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July 23, 2007 | by  | in News |
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Vic’s surplus ‘lower than recommended’ – Report, TEC

Figures in an annual financial report have shown that the University’s surplus and return on assets fell below minimum levels recommended by the government last year, for the first time since 2001.

The Tertiary Education Commission’s Tertiary Advisory and Monitoring Unit (TAMU) recommends thresholds on four aspects of revenue. While the University exceeded levels set for cash cover and asset productivity, it earned just over half the TAMU threshold for surplus, and received a 0.7 per cent return on assets, falling short of the recommended 1 per cent.

Last year’s surplus, at $4.0 million, was $1.4 million lower than budget figures, and $4.1 million less than in 2005.

The reduced income has been attributed, by Chief Financial Officer Wayne Morgan, to the newly formed Research Trust – to which $1.4 million in research grants was transferred. Furthermore, he added that a change in depreciation methodology employed by the University has also reduced surplus by $1.2 million.

The reduction in surplus, Morgan said, reflected the growth of costs at a rate greater than growth in revenue. In 2006, the University received $113 million in government grants, in addition to $50 million in tuition fees from domestic students and a further $34 million from international students.

The total expenditure by the University was $257 million. The largest portion of this went towards ‘people’ – which, according to Morgan, largely resulted from the desire to reduce student-to-staff ratios and to continue the reduction in the gap between domestic and international salaries for academic staff.

Operation costs made up only about a third of the total spent on ‘people’, while other areas of expenditure included equipment and depreciation.

In addition, the University spent approximately $1.4 million on public relations, and another $2.5 million on marketing, including $1 million on advertising alone.

In response to the financial report, Vice Chancellor Pat Walsh said that in order to achieve the goal of being a first-class university in the Asia-Pacific region, the University had to ensure that it has the financial resources to do so.

“Given the inadequate level of funding universities receive, significant changes in academic and administrative processes will be needed in the next year.”

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