Lower efts numbers cost uni $2.806m

A shortfall in student numbers has ushered in a period of moderate budgetary belt-tightening for the second year in a row at the University of Otago.

In March, the university reported its equivalent full-time student (efts) numbers were down 2.7% (469 efts) on March 2014 numbers, with 17,172 efts total.

A financial report from a university committee meeting this week shows the lower efts numbers have cost the university $2.806 million so far, causing it to come in 1.5% under budget.

Last year, the university's efts income also fell short of budget.

This time last year, that shortfall was forecast to cost the university $4.183 million by the end of 2014.

This year's shortfall is forecast to cost the university a total of $5.66 million by the end of the year.

University chief financial officer Sharon van Turnhout said the 1.5% shortfall was ''a little higher than in previous years''.

But, she added, ''while efts income is forecast to be down on the original 2015 budget, it is still forecast to be up on last year''.

While the 2014 shortfall was mostly due to lower international student numbers, this year's was largely accounted for by domestic student numbers.

The committee documents say over 50% of the budget shortfall in efts income - $1.466 million of $2.806 million - was in domestic fees.

International tuition fees accounted for only $379,000 (13.5%) of the shortfall, despite the fact international students pay significantly steeper tuition fees.

In its March numbers, the university reported a 411 efts (2.5%) drop in domestic enrolments compared with March 2014, and a 59 efts (5%) drop in international enrolments.

To compensate for the income shortfall, Ms Turnhout said, ''the university has carefully considered ways in which savings could be made''.

''For example, where staff positions become vacant, the need for replacing those staff this year is carefully considered,'' she said.

''Also, areas such as travel and professional consulting fees have been reduced.''

The impact of the efts income shortfall was mitigated by sources of income that overperformed, including commercial contracts and external research funding.

The documents also revealed that total expenditure per efts was 2.7% above budget, and 5% above the corresponding period last year, at $16,835 per efts.

That was due to efts being below budget, but also due to a greater proportion of 2015 enrolments being in ''relatively high-cost areas''.

Also, ''with the shortfall in enrolments against forecast, income has struggled to keep up with staff salary increases'', Ms Turnhout said.

The predicted shortfall of $5.66 million for the full year was ''not significant overall'', and would represent 1.8% of the university's total income to date, she said.

carla.green@odt.co.nz

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