The Presidential Ordinance No. LI of 2002, under section 10(g) and (h) requires the Commission to submit to the Federal Government the financial requirements for recurring and development needs of public sector higher education institutions in Pakistan and approve funds for these institutions out of bulk grants received from the federal government each year. The Commission’s funding mandate as laid down in the said Ordinance is reproduced as under:
Section 10 (g):
Submit to the Federal Government the recurring and development budgets for public sector Institutions and allocate funds to public sector Institution out of bulk financial provision received from the government and other resources on performance and need basis.
Section 10 (h):
Review and examine the financial requirements of public sector Institutions: approve and provide funds to these Institutions on the basis of annual recurring needs as well as for development projects and research based on specific proposals and performance and while approving funds for a public sector Institution the Commission shall ensure that a significant proportion of the resources of the Institution are allocated to research support and libraries.
HEC started formula based funding from 2003-04 and is continuously refining it. The funding to higher education institutions is based on following general principles: