How do USyd colleges make and spend their money?

Daniel Ergas takes a look into the books of Sydney University’s sandstone institutions

Colleges’ misdeeds are increasingly well known. But you would be forgiven for not knowing one of their best-kept secrets: colleges don’t pay a cent of rent. And as a result, they’re big business. How big? Their revenues from students in 2014 total over $30 million. To put that in perspective: the University of Sydney collects $201.9 million each year from all 25,000 of its domestic undergraduate students in fees. In other words, the University only banks from undergraduates about seven times what the colleges do each year, even though they take on close to 17 times the students (and are offering, you know, an education).

This is not information the colleges provided voluntarily. Recent regulations from the national charities’ watchdog required that colleges publicly release their audited 2014 financial reports late last year. While a small number of colleges have, in the past, compiled a short summary of their finances for their alumni’s annual report, this is the first time the public has had access to the full, unedited documents from the vast majority of colleges. A notable exception, St Andrew’s College, continues to ignore the charities’ watchdog’s deadline to submit their financial reports, and so cannot be analysed for this piece.

Earnings

Investments and foundations’ long-term building and scholarship funds

With all six of the University of Sydney colleges established close to a century ago, their alumni pools run unsurprisingly deep. Collectively, their investment and foundation funds total over $36 million. It appears these donations come from a small number of wealthy, generous benefactors. Of funds raised in 2015 by St Paul’s, $93,000 came from just seven major donors. The College also owns a fine art collection valued at over $1.25 million. A St Andrew’s report from 2014 indicates the $244,855 raised for the year came from only 122 donors.

University contributions

As Vice-Chancellor Spence has made it clear to the media in the wake of reporting by Aparna Balakumar and Justine Landis-Hanley, colleges are, in many ways, independent of the University. They are on their own land, which they effectively own; with their own, private admissions standards and governing councils, often set by statute.

But their financial reports make it clear that the colleges’ relationship with the University is more complex and reciprocal than it first appears. While it is difficult to judge the full extent of the University’s commercial relationship with the colleges due to limited public access to their books, over the 2013 – 2014 period, St Paul’s was the recipient of a collective $2.12 million ‘contribution’ for their Graduate House from the University of Sydney. At least part of the colleges’ significant marketing expenses (totaling over $400, 000 from the only two colleges with a specific ‘marketing’ line-item) go to the University for participation in Open Day and university recruitment functions.

Student fees

Despite their sizeable foundation and investment funds, all six University of Sydney residential colleges feature in the top ten most expensive colleges in Australia when it comes to student fees. To calculate this, Honi took the total revenue colleges collect from students, and divided it by their total number of students for that year, in order to take into account grants and bursaries.

The average yearly fee paid by a University of Sydney college student (approximately $22,000) could pay for rent in a room in a four-bedroom apartment in Auburn for almost three whole years.

Dr Amanda Bell, the Principal of Women’s College, and the only college to respond to Honi’s request for comment, noted the colleges’ fees were, comparative to the area, reasonable. In a statement, Bell wrote “if a student was living off campus [at] a market rent of $350 per week, they would be spending a similar amount annually.”

This seemed to be a strange comparison. Colleges own the land and are registered as non-profits, so to be judged relatively to rent-seeking landlords seems generous. Even so, the average rent in Newtown in a four-bedroom sharehouse (the closest equivalent to the 200-bedroom sharehouse that is college) is closer to $260 per week.

Expenses

Catering

Every residential college at the University of Sydney provides full-service catering, collectively spending over $7.2 million in 2014 – an average cost of approximately $6,100 per student that year.

The catering at each college varies, though each features ‘formal dinner’. Formal dinner is an involved event: students are required to wear academic dress (at least a black graduation gown with a collared shirt) for a three to four course meal served by waiters in black tie.

This occasion is either weekly (as at Women’s or Sancta Sophia), bi-weekly (at Wesley and St John’s) or every weekday (St Paul’s).

Compared to similarly sized colleges across Australia, Sydney’s colleges are unmatched in their food-spend. Australia-wide, St Paul’s College leads the pack with approximately $9,000 spent each year per student on their catering budget.

Even when compared with all the colleges in Sydney, Melbourne, Perth, Adelaide and Hobart that Honi could access reliable financial reports for, the University of Sydney colleges dominated the top quarter of colleges’ catering budgets (claiming four out of the six spots); and USyd was also the only university able to claim the unique mantle that each of its colleges spent at least $1,700 above the average food spend per student (which was approximately $3,200).

Staff fees

University of Sydney colleges are sprawling institutions, collectively employing at least 75 full-time, 60 part-time, and 171 casual staff (a ratio of six students to every one staff member) at a cost of over $6.7 million in 2014. Their salaries are almost a third of the total costs associated with colleges.

University of Sydney colleges boast of their capacity to provide unique academic support to their students through external tutorials run exclusively for colleges (their commitment is such that the word ‘academic’ appears 25 times in St John’s 2,700-word prospectus). Colleges regularly use the cost of these tutorials to justify their staffing expenditures.

When comparing how much of each resident’s fee goes toward staff salaries, all but Wesley College spent over the median sum, which was approximately $4,700 per student nationwide. St Andrew’s reached the top quartile of its employee spending (over $7,000 per student per year attending to staff fees).

Strange, miscellaneous costs

While the two categories above explain 62 per cent of students’ fees (32 per cent for catering, 30 per cent for staff), this leaves another 38 per cent unaccounted for. This is tied up in the colleges’ sizeable surpluses, and occasional opaque line items.

The colleges’ collective surplus in 2014 was $6.4 million: a staggering 28 per cent of total students’ fees. In other words: of the fees paid by students in 2014 more than a quarter simply went into the colleges’ coffers, not to be spent that year.

Over the 2013-2014 period, Sancta Sophia spent $246,432 in ‘marketing’ and $107,628 in ‘other student support costs’; Women’s College spent $156,693 in ‘advertising’, $195,841 in ‘consultancy fees’, $46,664 on ‘printing, postage and stationery’, $72,903 in ‘telephone’ expenses and $75,558 for ‘IT and web page support’; Wesley College spent over $125,000 under the ‘administration’ line-item in 2014 – although it’s not clear what this might mean – and another $104,545 in ‘student services’. St John’s College’s report is perhaps most egregious in its ambiguity. It separates its total expenses into only two categories: ‘employee expenses’ ($1.5 million) and ‘all other expenses’ (a startling $4.3 million), with no further explanation provided.

The financial reports themselves are complex: they can be both curiously abstruse and tediously mundane. They are incomplete and equivocal. But what they do reveal is that the University of Sydney colleges do not only hold immense social power, but also access to significant financial capital, entirely independent of the University.