The use of state funding in universities of applied sciences is mainly transparent. However, due to inadequate guidelines of the Ministry of Education and Culture, it is not possible to monitor compliance with the only funding condition. The Ministry should pay attention to adequate supervision and guidance.
The audit was targeted at the state funding granted for the activities of universities of applied sciences. The amount of state funding is largely determined on the basis of calculation criteria. There are 22 universities of applied sciences operating in the form of a limited liability company in the administrative sector of the Ministry of Education and Culture. The ones selected for the audit were the 13 universities of applied sciences that received the most core funding in 2023.
The Ministry of Education and Culture steers the activities of universities and universities of applied sciences with similar instruments. The funding model for core funding channelled through the Ministry is also similar for universities and universities of applied sciences. In 2023, the universities of applied sciences were granted approximately EUR 954 million in state funding.
According to the audit, the accountability of the universities of applied sciences is realised, but the Ministry of Education and Culture should pay more attention to adequate supervision and guidance. Many of the findings addressed in the audit report are the result of inadequate monitoring by the Ministry.
As regards an error the audit found in the funding criteria, the Ministry of Education and Culture has announced that it will take measures according to the Universities of Applied Sciences Act (932/2014). The measures are likely to lead to the returning of wrongly granted funding. There is only one condition for the use of state funding: the funding granted may not be used to support business activities. To make it possible to verify the implementation of this condition, the Ministry of Education and Culture should specify its guidelines. As regards external funding to research, development and innovation (RDI), the Ministry should be better aware of the types of activities that universities of applied sciences interpret as RDI activities.
The funding model for universities of applied sciences, which is still in use in 2024, offers universities of applied sciences opportunities for short-term benefits at the expense of the overall benefit. The funding model for 2025–2028 has partly addressed the current problems. The current funding model includes for example such elements that a university of applied sciences, by focusing on them, may have achieved short-term economic benefits, the competence benefits of which have not been targeted to the development of the Finnish working life. Publications and cooperation studies aimed at the general public also involve risks of partial optimisation. The Ministry of Education and Culture should react more quickly to the risks involved in the funding model in order to make it easier to verify the grounds for the use of the funding.
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