This paper formulates a model to partition the observed administrative/facu
lty ratio (or administrative intensity) for higher education institutions i
nto two components. One component uses internal factors. The second compone
nt acts as an augmenter and uses external factors. In particular, it uses s
ources of funding dependency to explain additionally the demand for adminis
trative resources. A legit analysis is used to link the type of institution
al control to sources of funding dependency. The main results indicate that
public institutions use relatively less administrative resources compared
to privates in seeking public and private sources of funding. Privates, on
the other hand, use relatively less when seeking private funding, but they
use relatively more when seeking public funding. Policy implications relate
to barriers of entry to the funding sources.