Administration, steering and funding of universities of applied sciences

Universities of applied sciences coming under the administrative branch of the Ministry of Education are owned by municipalities or private bodies. Operating licences for universities of applied sciences are granted by the Government. The operating licence contains provisions on the educational task of the university of applied sciences, its fields of study, and the number of students and locations.

Universities of applied sciences are self-governing in their internal matters. The internal administration of the universities of applied sciences is the responsibility of the board and the rector. The body maintaining the university of applied sciences decides on its budget and strategy.

Steering and assessment

Every four years, the Government adopts a development plan setting out its medium-term educational and research targets. In addition to the Government Programme, legislation and the strategies laid out in the educational and research development plan, performance management is also used to guide the operations of the universities of applied sciences.

The most important targets laid down in the national policy on higher education that the university of applied sciences should achieve are set out in a three-year performance agreement jointly prepared by the Ministry of Education, the university of applied sciences and the body maintaining the university of applied sciences. The agreement also contains provisions on the monitoring of the targets and the most important national development projects. There are separate yearly agreements on student intake and project funding.

The task of a university of applied sciences is to ensure that its educational and other offerings are of high quality, to develop them on a continuous basis and to take part in regular evaluations carried out by external parties. The university of applied sciences must publish the results of the evaluation it has organised.

Core funding, project funding and performance-based funding

The funding granted to universities of applied sciences by the Ministry of Education comprises core funding, project funding and performance-based funding. The Ministry also provides money for the universities of applied sciences’ joint expenses.

Core funding is intended to cover the operating expenses of the universities of applied sciences. The unit cost per student in each university of applied sciences is calculated on the basis of the number of students in different fields and the number of graduates during a two-year period. The unit cost is on a calculative basis depending on the intake and the number of students laid down in the performance agreement. The unit cost is calculated each year using the actual costs as a basis. Since 2006, the investments of the universities of applied sciences have no longer been provided with any separate funding. The operating costs and investments are treated equally by incorporating depreciations in the calculation basis of the unit cost.

Core funding of universities of applied sciences is part of the central government transfers to municipalities, which among other things means that municipalities contribute to the funding by providing a sum depending on the number of residents.

By granting project funding to universities of applied sciences, the Ministry of Education supports the implementation of the objectives laid down in the national policy on higher education and those of the universities of applied sciences themselves. The funding is directed at the most important development and network projects.

The Ministry of Education also grants universities of applied sciences performance-based funding each year. The funding acts as an incentive to the universities of applied sciences to make their operations more efficient, effective and economic and to improve their quality.

The Ministry of Education also provides funding for a number of operations and projects jointly run by all universities of applied sciences, such as the Finnish University and Research Network (FUNET).