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Sydney University cashes up

Madeleine King makes cents of the university’s finances

The votes are in and the money’s been counted: 2012 was a good year for Sydney University, according to the latest report from the NSW Audit Office.

The report, tabled in Parliament in late May, paints quite the rosy picture of the university’s financial health: the best scorecard in the past five years.  The university’s annual surplus is up $48.5 million from the previous year, now sitting at $137 million.

Student course fees rose 10% to $601 million, likely a response to the government’s lifting of course quotas for commonwealth assisted places. The majority of these fees (almost 50 percent) came from overseas students, despite the fact they make up less than a quarter of the student population.

Grants from the Australian government, mostly for research, have also seen a sweet rise of 10 percent, 50 percent of which came from the federal melting pot of issues, the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education.

Yet total revenue from research has risen only marginally: just 3.3% since 2011. This is controversial. Research output was the primary yardstick of worth during last year’s wave of staff redundancies, with the HR department citing the contractual obligation staff have to dedicate 40 percent (or 19 weeks of full-time employment) to research.

On the whole, however, the report notes that the targets of that contentious ‘cost reductions strategy’, outlined in the 2011-15 Strategic plan, have been achieved: non-salary expenditure has been reduced by $28 million; employment costs of general staff, casual staff and contractors have been successfully limited; and ‘underlying academic and general staff costs’ have been reduced by $36 million.

The outlook is nonetheless not all peachy, with the report highlighting a few areas of concern.

Operating costs have increased, marking a general trend over the past 5 years (up 35.4%), and is mostly thanks to employee benefits. The audit notes that the “University acted to restrict increases in employee benefit expenses in 2012, but these still increased by 5.3% and include $26.0 million for redundancy and severance costs.” In total, operating costs increased to $1.6 billion, around 7 percent from 2011.

Annual leave imbalances continue to plague the university, with the report noting that the “current strategy implemented in 2010 does not appear to be effective … 9.9% of full time equivalent employees [have leave imbalances exceeding 40 days].”

This is problematic for the university, as it is forced to maintain an emergency pool reserve of funds in case large payments have to be paid at one time when the leave is taken. In contrast to a ‘pay as you go’ system, this ‘fully-funded’ method traps money until the leave is taken or staff end their employment.

The extensive capital works program the university has embarked on – the Charles Perkins Centre and The Abercrombie Precinct Redevelopment – are expected to be completed on time and within budget. The report does not mention the $500 million loan the university will now be drawing upon for the completion of these projects, which CFO Mark Easson told Honi Soit last year will accrue $25 million in yearly interest repayments.

While these projects are on target, the Sydney Student System – a reworking of the university’s IT facilities – has been delayed and is expected to go over its budget $56.5 million project. This is in spite of Easson claiming in the same interview that they had – as of mid-2012 – now correctly budgeted the project.

The university was unavailable for comment as this article went to print.