INTOSAI WORKING GROUP ON KEY NATIONAL INDICATORS Development of KNIs in Italy.

1. INTOSAI WORKING GROUP ON KEY NATIONAL INDICATORS Development of KNIs in Italy. A focus on the last Corte dei conti’s report on the University System Rome, 27 – 29 March 2018

2. The UN 2030 Agenda has set out 17 Sustainable Development Goals (SDGs) relating to various areas of critical importance for progress and prosperity. Their implementation involves all countries and all political and institutional stakeholders acting in collaborative partnership. The SDGs respond to the need to foster universal peace and freedom, to eradicate poverty in all its forms and dimensions, and to achieve substantial improvements, in terms of personal security, well-being and justice, in the three dimensions of sustainable development: the economic, social and environmental.

3. The SDGs indicators were developed through a political agreement in the global community to measure progress against its values, priorities and goals. On this basis, a number of SDGs indicators have been utilized in almost all the experiences developed in recent years at both the national and supranational levels. Italy played an important role in all phases of the negotiations that led to adopt the UN 2030 Agenda. It served as the vice-president of the preparatory Committee of the Rio Conference + 20 (held in Rio de Janeiro in 2012), it took part in the SDGs Working Group and took the lead in the European Union context.

4. The Italian National Institute of Statistics (ISTAT) is fully involved in this context. Even before the UN agenda 2030, it had already developed a set of "Equitable and Sustainable Well-being" - BES indicators, in 12 domains, to monitor progress of national well-being. Although different in number and scope, the BES indicators cover the same areas as the SDGs indicators.

5. Recently, the BES indicators have also been included in the process of economic planning. In the aftermath of the economic and financial crisis, the Italian authorities recognized that the economic policy needed to go beyond a merely financial approach and take on commitments to define policies in a way that improves specific areas of citizens’ quality of life and is sustainable for future generations.

6. Therefore, in 2016, the Italian Parliament approved, by a large majority, the introduction of indicators of equitable and sustainable well-being in the budgetary cycle (BES indicators). The reform (Law 163 of 2016) mandated the Government to monitor the trend of the BES indicators in the preceding three years and to predict their movements for the following three years, in a “no policy changes” scenario, as well as in the light of new program decisions. Those indicators needed to be selected by an ad hoc Group, after consultation with the appropriate Parliamentary committees.

7. However, pending final selection, the Government decided to anticipate, on an experimental basis, the inclusion of a first group of BES indicators in the budget process, starting from the Economic and Financial Document (DEF) for 2017. With this decision, Italy was the first country in the European Union and the G7 to introduce in its documents of macro-economic planning - in addition to Gross Domestic Product (GDP) and other «monetary value» indicators – some indicators of equitable and sustainable well-being, to measure not only economic performance, but also social progress.

8. The Italian DEF for 2017 identified four indicators that were considered as particularly relevant for the quality of life of individual citizens and for the society as a whole: the average available income, a measure of inequality, the unemployment rate and the greenhouse gas emissions.    For each of these four indicators, the DEF presented the performance of the past three years, the performance that is foreseeable in the existing policy scenario and the one that can be expected in a scenario with new policy decisions.

9. Also the Budget Law for 2017 was drafted in the light of the objectives of the 2030 Agenda. The Ministry of Environment and the Ministry of Economic Development established short and long-term priorities, related to the diversification of energy sources and the development of infrastructure. Local authorities were involved in this context, for example, the mayors of the metropolitan cities have signed an agreement aiming to achieve some of the goals related to the environment safeguard.

10. In the academic context, the Italian Alliance for Sustainable Development (ASviS) was established in February 2016, upon the initiative of the Unipolis Foundation and the University of Rome “Tor Vergata” to raise the awareness of the Italian society, economic stakeholders and institutions about the importance of the 2030 Agenda for Sustainable Development, to mobilize them in order to achieve the Sustainable Development Goals (SDGs) and to spread a wider knowledge of current and future expected trends in relation to the SDGs.

11. This Alliance already brings together over 180 of the most important civil society institutions and networks, such as: associations representing social partners (businesses, trade unions and third sector associations); networks of civil society associations pursuing specific goals (in health, education, employment, environment quality, gender equality, etc.); associations of local administrations; public and private universities and research centers; associations of stakeholders working in the fields of culture and information; foundations and networks of foundations; Italian organizations that are members of international networks dealing with the SDGs.

12. This presentation focuses on one of the indicators included in the UN 2030 Agenda - the Quality Education (SDG n. 4), which is aimed to ensure inclusive and equitable education and promote lifelong learning opportunities for everybody. In Italy, these objectives are taken into consideration by a specific BES domain, which has a similar scope to SDG indicator n. 4.

13. Increasing the degree of competences through education and training affects the well-being of individuals and opens up opportunities otherwise precluded. People with higher levels of education have higher standards of living and more opportunities to find a work; they live longer and better because they have healthier lifestyles and are more likely to work in less risky environments. Furthermore, higher levels of education and training correspond to higher levels of access and enjoyment of goods and cultural services, and lead to active participation in the production process in cultural and creative sectors.

14. The “Education and training” domain basically covers four areas: 1. Formal education. Provided in schools and universities, it is the main pillar of competences that people acquire during lifetime. The educational attainment can be considered as a proxy of the stock of human capital available in a country. 2. Long-life learning. People continue to acquire competences throughout their life, especially at work but also through the activities carried out during their free time. The participation of adults in training activities is a key-factor in improving their competences.

15. 3. Levels of competences. The educational attainment gives an idea of the potential in terms of human capital but it does not tell anything on the real competences of the population; for this reason, it is necessary to measure the competences actually acquired and their impact on the individual well-being. 4. Cultural participation. It represents an important source of "random learning”, in continuity with formal education and training and with a direct and positive effect on the degree of life satisfaction.

16. To show the relevance of the SDGs related to Quality Education, one can emphasize that the Budget Law for 2017 ha provided for equal access to be ensured by 2030, to all women and men, to affordable, high-quality education, including professional and higher education. With this objective in mind, access to university for students from low-income families will be facilitated by acting on student contributions (+40 million euro in 2017 and +85 million euro as from 2018), and by increasing the State Supplementary Fund for scholarships, which provides financial aid to disadvantaged students (+50 million euro as from 2017), merit-based scholarships (+21 million) and pre-university orientation (+5 million as from 2017). The regional system for the right to education will also be strengthened.

17. One of the fundamental areas of well-being, in the meaning of “better conditions for individual life”, in connection with sustainable development, is the investment in human capital, and in particular the system of higher studies. Precisely on this issue - the university education and the associated opportunities - the Italian Corte deiconti has recently issued a special report (n. 11/2017), which deserves further examination in the context of this presentation. This report, while considering the new model of governance, the reform of the accounting system and the funding mechanism, highlights the specific interventions related to quality and efficiency of the educational offer and the right to education within the Italian university system.

18. The Italian university system is based on 61 State universities. As for the educational offer, in the academic year 2015-2016 there were 4,586 courses, out of which 2,225 for three-year degree, 2,015 for master degree (3 years + 2 years) and 316 for five-year single cycle. In the same academic year, there were 245 courses totally done in English and 65 courses partly done in English. The number of new students in the academic year 2015-2016 increased after years of continuous decline. They were 276,000 (+2% compared to the previous academic year). The total number of students was 1,671,237 in both the State and private universities (see table n.1).

19. UNIVERSITIES AND NUMBER OF STUDENTS TABLE N. 1 Source: Corte deiconti on data of the Ministry for education

20. The reform introduced by law n. 240 of 2010 is aimed to increase efficiency and effectiveness by recognizing a higher degree of autonomy to universities including when it comes to establish the typologies of study courses (degree and master degree). This triggered a gradual process of rationalization of the educational offer.

21. This rationalization is shown by the number of study courses, which decreased after the reform (table n. 2). NUMBER OF COURSES AND GEOGRAPHICAL DISTRIBUTION Source: Corte deiconti on data of the Ministry for education

22. The right to education is anchored in the Italian Constitution. The State has exclusive authority to define the so-called “Essential Levels of Performance” (LEP), to be provided by Universities. Legislative decree n. 68 of 2012 sets out an integrated system to guarantee the right to education, which involves a number of subjects, amongst which: - The Regions to regulate and activate actions related to the concrete exercise of the right to education; - The Universities to organize services – including orientation and tutoring – and to promote cultural, sport and leisure activities, as well as exchange between students of Italian and foreign universities.

23. The following table (n. 3) shows data regarding the resources available for scholarships in the period 2011-2015, as well as their adequacy compared to actual demands in 2015. TABLE 3 RESOURCES AVAILABLE FOR SCHOLARSHIP (in million euro) Source: Corte deiconti on data of the Ministry for education

24. The Ministry for Education and Research promotes agreements and memorandums of understanding between various Institutions to contribute towards the success of the education process and to enlarge the types of services provided. Among these services, there are student accommodations, transport facilities, health care and free access to culture and learning documentation. The right to benefit of these services is provided by regions and universities, depending on income conditions.

25. Scholarships are ensured, within the ceiling of available resources, to students meeting the requirements in terms of academic merit and financial conditions. The amount is established every three years by an inter-ministerial decree. The national data regarding scholarships show an acceptance rate of 80% of applications. At a regional level, there are significant differences: some regions have sufficient resources to provide scholarships (for example, Basilicata, Emilia Romagna, Umbria), some others have resources to meet most of the needs (Lombardy, Piedmont, Tuscany), whilst less than a half regions have inadequate resources compared to the needs. In the period considered (2012-2013, 2013-2014 and 2014-2015), the unmet needs were still high (see table n. 4).

26. TABLE 4 DEGREE OF SATISFACTIONOF STUDENTS’ APPLICATIONS FOR SCHOLARSHIP Source: Corte deiconti on data of the Ministry for education

27. In its report, the Corte deiconti also evaluates the relationship between university and the world of labor. For the analysis, it used data provided by ANVUR - National Agency for the evaluation of the university and research system – and by Almalaurea, an Interuniversity Consortium established in 1994, which counts 75 public and private universities amongst its members. ANVUR carries out independent, impartial and transparent evaluations on universities. Almalaurea carries out annual surveys on the students’ profile and employment status 1, 3 and 5 yearsaftergraduation, reporting to the memberUniversities, the Ministry of Education and Research and ANVUR, with a view to improving the decision-makingprocess and enhancing the study planning, orientation and services.

28. As shown in the analysis, in Italy a reversal of the trend in youth employment only started in 2015, one year later than the average European data. In particular, the rate of misemployment changed: 8% in 2011, 12,7% in 2014 and 11,9% in 2015. In the period 2007-2014, the gap of misemployment between graduates and bachelors changed from 3,6% to 12,3% in favor of graduates. In addition, as education levels increase, gender inequalities decrease. According to the data provided by Almalaurea, three years after graduation, the employment rate is 66% for three-year graduates (54% of the students continue for two years more to get master degrees), 70% for three plus two-year master graduates and 49% for five-year single cycle graduates (provided for departments of Medicine, Law, Pharmacy, Veterinary Medicine and Architecture).

29. The data reported in a survey by ISTAT on graduates in the year 2011 shows that, four years after graduation, the employment estimate is: 72,8% for three-year graduates, 80,3% for single cycle graduates and 84,5% for master graduates (three years + two years). The results of these two surveys cannot be compared, as they refer to different periods and apply different methodologies. Anyway, it is interesting that in the data issued by ISTAT, single cycle degrees have a better performance in terms of employment compared to the data reported by ANVUR. More detailed analysis of the survey carried out by ISTAT indicates that the highest levels of employment (more than 93%) are observed among single cycle graduates and for master graduates in Defense and Security, Medicine and Engineering (99,4%, 96,5% and 93,9%).

30. Access of graduates to the labor market is more difficult for three-year graduates, master graduates and five-year single cycle graduates in the framework of literature disciplines (61,7% for three-year graduates and 73,4% for master graduates and five-year single course graduates), and biology disciplines (58,6% for three-year graduates and 76,5% for master graduates and five-year single cycle graduates). Three-year graduates in psychology (67,6% people employed) are significantly below average. Only one in two (52,8%) of three-year graduates has a fixed-term work or occasional work contracts or paid internships. Temporary work involves 41,9% of single cycle graduates and master graduates.

31. A job placement service is established in almost all Italian universities (97,9% in the period 2013-2014), except for 4 universities which have not yet activated it (1 university in the North-West, 1 university in the center, and 2 universities in the South of Italy). Single-cycle graduates and master graduates coming from Defense and Security, Medicine and Engineering have higher monthly salaries (more than 1,600 euros per month).

32. The following table (n. 5) shows an increase in internships, which allow trainees to be introduced in the labor market by gaining targeted professional experience. In addition, the internships can serve as a means of orientation for students. The table also presents the distribution of trainees on the territory.

33. TABLE N. 5 INTERNSHIP 2013-2014 Source: Corte deiconti on data of the Ministry for education

34. Post degree internship are, instead, a training service provided to young students who have graduated no more than 18 months (table n. 6). The analysis of post degree internship is particularly interesting and sufficiently reliable. 76,4% of Universities declare to have an ex post evaluation system, 12,4% of Universities declare to have an ex post evaluation system, although not complete, and 11,2% declare not to have any evaluation system. This ex post evaluation is aimed at verifying if such internships have given results in terms of actual employment.

35. TABLE 6 POST DEGREE INTERNSHIPS Source: Corte deiconti on data of the Ministry for education

36. The data above are very important also for the evaluation of professional training policies during the university education processes. Evaluation of public policies sees our strong support, as known by some colleagues who are members of the Expert Network on Public Policies of the Contact Committee. In the context of the next XXIII INCOSAI (to be held in Moscow in 2019), on “The role of the Supreme Audit Institutions in the achievement of the national priorities and goals, theme II considers the involvement of SAIs in the public policies process to assess the risks associated to public programs and policies, and to verify their contribution towards the achievement of SDGs.

37. In conclusion, the Italian approach to KNIs goes beyond macro-economic indicators to consider factors and aspects that describe the well-being of citizens and measure progress against set objectives. However, those indicators are only useful if they enter into a dynamic process, where political decisions are taken and submitted to subsequent assessment. Both political decision-makers and SAIs need indicators which are based on objectively measurable elements.

38. Educational attainment is one area where objective measures can provide significant results by relying on outcomes rather than output. This presentation provided an example: it not only considered the output of the investment on higher education (number of graduates), but also its impact on the labor market (employment rate).

39. Thankyou for yourattention