The University of Otago's healthy financial position has been underscored by a better-than-budget operating surplus of $18.58 million, despite some earthquake-related costs involving the university's Christchurch campus.
A recently-released financial statement covering the first eight months of this year, until August 31, shows an operating surplus of $18,587,000.
This is about $2.1 million better than budget for the year to date.
But this outcome is $12,875,000 less than the $31,462,000 surplus achieved by the university at the same stage last year.
The financial report noted the major causes of the better-than-budget variance were savings and timing issues in consumables spending ($3,269,000) and extra overhead recoveries and funds received from external research funders for capital purchases ($1,754,000).
Other factors were extra investment income ($363,000) and savings in depreciation due to delays in capital spending ($446,000).
These favourable factors had been partly offset by costs associated with the Christchurch earthquakes and the timing of repairs and maintenance ($1,290,000).
Other offsetting factors included lower-than-budgeted tuition fee income because of fewer student enrolments ($1,870,000).
The report also noted the university's occupancy costs were $1,495,000 (5.9%) greater than budget.
The major cause of this was repairs and maintenance for the university's Christchurch campus after the recent earthquakes.
Most of these costs would be recovered from the insurers.
Adding to this unfavourable variance had been higher-than-budgeted external rental costs to provide temporary replacement space near the Christchurch campus, and extra space that was being rented by Otago University property services.
Total income for the year to date was $392,017,000, which was slightly less than the $392,961,000 budget.
This was due to lower than budgeted tuition fees largely offset by higher sundry income, greater Government funding and improved investment income.
Expenditure for the period was $373,430,000, which was about $3 million under budget.
Savings, including in consumables, and in salaries, contributed to this favourable variance.
University financial services director Grant McKenzie noted that savings continued to be made across the university.
This was in expectation of "a more difficult 2012" as the rate of revenue growth in the university continued to decline.
"The university's cash flows are strong and the financial position remains healthy with no real external debt," Mr McKenzie said in the report.
• Domestic tuition fees were $1,337,000 (2.1%) less than budget, and the largest declines in domestic students had occurred in the academic divisions of commerce and sciences.
International student fees were $534,000 (1.9%) less than budget.
The international fee variance was caused by a small decline in forecast international equivalent full-time students (EFTS) and a change in the mix of papers, with more students enrolled in lower value papers, such as commerce and humanities, and fewer in higher value papers, such as health sciences and sciences, the report said.
