The University of Otago is facing a tight financial situation
next year, with Government policy, flat enrolments and
increased costs beginning to bite at the institution's
The university's proposed budget for 2013, which is set to
come up for approval at a university council meeting
tomorrow, notes that setting the budget in the current
climate was a "challenging process".
Otago University director of financial services Grant
McKenzie said in the proposed budget that the response of the
university's service divisions to the tight financial
environment had been to "cut costs in anticipation of budget
The academic departments meanwhile had increased the use of
savings built up from previous budgets, which were called
The proposed budget predicts the enrolments environment will
stay flat, with a slight increase in domestic full-time
students from 17,426 equivalent full-time students (EFTS)
forecast this year to 17,638 next year.
Full-fee paying international EFTS are forecast to fall for
the second year in a row from 1555 EFTS predicted this year
to 1487 next year.
In predicting student numbers the university notes it is
"amongst the most difficult time in at least two decades" to
"Global uncertainty remains a significant factor and the
extent to which the aftermath of the Canterbury earthquake
will continue to impact on enrolments is difficult to call
with great confidence."
As well, "reduced Government funding for the tertiary sector"
also made setting the budget harder.
The proposed budget reports a forecast total income of $600.9
million and expenditure of $585 million, with an operating
surplus of $19.125 million, up from the $18.981 million
operating surplus forecast this year.
This would mean the university would fail to meet the
Tertiary Education Commission requirement for a minimum
operating surplus of 3% of revenue - with a 2.6% return. The
university was also expecting that it would not meet the
guideline this year, with a return of 2.3% forecast.
Mr McKenzie predicted difficult times would continue beyond
next year with "further savings and efficiencies" needed.