1.0 million equivalent, including contingencies). Because of the small package size in terms of value and quantity, office equipment would be procured through National Competitive Bidding (NCB) procedures acceptable to the Bank. National shopping would be used for equipment contracts estimated to cost less than US$50,000 per contract up to an aggregate amount of US$300,000 equivalent, with quotationsfrom at least three suppliers.
(d) Civil Works (estimated total value: US$0.5 million equivalent, including contingencies).Renovation of BHE and BAN offices would be awarded through NCB procedures acceptableto the Bank.
(e) Consultants' Services and Studies (estimated total value: US$3.0 million equivalent. including contingencies)include auditing and training specialists to assist BHE, BAN, and the CPCU in project implementationand development of new paradigm, and - 27 - visiting scholars to provide academic expertise to universities and policy studies. The consultants would be selected and contracted in accordance with Bank Guidelines for Use of Consultants. All consultancycontracts would use the Bank's standard forms of contract for consultants.
(f) Project Management (estimated total value: US$2.2 million equivalent, including contingencies) which includes expenditures by the CPCU for administration costs, including honoraria, consumable materials, and travel would be met following governmentadministrative procedures acceptable to the Bank.
4.9 Bank Review. One of the explicit objectives of the project is to help strengthen the capability of the Board of Higher Education to select and award educationaldevelopment and university research grants on the basis of agreed criteria and procedures, as well as to develop management capability of regional universities. The Bank's prior review requirementsare intended to monitor the selection and award process, and the adherence to the agreed procedures by the awarded universities, rather than review the details of individual activities. Review of procurement activity by the Bank would be conducted as follows:
(a) All contracts for goods estimated to cost US$250,000 or more per contract, the first contract for civil works by each of the target universities, the first contract for civil works under Components II and 111, the first contract for goods over US$50,000 under ComponentsII and m, and Universities Development Grant agreements would be subject to prior review. Roughly 80% of the contracts will be subject to prior review, including procurement under the UniversitiesDevelopment Grants which will be reviewed as part of review and approval process of Grant applications. Other contracts will be subject to random post review. The CPCU will closely monitor implementation progress under the grant agreements, in particular, universities' adherenceto the agreed procurementprocedures and report to the Bank semi-annually. Bank supervision missions and RSI staff will carry out post-review of various procurement activitiesunder the project. In addition, technical audits (para 4.13) will be undertakenby independentexperts, on an annual basis, to ensure, inter alia, that the agreed procurement procedures under the Grant agreements are adhered to by the target universities;the technicalaudit reports will be sent to the Bank.
(b) All individual consultant contracts costing more than US$50,000 and contracts for consulting firms costing more than US$100,000 would be subject to prior review. Other consultants' contracts would be subject to random post review. However, all terms of reference and single-source selection of consultants would be subject to prior review. Other contracts would be subject to random post review.
(c) Annual trainingplans for both overseas and domestic for each year would be furnished as part of the annual report for review and discussionwith the Bank; - 28 - D. DISBURSEMENTS
4.10 The proposed loan of US$65.0 million equivalent would be disbursed over a period of six years (Annex 12). Disbursements are expected to be completed by September 30, 2002, the Loan Closing Date. The disbursement schedule is based on the implementation schedule and the disbursement profile for education projects in Indonesia. It is somewhat faster than the present profile reflecting the readiness of this project and the past implementationexperience of DGHE. Agreements with six target universities would be for five years. Although the target universities at present lack experience in dealing with the Bank, they do have experience in undertaking procurement and other aspects of project implementation,and the incentive for them to learn rapidly--the possibilitythat they will lose the grant money to competitor universities if it is not spent according to plan--is very high. Disbursements estimated for FY97 are based on the proposed initial deposit into the project Special Account and replenishment. Disbursementswould be made as shown in Table 4.4.
Table 4.4: Disbursements
Amount % of expenditures Category (USSmillion) to be financed (1) Civilworks 0.4 80%of totalexpenditures not includedunder (5) (2) Goods 0.7 100%of foreignexpenditures, not includedunder (5) 100%of localexpenditures (ex-factorycost), and 65% of localexpenditures for other itemsprocured locally (3) Training not includedunder (5): (a) Domestic 0.8 50%/0of totalexpenditures (b) Overseas 1.8 100%of totalexpenditures (4) Domesticfellowships 5.6 50%of totalexpenditures not includedunder (5)
(5) UniversitiesGrants 50.8 75%of Grantamount
(6) Studiesnot included 1.6 100%of totalexpenditures under(5)
(7) ProjectManagement 1.1 50%of totalexpenditures (8) Consultant'services not 1.1 80%of totalexpenditures includedunder (5)
(9) Unallocated 1.1 TOTAL 65.0
4.11 Disbursements from the loan proceeds for the following contracts and agreements would be made against full documentation: (a) contracts for goods costing more than US$250,000; and (b) consultants' services with individual consultants costing more than US$50,000 and consulting firm contracts costing more than US$100,000. All other disbursements would be made against statements - 29 - of expenditures (SOE) for which relevant documents would be retained by responsible agencies and made available for review as requested by visiting Bank missions. To facilitate disbursements, a Special Account in an amount up to US$5.0 million would be established at the Bank Indonesia or a state commercialbank, to be used by DGHE under the direction of the Director General of the Budget, Ministry of Finance, following establishedprocedures. The proposed Special Account would be used for all foreign and local expenditures. Replenishment to the Special Account would be made on a monthly basis or whenever the outstanding balance is less than 80 percent of the initial deposit, whichever comes first.
E. ACCOUNTS AND AUDITS
4.12 DGHE will establish separate project accounts for all project expenditures to be maintained in accordance with sound accountingpractices. Accountsand documentationsupporting the Statement of Expenditures and Special Account are to be maintainedseparately by DG Budget, MOF. The CPCU will prepare a consolidated financial statement covering all project expenditures. The financial statement will be audited by independentauditors acceptable to the Bank. The audit report will contain a separate opinion by the auditors on the statement of expenditures used as a basis for disbursement. Certified copies of the financial statement on the project for each Government fiscal year, together with the auditors' statement, will be furnishedto the Bank as soon as available,but not later than six months after the end of each fiscal year. During negotiations,the Government provided an assurance that the project accounts, including the special account and SOEs, will be audited annually by independent auditors satisfactoryto the Bank and audit reports are to be furnished to the Bank within six months of the end of the Government'sfiscal year.
4.13 Technical Audits. To ensure accountability to the Government, the Bank, the academic community, and the general public, a technical audit (Annex 13) of the various project componentswill be carried out annually, in a manner acceptable to the Bank, and the technical audit report will be furnished to the Bank not later than June 30 of each year. The technical audit will be carried out by an independent consultant with no association with the project and possessing specialistswith expertise in (i) managementand award of development grant programs; (ii) university administration and finance; (iii) university accreditation; and (iv) graduate fellowship programs. The goal of the technical audit is to provide an independent and impartial assessment of the quality and adequacyof procedures and processes employedby the BHE and the BAN Secretariats and the six target universities under the proposed project. For the BIHE,the audit team will examine the efficiencyand effectivenesswith which the BIHEselected awardees, made awards, and monitored and evaluated the implementationof the universitygrants under the project. In addition,the audit team will examine whether BHE's personnel are performringas reported and whether equipment and facilities availablefor the BHE Secretariat operations are adequate, as well as being used as reported. For the BAN, the audit team will examine (I) the development of accreditationpractices and procedures and (ii) the timelines of the accreditation of selected academic fields and institutions. For the individual universities, the technical audit will include a sample check of documentationfor award as well as selected site visits (about two per year) to check physical reality against the most recent report submitted to the BEE Secretariat and compliance with accounting, procurement, and reporting guidelines. The technicalaudit for the Domestic Fellowship componentwill include a sample check of the selection process and the progress made by the selected candidates. - 30- 5. BENEFITS AND RISKS
A. BENEFITS
5.1 The benefits from the project-supported phased implementation of the New Paradigm are expected to be substantial. At the institutionallevel, the project is expected to have an economicrate of return of 24 % (para 3.16), arising from improvements at the six selected target universities in (a) education quality, resulting in increased earnings for graduates, (b) the efficiency of teaching/learning processes, resulting in a reduction in the time students take to graduate, and (c) the relevance of study programs and curricula, resulting in a reduction in the time graduates must wait until they obtain employment. Mean job search time is expected to decrease as individual institutions of higher education foster relationships with local businesses and industries to improve the relevance of their offerings, and as they restructure themselves to supply graduates in fields demanded by local stakeholders. The project is therefore expected to contribute to regional development in the areas surrounding the six target universities. Expected benefits of the sector-wide components include (d) improved education qualitv throughout the higher-education system, as institutions respond to the evaluation and accreditation process, as they undertake self-evaluation and compete for funds and teaching staff, and as they have access to a larger pool of better-qualified teaching staff, (e) improved efficiency as institutions acquire the responsibilityand accountabilityfor their use of resources and therefore undertake evaluation and planning designed to improve their efficiency, and (f) increased relevance, as the center increasinglyfocuses scarce resources on highest-priorityneeds and programs. By raising the quality of university graduates, the project as a whole is expected to help Indonesia compete in the internationalmarketplace.
B. RISKS
5.2 Five risks have been identified in this project. A first risk is that the central Government may be unwillingto implement the New Paradigm fully, i.e., it may be unwillingto devolve resources and the responsibilityfor planning and implementationto the university level. This risk is considered minimal,since during project preparation, substantialprogress was made in building ownership of the New Paradigm, both at the level of the central Government and at the level of the stakeholders. A second risk is that funds made available from other sources would subvert the competitive allocation mechanism introduced in this project. This risk would be mitigated because the BHE is committed to the New Paradigm and will closely monitor.future funding decisions. A third risk is that the accreditationprocess may be too ambitiousfor the newly establishedBAN to carry out in a meaningful way, such that the results will be discredited. This risk will be minimizedthrough careful planning and a phasing in of the accreditationprocess as capacity is developed to carry out critical evaluations. A fourth risk is that bottom-up planning, where individual universities determine what courses and programs of study they will offer, may be incompatiblewith national requirements. This risk is also considered to be minimal, since it is expected that universities will become progressively more sophisticatedin reading market signals and in determining their course offerings accordingly. A fifth risk is that the six selected universitieswill not be able to implementtheir proposals adequately, since they will be responsible for tasks which heretoforehave been the responsibilityof the center. This risk would be mitigated through the provision by the Central Project CoordinatingUnit of timely training and technical assistance in all the various aspects of implementation, including procurement, accounting,monitoring, and reporting. - 31 - 5.3 Simulations presented in Annex 6 provide some indication of how failure to achieve the performancetargets would affect the estimated economic rate of return. Delaying all benefits by three years would result in an economic rate of return of 14 percent. Achieving all other targets, while making no progress in reducing the waiting time to employment,would result in an economic rate of return of 20 percent. Achieving all targets but the reduction in time to graduate would result in an economicrate of return of 21 percent.
C. SUSTAINABILITY
5.4 Financial Sustainability. At the level of individual institutions, the project introduces a new measure to improve sustainability of investment inputs through the requirement that universities develop their own investmentproposals based on their institutionaldevelopment plans and their ability to sustain the proposed investmentsfrom their own self-generated resources. The guidelines used by the six target universitiesin the preparation of their proposals explicitly limited the total amount that could be requested by each individual university, based on that university's projections of self- generated income (the budget on which the sustainabilityof the investmentwill depend). The project is therefore expected to be sustainable, in terms of each target university's ability to sustain the investment made. At the sector level, as the New Paradigm is phased in, all institutions of higher education in Indonesia wilHbe required to compete for resources--and to suffer the consequences of bad planning. This should result in more realistic planning which is more likely to be sustained in the long run.
5.5 Institutional Sustainabilitv. In terms of institutionalsustainability, commitment to the New Paradigm is evident among all stakeholders. Decision-makers at the center have already begun to promulgate the legal framework for the New Paradigm and are moving towards a more rational system for allocatingresources. If for any reason the commitmentamong these decision-makersat the center to moving towards a more decentralizedsystem were to wane, the sheer size and complexity of Indonesia's higher-education system would force continued movement in the direction of decentralization. At the university level, the ten universitiesinvited to undertake self-evaluationand prepare proposals expressed enormous enthusiasm about the process and believed that their educationalmandate was far more likely to be achieved successfullyin the future, since they were now involved in planning that mandate.
D. ENVIRONMENTAL IMPACT
5.6 The proposed has an environmentalrating of 'C'" no project activity is expected to have adverse effects on the environment. There is potential for positive effects on environmentaleducation and research through improved scientific capacitiesin the selected universitiesand through the linkages of study program developmentto regional and national needs related to economicallysustainable.
E. IMPACT ON WOMEN
5.7 In 1992, women constituted 36% of undergraduates and 46% of diploma-program students, with increasing proportions of women among the new intake every year. Research on gender has shown that women face difficultiesin attending universitiesfar from their homes and families and that - 32 - there are higher forgone costs associated with educating females. This project will provide quality higher education close to home and with greater efficiency,thereby reducing these constraints.
6. AGREEMENTS REACHED AND RECOMMENDATION
6.1 During negotiations, assurances were obtained that (a) the Governnent will provide grants to target universitiesin accordance with procedures and on conditionsagreed with the Bank (para. 3.3), (b) the Governnent will implement the Universities Development component according to the implementation plan furnished the Bank (para 3.4), (c) the grant agreements between the target universities and the CPCU will include a requirement that the BHE prepare and monitor baseline and target indicators and recommend to DGHE any ameliorative actions (paras. 3.4 and 3.6), (d) the Government will maintain the BiE and its Secretariat in accordance with terms of reference, staffing, and resources acceptable to the Bank (para. 3.6), (e) the Government will implement the BAN componentaccording to the guidelines,plans, and terms of reference provided to the Bank (para. 3.7), (f) the current remuneration and incentive structure for university teaching staff will be analyzed and the comments and recommendationsof the analysis will be furnishedto the Bank by October 30, 1997 (para. 3.8), (g) the Government will maintain, throughout implementation,a CPCU (para. 3.9), (h) by June 30 each year, the CPCU will furnish an annual report for the Bank's review (para. 3.32), (i) the Governnent will carry out a mid-term review on terms and conditions acceptable to the Bank by September 30, 1999 (para. 3.33), G) training contracts with local training providers will be in accordance with Governmentadministrative procedures acceptable to the Bank (para. 4.8), and (k) by June 30 of each year, the CPCU will furnish to the Bank a technical audit report (para. 4.13).
6.2 Subject to the above agreements,the proposed project is suitable for a Bank loan of US$65.0 million equivalent to the Republic of Indonesia for a term of 20 years, including a grace period of five years, at the Bank's standard variable interest rate for currency pool loans. - 33 -
ANNEXES
Annex 1 -35- Page I of 6 INDONESLIA Higher Education Support Project: Developmentof UndergraduateEducation
Data on The Higher Education Sector Table 1: Student Enrollmentin Higher Education by Type of Institution1984-1994 ('000) Type | 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 S1 Public 399 448 417 448 427 435 433 433 428 436 445 Private 416 474 571 677 725 811 853 994 1004 1078 1170 Service' na na na na na na 116 143 110 115 120
Total SI 1402 1571 1542 1629 1734 Diploma Public 75 82 86 89 89 84 74 64 80 86 91 Private na na na na na 199 223 248 269 300 325 Technical na na na na na na 16 19 16 20 26
Total I__I I _ I__ 312 331 365 405 442 Source: Directorate General of Higher Education. 1996. Developmentfor UndergraduateEducation: Project Proposal Document and Universityof Indonesia data. Note: "na" signifies data not available. Figures have been rounded.
Table 2: Projected Enrollment Data on IndonesianHigher Education 2000-2020 (in '000) 2000 2005 2010 2015 2020
Public Sector Enrollment Engineering 140 215 300 390 487 Other Science2 100 120 141 201 273 Social Sci &Humanities 340 350 375 385 400
Total 580 690 820 980 1,160 Private Sector Enrollment Engineering 399 510 620 789 928 Other Science 258 360 414 473 608 Social Science 1,690 2,130 2,413 2,683 3,109 &Huranities
Total 2,350 3,000 3,450 3,950 4,650 Teaching Staff Public Institutions Total 62 73 87 104 123 S2 and S3 30 37 na na na
Private Institutions Total 76 97 na na na S2 and S3 12 15 na na na Source:University of Indonesia.Note: "na" indicatesthat estimatedfigures are not available.
IHighereducation administered by otherrelevant Ministries
2 Also includes agriculture and health sciences. INDONESIA Higher Education Support Project: Development of Undergraduate Education
Table 3: Public and Private Resources and Unit Costs for 51 Public Higher Education Institutions Institution Enrollment DIK 95/96 DRK 95/96 OPF 95/96 DIP 95/96 Unit Cost D3 Si (Rp. 1,000) (Rp. 1,000) (Rp. 1,000) (Rp. 1,000) (Rp. 1,000) STKIPGorontalo 99 766 5,478,846 798,483 366,697 1,659,343 7,815 ASTIBandung 280 165 1,629,828 1,047,432 150,793 1,116,040 6,531 Inst. PertanianBogor 1,503 6,334 16,224,148 26,370,954 2,850,272 24,298,050 6,016 Inst. TeknologiBandung 4,492 9,406 17,959,075 57,032,673 3,368,447 65,218,773 5,967 ASKIPadang Panjang 330 0 1,445,529 123,315 188,351 1,275,928 5,595 STSI Denpasar 0 497 1,648,425 355,075 384,897 2,102,798 5,102 Inst. Seni Indonesia 2 1,915 6,728,532 966,036 354,205 2,818,235 4,302 Inst. Tekn. SepuluhNop. 1,284 6,446 10,439,963 14,290,575 2,185,993 26,282,993 3,717 STSI Surakarta 282 683 2,503,589 370,454 252,949 1,920,744 3,380 UnivCenderawasih 1,075 3,855 12,527,373 1,712,373 1,298,060 12,259,849 3,326 UnivBengkulu 465 3,000 8,606,081 1,845,493 633,515 4,539,870 3,293 Uni Indonesia 4,940 12,915 25,816,340 26,435,009 3,526,523 10,713,116 3,167 IKIP Surabaya 889 5,338 12,439,636 5,314,270 1,151,034 5,216,884 3,070 Univ Brawijaya 1,531 9,235 ,12,999,826 15,026,149 2,883,133 12,363,262 2,951 STKIPSingaraja 570 1,652 5,616,742 595,065 159,484 1,432,662 2,913 IKIP Padang 1,415 6,237 13,927,642 5,671,605 1,220,881 4,055,887 2,745 IKIP Manado 1,026 3,846 10,529,989 1,439,976 918,681 5,340,014 2,722 Univ Airlangga 2,048 8,896 17,344,285 8,271,517 1,637,341 11,863,055 2,566 Univ Padjadjaran 2,725 14,104 20,942,976 19,100,678 1,802,116 15,718,410 2,552 UnivSan Ratulangi 1,151 8,943 12,933,139 9,401,759 2,122,332 7,801,921 2,477 Univ GadjahMada 1,887 18,656 24,537,227 21,208,005 2,974,661 17,404,713 2,431 Univ Mulawarman 2,255 4,196 10,139,864 3,095,315 1,839,919 4,331,038 2,384 UnivJambi 796 5,180 9,849,393 3,197,065 905,666 4,153,457 2,249 Univ Andalas 1,147 9,466 13,029,684 7,282,393 2,962,010 5,605,667 2,230 x UnivPalangkaraya 4,932 844 8,711,325 2,681,985 1,980,486 3,605,945 2,205 _ UnivMataram 571 5,546 9,730,083 2,326,140 857,927 6,091,805 2,180 IKIPBandung 1,807 8,672 15,902,283 4,822,925 1,640,043 4,366,932 2,163 INDONESIA Higher Education Support Project: Development of Undergraduate Education
Univ Udayana 658 9,859 15,012,340 5,234,366 2,218,723 3,369,603 2,159 IKIP Malang 1,193 6,751 11,051,211 3,645,600 1,244,937 4,455,384 2,046 UnivJember 1,522 6,814 10,703,728 4,137,951 1,789,578 4,664,148 2,034 IKIP Yogyakarta 498 8,755 11,775,765 5,808,459 819,187 4,499,380 2,023 UnivLampung 1,445 7,112 10,594,447 4,818,301 1,345,735 4,395,543 1,995 IKIP Ujung Padang 1,152 5,958 10,837,640 2,087,516 955,696 2,819,036 1,979 IKIP Jakarta 1,895 8,079 12,849,660 4,349,231 1,407,407 14,007,214 1,964 Univ Sumatera Utara 3,575 14,382 17,233,911 14,345,731 3,210,791 4,906,387 1,957 IKIP Medan 1,753 7,247 12,653,175 3,511,170 1,070,016 4,731,156 1,952 Univ Hasanauddin 2,022 15,941 15,862,353 14,707,920 3,480,037 9,009,842 1,931 Univ Sriwijaya 1,630 9,883 13,315,995 5,998,685 2,440,134 3,139,481 1,909 UnivJenderal Soedirman 1,798 6,831 9,349,472 5,348,892 1,292,762 5,193,601 1,895 UnivHaluoleo 652 6,181 7,502,528 3,136,353 1,240,071 8,322,612 1,826 Univ Tadulako 1,241 5,701 8,452,238 2,101,678 1,175,907 7,472,474 1,765 UnivNusa Cendana 651 6,462 8,885,212 1,712,355 3,546,295 5,651,070 1,763 UnivLambung Mangkurat 1,264 7,396 11,423,326 2,069,571 1,544,191 7,269,994 1,753 IKIP Semerang 1,876 7,355 11,154,389 2,874,606 1,302,416 5,452,546 1,702 UnivRiau 1,036 9,711 10,850,658 6,864,379 1,034,778 4,003,254 1,696 Univ Tanjungpura 941 7,539 9,132,176 2,952,228 1,643,801 5,756,820 1,666 Univ Syiah Kuala 4,544 8,786 12,906,734 4,572,193 2,339,052 26,030,147 1,623 Univ Diponegoro 4,320 14,360 14,233,439 10,413,739 2,979,186 21,923,963 1,561 Univaulimura 996 8,932 9,708,857 2,649,262 1,477,085 6,750,262 1,441 UnivSebelas Maret 293 16,828 14,618,828 7,223,019 1,779,205 4,697,167 1,399 Univ Terbuka 10,251 68,930 12,331,656 45,391,126 710,524 1,122,688 739
Note: Unit Cost = (DIK+DRK+OPF+7%DIP)/(SI+D3) DIK = RoutineBudget Source: Moeliodihardjo,1995. University of Indonesia DRK = Budgetfrom fees and incomegeneration by public institutions Italicizedentries are the 17 lessestablished universities OFP= Operationand MaintenanceBudget CD DIP = DevelopmentBudget 0D -38- Annex I Page 4 of 6
INDONESIA Higher Education Support Project: Development of Undergraduate Education
Table 4: Twenty-Six Public Polytechnics Polytechnic Location Numberof Numberof Staff Programs Students Offered ITB Bandung 1548 98 E C D3 POLMAN Bandung D2 197 D3 190 90 E UI Jakarta 1788 172 E C D3 UNDIP Semarang 1788 211 E C D3 UNIBRAW Malang 1474 203 E C D3 UNSRI Palembang 1449 150 E C D3 USU Medan 1816 166 E C D3 UNAND Padang 850 136 E D2 UNSYIAH Lhoksemawe 795 129 E C D3 UNHAS Ujung Pandang 1271 104 E C UNUD Denpasar D2 332 D3 818 174 E C UNMUL Samarinda D2 438 D3 48 72 E C UNTAN Pontianak 273 25 E D2 UNLAM Banjarmasin 287 E D2 UNSRAT Manado 1609 66_ E C D2 UNPAT-TI Ambon 341 24 E D2 UNDANA Kupang 242 11 E D2 Dili Dili 278 18 E D2 ITS (Elect) Surabaya 409 38 E D3 ITS (Ship) Surabaya 424 34 E D3 UNANDLAS Payakumbuh 540 66 A D3 UNLAM Lampung 491 71 A D3 UNEJ Jember 502 71 A D3 UNMUL Samarinda 373 32 A D3 UNHAS Ujung Pandang 438 42 A D3 UNCEN Kupang 413 48 A D3 E=engineering D3=3 year diploma C=commerce D2=2 year diploma A=agriculture -39- Annex 1 Page 5 of 6
INDONESIA Higher Education Support Project: Development of Undergraduate Education
Table5: Qualificationsof TeachingStaff at Public& PrivateUniversities
PublicUniversities PrivateUniversities Si S2/S3 Total Si S2/S3 Total Engineering 4,469 1,781 6,250 7,384 1,002 8,386 Science 1,773 1,468 3,241 2,343 330 2,673 Agriculture 4,368 3,282 7,668 2,464 661 3,125 Health 2,651 1,548 4,199 852 284 1,136 Total Science Based 13,279 8,079 21,358 13,043 2,277 15,320 Social 9,050 3,029 12,079 20,758 2,307 23,065 Education 10,580 2,718 13,298 6,255 471 6,726 Total Social Based 19,630 5,747 25,377 27,013 2,778 29791
Grand Total' 32,909 13,826 46,735 40,056 5,055 45,111 % ~~~35.8%15.1% 50.9% 43.6% 5.5% 49.1% Source: Ministry of Education and Culture
lIncludes SPI and SP2 degrees (advanced degrees in selected professional fields). INDONESIA Higher Education Support Project: Development of Undergraduate Education
Table 6: Employment by Level of Education
Employment by Level of Less than Primary High School Tertiary Education Total Education Primary Junior Senior 1-2 yrs college 3 yrs college University
Census 1980 Labor Force 35,116,186 11,143,005 2,708,545 3,018,002 225,938 199,166 52,410,842 Employed 34,656,381 10,943,948 2,631,488 2,893,563 221,383 196,181 51,542,944 Unemployed 459,805 199,057 77,057 124,439 4,555 2,985 867,898 % Unemployed 1.3% 1.8% 2.8% 4.1% 2.0% 1.5% 1.7% Census 1985 Labor Force 35,253,516 17,496,160 4,607,609 5,627,114 168,501 329,792 342,923 63,825,615 Employed 35,050,222 17,233,071 4,401,470 4,975,731 164,093 306,512 326,039 62,457,138 o Unemployed 203,294 263,089 206,139 651,383 4,480 23,280 16,884 1,368,477 % Unemployed 0.6% 1.5% 4.5% 11.6% 2.6% 7.1% 4.9 2.1% Census 1990 Labor Force 33,062,105 23,312,378 6,780,166 9,006,080 302,063 584,117 866,041 73,912,950 Employed 32,624,886 22,710,609 6,433,319 8,165,636 288,351 547,918 798,514 71,569,233 Unemployed 437,219 601,769 346,847 840,444 13,712 36,199 67,527 2,343,717 % Unemployed 1.3% 2.6% 5.1% 9.3% 4.5% 6.2% 7.8% 3.2% Census 1994 Labor Force 29,150,489 31,497,742 9,979,772 12,627,235 362,371 999,254 1,158,770 85,775,633 Employed 28,923,766 30,736,528 9,352,542 10,814,028 330,565 893,777 986,903 82,038,109 Unemployed 226,723 761,214 627,230 1,813,207 31,806 105,477 171,867 3,737,524 % Unemployed 0.8% 2.4% 6.3% 14.4% 8.8% 10.6% 14.8% 4.4% Proportion by Education Labor Force 34.0% 36.7% 11.6% 14.7% 0.4% 1.2% 1.4% 100.0% Employed 35.3% 37.5% 11.4% 13.2% 0.4% 1.1% 1.2% 100.0% Unemployed 6.1% 20.4% 16.8% 48.5% 0.9% 2.8% 4.6% 100.0% CD
ENTER YOURNAME HERE M:\DUE\ANNEXES\ANNEXIE.DOC -41- Annex 2 Page I of 1
INDONESIA Higher Education Support Project: Developmentof Undergraduate Education
BANK GROUP-FINANCED EDUCATION AND TRAINING PROJECTS
Loan/ Year of Year of Amount Credit Board Actual (less cancellations) a! Number Approval Closing Projects Agency IBRD IDA ------US$ million----
Projects with MOEC
219 1970 1976 First Education MOEC /b 4.5 387 1973 1981 Third Education MOEC 13.5 1237 1976 1981 Fourth Education MOEC 24.1 1433 1977 1984 First Teacher Training MOEC 17.8 1486 1977 1984 Nonformal Education MOEC 8.3 869 1978 1985 Polytechnic MOEC 49.0 1904 1980 1987 First University Development MOEC 43.1 2101 1982 1990 Second Teacher Training MOEC 79.1 2102 1982 1988 Second Textbook MOEC 24.9 2290 1983 1990 Second Polytechnic MOEC 106.0 2355 1983 1990 Second Nonformal Education MOEC 43.0 2472 1984 1990 Secondary Education and Mgmt Training MOEC 76.6 2547 1985 1993 Second University Development MOEC 147.0 2944 1988 1993 Higher Education Development MOEC 140.3 3158 1990 -- Second Secondary Education and Mgmt. MOEC 154.2 3311 1991 1996 Second Higher Education Development MOEC 150.0 3431 1991 -- Third Nonformal Education MOEC 59.6 3448 1992 -- Primary Education Quality Improvement MOEC 37.0 3496 1992 -- Primary School Teacher Development MOEC 36.6 3754 1994 -- University Research for Graduate Education MOEC 58.9 3887 1995 -- Book and Reading Development MOEC 132.5 3979 1996 -- Secondary School Teacher Development MOEC 60.4
Subtotal of Projects with MOEC 1399.4 67.0 a/ "The amount less cancellation" applies only to the projects which were closed (with "Year of Actual Closing"). The amount for other ongoing projects was taken from the Staff Appraisal Reports. b/ MOEC - Ministry of Education and Culture -42- Annex 3 Page 1 of 16
INDONESIA Higher Education Support Project: Development of Undergraduate Education
Identification and Selection of Less Established Universities
Over half of Indonesia's universities can be considered less established lacking both focus and academic tradition. The Government of Indonesia believes that the necessity to provide assistance to those less established universities has become urgent. To identify the 17 possible target institutions, the DGHE began with the existing 51 public universities and excluded the following:
* the seven (7) universities and three IKIPs with large and established graduate programs * the nine (9) IKIPs and STKIPs * the nine (9) less established universitiesreceiving sizable investments from other sources * the five (5) art universities * the one (1) open university
The universities listed below were the 17 eligible for participation in the DUE project:
Universitas Jambi, Universitas Bengkulu, Universitas Riau, Universitas Lampung, Universitas Pattimura, Universitas Nusa Cendana, Universitas Cendrawasih, Universitas Haluoleo, Universitas Tadulako, Universitas Lambung Mangkurat, Universitas Palangkaraya, Universitas Mataram, Universitas Tanjungpura, Universitas Sam Ratulangi, Universitas Jember, Universitas Jenderal Soedirman, and Universitas Sebelas Maret
The following criteria will be used in awarding grants to universities: I. Leadership and institutional commitment 2. Efficiency and productivity 3. Relevance to local and national labor market needs. 4. Internal management and organization 5. Academic atmosphere 6. Sustainabilityof investmentsthrough the DRK upon project completion.
Participatory Process
To encourage participation at an early stage in the process, representatives from each of the 17 universities were invited to participate in one of three workshops. Three day workshops were held in Pekanbaru, Ambon, and Mataram in order to disseminate information about the New Paradigm, to seek feedback on the New Paradigm from the universities, and to provide guidance to the universities on the process of self evaluation that they would carry out. Each university was represented either by the Rector or Vice Rector. The workshops were facilitated by the Director for Academic Affairs of the DGHE and the five World Bank Mission members.
In addition, sessions were also conducted with students in order to allow them to express their concerns regarding their education. Students were generally open and articulate in -43- Annex 3 Page 2 of 16 expressing their concerns over the lack of transparency in university management and the lack of a reliable and secure mechanism to communicate with university management. It was also discerned during these sessions that the Student Senate, which should provide an avenue of communication between the students and the administration, does not serve this function. Separate sessions were held with employers to obtain their assessment of the quality and relevance of the current study programs and to solicit their ideas for strengthening the linkages between higher education and the productive sectors.
Pre-proposalPreparation
As part of the pre-proposal process, each university was asked to prepare a self evaluation upon which their pre-proposals and full proposals for funding would be based. Self evaluations were asked to contain a description of existing available resources, including academic staff, administrative staff, laboratory facilities (including major equipment), class room space, teacher and administrative space, library facilities, land, experimental fields, if any, student enrollment, and other relevant resources. The description should indicate resources which have been acquired over the last 5 years, and sources of funding. It is important that universities demonstrate the ability to recognize institutional deficiencies in their self evaluations and to indicate actions taken to remedy them. In addition, pre-proposals should contain the following information':
* Leadership and institutionalcommitment * Efficiency and productivity * Relevance to local and national labor market needs. * Utilization of class rooms and laboratories * Number of library transactions * Internal management and organization * Current budget, including the DRK, for the last three years * Budget allocation mechanism * Revenue generated from alternative sources * Efforts to improve transparency in management. * Efforts at Reducing bureaucracy * Maintenance of equipment and physical facilities * Sustainabilityof investments through the DRK upon project completion. * Ratio between administrative and academic building space * Academic atmosphere * Staff profile and teaching load * Teacher attendance * Student-staff ratio by study program * Resource sharing among faculties, departments, and programs * Introduction of staff evaluation by students and peers * Production of student laboratory manuals * Staff development * Recruitment mechanism of new teaching staff.
The Annex containsa list of pre-proposaland proposalcomponents. A more detailedexplanation of these componentscan be found in the ProjectProposal Document in the divisionalproject files. -44- Annex 3 Page 3 of 16 * Incentives provided to high performing faculty * Innovations in curriculum implementationto meet local needs * Profile of incoming students * Average GPA of incoming and graduating students * Student drop out rate. * Average duration of study and skripsi * Waiting time of graduates before acquiring first job. * Study programs available and attempts at rationalization * Reentry program for new retumees 45 Annex 3 Page 4 of 16
Preproposal Submission Process
DGHE Advisory Board of Higher Education
Call for pre-proposal October 17, 1995
PROCES
Pre-proposal December
Invitation to submit investment proposal (December)
Eligible Universities
Full Proposal Submission Process
Advisory DGHE ...... BOARD OF HIGHER EDUCATION
Invitation to submit full proposal Deadline for December 12, 1995 submission Desk Evaluation February 10, 1996
Full proposal
Announcement March 1996 March 1996 10 Selected universities INDONESIA Higher Education Support Project: Development of Undergraduate Education
Information on SeventeenLess EstablishedUniversities Numberof Student/ DRK95/96 Students Numberof Staff Staff Ratio Rp. 000 Tuition/year University Science Social S-1 S-2 S-3 Science Social Univ Riau 2,251 3,440 325 159 22 11.25 3,536,812 360,000 360,000 Univ Bengkulu 892 2,843 194 237 29 8.12 1,050,992 130,000 80,000 Univ Lampung 3,756 4,599 506 256 30 10.55 3,750,368 290,000 270,000 Univ Jambi 2,065 3,556 449 112 5 9.93 2,073,035 200,000 200,000 Univ SebelasMaret 3,255 9,934 976 329 33 9.86 5,474,790 360,000 300,000 Univ Jember 989 7,757 415 152 21 14.87 2,852,531 210,000 210,000 Univ JenderalSoedirman 3,559 5,997 490 199 22 13.44 2,931,233 360,000 360,000 Univ Tanjungpura 2,657 5,588 747 11.04 2,217,675 120,000 120,000 Univ LambungMangkurat 3,944 4,904 300 176 14 18.06 1,663,858 120,000 120,000 Univ Palangkaraya 1,754 2,906 306 51 4 12.91 1,724,269 180,000 165,000 Univ Sam Ratulangi 4,907 3,854 905 321 41 6.91 3,664,888 Univ Tadulako 2,940 4,095 545 178 5 9.66 1,721,518 240,000 210,000 Univ Haluoleo 1,139 4,527 311 151 18 11.80 2,110,280 180,000 180,000 Univ Pattimura 3,636 5,711 571 158 14 12.58 1,879,340 125,000 80,000/105,000 Univ Cenderawasih 1,155 2,918 403 10.11 839,200 150,000/175,000 130,000 Univ Mataram 2,388 2,805 330 189 22 9.60 1,570,036 150,000/195,000 120,000 Univ Nusa Cendana 1,891 1,613 396 12 6.65 1,401,649 208,000 208,000
Note: Numberof studentsand staff are basedon submittedpre-proposals DRKdata from DGHE Staff by qualificationis not availablefor Univ Tanjungpuraand Univ Cendrawasih Pattimura,tuition for Economicsis Rp. 105,000/yearand other Social Sciencesare Rp. 80,000/year Cendrawasihand Mataram:tuition for Engineeringis Rp. 175,000/yearand Rp. 195,000per year. Other Social Sciences:Rp. 150,000/year
x INDONESIA Higher Education Support Project: Development of Undergraduate Education
Origin of Incoming Students by High School Attended Agriculture, Engineering and Sciences Social Sciences, Humanities and Education Java Outer Island % Outer Island Java Outer Island % Outer Island Univ. Riau 35 513 93.6 59 1,025 94.6 Univ. Lampung 81 497 86.0 138 1 971 87.6 Univ. Benkulu 12 162 93.1 35 456 92.9 Univ. Jambi 13 146 91.8 24 443 94.9 Univ. Jember 256 257 50.1 1449 30 2.0 Univ. Sebelas Maret 635 12 1.9 1728 19 1.1 Univ. Jenderal 564 8 1.4 679 11 1.6 Soedirman Univ. Tanjungpura 39 410 91.3 151 908 85.7 Univ. Palangkaraya 55 245 81.7 136 289 68.0 Univ. Lambung 41 497 92.4 61 715 92.1 Mangkurat Univ. Sam Ratulangi 61 593 90.7 160 670 80.7 Univ. Tadulako 19 378 95.2 41 517 92.7 Univ. Haluoleo 8 276 97.2 25 901 97.3 Univ. Pattimura 48 430 90.0 42 531 92.7 Univ. Cendrawasih 12 140 92.1 35 329 90.4 Univ. Nusa Cendana 12 164 93.2 35 358 91.1 Univ. Mataramr 126 376 74.9 69 514 88.2
-I. INDONESIA Higher Education Support Project: Development of Undergraduate Education
Parental Income of New Students at the Less Established Universities, 1995
Agriculture, Engineering and Sciences Social Sciences, Humanities and Education < Rp 500,000 Rp 500,000-1,000,000 > Rp 1,000,000 < Rp 5,000,000 Rp 500,000-1,000,000 > Rp 1,000,000 Univ. Riau 64.6 29.2 6.2 72.2 23.4 4.3 Univ. Lampung 82.9 15.1 2.1 82.3 15.2 2.5 Univ. Benkulu 82.2 16.1 1.7 84.1 14.3 1.6 Univ. Jambi 77.0 21.5 1.5 80.1 16.7 3.2 Univ. Jember 82.1 17.1 0.8 84.7 15.1 0.2 Univ. Sebelas Maret 77.0 21.5 1.6 87.4 12.3 0.3 Univ. Jenderal Soedirman 84.3 15.4 0.4 78.7 20.3 1.0 Univ. Tanjungpura 76.6 22.3 1.1 77.5 19.0 3.5 Univ. Palangkaraya 81.0 16.0 3.0 80.0 19.3 0.7 Univ. Lambung Mangkurat 76.4 23.2 0.4 79.3 20.8 0.0 Univ. Sam Ratulangi 54.0 45.1 0.9 64.9 33.5 1.6 Univ. Tadulako 77.8 21.9 0.3 74.9 25.1 0.0 Univ. Haluoleo 67.3 32.6 0.0 70.4 29.6 0.0 Univ. Pattimura 71.3 28.0 0.6 77.8 22.2 0.0 Univ. Cendrawasih 75.0 25.0 0.0 79.4 20.3 0.3 Univ. Nusa Cendana 95.5 4.6 0.0 94.9 5.1 0.0 Univ. Mataramn 80.5 18.3 1.2 82.2 17.3 0.5 Source: National Entrance Exam Test Database Note: Income is stated in Rh. per month and is based on student reporting.
(D !, .49- Annex 3 Page 8 of 16 SUMMIARIESOF FULLPROPOSALS SUBMITTED BY THE SIX-SELECTEDUNIVERSITIES
University of Jember (UNEJ)
Year Established:1964
Location: Jember,East Java
ProgramsOffered: Six Faculties:Teacher Training and EducationalSciences, Agriculture, Law, Letters, Economics,and Social and PoliticalSciences.
Staff Profile: 78% of teachingstaff holds S-I Degree.Teacher attendance is not satisfactoryat 82%.
Physical Fcilities: Utilizationof classroomsis 70%, with some very large classroomsand not enough space for academicstaff offices.
TeachingMaterials: There are only 15%of handoutand laboratorymanuals needed.
Student Profile: Incomingstudent body averagesa score of 240 (raw score) for five subjects examinedin the universityentrance examination. Students' GPA is low. Existingduration of study is 5.6 years.
Employabilityof Graduates:Only one percent of graduateswas employedone year after graduation; average waitingtime for studentsto obtaintheir firstjob is 32 months.
Plan for Self-Improvement:The proposedprogram aims at assisting the facultiesof Agricultureand the Science Education Study Programnin the Faculty of Education, in addition to selected university-wide activities,including staff development, improvementsin the curriculumand in the teaching and learning processes,and improvementsof supportingfacilities.
How to Achieve Improvements:Improve the qualificationsof teachingstaff, especiallyin the Faculty of Agricultureand in the ScienceEducation Study Program, and those of technicians,through postgraduate studies,short coursesand training both in-countryand overseas. The teachingand learningprocesses will be improvedthrough the introductionof teachingand researchgrants. Also, skripsi grants for studentswill be introduced.To enhanceemployability of graduates,a Centerfor Career and Opportunities,linked to the Alumni Association,will be established.In addition, meetings with local private sector will be held in order to make the curriculummore relevant,while practical work experiencewill be introducedin selected courses. Supportingfacilities will be improved,a new greenhousebuilt, and someclassroom space will be shifted to academicstaff rooms.
PerformanceIndicators: Reduce average duration of study from 5.6 to 4.2 years; Reduce average waiting time to firstjob from 32 to 22 months;Increase employability of graduatesby 8%; Work towardsa goal of having 20%, 60%, 20% teachingstaff with S-1, S-2 and S-3 qualifications;Increase attendance of teachingstaff; IncreaseStudents' GPA;Attract higher quality students(raise averagescore from 240).
AmountRequested: A total investmentof Rps. 8, 120,103million is requestedover the 5 years period.
ProjectSustainability: Propose to share 7% of costs of programout of the DRK. -50- Annex 3 Page 9 of 16 University of Lampung (UNILA)
Year Established: 1965
Location: Bandar Lampung
Programs Offered: Seven colleges: Economics,Law, Education and Teachers Training, Agriculture, Engineering, Social and Political Sciences, and Mathematicsand Natural Sciences. UNILA offers 27 programsand three non-degreeprograms.
Staff Profile: Although the university recruits teaching staff from the outside market (no in-breeding), staff qualificationsare poor, with most staff holding S-1 degrees,low teachingexperience (mainly because of the young age of most staff), low competencyand low specialization.
Physical Facilities: The university has sufficientspace to and a resource sharing mechanismhas been introduced in 1992 to use facilities and resources more efficiently. Laboratory facilities are inadequate. Existingfacilities lackproper maintenance.
Teaching Materials: There is a lack of laboratorymanuals, lack of teachingaids and limited electricity and water supply.There is also a lack of capabletechnicians to operateand repair teachingaids.
Student Profile: Quality of incomingstudents is not good. Average duration of study is of 5.6 years (1985-89) and that of the skripsi ranges from 7 to 14 months (against an appropriatetime of 6 months). Averagescore of studentsadmitted to variousprograms in 1995 is between473 (Civic Education)and 652 (Accounting).
Employability of Graduates: At present the waiting time for graduatesto get their first job is 2-3 years. In order to shortenthis time span, a Job PlacementCenter has been recentlyset up with the assistancefrom USAID.Average graduate GPA is below2.5, which is too low even for employment with the public sector.
Plan for Self-Improvement: Includes improvements in relevance, improvements in the academic atmosphere,improvements in internal managementand organization,improving sustainability,efficiency and productivity.
How to Achieve Improvements: Add flexibility to the curriculum and development of the language laboratoryand laboratoryof engineeringand basic sciences,increase involvement of staff in planning for. academic activities, review and improve academic regulations, increase involvement of individual departmentsin planningand budgeting,improve access to widersources of fundingand enable laboratories to becomeself-funded by extendingscope for cooperationwith the private sector, improvethe capacity of administrativestaff, improveteachers attendance and encouragestudents counseling activities
Performance Indicators: Relevance: Target is to shorten waiting time to get first job; Academic Atmosphere:Target is to increaseaverage score of graduateGPA and increasestaff teachingload; Internal Management:more transparencyin managementand shortertime of bureaucraticprocesses; Sustainability: accesswider sources of funding, strengthenautonomy and improvestaff career development;Efficiency: Increaseproductivity ratio and increaseefficiency of facilitiesutilization.
Amount Requested: A total of Rps. 17,188,177million is requested underthe proposedproject.
Project Sustainability: 10%of DRK is committed. -51- Annex 3 Page 10 of 16
University of Bengkulu (UNIB)
Year Established:1982
Location: Bengkulu,Bengkulu Province
ProgramsOffered: The universityhas five faculties:Agriculture, Economics, Law, Political and Social Sciences,and TeacherTraining and EducationSciences, and offers 14 programs.
Staff Profile:The number of teachingstaff in academicyear 1995/96is 459 as opposedto 444 in 1991/92. While the number of academicstaff has increasedonly slightlyover the last five years, staff qualifications have improved,with the numberof staff with S-2 and S-3 degreesincreasing from only 22.4% in 1991/92 to 57.8% in 1995/96.The Faculty of Agriculturehas the highestnumber of staff holding S-3 degrees and Currently,58% of academicstaff holds S-2 and S-3 degrees.Academic staff lacks researchand extension experience.Academic staff load is on averagemore than 12 FTE, and it is highest for staff holding S-3 degrees. Overall, teachers attendanceis less than standard (90%). The university also has a total of 300 administrative staff. The supply of laboratorytechnicians is inadequate,with every technician serving approximately30 students. The ratio of academic staff to students is relatively high at 1;7, but differs greatly among facultiesand programs.Recruitment of academicstaff is done at the nationallevel through a competitive process. The competitivenessof the social programs is generally higher than for natural scienceprograms, with an applicant/admittedratio of about0.12 and 0.20, respectively.
Physical Facilities: The universityallocates 5 buildings for classrooms(3924 sq.m.), and accommodate 2950 students. Currently, an additional 3500 sq. m. are under construction, and are expected to accommodatean additional 2950 students. However,classroom utilization is not optimal. Utilizationof laboratoriesis high, due to the fact that laboratoryequipment is uneavenlydistributed. Although there is no data on space ratio between academic and administrative space, this is obviously not appropriately distributedas most academic staff do not have offices. Efforts to date to build office space for academic staff have been constrainedby unavailabilityof funds. The library building is large, but lacks adequate librarymaterial.
Teaching Materials: Classrooms lack adequate teaching aids. The record system in the library is incomplete and limited to the number of visitors and number of transactions.Laboratory equipment is obsolete or lacking. In agronomy and basic sciencesprograms, student laboratorymanuals are either not available,or typed rather than published.Only relativelysimple equipmentcan be properlymaintained by the university.
StudentProfile: Number of applicantshas remainedrelatively constant over the last few years. Most of incomingstudents, especially in the Faculty of Agriculture,has low capabilitiesin basic sciences. Up to January 1995,UNIB produced2,831 S- I graduates.Overall averageduration of skripsi is of more than 5.5 years, far above the lengthof study in the curriculumwhich is of 4 years. In certain facultiesthe duration of studies is even higher i.e. 49.93% of students in the faculty of agricultureneeds 6 or more years to graduate. This is mainly due to the length of time involved in preparing the skripsi, as well as to the inadequacyof teachingstaff in the early years of study and the weaknessof academicadvisers. In order to shortenthe durationof studies,a new curriculumwith less SKS (but still within the nationalstandard) has been recently introduced.Overall,average GPA of graduatingstudents has been around2.50.
Employabilityof Graduates: There is no data on employabilityof graduates.However, indicationsare that local public and private sector requires graduateswith at least a 2.75 GPA. Personal communication with studentshas indicatedthat waiting time has been around2 to 3 years. -52- Annex 3 Page 11 of 16 Plan for Self-Improvement:Improve relevance; improve academic atmosphere; improve internal managementand organization;improve sustainability; increase efficiency and productivity
How to Achieve Improvements:By revising curriculum in each study program and introducing internships for students; improving library collections,providing students with counseling; stimulating studentsto improve Englishproficiency by expandingEnglish Centerand its facilities;centralizing class schedulesat the universitylevel, and conductingperiodic evaluations at all levels and units withinthe university;encouraging income generating activities by establishinga Small BusinessDevelopment Center providingconsulting and researchservices; increasing student body and improvingsupporting facilities.
PerformanceIndicators: Increase percentageof teachingstaff with S-2 and S-3 degrees to 80% over the next few years; Distribute teaching load more equally among teaching staff; shorten average duration of study to 4.5-5.0 years; increasenumber of transactionsin library; accelerate graduationtime and reduce drop-out rate by offering tutorials; increasegraduates' GPA from 2.50 to 2.75; shorten waiting time to obtain firstjob from 2-3 yearsto I year.
AmountRequested: Totalinvestment budget is of US$5,818,936.35.
ProjectSustainability: Of the amountrequired for the investment,the Universitywill fund USS 344,005 out of its DRK ( 5.91%).
University of Nusa Cendana (UNDANA)
Year Established: 1962
Location: Kupang
Programs Offered: Five faculties: Animal Husbandry,Agriculture, Administration Science; Teacher Trainingand Education;Law.
Staff Profile: The universityhas 677 academicstaff and 711 administrativestaff. The ratio between staff holding S-1: S-2 : S-3 degrees is 39: 9: 1. 50% of staff holding doctoratesis in the Faculty of Animal Husbandry.Academic and administrativestaff have to serve 6263 students enrolled in 26 programs. Average teaching load of staff is of 3.05 credit hours per semester. The teaching load of staff with a doctorate degree is of 5.0 credit hours per semester.The heaviestteaching load is carried out by Basic Science staff. Teacher attendance ratio is of approximately 87.5%. Student-staff ratio varies across faculties,but is particularlypoor in the PhysicsStudy Program ,as most staff are currentlyaway attending higher degrees.
Physical Facilities: The space occupiedby administrativestaff is twice as much as the space being used for academicpurposes. This is exhibited by the building space ratio between administrativeand academic of 4. 19/sq.m./person:2.38 /sq.m./person.Some classroomsare in need of renovation.Although overall the university has enough rooms to serve student needs both academicallyand administratively,the available space has not been optimallyutilized, especiallyas concernsacademic purposes. The university is unable to provide for proper maintenanceof existing physicalfacilities becauseof limitedresources. On average, administrativefacilities are better maintained than teaching facilities. Most laboratories are faced with problems suchas lackwater and unstableelectricity.
TeachingMaterials: Equipmentfor studentpractices is insufficient,especially during the first year. All laboratoriesexcept for the Chemistrylaboratory are assistedby unskilledtechnicians. -53- Annex 3 Page 12 of 16 Student Profile: According to the UMPTN test criteria, students coming from NTF province are of moderatequality with respectto those coming from other 26 provinces.Of these, the least able choose to continue studies in NTT province and constitutethe pool of applicantsto UNDANA. Data on durationof skripti is only available for the Faculties of Agriculture and Animal Husbandry (about 2 semesters). Studentsspend on averagemore than 6 years to completetheir studies.
Employability of Graduates: Waitingtime for studentsto obtain the first job is between 6 to 30 months. The shortestwaiting time (6 months)has been registeredfor studentsin Mathematics,Physics, Chemistry, and English.The longestwaiting time has been registeredfor graduatesin SocialSciences.
Plan for Self-Improvement: The program proposes to assist four programs: Agronomy, Animal Production,Basic Science,and English LanguageEducation. Selection of the four programsis aimed at; improvingquality of the programs,increase their relevance,enhance knowledgeand skills of academic staff, increaseemployability rate of graduates;and striveto offer more practicalcourses.
How to Achieve Improvements: Improve students input through matriculation,improve teaching and learningprocess through provision of more practical learningexperience such as practicum, tutorial, site visits, class exercises,and assigningsenior and qualifiedstaff for teachingthe first year students;improve relevance of S-l education by designing local curriculum which accommodates the needs of local communities;improve staff qualificationsthrough S-2 and S-3 degreetraining, or trainingprograms, both overseas and domestic; optimizeuse of laboratoriesand classrooms,through reallocation and sharing of resources; implementbottom-up planning in managementand increasetransparency; provide recognition to students and provide incentives to staff with extra teaching load, provide staff with teaching grants allocatedon a competitivebasis; generate income through marketing of staff expertise,university facilities such as laboratoriesand buildingsfor externaluse.
Performance Indicators: Increased frequency of teaching staff attendance at respective department; increasein frequency and quality of academicinteraction and communicationbetween teaching staff and students;increase in GPA;reduce lengthof thesiswriting; reducelength of study; increasein teachingstaff productivity;reduce administrative/academicstaff ratio.
Amount Requested: A total of USS 6,007,598is requestedover fiveyears.
Project Sustainability: The universityhas committedUS$ 410,295,equal to 10% of the DRK over five years.
University of Riau (UNU)
Year Established: 1962
Location: Pekanbaru
Programs Offered: Seven faculties: Fisheries, Agriculture, Engineering, Mathematics and Natural Sciences,Social Sciencesand Politics,Economics and TeachersTraining and Education.
Staff Profile: Data on staff with advanceddegree is not available.However, the overallpercentage of staff holding S-2 and S-3 degrees is low. Recruitmentmechanism for staff is not transparent.Student-teacher ratio is low in most faculties,in the order of '12:1. Most lecturershave high teachingloads and limited teaching preparation.Most teachingstaff and studentslack Englishproficiency. Academic staff research is often unrelatedto localneeds. -54- Annex 3 Page 13 of 16 PhysicalFacilities: Utilizationof classroomis generallylow. Laboratoryspace is limitedor unavailable.
TeachingMaterials: There is a lack of manuals for practice and laboratoryexercises. Teaching aids are limited and reproductionof teachingmaterials would greatly enhancethe teaching-learningprocess. The Universitylibrary is not used effectively.Data on number of transactionsis lacking.The library does not have adequateand relevant collectionin most of the scientificsubject matters.Some of the faculties (i.e. Agribusiness)have thereforeestablished their own libraries,which have a slightlybetter collection than the universitylibrary.
Student Profile: Quality of incoming students is generally low in all faculties and study programs, althoughit is difficultto measure it in quantitativeterms. Competitiveness among studentsthrough national entrance examination is ]ow. Student drop-out rate is also high, but difficult to monitor because administrativemanagement, especially at registration,is not good. Graduate GPA is low. It varies across faculties,but generallywithin the range of 2.2 - 2.5.
Employabilityof Graduates: Averagetime required for graduatesto obtain their first job varies across faculties,but it is overage of 2.0-2.5 years. There is a marked lack of informationamong studentsof the job market.
Plan for Self-Improvement: The scope of the proposed development program covers eleven study programs-basedactivities and two university wide activities as follows: Agribusiness (Faculty of Agriculture);Chemistry (Faculty of Mathematicsand Natural Sciences);Physics (Faculty of Mathematics and Natural Sciences);Mathematics (Faculty of Mathematicsand Natural Sciences);Aquaculture (Faculty of Fisheries); Aquatic Resources Management (Faculty of Fisheries); Marine Sciences (Faculty of Fisheries); Accounting (Faculty of Economics); Management (Faculty of Economics); Economic Development(Faculty of Economics);English Education(Faculty of Teacher Training and Education); Computer Center (University wide activities); Career and Entrepreneurship Development Center (Universitywide activities).All activitiesproposed are aimed at increasingefficiency and productivity.In particular, the actives could be classifiedin the following categories:improving human resource quality; providing more adequate facilities; providing teaching materials; improving academic atmosphere, increasingrelevance of the curriculum;and improvingthe internaland externalmanagement system.
How to Achieve Improvements:Staff from the selectedstudy-programs will be sent for further training both in-country and abroad. Training will include both degree (Masters and Ph.D. level) and non-degree (short courses and study visits).In view of the limitationsof equipmentwhich UNRI has been facing since 1962, and in view of the importanceof adequateequipment for improving quality and effectivenessof education,the universityproposes investments in laboratoryand field equipment.In terms of civil works, these will mainly comprise renovationsof existing facilities. Some technical assistancewill be required during and after implementationof the investment.The assistance will be invited from overseas and domestic experts.The proposalalso includesprovision of updatedreading materialand additional titles for the library.The provisionof researchgrants is also includedfor each study program,as a way to reducethe duration of study for S- I studentsand to increasesupervision of researchprojects for studentsskripsi.
PerformanceIndicators: Improvementsin the curriculumto increaseemployability of graduates and reduce waiting time (i.e. some facultieshave set up Task Forces in chargeof reviewingthe curriculumi.e. Agribusiness).Increase linkages with local industrythrough seminars and workshops.Improvements in the quality of skripsi and in docent research. Enhancedrelevance of research to local needs. Introductionof more transparentmanagement by increasingmanagerial skills and makingbudget allocationprocesses clearer. Reductionin bureaucracythrough rationalizationof administrativeprocesses and introductionof bottom-upmanagement.
AmountRequested: The total amountof the proposedinvestment is fUS$10,182,042. -55- Annex 3 Page 14 of 16 Project Sustainability: About 10% of five years UNRI's DRK will be allocated to support the implementationof the project for a total amount of US$1,008,000.
Sebelas Maret University (aNS
Year Established: 1976
Location: Kenthingan(Surakarta)
ProgramsOffered: The universityhas 8 faculties:Arts and Letters, Teacher Training and Education, Law, Economics, Social and PoliticalSciences, Medicine, Agriculture, and Engineering. In addition,the universitycomprises a main office,a laboratorycenter and a languagecenter.
Staff Profile: The university has 1338 academicstaff, of which 976 (72.9%) have S-l degrees, 329 (24.5%) are S-2 graduates,and 33 (2,5%)are S-3 graduates.At present,226 of the 1338 academicstaff are working on their graduate degrees in a variety of universities,including domestic S-2 (167), overseas S2 (22), domestic S3 (34), and overseas S# (3). New teaching staff are recruited on the basis of GPA (minimum 2.5 to 3.0), and achievementsin performance and selection tests. In 1993, there were 17 vacancieswith 157applicants; in 1994 there were 12 vacancieswith 36 applicants;and in 1995,there were 241 applicantsfor only 26 vacancies.Vacancies for teachingstaff are publiclyadvertised and decisionson selection are made in an open university top managersmeeting. Main negative points in terms of staff developmentis that none of the facultiesor study programshave specifiedprograms for returnees.Main problem is that academicstaff are not proportionatelydistributed .The overall student-staffratio is of 1:1 1. In addition,faculties for which there is a high demand for graduates,such as Economicsand Engineering, lack senior and better qualifiedstaff. There are currently792 administrativestaff. Average graduate GPA varies across faculties.Although overall average GPA is improving,there are still a few study programs where graduateshave low GPAs (i.e. Faculty of Medicine,where average GPA over the last three years was 2.3, 2.5 and 2.4 respectively).
PhysicalFacilities: The universityhas a large area of land, about 926.342 sq.m. The big problem is that the land is not in one location, but spread in different locations throughout Surakarta. The ratio of administrativeand academicspace is respectivelyI ;2.5. More academicspace is badly needed. Of the 193 classrooms available,39% have a capacitybetween 40 and 60 students,20% are smaller classroomsfor less than 30 students, and the rest are larger classroomsfor more than 60 students. To improve quality, small group instructionneeds to be encouraged.One positive aspect in the utilizationof classroomsis that sharing among many study programs is highly common.Almost each study program has at least one laboratory.The intensity of laboratoryutilization varies from one lab to another. In addition to its own library,each facultyhas its own library. Studentsand books ratio is 1:9 respectively.The averagenumber of transactionseach month in all librariesis 14,000,compared to a numberof 18,092students, denoting the need to assist the libraryand improveits utilizationby both studentsand teachingstaff.
Teaching Materials: Althoughthe libraryhas a large collection,it mostly consists of BPK written by UNS teachers.Recent bookson particularfields, such as scienceand technology,are scarce and the library needs more communicationmedia and scientificjournals. Provisionof advancedequipment is also needed for the laboratorycenter. Training is also needed in the use of more advanced equipmentand technology, particularlyfor studentsin the EngineeringFaculty.
Student Profile: There are currently 18,092 students enrolled in the university, of which 14,816 are regular degree students, 1197are non-degreestudents, and 2,079 extensionstudents. Quality of studentsis good, and students admitted are among the top in the nation. In terms of average scores obtained by applicantsadmitted, the university is ranked number 7 in the nation for science faculties (avg. score of -56- Annex 3 Page 15 of 16
668.85), number 4 for science education (avg. score 559.33), number 6 for non science faculties, and number 2 for non-scienceeducation. Number of drop-out students is getting lower. In the Faculty of Medicine the drop-out rate is the highest at about 6% per year> In other faculties,students drop-outs are relativelylow at about 1%to 3%.
Employabilityof Graduates: Waitingtime for graduatesto get their firstjob varies from I year (English, Science and Math) to five years (other study programs).Waiting time for graduates from the Faculty of Economics,General Medicine,Agriculture and Engineeringis the lowest from 3 to 12 months.
Plan for self-improvement: UNS proposal request assistance for programs at basically two different scopes: program -wide and university-wide areas. The selected programs are: the Engineering Program, at the Faculty of Engineering, serving students at all the departments of the faculty, except those at the Mathematics Program; the Basic Science Program, at the Central Laboratory with its sub-laboratories, serving students learning Chemistry, Biology, Physics and the Agriculture, Engineering, Medicine, and the Teacher Training and Education Facilities; and the Entrepreneurship Program, at the Faculty of Economics. University-wide programs will include assistance for: the library program, the language program, the computer progran and the administration program, all of which are serving the S-I students and the entire faculties. The programs to be assisted under the proposed program, the Engineering and Basic Science Programs especially, have been selected in view of their importance to national development and Government's policy to increase output and quality of graduates in engineering and other scientific fields.
How to Achieve Improvements: Engineering Program: activities will include increase in relevance of the curriculum and procurement of recent books and publications; improvements in the quality of academic staff through post-graduate studies, technical assistance and visiting experts; improvements in staff and students' ability in the use of high technology and improvements in the management system for the teaching-learning process. Basic Sciences Program: activities will include: procurement of equipment in quality, quantity and in variation, development of staff qualifications through both post-graduate education and non-degree training; increase in practical sessions, improvement in the coordination between the Basic Sciences Laboratories and the other units at UNS; improve efficiency by providing students with the opportunity to perform practical work in the laboratories. Entrepreneurship Program: activities will include: support for laboratories in entrepreneurship training and departmental on-the-job training; improvements in the quality of education; and improvements in educational input factors through staff training, teaching-leaming activities, construction of outdoors laboratories, and procurement of updated reference materials, ; provision of intensive assistance for final assignment and skripsi writing. Assistance to university-wide program swill include: improvements in the library collection and in the quality of library services; provision of means and facilities for improving undergraduate students' proficiency in English; provision of greater opportunities fro students to join computer courses and coordination of the implementation of computer courses with facilities; and the development of a computerized administration system for UNS administrative services..
Performance Indicators: Increased relevance will be measured through improvements in the quality, quantity and variation of updated equipment and teaching manuals and by increased opportunities for students to participate in activities which are relevant to the job market; improvements in academic atmosphere will be measured by improvements in teachers' attendance, increases in academic staff qualifications, increased academic activities such as seminars and workshops, and stronger collaborations with other institutions both in-country and abroad; increased efficiency and productivity will be measured by increases in students intake, reduced drop-out rates, increased GPA for students and increased in employability of graduates with shortest time-wait. Finally, increased sustainability will be measured by increased DRK funds to match investment budget, and wider participation of individuals and units in UNS in the designing and implementation of activities. .57.. Annex 3 Page 16 of 16
Amount Requested: The total proposedinvestment budget is of USS23,068,220
Project Sustainability: The universityplans to allocate 10%/aof DRK funds to support project activities, for a total of USS 1,655,236. -58- Annex 4 Page 1 of 2 INDONESIA Higher Education Support Project: Development of Undergraduate Education
The Board of Higher Education
The Government plans to strengthen institutional capacity both at the center and at individual universities. At the central level, the Government is in the process of establishing a new Board of Higher Education (BHE), to be supported by a permanent Secretariat. The BHE will operate in four areas: (a) assist the DGHE in its task of overseeing the higher education system by making recommendations on higher education policies, identifying local and national needs and new programs to be financed, and providing a medium- to long- term perspective to the DGHE; (b) undertake the competitive funding for research and graduate education through the existing University Research Council (URC), which was established to assist the implementationof the URGE project and which is to be merged into the BHE; and (c) introduce competitive funding mechanisms for undergraduate education and implement projects (including the proposed project) which support such activities. The BHE will also have an important role in assisting universities by providing technical assistance and training to strengthen decentralized capacity for academic planning and management. These initiatives would be supported under the project through the provision of technical assistance, training, policy studies, equipment for the BHE Secretariat, incremental operating costs, and workshops and technical assistance at individual institutions of higher education. The Board of Higher Education (BHE) is an expansion of the previously established University Research Council (URC). The BHE will have two executive commissions to carry out its activities: the University Research Council and the University Education Council. In addition to these two councils a set of discipline based commissions will also be established, as well as Special and Ad-hoc sub-commissions or Task Forces when necessary.
Structure of the Board for Higher Education: The BHE will be chaired by the Director General of Higher Education with three Vice Chairs: the Vice Chair for University Research, the Vice Chair for University Education, and the Vice Chair for Higher Education Development. The Vice Chair for Research will serve as the Chairperson of the University Research Council, responsible for overseeing the research aspects in the BHE. The Vice Chair for Education will serve as Chair of the University Education Council, responsible for overseeing the education aspects in the BHIE.The Vice Chair for Strategy will serve as the Chair for the Task Force for Strategy, responsible for overseeing the strategy aspects in the BHE.
Board for Higher Education Membership: The BHE will consist of approximately sixteen members who have been selected on the basis of recognized expertise, such as personal research experience, maintaining a balance with respect to domain of expertise and institutional affiliation. Individual members will be recruited from DGHE, universities, the National Research Council (DRN), and BAPPENAS,as well as from private universities and enterprises. The Chairpersons of the University Research Council, the University Education Council, the Higher Education Strategy Council, and the discipline based commissions will also be members. -59- Annex 4 Page 2 of 2 BHE Secretariat: The existing University Research Council Secretariat will be expanded to become the BHE Secretariat, with two Assistants: the Assistant for Research and the Assistant for Education. The function of the BHE's secretariat will be integrated into the existing sub-directorates within the Directorate of Academic Affairs and Directorate of Research and Community Service Development. The supervision of project implementation will be the responsibility of the Secretariat. Specific responsibilities of the Assistant Secretary in supervising the DUE project include: (i) reviewing reports submitted by the CPIU; (ii) initiating and administering evaluation activities to be carried out by the UEC; (iii) initiating and administering site visits conducted by the UEC members; (iv) providing data analysis and information acquired from the CPIU, LPIUs, and other sources for the UEC.
University Research Council (URC) : The University Research Council will be a modification of the previously established University Research Council, adjusting its structure within the new BHE. The URC will focus its activities on research and community services. It will be chaired by the Director for Research with a membership consisting of the Secretary, the BHE Vice Chair for Education, the chairs of the discipline based commissions, and other academics with outstanding reputations. Research proposals will be reviewed by members of the discipline-based commissions and special commissions, if needed, can draw membership from the URC and UEC.
University Education Council (UEC) : The UEC will oversee graduate, undergraduate, and professional education and be responsible for reviewing institutional funding proposals. Based on the disciplines, programs, and proposals reviewed, it can draw members from the discipline based sub-commissions as peer reviewers. The UEC will be chaired by the Director for Academic Affairs, with membership consisting of a Secretary, the BHE Vice Chair for Research, the chairs of the discipline based commissions, and other academics with outstandingreputations.
Higher Education Development Council (HEDC): Council members are assigned to carry out specific tasks in higher education development with the primary responsibility of developing, improving, and modifyingthe long-term strategic plan for higher education. This task will be carried out by monitoring the implementation of the strategic plan, evaluating the results, soliciting input from the stakeholders, and modifying the existing plan as necessary. The HEDC will be chaired by a non ex-officio member with commissions members assigned to carry out the relevant tasks. The HEDC will be supported by the BHE Secretariat.
Discipline-based commissions: Seven discipline based commissions will be established from the existing discipline based consortia. Members in each commission will be grouped to carry out specific tasks and special and ad-hoc sub-commissions can draw their membership from the relevant group of discipline-based commissions. -60- Annex 5 Page 1 of 2
INDONESIA Higher Education Support Project: Developmentof Undergraduate Education
The National Accreditation Board
Structure of the National Accreditation Board: Law No. 2/1989 of the National Education System requires the establishment of the National Accreditation Board (BAN) which was established by Ministry of Education and Culture decree No. 0326/U/1994 on December 15,1994. The appointment of its Chair, Secretary, and members was carried out by decree No. 0327/U/1994. Members are initially appointed for one four year term and can serve a maximum of two terms.
NATIONAL ACCREDITATIONBOARD
DATABASE Accreditation Result
Data processing Institutional Program Evaluation Evaluation Form Form Exception report
Institution | Site visit|
Membership of the National Accreditation Board: Ban will have 17 members: two from the DGHE, seven from public universities, three from private universities, three from industy, and two represent political parties in the country.
Roles and Responsibilities of the National Accreditation Board: The objective of the BAN is to strengthen quality assurance within the higher education sub-sector in both public and private institutions and to provide information pertaining to the performance of higher education institutions and, when necessary, to recommend corrective actions. There will be four levels of accreditation, A,B,C, and D, with A signifying the highest level of accreditation. The primary task of the BAN will be to conduct periodic evaluations of study -61- Annex 5 Page 2 of 2
programs and institutions and judge the quality of the programs and the efficiency with which they operate. Ban has developed:
* a set of criteria for each level of accreditation; * policies and evaluation criteria for deternining the level of accreditation for programs and institutions; * strategy for assisting higher education institutions in carrying out self assessments.
Activities of the National Accreditation Board: The process of accreditation will be carried out for all higher education institutions, including public, private, and other government agencies' service programs1. The initial accreditation process will take quite some time to complete given that there are approximately 1,300 institutions of higher education in Indonesia and 11,000 study programs.
The BAN will evaluate the following nine components at each higher education institution and in each program seeking accreditation: (1) quality of the curriculum, (2) quality of the teaching staff, (3) quality of the students, (4) quality of the teaching and learning process, (5) the infrastructure, (6) quality of the academic administration, (7) quality of personnel, (8) efficiency of the financial administration, and (9) the structure of the intemal organization.2
In order to test the accreditation mechanism and tools, a pilot project was carried out at ten public and five private universities involving programs in the faculties of medicine, dentistry, psychology, and law. A draft evaluation sheet, which was developed by the Task Force for Accreditation, was used in the process. Based on the pilot, revisions were made to the evaluation sheet3.
X Theseinclude higher education institutions under government agencies other than Ministryof Educationand Culture,e.g. Ministry of Religion,Ministry of Health,etc.
2 For a detaileddescription of the evaluationand accreditationmethodology, and the evaluationcriteria to be used by the AccreditationBoard, please refer to the relevantsection in the ProjectImplementation Plan. The evaluationsheet can be found in the ProjectProposal Document. -62- Annex 6 Page 1 of 7 INDONESIA Higher Education Support Project: Development of UndergraduateEducation
Calculation of Economic Rate of Return
The economic rate of return for the investmentsto be undertaken in the Universities Development Program component is estimated to be 24 percent. This estimate was obtained by solving for the internal rate of return that equates the stream of benefits and costs resulting from the investment over a twenty year horizon. This annex describes how the estimate was made and provides an indication of how sensitive the estimate is to the underlying assumptions.
Benefits
As no estimates of the positive extemalities from public investment in higher education are available, a difference in eamings is taken as a measure of the social benefits of the investment. The investments are expected to lead to higher lifetime eamings by:
1. Reducing the time needed for students to graduate - from 5.75 to 5.25 years; 2. Reducing the time needed for graduates to find their first job - from 1.75 to 1.5 years; and 3. Increasing starting salaries of graduates once employed by an average of US$ 120 a year, with the differential growing by 3 percent a year.
Once explicit quantitative assumptions about the effect of the project on these key variables are made, the calculation of the economic rate of return is a straightforward exercise of working through the implications of these assumptions. Thus, the key consideration in judging the economic rate of return lies with the reasonableness of the assumptions of the program effects. Below we discuss why and how the project investments could be expected to have the assumed effect.
Reduction in time neededfor students to graduate
The estimate of the current average time needed to graduate (5.75 years) is the median value reported in the investment proposals submitted by the ten universities that made it into the second round of competition. Through a variety of actions, the universities expect to be able to reduce the time needed to graduate while maintaining quality constant. One approach mentioned by virtually all universities is to use the research grants to help finance student theses, the skripsis. The long time required to complete the skripsi was identified as a major cause of the delays in graduation. In addition, the universities proposed several actions that would have the effect of raising the value of the university professors time to work in the public university rather than work in their second of third jobs. The increased attention that the students would receive should also reduce the time needed to graduate. Finally, starting the fourth year of the project, there will be an important incentive to reducing the time to graduate. Failure to make satisfactory progress would constitute a remedy within the contract signed by the university and the Board of Higher Education. As a result of the both -63- Annex 6 Page 2 of 7
the investments and the incentive, the universities expected to be able to reduce the time needed to graduate to an average of 5 years. The calculations of the economic rate of return adopt the more conservative assumption that the average time to graduate would be reduced to 5.25 years as a result of the project.
Reduction in waiting time and increase in salary once employed
The effect of the project on the waiting time to the first job and the earnings once employed would be achieved through three mechanisms: a) being able to attract higher quality students to the university; b) improvementsin allocative efficiency; and c) improvements in the quality of a specific program. As with the reduction in time to graduate, the improvements in the quality of students would be achieved by a combination of investments and incentives. To the extent that the investments raise the quality of the university and the improvements are perceived, the university could expect to become relatively more attractive to the higher quality students in their province. Of course, this effect would probably not be felt immediately, but might take three or four years to occur. Beginning with the fourth year of the project, failure to make adequate progress in attracting high quality students or in reducing the waiting time for a job would constitute a remedy within the contract signed by the university and the Board of Higher Education.
In their proposals, the ten universities set as a performance target a reduction in the average waiting time from 1.75 to I year. The calculations of the economic rate of return adopt a more conservative assumption, that the average waiting time would be reduced from 1.75 to 1.5 years. The current estimate of the average waiting provided by the universities may be high. However, the calculations for the economic rate of return are sensitive to the difference in the waiting time with and without the project, not on the absolute values. Thus, even if the average waiting time is overestimated, as long as the reduction is of the order of three months, the calculations presented here would remain valid.
As will be seen in this annex, the largest source of benefits arises from the assumed increase in salary of the graduates who benefit from the project. Our assumption that the project could lead to an increase in earnings of $10 a month is based on two observations. First, note that the universities could improve allocative efficiency by concentrating their improvements in fields in which they have a comparative advantage and which the market values highly. Simulations based on data from a 1994 Tracer study of SI graduates from 1989, 1990 and 1991 provides some indication of the magnitude of this effect. This study covers the graduates of 10 universities in and outside Java. While the study is flawed in that it is based on a select group of graduates who chose to return the mail questionnaires (less than 33 percent), it is one of the few surveys that provides information on earnings by field of study and is sufficient for our illustrativepurpose. If half of the graduates who are
' Thestudy found substantial variation in earningsand waiting tirne to employmentby field(and also by the qualityof the university).The average earnings of graduatesin thehighest paying field was overthree timesthose of the lowestpaid field. Similarly,the field with the longestwaiting time was over three times that of the shortest.The correlation between average earnings and length of waitingtime was -0.66 - the longerthe waitingtime, the lowerthe earnings,as onemight expect. -64- Annex 6 Page 3 of 7 employed in fields in the bottom fifty percent of earnings were instead to be employed in fields in the top fifty percent of earnings, the average salary would rise by 12 percent. At the mean starting salary reported by the ten universities of US$ 1,460 a year, a 12 percent increase would amount to roughly $15 a month. This thought exercise overstates the case somewhat because if students were to shift from lower to higher paying fields the change in relative supply would have the effect of narrowing the wage differentials across fields. Nevertheless, the simulation does suggest that if the selected universities were able to shift students to higher paying fields, that effect alone could bring about an increase in wages of the average graduate on the order of 10 percent. The substantial variation in earnings from graduates of universities of different reputation suggest there is some scope for quality improvements in the universities selected in this project to raise earnings. Any quality improvements made in individual programs could also be expected to raise future earnings
Second, an increase of $10 a month is roughly compatible with a shift in the earnings of graduates from the nth to the n+lOth percentile of earnings of university graduates in the provinces in which the universities are located. We assume that the project investments could bring about such a shift in the eamings of graduates. From the I 0th through the 70th percentiles, earnings increase by approximately$15 a month for each ten points. The percentile distributions are based on reported earnings from the 1992 Sakernas Labor Force survey expressed in 1995 Rupiah, inflated using provincial price indices reported by BPS. The mean starting salary reported by the ten universities was US$ 1,460 a year, which lies between the 50th and 60th percentile of salaries averaged over the provinces where the universities are located. Thus, what the universities report appears to be consistent with other data. The 3 percent growth rate in the differential is included to reflect the widening of wage differentials that tends to occur over time.
Effect on number of graduates
The investments are not expected to lead to an increase in the number of students enrolled in any given year. In the Indonesian higher education system, there is an excess demand for the places within public universities and positions are rationed. Even poor public universities receive many more applicants than they can accept. Thus, the number of enrolled students is not dependent on demand. It depends on administrativedecisions made in the public university system on how many students they.would like to have enrolled in any year. We assume that the investments do not lead to an increase in the number enrolled in any year. However, if the time that students take to graduate can be reduced, more students could be admitted without affecting the number enrolled at any one time. Indeed, this ability to have more students pass through the system is an important part of the expected gains from the investment. -65- Annex 6 Page 4 of 7
As indicated in the disbursement profile, the US$68.1 million investment is expected to be spread out over six years, with 5 percent invested the first year, 10 percent the second, 30 percent the third, 22 percent in the fourth and fifth years and 11 percent in the sixth year. After the six year period and in each year up to the end of the twenty year horizon, ten percent of the original investment of US$68.1 million is expected to be spent on maintaining the gains of the original investment. Although these expenses would be expected to come out of other sources of funds and not from the project, they are included in the calculation of the economic rate of return. The universities have provided for this 10 percent to come out of their DRK budget.
The Calculations
A simulation model was used to project how the number of graduates employed each year would vary with changes in the time spent to graduate and with changes in the waiting time to a job as a result of the investments. In keeping with the assumption that enrollments would not change, the simulation model assumes for all cases that the yearly inflow of students would equal the yearly outflow. Because the number of students enrolled in any one year is the same with or without the investment, the opportunity costs to being in school will be the same with or without the investment. As the net benefits to the investment depend on the difference in benefit and cost streams with and without the investment, the opportunity costs will cancel out.
With or without the investments it is assumed that in any year 66,315 students would be enrolled. This is equal to 80 percent of the current enrollment in the 10 universities. It is expected that up to seven universitieswould be selected for funding. The figure of 80 percent was chosen (instead of 70 percent) because after reading the individual proposals it appeared that some of the larger universities are more likely to be funded.
Based on the current mean time to graduate of 5.75 years, the implied yearly inflow and outflow of students that would keep enrollment constant is 11,532 (66,315/5.75). The simulation assumes that the time needed to graduate would decline gradually from 5.75 years to 5.5 years. After the first year of the investments,the outflow of students would accelerate steadily until it reached 12,628 which (except for some minor rounding errors) is equal to the total enrollment divided by the target mean time to graduate (5.25 years).
The waiting time to employment is also assumed to decline gradually over time with the investments. For simplicity, the simulation assumes that the waiting time is determninistic. Without the investments,all graduates are assumed to wait 1.75 years before becoming employed. With the investments, after the initial year the waiting time to employment is assumed to decline steadily until it reaches 1.5 years after the fifth year of the investment. It would be possible to make the waiting time a random variable, but this is unlikely to change the results in any significant way. -66- Annex 6 Page 5 of 7 The major source of benefits from the reduced waiting time is that, after the adjustment to the change in time to graduate and waiting time, there are fewer graduates unemployed in any one year. In the base case, there are 20,181 graduateswaiting to be employed in the steady state. With the assumed changes brought about by the project, there would be 18,942 graduates waiting to be employed even with the higher outfolw of graduates.
Results
Given the assumptions related to the stream of benefits and costs, the economic rate of return is estimated to be 24 percent. The numbers used in the calculation of the return are presented in Table 1.
While the cost side is straightforward, it is of interest to see what the relative contribution of the three sources of increased earnings are to total benefits. To calculate the relative contribution, the stream of benefits from each source are first converted to their present value (assuming a discount rate of 10 percent). The largest contribution to total benefits arises from the increased salary after employment (81 percent), followed by the benefits from reducing the time spent in school (11 percent) and the benefits from having fewer graduates waiting for employment at any one time (8 percent). Even though the effect of the project on the monthly earnings of any one graduate are small (US$10), there are many graduates who would benefit. Moreover, the benefits would be received for many years. The benefits from having fewer graduates waiting for employment are large because the opportunity cost of having a potential worker idle are substantial. These costs are assumed to be US$ 1460, which is equal to the mean of the starting salary reported by the ten universities.
The benefits from reducing the time spent in school makes a significant difference to the total number of students who pass through the system. In twenty years, roughly 25,000 (7 percent) more students would graduate after 20 years if the mean time to graduate were to decline from 5.75 to 5.25 years, with no change in the number enrolled at any given time. Without the investments, these students would be expected to go to private universities where previous econometric work has suggestedthat returns are 9 percent lower. The calculations assume that the difference in earnings a student could obtain from going to an improved public university versus the existing private university is US$190 (equivalent to the difference between the 30th and 50th percentile of earnings of University graduates in the provinces of the 10 Universities). This premium would be earned every year after graduation.
Sensitivity to assumptions
In order to calculate the effect of different assumptionson the estimated economic rate of return, several additional simulations were run. The results are as follows: -67- Annex 6 Page 6 of 7
Change Economic rate of return
Eliminate 3 % yearly increase in earnings 21 % differential (stays constant at US$ 120 a year) Increase premium of improved public 25 % university over existing private from US$190 to US$270 Reduce increase in salary once employed 12 % from US$120 to US$ 60 Keep waiting time to employment at 1.75 21 % years Keep time to graduate from university at 20 % 5.75 years Delay all benefits for three years without 14 % delaying costs Calculationsof Economic Rate of Retum
Graduates from Univ Difference in number Increase in graduates Benefit from change Eamings from without DUE waiting for employedwith DUE Increasedeamings in number of additional graduates Year Costs (Base number of employment to base number of graduateswaiting for with DUE Net benefits graduates) (with DUE) _ graduates employment
1 -34050000 11532 -274 0 1383840 400040 0 -2421200 2 -20430000 11532 -15 806 2809195 -21900 153140 -3869565 3 -6810000 11532 277 1114 4277311 404420 369394 -15378875 4 -3405000 11532 604 1422 5789470 881840 650656 -7660034 5 -3405000 11532 1239 1731 7346994 1808940 999066 4827000 6 -6810000 11532 1239 1096 8951244 1808940 1237278 4506462 7 -6810000 11532 1239 1096 10603622 1808940 1482636 7085198
8 -6810000 ___ _ 11532 1239 1096 12305570 1808940 1735355 9039865 9 -6810000 11532 1239 1096 14058577 1808940 1995656 11053173 10 -6810000 11532 1239 1096 15864175 1808940 2263765 13126880 a 11 -6810000 11532 1239 1096 17723940 1808940 2539918 15262798 x 12 -6810000 11532 1239 1096 19639498 1808940 2824356 17462794 13 -6810000 11532 1239 1096 21612523 1808940 3117327 19728790 14 -6810000 -_ 11532 1239 1096 23644739 1808940 3419086 22062765 15 -6810000 11532 1239 1096 25737921 1808940 3729899 24466760 16 -6810000 11532 1239 1096 27893899 1808940 4050036 26942875 17 -6810000 11532 1239 1096 30114556 1808940 4379777 29493273 18 -6810000 11532 1239 1096 32401832 1808940 4719410 32120183 19 -6810000 11532 1239 1096 34757727 1808940 5069233 34825900 20 -6810000 11532 1239 1096 37184299 1808940 5429550 37612789
______Economicrate of 24 return
2% o -69- Annex 7 Page 1 of 11
INDONESIA Higher Education Support Project: Development of Undergraduate Education
Project ImplementationPlan
The Structure and Functions of the CPCU and the LPIU's
Organizational Framework - Overview: The implementation arrangements for the project comprise a number of governmental as well as independent bodies, both at the central level and at the level of individual universities. The Directorate General of Higher Education (DGHE) under the Ministry of Education and Culture (MOEC) will have responsibility for overseeing project implementation.In addition, DGHE will implement the fellowship program. The BAN and the BHE will be responsible for implementing their respective parts of the project. At the level of the six individual target institutions, implementation responsibility will lie with Local Project Implementation Units (LPIUs) which have evolved out of the University Task Forces which prepared the individual universities' proposals. At the central level, a small Central Project Coordination Unit (CPCU) located within the BHE Secretariat within DGHE will be responsible not for implementing the project, as in the past, but only for providing training, monitoring, and technical assistance to the LPIUs and for overall coordination of project activities. The CPCU is de facto already established in the form of the existing Project Preparation Team within DGHE. The structure, roles and responsibilities of the implementing agencies are summarized briefly below.'
Structure of the Central Project Coordination Unit (CPCU): The proposed project will be managed by the Central Project Coordination Unit (CPCU). The CPCU will report to the Assistant Secretary for Education at the BHE Secretariat. The CPCU will comprise of a CPCU Director, a financial officer, two procurement officers, and clerical staff. The CPCU Director will be appointed by the DGHE.
Roles and Responsibilities of the Central Project Coordination Unit : The overall responsibility of the CPCU is overseeing and managing the project implementation through intensive monitoring and supervision. Specific responsibilities are:
* to administer the grant agreement between the CPCU and the LPIUs; * to prepare the budget for the BHE and BAN activities, and handle the corresponding financial matters; * to administer the Competitive Domestic Fellowship Program; * to prepare progress reports for the Bank; * to submit periodic reports to the Secretariat; * to monitor project expenditures by periodically collecting standardized format reports from the LPIUs and prepare consolidated financial statements and submit audited statements of accounts to the Bank;
Fora detaileddescription of the structure,role andfunctions of the BHEand the BAN,please refer to Annexes4 and 5 respectively. -70- Annex 7 Page 2 of II * to closely monitor procurement activities, take corrective actions for any deviation found, and report it to the Secretariat as soon as possible; * to assist and supervise universities in reporting and collecting data for monitoring and evaluation; * to provide necessary managementtraining and technical assistance to the LPIUs; * to liaise with the LPIUs and the Bank on all project related matters.
Structure of the Local Project Implementation Unit (LPIU): The Implementing unit at the target universities will be the Local Project Implementation Unit (LPIU). The Vice Rector for Academic Affairs will be, ex-officio, become the Director of the LPIU. Due to his/her routine responsibilities as the Vice Rector, however, an Executive Director will be needed to carry out the day to day activities. The Executive Director will supervise two deputies: Academic Affairs, and Finance and Administration. Officers in charge of the LPIU will be appointed by the Rector after acquiring approval from the Education Commission.
Roles and Responsibilities of the Local Project Implementation Unit (LPIU): The LPIU is responsible for project implementationat the target university level. The Vice Rector I will chair the LPIU and an Executive Director will be appointed to oversee day-to-day operations, the Executive Director will report to the Vice-Rector I on progress, problems encountered and actions taken to resolve problems. Specifically the Executive Director will ensure communication and cooperation between the Academic and Finance and Administration units. Integration of the tasks of these two units is critical to successful implementation. The Academic unit will conduct a needs analysis for equipment, civil works, technical assistance and staff development and prepare appropriate terms of reference and specifications and, in conjunction with the Finance and Administration unit, prepare tender documents. The Finance and Administration unit will then conduct the tender process, evaluate bids and prepare contracts based on standard Bank guidelines for procurement of goods and services and guidelines for recruitment of technical assistance. Especially in the procurement of equipment and civil works the two units will jointly assume responsibility for checking equipment received and works carried out and for coordinating the installation and commissioning process to ensure that equipment and civil works ordered, and received, matches the needs identified by the end users.
In carrying out its task, the LPIU can draw expertise from other sources such as the CPCU, technical assistance from universities which have already developed experience and expertise in these tasks, and domestic as well as international consultants.
The organizational chart below shows the relationship between the various bodies involved in the implementation, monitoring and evaluation of the universities development program. A Project Implementation Schedule detailing the timeframe for the various project activities is attached. UNIVERSITIES DEVELOPMENT PROGRAM - IMPLEMENTATION FLOW, MONITORING AND EVALUATION
Evaluation and recommendation for grant agreement renewal DGHE BHE
BHE SECRETARIAT
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I Jo t, aftd~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. L XOUUV~~~~~~~~~~~~~~~~ 1995 1996 1997 1998 | 1999 | 20001 2001 ID Task Name Duration Start Q3 Q4 1 Q2103f1Q94Q1 IQ21Q3IQ4 Q1 102 03 1 4 Q1 Q2 Q3 Q4IQ1 1021031Q4Q1IQ2JQ3JQ4 23 Project Executdons 260w 1112/
24 Stage 1 execution 52w 11/12/96
25 Report1 from beneficaries Id 10/5/97 . .20I5
26 Report1 evaluation 2.8w 10/7/97
27 Annualcontract 1 preparation 2w 10/26/97 .
28 Annualcontract 1 sign Id 11/9/97
29 Stage2 execution 52w 11/11/97
30 Report2 from beneficiaries ld 10/4/98
31 Report2 evaluation 2.8w 10/6/98
32 Annualcontract 2 preparation 2w 10/26/98
33 Annualcontract 2 sign Id 11/9/98
34 Stage 3 execution 52w 11/10/98
35 Report3 frombeneficiaries Id 10/3/99 613~~~~~~~- 36 Report3 evalution 2.8w 10/5/99 . .D.
37 Annualcontract 3 preparation 2w 10/25/99
38 Annualcontract 3 sign Id 11/8/99 . .11
39 Stage4 execution 52w 11/9/99
40 Report4 from beneficiaries Id 10/1/00
41 Report4 evaluation 2.8w 10/3/00
42 Annualcontract 4 preparation 2w 10/23/00
43 Annualcontract 4 sign id 11/6/00 11/6 44 Stage5execution 52w 11/7/00
Task Summary RollbdUp Progress_
Date:5/21/96 Progress RolledUp Task Milestone *Rolled Up Milestone O
Page 2 1995 1996 1997[998] 1999 2000| 2001 ID Task Name Duration Start Q31Q4 Q 3JQ2JQ3|Q4Q IQII3Q4 !Q1|Q2|Q3|Q41Q2|Q3|Q4 ! 1Q2|Q3|Q4 45 Final Reportfrom beneficiaries ld 10/7/01
46 Final reportevaluation 4w 10/9/01
47
48 Higher Education Council 323w 8/28/95 . -
49 HEC Preparation 6.8w 1/2196
50 Finalizeguideline of the HEC 6w 1/2/96
51 Establishmentof HEC ld 2/13/96
52 Establishmentof HEC Secretariat 3d 2/14/96
53 HEC Activities 294w 3/17/96 _ -
54 Bechmarking 294w 3/17/96 _.
55 Designquestionnaires 3w 3/17/96
56 Designsystem test 2w 6/9/96 .
57 Data collection1 5w 9/1/96
58 Data processing1 2w 10/7/96
69 Data collection2 5w 9/1/97
60 Data processing2 2w 10/6/97
61 Data Analysis1 2w 10/20/97 62 Data collection3 5w 9/1/98
63 Data processing3 2w 10/6/98
64 Data Analysis2 2w 10/20/98
65 Data collection4 5w 9/1/99
66 Dataprocessing 4 2w 10/6/99
Task Summary Rolled Up Progress_ Proje:t2/9 Progress Rolled Up Task
Milestone *Rolled Up Milestone
Page 3 1995 1996 1997 19981 1999 1 2000 2001 ID Task Name Duration Start 03 0l4 01 1Q31Q4 011021031Q4 ! 1021Q3 104101 1Q21 Q3 0Q4 1Q1QQ1 Q22Q21Q3JQ4 10314 67 Data Analysis 3 2w 10/20/99
68 Data collection 5 5w 9/1100
69 Data processing 5 2w 10/6/00
70 Data Analysis 4 2w 10/20/00
71 Data collection 6 5w 9/1/01
72 Data processing 6 2w 10/8/01
73 Data Analysis 5 2w 10/22/01
74 Project Management Training 2w 7f7/96
75 Inter departemental mneeting 1w 6/9196
76 Overseas short visit 1 1w 7/28/96
n7 Ovemeas short visit 2 1w 8/3/97
78 Overseas short visit 3 1w 8/2/98 I 79 Overseas short visit 4 1w 818/99 I so Overseas short visit 5 1w 8/6/00 I 81 NationalAccreditation Board 292w 8i28196 e - 82 Preparaton 32w 8U28/95
83 Establishment of NAB Secretariat 8w 8/28/95
84 Design system of accreditalon 8w 10/23/95
88 Design questionaries 4w 12/18/95
86 Trial run 8w 1/15/96
87 Evaluation & impprovment 4w 3/11/96
88 Implementation 260w 4/8/96 ! -
_ _x Task Summary Rolled UpPro,qress Project: Progress Rolled Up Task
Milestone *Rolled Up Milestone 0
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II 8 afed -9L- L xauv .1995 9 1997 1998 1999 2000 2001 ID Task Name Duraon Start Q3104 Q11|2Q103104 Q1 Q2103104 01 Q22Q3 04 01 2Q2l3 Q Q240Q120304 |IQ2|IQ3104 111 Stage 3 Implementaton 52w 4/98..
112 Workshop I 2d 4/6/98
113 Data gatherng & processing 1 6w 4/6/98
114 Data evaluatlon 1 4w 5/18/98
115 Desk evaluation 1 4w 6/15/98
116 Site visit I 12w 7/13/98
117 Workshop 2 2d 10/5/98 lie Data gathering & processing 2 6w 10/5/98
119 Dat evaluation 2 4w 11/16/98
120 Desk evaluation 2 4w 12V14/98
121 Site visit 2 12w 1/11/99
122 Stage 4 Implmntatlon 62w 4/5199
123 Workshop 1 2d 45/99 .
124 Data gathering & processing 1 6w 4/5/99
125 Data evaluation 1 4w 5/17/99
126 Desk evaluation 1 4w 6/14/99
127 Site visit 1 12w 7/12/99
128 Workshop 2 2d 10/4/99
129 Data gathering & processing 2 6w 10/4/99
130 Data evaluation 2 4w 11/15/99
131 Desk evaluation 2 4w 12/13/99
132 Site vkit 2 12w 1/10/00
Task Summary __Rolled Up Progress CD
Date 5/21/96 ~~~~~~Progress Rolled Up Task X
Milestone * Rolled Up Milestone6
Page 6 1996 1996 1997 1998 1 999 2000 2001 IID Task Name Duraton Start Q3I Q4 Q1|Q2IQ31Q4 Q1 1021Q31Q41Q21Q 4 Q|Q2|Q3|Q44201 |2 Q3 Q4!Q Q3|0Q4 133 Stage 6 Implementatlon 62w 4t3/00
134 Workshop1 2d 4/3/00
136 Data gathering& processing1 6w 4/3/00
136 Data evaluation1 4w 5/15/00
137 Deskevaluation 1 4w 6/12/00
138 Site visit 1 12w 7/10/00
139 Workshop2 2d 10/2/00
140 Data gathering& processing2 6w 10/2/00
141 Data evaluation2 4w 11/13/00
142 Deskevaluation 2 4w 12/11/00
143 Site vlst 2 12w 1/8/01
144 Domestic Fellowships Programs 222.4w 9/22/96 - - -
146 Preparation 16.2w 9122196
146 Developingguidelines 12w 9/22/96
147 Developmentof eligiblestudy program 4w 12/16/96
148 Announcement ld 1/13/97 1/13
149 Stage I execution (Firt Batch) 148w 2t27197
150 Call for Applications Id 2/27/97 2t27
151 DeadlineApplications Submissions I d 6/3/97
152 Selection 8w 6/4/97
153 Announcement I d 7/30/97 7/30
164 Execution(Master Program) 126w 7/31/97 PE
Task Summary _RolledUp Progress 0 CD
Date:5t21196 Progress RolledUp Task_ Milestone *Rolled UpMilestone O
Page 7 1995 1996 1997 1 1998 1999 2000 1 2001 ID Task Name Duration Start Q3I Q4 Q1 Q21Q31Q4 Q1|Q2|03|Q4 Q1102|Q3104 !Q1Q20Q30Q401|Q2103104101|Q2|Q3|Q4 155 Stage 2 execution (Second Batch) 147.4w 2128/98
156 Call for Applications 1d 2/28/98 2t28
157 DeadlineApplication Submission 1d 6/1/98 158 Selection 8w 6/2/98 .z 1 159 Announcement 1d 7/28/98 . ,7I28
160 Execution(Master Program) 126w 7/29/98
161 DUE PROJECTPreparation 45.4w 1/26/96
162 Appraisal 4w 1/26/96
163 Negotiation 4w 5/6/96 .
164 EstablishmentCPCU 4w 6/5/96
165 EstablishmentLPIU 4w 11/12/96
|Taskl | Summaryw 8 t Rolled UpProgresP Proje:rt29 Progress Rolled Up TaskO
Milestone *Rolled Up Milestone X Page 8 -80- Annex 8 Page 1 of 9
Indonesia
Higher Education Support Project: Development of Undergraduate Education
Monitoring and Evaluation'
Introduction
1. The basic goals of this project are to speed Indonesia's economic and social development and enhance its ability to compete in an ever widening global marketplace. Specifically, the project seeks to improve the quality of SI education and to assist the Government of Indonesia take the first steps in operationalizing the New Paradigm which emphasizes mechanisms to enhance bottom-up, decentralized planning and performance based resource allocation for universities. The project includes activities designed to improve Indonesia's higher education system at both the sector level and at the university level.
2. As part of a five year effort, the monitoring and evaluation component plays an important role in gauging the overall success of the new institutional framework as well as efforts by less established universities to improve their overall quality, relevancy and efficiency. Numerous and varied activities will be planned and implementedin the six target universities. Each institutionhas prepared a self-evaluationand has submitted a limited plan for its development. The challenge to the monitoring and evaluation component will be to define a single set of cogent indicatorsthat will allow us to track progress within institutions and maintain validity, given the multiple groups responsible for gathering and processing information. Monitoring and evaluation will be carried out by each LPIU as well as the CPCU and the DGHE, at intervals sufficiently frequent to permit feedback and continual program improvement.
3. The tables that follow present the designated performance indicators to be used in monitoring and evaluating the project components and to be used during supervision. There is also a discussion of how and when they will be measured. The targets specified in the monitoring and evaluation matrix are average figures. The indicators are not meant to be applied to each of the institutionsindividually but to the average performance of the group as a whole.
Monitoring tracks the process of carrying out activities necessary for program implementation. This can be accomplished through recording and reporting from service delivery sites, supervisory sites, and periodic program reviews. Monitoring is an integral part of evaluation; it is used to measure process objectives, that is, to determine if and to what extent activities are being implemented as planned. Evaluation measures the progress of the program to outcome objectives which specify changes in behavior or services as a result of the project activities. The term evaluation also includes operational research designed to answer questions related to interventions and services. For example, the effectiveness of two different approaches to teaching reading, or the effectiveness of distance education compared to traditional classroom lectures. Annex 8 -81- Page 2 of 9
The Nature of EducationIndicators
4. Indicators are typically quantified measurements that can be repeated over time to track the progress toward the achievement of objectives. They are normally expressed as numbers, proportions, percentages and ratios. Education indicators attempt to characterize the success or effectiveness of an education system, institution or program by serving as a proxy for some educationalcomponent or relationship.
5. Caution is necessary when evaluating education projects, especially when interpreting educational indicators. First, the interpretation of educational indicators is innately subjective2. Typically, indicators are presented as being "value-neutral" measures of performance while in reality they are based on some value judgment about the desired effects of education. Windham (1992) gives the example of two institutions: one with a statistic indicating an 80 percent graduation rate, and the other a 20 percent graduation rate. The statistic does not become an indicator until it is attached to some goal. If the goal is maximizing the rate of graduation, the first program would appear more successful. If increasing the total number of graduates is the goal, the second program could also be considered successful if for example, the populationwas less advantaged students who might normally not graduate at all. It is critical therefor that the goals and objectives of a project are stated clearly and that there is agreement with their interpretation.
6. Second, education is more complexand difficult to summarizethan activities in other social sectors such as health and nutrition. It is relatively straightforward to evaluate the results of a vaccination or feeding program, but providing better quality schooling is more difficult to measure. For evaluating education programs, indicator sets are more valuable than single indicators because issues such as cost, equity and learning effectiveness need to be considered simultaneouslyto evaluate the true impact of an intervention.
7. Finally, since education is a relatively long-term process, interventions must also be long term. This increases the costs of monitoring and evaluation because these activities must occur over the life of the project. A single time slice measurement is inappropriate, when in fact, a programs' impact may not be seen for several years. In the case of higher education, the impact may not be realized until the beneficiariesenter the labor market.
Project Monitoring
8. During appraisal it was agreed that a core group of indicators would be utilized to monitor and evaluate the impact of the overall project. Three indicators were chosen: one each for quality, efficiency and relevancy
2 The section on educational indicators relies heavily on a paper by Douglas Windhamn.1992. "Educationfor All" Indicators: A Proposed Framework Manual, and Implementation Plan. A Report prepared for UNICEF. Annex 8 -82- Page 3 of 9
9. BenchmarkTest. To monitorquality. a BenchmarkTest will be administered at the target institutions to all students at the beginning of the project, at mid-term evaluation, and at project completion . It is expected that by the end of the project, the mean score on the benchmark test will have increased by 10% over the score at the beginning of the project. The test is currently being developed and will be administered and scored by the BHE. Studentswill take the test at their respectiveuniversities.
10. Decrease in Mean Cycle Cost. A decrease in the mean cycle cost by program will be used to measure efficiency. Cycle cost was chosen because it takes into account both the unit cost and the length of study. It is expected that mean cycle cost will decrease by 10% over the life of the project. The LPIU at each university will be responsible for measuring this indicator and forwarding it to the CPCU in its annual evaluation.
11. Decrease in Mean Job Search Time. A decrease in the mean job search time of graduates will be used to measure increased relevance of undergraduate education. By the end of the project, it is expected that 50% of students will find employment in their respective fields within six months of graduation. Although no baseline is presently available, this target is believed to represent a substantial improvement over the present situation. Baseline information is being collected and will be available when the universities' final proposals have been evaluated. Meanjob search time will be monitored by the LPIU and forwardedto the CPCU via the annual report.
Project Monitoring
12. To implement the New Paradigm, the Government plans to strengthen institutional capacity both at the center and at individual universities. The Board of Higher Education (BHE) will make use of the existing MIS for monitoring the higher education system. Lessons learned from the implementationand evaluation of the proposed project will be applied to future higher education policies and practices. The CPCU will be responsible for monitoring and assisting the LPIUs in implementing their respective projects and for collecting and analyzing data from the target universities. They will also provide the background informationneeded for the BHE.
Component Monitoring
12. Less EstablishedUniversities. The objective of this component is to improve the quality of S1 education in six of the less establisheduniversities. At the university level, the Rector will establish (1) a Local Project ImplementationUnit which will be responsible for project implementationand monitoring,and (2) a Task Force whose responsibilitywill be to gather information on established baseline indicators. The LPIU will prepare semi-annual and annual reports on the indicators cited as well as any problems that might have been encountered and actions to ameliorate them. These reports will be submitted to the Education Secretariat CPCU of the Board of Higher Education
13. As presented in the SAR, two sets of indicatorswill be used (paras. 3.24 - 3.26). The first will consist of those which can be measured in the short-run: the Secondary School Leaving Examination score of incoming students, student GPA, results on the UMPTN, Annex 8 -83- Page 4 of 9 change in teaching practices, the proportion of civil works completed and the proportion of goods procured. The second, which are long-termin nature, will be based on the results of a tracer study and the establishedbaseline indicators. These are outlined in the accompanying grid. In addition to the generic set of indicators,process indicators for each institution will be individually determined will be determined on a case by case basis and be linked to specific proposals.
14. Board of Higher Education. The DGHE will assign a technical auditing tearn to monitor the activities of the BHE and the CPCU on an annual and semi-annual basis using the indicators in Table 1.
15. National Accreditation Board. The CPCU will monitor the BAN. Annual monitoringof establishedbaseline indicatorswill occur INDONESIA Higher Education Support Project: Development of Undergraduate Education
Key Performance Indicators
Project Objectives Key Performance Baseline Mid-term Completion' Indicators Year Outputs To improve in six selected universities:
a)quality a) Improve quality: i. Increase in the mean X X + 5% X + 10% BT score of students3 ii. Increase in the mean Y Y + 2% Y + 5% UMPTN score
b)efficiency b) Improve efficiency: 5.75 years 5.5 years 5.25 years decrease in the time required to graduate
c) relevance c) Improved relevance: Z Z - I months Z - 3 months Decrease in the mean job search time of graduates
CPQ
3tt~000 x
3BTis the BenchmarkcTest developedfor thisproject. The BT willalso be givento secondand third year studentsto measurequality improvement. Project Objectives Key Pertormance Indicators Baseline Year Mid-Term Completion Inputs To ensure the project is a) Deviation from planned carried out as planned disbursements b) Satisfactory technical audit at each university4 c) Satisfactory technical audit for the BHE and the BAN. d) Satisfactory technical audit of the Competitive Domestic Fellowships e) Ratio of students accepted to students applied
00
~O00
4Processindicators and baselines to bedetermined for eachuniversity, based on their pre-proposals, aswell as the BHE and BAN. SUPERVISION MATRIX UPDATED AS OF:_ Project Component Baseline Target Present status Comments Less Established Universitiess Component Objective:To improve the quality Input Indicators of SI education in six less established I . Student GPA universities 2. Incomingstudent's score on National Entrance Examination 3. Cycle cost per graduate 4. Institutionalstrategy plan developed To be established at Process Indicators Baselinesto be To be negotiations 1. Percent of proposed civil works determined and will determined after completed correspond to establishment of 2. Percent of proposed goods procured individual proposals baselines 3. Percent of faculty and staff participating in training and receiving fellowshipsand grants in the selectedprograms 4. Proportion of students enrolled in S&T and engineering relative to baseline enrollment 5. Employmenttracer study of graduates conducted (recommend annually)
Output Indicators I. Decrease in dropout and repetition tracer study rates should be on- 2. Proportionof students ranking going university as first school of choice (recommended 3. Job search time for graduates annually) 4. Duration of study Board of Higher Education It is Component Objective: To assist the DGHE in 0 Input Indicators recommended overseeing the higher education system, to a 1. Decree establishedand BHE that the BHE provide policy advice, and to recommend and promulgated meet four times review university funding proposals. x 2. Membershipappointed annually o 00
5 Baselineand target indicators should be filledin by the LPIUsof the selecteduniversities based on theirfinal proposals. Project Component Baseline Target Present status Comments Process Indicators It is 1. Secretariat establishedand recommended functioning that 2. Frequency of Board meetings Commissions 3. Frequency of Commissionmeetings meet at least 4 times annually Output Indicators 1. Production of a long term plan for the higher education sector 2. Number of proposals submitted for review 3. Number of programs approved 4. Time elapsed between submitting a proposal and approval of funding 5. Percent of programs funded in national priority areas * Science * Engineering * Management * Accountancy __ The National AccreditationBoard Component Objective:To strengthen quality (BAN! assurance mechanismswithin the higher Input Indicators education sub-sectorthrough establishingan 1. Decree established and BAN-PT accreditation system for both public and private promulgated institutions. Process Indicators 1. Membersappointed Law No. 2/1989 of the National Education 2. Secretariatestablished and System requires the establishmentof the functioning National Accreditation Board. Decree No. 3. Peer review committeesestablished 0236/U/1994 establishedthe Board and Decree 4. Frequency of Board meetings No. 02371U/1994appointed the Chair, the 5. Accreditationrequirements for Secretary and all the members. programs, faculties and institutions 6. Pilot accreditation program CD completed Pilot accreditation program initiated and 0 completed on 15 programs in medicine and law. °x Output Indicators ,o0oo 1. Number of accreditation decisions made 2. Proportionof the number of faculties, programs and universities Project Component Baseline Target Present status Comments reviewed to the total number of faculties,programs and universities Increase in the seeking review mean score on 3. Mean score of applicants on the the National National Entrance Examination. Entrance Examinationby 10% CompetitiveDomestic Fellowship I. GOI to conduct a study of current By the end of remunerationand incentive the first year, the structures for teaching staff and the study should be role played by fellowships. completed and results analyzed to determine efficacy of this type of fellowship __component. I
x0
xO000 -89- Annex 9 Page 1 of 2
Indonesia Higher Education Support: Development of UndergraduateEducation
Supervision Plan Timing Mission Mission Purpose Team Composition Duration (Staff Weeks [SW]) (Weeks)
July 1996 2 Reviewthe plansfor firstyear Educationplanner (4 SW) implementationincluding Economist(3 SW) * ProjectLaunch Workshop ImplementationSpecialist * Plans for data collection,staff (4 SW) developmentand trainingfor the BAN- OperationsOfficer 2(3 SW) PT Total= 14 SW Plans for projectmanagement by the BHE - Plansfor universitydevelopment Plansfor the fellowshipcomponent Site visitsto 3 or 4 of selecteduniversities January1997 2 ImplementationSpecialist (4 Review: SW) Procurementand processingof contracts Educator(4 SW) - Monitoringand evaluationplans OperationsOfficer (3 SW) (includingresults of benchmarkexam Total= 11 SW and initialbaseline surveys) - Equipmentprocurement for universities - Availabilityand channelingof funds - Monitoringof fellowshipprogram Site visitsto remaining3 or 4 selected universities
June 1997 2 Reviewand discussthe annualplans and Educationspecialist (4 SW) report;carry out post-reviewof contracts. ImplementationSpec . Reviewproject expenditures, implementation (2 SW) progress,annual plans for BHE,BAN-PT, OperationsOfficer (3 universitiesand statusof fellows. Updateon Total= 9 SW performanceindicators November1997 2 ImplementationSpecialist Reviewprocurement plans, processingof (4 SW) contracts,availability of funds,project EducationSpecialist (2 SW) management.Update data on indicators.Site OperationsOfficer (3 SW) visits. Total= 9 SW
May 1998 2 Evaluateresults of mid-termbenchmark test. EducationSpecialist (4 SW) Updatedata on indicators.Mid-term review Economist(4 SW)
ImplementationSpecialist expected to beresident in Indonesia(RSI) 2 TheOperations Officer resident at RSIwill carry out post-mission follow-up/problem resolution, and assist in issuesrelated to localprocurement and SOE review. -90- Annex 9 Page 2 oT2
of procurementand projectexpenditures, OperationsOfficer (4 SW) trainingactivities, assessment of universities Total= 12 SW Sitevisits Educationspecialist (4 SW) November1998 2 Reviewprocurement plans, processing of Economist(2 SW) contracts,availability of funds,project OperationsOfficer (3 SW) management.Update data on indicators. Total = 9 SW
May 1999 2 Reviewand discussannual plans; Update EducationSpecialist (4 SW) data on indicators.Evaluate project ImplementationSpecialist management (4 SW) OperationsOfficer (I SW) Total = 9 SW November1999 2 Reviewimplementation procedures including:data collection, staff development, EducationSpecialist (4 SW) BAN-PT,BHE and universities;update ImplementationSpecialist indicators. (4 SW) Sitevisits to 3 or 4 of selecteduniversities OperationsOfficer (I SW) Total= 9 SW
May2000 2 Field Visits;Review and discussannual EducationSpecialist (4 SW) plans;Review project expenditures and Economist(2 SW) disbursement;training activities; monitoring OperationsOfficer (4 SW) and evaluationresults; final benchmark test; Total= 10 SW qualityimprovement at less established universities November2000 2 Preparefor ICR. Sitevisits Educationspecialist (4 SW) Finalreview of: Economist(4 SW) Procurementand projectexpenditures ImplementationSpecialist trainingactivities (4 SW) accreditationmechanisms OperationsOfficer (3 SW) evaluationof less establisheduniversities Total - 15 SW BHE Fieldvisits to all. CompleteICR INDONESIA Higher Education Support Project: Developmentof Undergraduate
Technical Assistance Summary
Estimated Cost Type of TA/ Activity Purpose/Objective Implementing Total Person- Status of TOR (Date) Short List (Dakt) Standard Contract Responsibility Agencies/Units (USS'000) Month Prepared Expected Prepared Expected Prepared (Y/N) for Supervision
A. Institutional Capacity Building
1. Visiting Scholars Provide academic LPIU 3,300 Nov. 1996 Jan. 1997 Mar. 1997 Yes RSI expertise
B. Implementation Support
1. Auditors (BHE) Perform technical CPCU 170 10 (1)* Mar. 1997 June 1997 Sept. 1997 No HQ audit of BHE
2. Auditors (BAN) Perform technical CPCU 170 10 (1)* Mar. 1997 June 1997 Sept. 1997 No HQ audit of BAN
C. Policy Support
1. Training Specialist Support CPCU 655 144 (L)* April 1997 July 1997 Nov. 1997 Yes RSI development of the New Paradigm
* These person-months figures are indicative only I = International L = Local Indonesia Development Undergraduate Education Project Cost Sumary
% I Total (Rn. Million) (USS '000) Foreign Base Local Foreain Total Local Foreign Total Exchange Costs
I. Investment Costs A. Civil Works 770.4 330.2 1,100.5 343.0 147.0 490.0 30 1 B. Equipment 451.0 1,633.3 2,084.3 200.8 727.2 928.0 78 1 C. Degree Training 2. Domestic Fellowship Master Programs 20,052.3 2,228.0 22,280.3 8,928.0 992.0 9,920.0 10 11 D. Non Degree Training Overseas 786.1 3,144.4 3,930.5 350.0 1,400.0 1,750.0 80 2 Domestic 3.307.0 367.4 3.674.5 .472.4 163.6 1.636.0 10 2 Subtotal Non Degree Training 4,093.1 3,511.8 7,605.0 1,822.4 1,563.6 3,386.0 46 4 E. Technical Assistance Overseas 168.0 672.0 840.0 74.8 299.2 374.0 80 - Domestic 1.809.6 201.1 2.010.6 805.7 89.5 895.2 10 1 Subtotal Technical Assistance 1,977.6 873.1 2,850.6 880.5 388.7 1,269.2 31 1 G. Studies 2,515.5 628.9 3,144.4 1,120.0 280.0 1,400.0 20 2 I. Universities Grants 61,124.2 81,025.1 142,149.3 27,214.7 36,075.3 63,290.0 57 69 J. Project Management 1. CPIU Honoraria 783.3 - 783.3 348.8 - 348.8 - - Consumables 400.2 44.5 444.7 178.2 19.8 198.0 10 - Travel 444.7 - 444.7 198.0 - 198.0 - - Operation and Maintenance - 9.672.72712.S2.7 1.19. - 1.190.0 -1 Subtotal CPIU 4.301.0 44.5 4.345.4 1.915.0 19.8 1.934.8 1 2 Total Investment Costs 95,285.0 90,274.9 185,559.9 42,424.3 40,193.6 82,618.0 49 90 II. Recurrent Costs A. Operational Cost for Secretariat Honoraria 2,311.8 - 2,311.8 1,029.3 - 1,029.3 - 1 Consumables 1,394.8 155.0 1,549.7 621.0 69.0 690.0 10 1 Travel 4,346.0 - 4,346.0 1,935.0 - 1,935.0 - 2 Operation and Maintenance 12.760.6 - 12.760.6 5.s.,.l.-81.5 - - 5.61.5 - 6 Total Recurrent Costs 20.813.2 155.0 20.968.2 9.266.8 69.0 9.335.8 1 10 Total BASELINE COSTS 116,098.3 90,429.8 206,528.1 51,691.1 40,262.6 91,953.8 44 100 Physical Contingencies 1,942.3 2,578.1 4,520.4 864.8 1,147.9 2,012.7 57 2 Price Contingencies 13.999.4 4.208.0 18.207.4 6.233.0 1.873.6 8.106.6 23 9 Total PROJECT COSTS 132,040.0 97,216.0 229,256.0 58,788.9 43,284.1 102,073.0 42 111
- a o X 0 _ Indonesia Development Undergraduate Education Expenditure Accounts by Components - Base Costs (us$ '000)
Impl. of Competitive Universities Institutional National Domestic Physical Development Capacity Accreditation Fellowship Project Contingencies Program Bldg. in HE System for HE Program Management ITotal t. Amount
I. Investment Costs A. Civil Works - 105.0 280.0 - 105.0 490.0 10.0 49.0 B. Equipment - 420.0 338.0 - 170.0 928.0 7.0 65.0 C. Degree Training 2. Domestic Fellowship Master Programs - - - 9,920.0 - 9,920.0 - - D. Non Degree Training Overseas - 750.0 1,000.0 - - 1,750.0 - - Domestic - 1.396.0 240.0 - - 1.636i 0 - - Subtotal Non Degree Training - 2,146.0 1,240.0 - - 3,386.0 - - E. Technical Assistance Overseas - 204.0 170.0 - - 374.0 - - Domestic - 655.2 - - 240.0 895.2 - - Subtotal Technical Assistance - 859.2 170.0 - 240.0 1,269.2 - - G. Studies - 1,400.0 - - - 1,400.0 - - I. Universities Grants 63,290.0 - - - - 63,290.0 3.0 1,898.7 J. Project Management 1. CPIU Honoraria - - - 348.8 348.8 - - Consumables - - - - 198.0 198.0 - - Travel - - - - 198.0 198.0 - - Operation and Maintenance - - - - 1.190.0 1.190A 0 - - Subtotal CPIU - - - 1.9348 1934.8 - - Total Investment Costs 63,290.0 4,930.2 2,028.0 9,920.0 2,449.8 82,618.0 2.4 2,012.7 II. Recurrent Costs A. Operational Cost for Secretariat Honoraria - 366.3 663.0 - - 1,029.3 - - Consumables - 330.0 360.0 - - 690.0 - - Travel - 285.0 1,650.0 - - 1,935.0 - - Operation and Maintenance - 412.0 5.269.5 -5,681.5- - - - Total Recurrent Costs - 1.393.3 7.942.5 - - 9.335.8 - - Total BASELINE COSTS 63,290.0 6,323.5 9,970.5 9,920.0 2,449.8 91,953.8 2.2 2,012.7 Physical Contingencies 1,898.7 39.9 51.7 - 22.4 2,012.7 - - Price Contingencies 4.870.6 591.0 1.092.5 1.197.9 354.6 8.106.6 L1.8 .143.5 Total PROJECT COSTS 70,059.3 6,954.4 11,114.6 11,117.9 2,826.8 102,073.0 2.1 2,156.1
Taxes 4,203.6 87.4 97.9 - 48.6 4,437.5 3.0 133.0 tJ C Foreign Exchange 38,867.1 1,738.9 1,406.1 1,041.5 230.4 43,284.1 2.8 1,198.6 0 Indonesia Development Undergraduate Education Expenditure Accounts by Components - Totals Including Contingencies (US$ '000)
Impl. of Competitive Universities Institutional National Domestic Development Capacity Accreditation Fellowship Project Program Bldg in HE System for HE Program Management Tot.alK
I. Investment Costs A. Civil Works - 116.2 309.9 - 116.2 542.2 B. Equipment - 459.2 367.1 - 186.7 1,013.0 C. Degree Training 2. Domestic Fellowship Master Programs - - - 11,117.9 - 11,117.9 D. Non Degree Training Overseas - 792.2 1,052.8 - - 1,845.0 Domestic - 1.482.1 262.1 - - 1,744.2 Subtotal Non Degree Training - 2,274.3 1,314.9 - - 3,589.2 E. Technical Assistance Overseas - 219.5 180.1 - - 399.5 Domestic - 702.5 - - 282.9 9852 4 Subtotal Technical Assistance - 922.0 180.1 - 282.9 1,384.9 G. Studies - 1,557.7 - - - 1,557.7 I. Universities Grants 70,059.3 - - - 70,059.3 J. Project Management 1. CPIU Honoraria - - - - 411.0 411.0 Consumables - - - - 231.1 231.1 Travel - - - - 233.5 233.5 Operation and Maintenance - - - - 1.365.4 1365.4 Subtotal CPIU - - - - 2.241.0 2L241.0 Total Investment Costs 70,0P9.3 5,329.3 2,171.9 11,117.9 2,826.8 91,505.3 II. Recurrent Costs A. Operational Cost for Secretariat Honoraria - 432.1 740.0 - - 1,172.1 Consumables - 385.2 399.0 - - 784.2 Travel - 328.6 1,860.7 - - 2,189.3 Operation and Maintenance - 479 2 5,943.0 - - 6,422.2 Total Recurrent Costa - 1 625.0 8.942 7 - - 10 567 7 Total PROJECT COSTS 70,059.3 6,954.4 11,114.6 11,117.9 2,826.8 102,073.0
Taxes 4,203.6 87.4 97.9 - 48.6 4,437.5 Foreign Exchange 38,867.1 1,738.9 1,406.1 1,041.5 230.4 43,284.1 Indonesia Development Undergraduate Education Expenditure Accounts by Years (US$ '000)
Base Cost Foreign Exchange 1QQ6 1997 1998 1999 2000 2001 2002 Total t Amouint I. Investment Costs A. Civil Works 490.0 ------490.0 30.0 147.0 P. Equipment 728.0 - - 200.0 - - - 928.0 78.4 727.2 C. Degree Training 2. Domestic Fellowship Master Programs - 2,000.0 4,000.0 2,960.0 960.0 - - 9,920.0 10.0 992.0 D. Non Degree Training Overseas - 700.0 525.0 450.0 75.0 - - 1,750.0 80.0 1,400.0 Domestic 420.0 536.0 536.0 86.0 52.0 6.0 ------1.636.0 10.0 1634.6 Subtotal Non Degree Training 420.0 1,236.0 1,061.0 536.0 127.0 6.0 - 3,386.0 46.2 1,563.6 E. Technical Assistance Overseas 68.0 68.0 68.0 68.0 68.0 34.0 - 374.0 80.0 299.2 Domestic - 372.6 372.6 45.0 45.0 45.0 15.0 895.2 10.0 89.5 Subtotal Technical Assistance 68.0 440.6 440.6 113.0 113.0 79.0 15.0 1,269.2 30.6 388.7 G. Studies 50.0 490.0 360.0 160.0 260.0 60.0 20.0 1,400.0 20.0 280.0 I. Universities Grants 4,490.0 17,300.0 20,620.0 11,900.0 6,340.0 2,640.0 - 63,290.0 57.0 36,075.3 J. Project Management 1. CPIU Honoraria 18.0 63.0 63.0 63.0 63.0 63.0 15.8 348.8 - Consumables - 9.0 36.0 36.0 36.0 36.0 36.0 9.0 198.0 10.0 19.8 Travel 9.0 36.0 36.0 36.0 36.0 36.0 9.0 198.0 - - Operation and Maintenance 2.0 160.0 .. 20.0 - 1600Q 210.0 160.0 35.0 1190.0 Subtotal CPIU - - 291.0 2 345.0 4 5 68.8 1.934.8 1.0 198 Total Investment Costs 6,537.0 21,761.6 26,826.6 16,164.0 8,145.0 3,080.0 103.8 82,618.0 48.6 40,193.6 II. Recurrent Costs A. Operational Cost for Secretariat Honoraria 149.3 199.2 199.2 199.2 199.2 66.6 16.7 1,029.3 - Consumables - 87.0 132.0 132.0 132.0 132.0 60.0 15.0 690.0 10.0 69.0 Travel 267.9 344.4 416.4 479.4 389.4 30.0 7.5 1,935.0 - - Operation and Maintenance 775.5 1.022.0 1.229.5 1437.0 1,.146.5 58.0 13.0 5.681.5L------Total Recurrent - Costs 1.279.7 1.697.6 1.,977.161.11224.6 1,866.1 52.2 9.335.8 0.7 69.0 otal BASELINE COSTS 7,816.7 23,459.2 28,803.7 18,411.6 10,012.1 3,294.6 155.9 91,953.8 43.8 40,262.6 Physical Contingencies 234.7 519.0 618.6 3-1.0 190.2 79.2 - 2,012.7 57.0 1,147.9 Price Contingencies 43.4 766.0 2.267.7 2.381.3 1.855.0 737.6 55.6 8.106.6 23.1 1.873.6 Dtal PROJECT COSTS 8,094.7 24,744.2 31,690.0 21,163.9 12,057.3 4,111.4 211.5 102,073.0 42.4 43,284.1 Taxes 408.1 1,115.9 1,378.3 854.9 470.5 206.8 2.9 4,437.5 - - Foreign Exchange 3,531.2 11,378.9 13,719.4 8,465.5 4,384.7 1,795.3 9.0 43,284.1 - - cqh
Co Indonesia Development Undergraduate Education Expenditure Accounts by Years (US$ '000)
Totals Including Contingencies 1996 1997 1998 1999 2000 2001 2002 Total
I. Investment Costs A. Civil Works 542.2 ------542.2 B. Equipment 781.8 - - 231.2 - - - 1,013.0 C. Degree Training 2. Domestic Fellowship Master Programs - 2,085.4 4,406.4 3,445.3 1,180.7 - - 11,117.9 D. Non Degree Training Overseas - 716.5 554.2 490.0 84.3 - - 1,845.0 Domestic 42.30 558.9 590.5 100.1 64.0 L744.27.8 1- Subtotal Non Degree Training 423.0 1,275.4 1,144.7 590.1 148.2 7.8 - 3,589.2 E. Technical Assistance Overseas 68.3 69.6 71.8 74.0 76.4 39.4 - 399.5 Domestic - 388.5 410.5; 52.4 55.3 58.5 20.2 98r.4 Subtotal Technical Assistance 68.3 458.1 482.2 126.4 131.7 97.9 20.2 1,384.9 G. Studies 50.3 509.6 394.2 184.5 315.8 76.8 26.4 1,557.7 I. Universities Grants 4,646.8 18,333.1 22,690.4 13,601.6 7,529.2 3,258.4 - 70,059.3 J. Project Management 1. CPIU Honoraria 18.1 65.9 69.8 74.0 78.4 83.2 21.6 411.0 Consumables 9.1 37.5 39.6 41.9 44.2 46.7 12.1 231.1 Travel 9.1 37.6 39.9 42.3 44.8 47.5 12.3 233.5 Operation and Maintenance 256.9 167.3 232.7 187.9 261.5 .a211.2 47.9 1.365.4 Subtotal CPIU 293.2 308.3 382.1 346.1 429.0 388.6 93.9 2.241.0 Total Investment Costs 6,805.5 22,969.9 29,500.0 18,525.3 9,734.7 3,829.5 140.5 91,505.3 II. Recurrent Costs A. Operational Cost for Secretariat Honoraria 150.4 208.3 220.7 234.0 248.0 87.9 22.8 1,172.1 Consumables 87.6 137.6 145.3 153.5 162.2 77.9 20.1 784.2 Travel 269.9 360.1 461.4 563.1 484.9 39.6 10.3 2,189.3 operation and Maintenance 781.3 ..1..0.4A 1.36J2.5 1.688.0 1.427.6 76.6 17.8 6.422.2 Total Recurrent Costs 1.289.2 1.774.4 .2.120.0Q 2.638.6 2.322.6 281.9 71.0 10S.67.7 Total PROJECT COSTS 8,094.7 24,744.2 31,690.0 21,163.9 12,057.3 4,111.4 211.5 102,073.0
CD o X -a- Indonesia Development Undergraduate Education Project Components by Year (US$ '000)
Ba&E Cost 1996 1997 198 1999 _ 2000Q 2001 -2022- To2tal--
1. Universities Development Program 4,490.0 17,300.0 20,620.0 11,900.0 6,340.0 2,640.0 - 63,290.0 2. Institutional Capacity Bldg. in HE 949.2 1,904.2 1,699.2 746.6 637.6 314.6 72.2 6,323.5 3. Impl. of National Accreditation System for HE 1,861.5 1,915.0 2,094.5 2,415.0 1,684.5 - - 9,970.5 4. Competitive Domestic Fellowship Program - 2,000.0 4,000.0 2,960.0 960.0 - - 9,920.0 5. Project Management 516.0 340.0 390.0 390.0 390.0 340.0 83.8 2.4499. Total BASELINE COSTS 7,816.7 23,459.2 28,803.7 18,411.6 10,012.1 3,294.6 155.9 91,953.8 Physical Contingencies 234.7 519.0 618.6 371.0 190.2 79.2 - 2,012.7 Price Contingencies 43.4 766.0 2.267.2 2.381.3 12iSS0 737.6 55.6 8.106.6 Total PROJECT COSTS 8,094.7 24,744.2 31,690.0 21,163.9 12,057.3 4,111.4 211.5 102,073.0
Taxes 408.1 1,115.9 1,378.3 854.9 470.5 206.8 2.9 4,437.5 Foreign Exchange 3,531.2 11,378.9 13,719.4 8,465.5 4,384.7 1,795.3 9.0 43,284.1
Indonesia Development Undergraduate Education Project Components by Year (US$ '000)
Totals Includina Contingencies 1996 1997 1998 1999 2000 21 2002 Ttal
1. Universities Development Program 4,646.8 18,333.1 22,690.4 13,601.6 7,529.2 3,258.4 - 70,059.3 2. Institutional Capacity Bldg. in HE 987.6 1,978.3 1,858.8 854.7 771.6 405.9 97.4 6,954.4 3. Impl. of National Accreditation System for HE 1,922.2 1,992.2 2,302.7 2,806.0 2,091.5 - - 11,114.6 4. Competitive Domestic Fellowship Program - 2,085.4 4,406.4 3,445.3 1,180.7 - - 11,117.9 5. Project Management 538.2 355.2 431. 456.3 484.3 447.1 114.0 2.826.8 Total PROJECT COSTS 8,094.7 24,744.2 31,690.0 21,163.9 12,057.3 4,111.4 211.5 102,073.0
o X 0'Ne Annex 12 -98- Page-1 of 1
INDONESIA Higher EducationSupport Project: Developmentof UndergraduateEducation
Estimated Scheduleof Disbursements
IBRD fiscal year Amount per Cumulative Disbursement Profile a/ and semester semester amount (%) ------(US$ million)------%
FY97 1 3.0b/ 3.0 5 0 2 2.0 5.0 8 0
FY98 1 4.5 9.5 15 3 2 4.5 14.0 22 6
FY99 1 5.5 19.5 30 10 2 5.5 25.0 38 22
FY 00 1 6.0 31.0 48 34 2 6.0 37.0 57 42
FY01 1 6.0 43.0 66 54 2 6.0 49.0 75 66
FY02 1 6.0 55.0 85 74 2 6.0 61.0 94 82
FY03 1 4.0 65.0 100 90
Project Completion Date: March 31, 2002 Project Closing Date: September 30, 2002 a/ Latest standard disbursement profile for education projects in Indonesia (1995) b/ An estimated initial deposit to the Special Account -99- Annex 13 Page 1 of 6 INDONESIA Higher EducationSupport Project: Developmentof UndergraduateEducation TechnicalAudit Terms of Reference
To ensure the accountability to the Government, the World Bank, the academic community, and the general public, a technical audit of the various project components would be conducted annually. The technical audit would be carried out by an independent consultant with no associationwith the project and possessingspecialists with expertise in (i) management and award of development grant programs; (ii) university administration and finance; and (iii) university accreditation. The goal of the technical audit is to provide an independent and impartial assessment of the quality and adequacy of procedures and processes employed by the seven beneficiary universities and the BHE Secretariat. The technical audit will be used as a tool to improve managementof the DUE project and will complement both the university-levelauditing practices and the monitoring and evaluation carried out by the BHE Secretariat.
The objective of the technical audit is to ensure that the proposal review and selection process carried out by the BHE Secretariat as well as program implementation,are in compliance with its policies and operating guidelines and terms contained in the Guidelines for Full Proposal submission.The audit should also ensure that the grantees are undertaking activities in compliancewith grant agreements and award conditions.
Scope of Work and Procedures Scope:
1. Evaluation of selection procedures and results, award procedures and results and program implementationfor the seven university grants initiatedduring 1996/97. 2. Review of all university grants 3. Assessment of the effectivenessand efficiency of the BHE Secretariat in implementing its responsibilitiesfor the DUE project. 4. Assessment of the effectiveness,efficiency and timelinessof the BAN in accrediting tertiary education institutionsand study programs. 5. Evaluation of selection and award proceduresunder the graduate fellowship program.
Procedure:
1. Broad summary review of compliance with selection procedures and a check of all documentationrequired for award; and 2. Site visits to check (a) physical reality against the most recent report submitted to the BHE Secretariat; and (b) compliancewith procurementrequirements.
Location
1. Beneficiary Universities: TO BE DETERMINED 2. BHE Secretariat Jakarta 3. BAN Secretariat Jakarta -100- Annex 13 Page 2 of 6
The selected seven universities
Contracting Body for the Audit
Project ImplementationUnit Department Pendidikan dan Kebudayaan Developmentof UndergraduateEducation Project/DUE Gedung C Lantai 18, Depdikbud Jalan Jenderal Sudirman Senayan, Jakarta Pusat Kotak Pos 4920/JKP 10049
SupportingData
WORLD BANK Documentation: -Staff Appraisal Report -ProcurementGuidelines
BHE Secretariat Documentation: -Annual Report Fiscal Year 1996/97 -Proposal and other material provided by the beneficiary Institution
BAN SecretariatDocumantation: -Annual Report Fiscal Year 1996/97
Expected Outcomeand Duration
A draft report should be submitted to the PIU for review and comments not later than five months after commencementof project activities and a final report not later than six months after commencement of project activities. The audit shall commence not later than April 1, 1997.
Descriptionof Tasks
Five distinct tasks would be carried out as part of the technical audit: (1) audit of selection documentationand award procedures and results for the university development grants and examination of program implementation; (3) examination of grant implementation; (4) assessment of efficiency and effectiveness of the BHE Secretariat; (5) audit of selection documentationand award procedures and results for the domestic fellowships program; (6) assessment of efficiency and effectiveness of the BAN, including review of criteria and procedures applied in accrediting institutions;and (6) preparationof the final report. -101- Annex 13 Page 3 of 6
L Audit of Selection documentationand award procedures(University Grants)
This represents the first stage of the audit. For each beneficiary institution, the Team shall verify that:
1. proposal review and selectiondocuments were consistent with BHE's operating guidelinesand in line with the Guidelinesfor Proposal Submission. 2. documentationfor each university was adequate and accessible. This will include documentationrelating to informationflow between relevant parties, for recommendationor decision at each required stage. 3. the required review and selection processes were adequately undertaken for each university in a manner consistent with available information. Any departure from this practice should have a documentedexplanation. 4. operating guidelines of the BHE Secretariatwere not violated 5. Peer reviewers were involved at all relevant review steps.
]L Examination of Program Implementation
Program implementationis conducted by the Secretariat and the DUE project staff, and consists of a number of activities. The second stage of the Technical Audit is limited to an examination of (i) progress reports and site visits of beneficiary institutions, and (ii) documentationof program monitoringand evaluation.
For each beneficiary institution visited, the Team will identify specific elements of the reported progress or activities that should be verified during the site visit. Specific elements to be audited at each university will depend on the contents of the individual institution's proposals. These elements will be added to the general items listed in III below. Prior to conducting site visits, the Team shall obtain documents describing the monitoring and evaluation activities carried out by the appropriatestaff, in conjunctionwith World Bank mission or separately, as appropriate. Significant actions taken by the-BHE Secretariat or DUE CPIU staff resulting from monitoring and evaluation activities should be followed up during the site visits as well.
ImL Examination of Grant Implementation
Grant implementation under the DUE project is carried out by beneficiary institutions through the activities specified in the terms of their grant agreement and the contract between the CPIU and LPIU at the beneficiary university. The Team shall visit all beneficiary institutions. The purpose of the site visits is to confirm that expenditures and related financial procedures are being executed according to the terms of the grant agreement. In addition, the Team shall seek to verify that reported activities and progress can be sustained.
To conduct this portion of the audit, the Team should prepare site visit procedures to address the specific items in Parts III-A and Ill-B below. .-102- Annex 13 Page 4 of 6
To tailor the procedure to each site being visited, the Team will also incorporate elements identified in Part II above. Thus, each site visit will have a common core, with award specific items added to extend the utility of the visit.
A. Conformance with terms and conditions of grant agreement. For each award, the Team shall evaluate the appropriateness,efficiency, and/or adequacyof the following:
1. Procurementprocedures and documentation 2. Funds expended accordingto budget; permissionrequired from the BHE Secretariat to modify spending beyond 10% fungeability ceiling. 3. Major procurementand hirings occurred according to schedule
B. Verification of activities reported in progress reports. For each grant award, the Team shall summarize the available evidence regarding the consistency between reported activities and those observedduring the site visit:
1. Personnelare performing the reported tasks and at the reported level of effort. 2. Equipmentand instrumentationimportant for execution of grant activities are being used as reported and at the reported rates.
IV. Assessment of Efficiencyand Effectivenessof the BHE Secretariat
The Team shall review all findings from Parts I-III and prepare a statement summarizing the efficiency and effectiveness with which the BHE Secretariat selected beneficiaries, made awards, and monitored and evaluated the implementationof the university grants under the DUE project. In addition, the Team shall also examine whether:
I . Personnel are performingthe reported activities and at the reported level of effort; 2. Equipment and facilities available for the BHE Secretariat operations are adequate, as well as being used as rcported and at the reported rates.
This section of the audit should focus on the performance of proposal selection and awarding, and program monitoring and evaluation. It should not focus on the technical details of other functions of the BHE Secretariat. When appropriate,the audit statement shall also include recommendations for improvement of the BHE Secretariat in relation to the DUE project.
V. Audit of Selection Documentsand Award Procedures(Domestic Graduate FellowshipsProgram)
For each program beneficiary, the Team shall verify that:
1. Review a random selectionof applicationsand other documents for consistency with the program's selection criteria and applicationrequirements; 103 103 ~~~~~AnnexPage 5 of13 6
VI. Assessmentof Efficiency,Effectiveness and Timelinessof the BAN
The Team shall review the processes and criteria used by the BAN to evaluate institutions and study programs for the purpose of accreditation and prepare a statement summarizingthe efficiency, timeliness and effectivenesswith which the BAN carried out its tasks as an accreditation body. In addition, the Team shall also examine whether:
1. Staff of the BAN is performingthe reported activities and at the reported ;level of efforts; 2. Accreditationis granted only upon the conduct of all necessary assessments by the BAN; and 3. Accreditationis awarded after an institutionor a program has complied with the minimum criteria.
VII. Preparationof the Final Report
The Team will prepare a final report at project completion. The confidential report is intended for dissemination to the DUE project staff and World Bank staff. It shall contain detailed summaries for each development program at the selected universities and a of review of: i) documentation of selection and award procedures for the university development grants; ii) grant implementation;iii) implementationof the domestic graduate fellowship program; iv) and an assessment of the BAN's performance in conducting accreditation. This report should also contain the summary of BH-ES cretariat efficiency report in Part IV above.
ContractorIdentification and Qualification
The contractor must be an independent body with no association with the DUE project and must be able to assemble specialists with expertise in: i) management and award of development grant programs; and ii) university administrationand finance.
Qualificationsof members of the Team:
The members of them Team must have appropriate qualifications, and demonstrated expertise in one or more of the areas identified above.
Requirements
1. Submit a signed curriculumvita, legalized by supervisor(except as freelance), and a copy of diploma 2. Submit a letter of acceptanceto act as a member of the Team on a legal paper. 3. No other job commitmentduring the period of the contract. 104 Annex 13 Page 6 of 6 The Contract
A contract will be signed between the CPIU and the selected audit team and be in effect from April 1, 1997 to October 1, 1997. The contract will be extended for the duration of the project upon successfulcompletion of the first six month period. -105 - Annex-14 Page I of I
Indonesia HigherEducation Support Project:Development of UndergraduateEducation
Selected DocumentsAvailable in the Proiect File
1. Project Proposal Document
2. Project ImplementationPlan
3. Sixteen(16) Pre-proposalsfrom less establisheduniversities
4. Ten full proposals
5. Asian DevelopmentBank studyon Private HigherEducation in Indonesia
6. Tracer study of University Graduates in Indonesia a
7. Employer Survey a
8. Study on The Effectiveness of the Overseas and In-Country Fellowship Program
9. Private University Development Strategy, Final Report Draft a
10. Unit Cost of Education, Final Report a
11. Financing Higher Education in Indonesia: Issues for Strategy and Reform a
12. A draft study entitled Labor Marketsfor D3 and SI Graduates '
13. Terms of Referencefor the NationalAccreditation Board (BAN)
14. Guidelines and Procedures for Accreditation (BorangAdreditasi Program Studi and Pedoman Cara Penilaian Akreditasi Program Studi).
15. Model Grant Agreementbetween the CPCU and the LPIU.
Note: Indicatesa studycommissioned for theproject INDONESIA I)EVELOPMENT 1OFUNDERGRADUATE EDUCATI ON P'ROJECTI ORGANIZAT IONAL DIAGRAM AccreditationiRestilt |Nationall Director GeneralofAcrdtioBad HglgherEducation* Advisoty
DirectorateFor Directoratefor AcademicAffairs Research and Community Service
BHE Secretariat Board for HigherEducation
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IMAGING
Report No: 15498 IND Type: SAR