Academic divisions at the University of Otago have agreed to
tighten their belts in the wake of a multimillion-dollar
shortfall caused by a failure to meet forecast student
This comes as chief financial officer Sharon van Turnhout
said at yesterday's council meeting the possibility of the
university not making large enough surpluses to fund its
capital development programme was ''worrying''.
A report from chief operating officer John Patrick tabled at
the meeting said having lower-than-expected student numbers
was expected to cost the university $4.183 million by the end
of this year.
Despite overall student numbers increasing by the slightest
of margins this year, the 0.1% increase revealed earlier this
year did not match its forecast for a 1.7% increase.
International numbers fared even worse, declining 3.7% on
last year against a forecast for a 2.6% increase.
Mr Patrick said this, and the fact expected insurance
proceeds from the Christchurch earthquake of $2 million were
paid out last year instead of this year, was placing pressure
on the university's budgeted operating surplus of $20.597
million for the year.
To make up for the tuition income shortfall, the university
had identified savings of $2.069 million from its corporate
budgets, but the academic divisions were expected to find
savings to make up the remaining $2.114 million.
The surplus for the year was now expected to come to $18.597
million, with the drop in insurance income not expected to be
recovered through savings.
Ms van Turnhout earlier emphasised the importance of the
university meeting its surplus targets, after she was
questioned by council member Roger Tobin.
If it did not meet these targets, it would not be able to
fund all of its massive capital works programme.
Mr Tobin said the financial report tabled at the meeting was
''the most serious warning we have had for some time about
the vulnerability'' of the university's financial position.
• The university's surplus for the year until the end of
April was $5.857 million, which was $2.471 million lower than
expected, largely due to a shortfall in tuition fees.
The university's cash on hand, much of which would be spent
on its building programme, was ahead of budget at $169.702