Head of Corporate Services Financial Overview
University operations recorded a consolidated surplus of $9.5 million in the year to December, 2006, compared with $8.5 million the previous year.
Given the challenging operating environment, this represented an excellent result for the second consecutive year which can be attributed to the commitment of all staff to meeting their financial goals together with some positive unbudgeted movements in both revenue and expenditure.
For the University only, the 2006 surplus was $7.5 million, an improvement both on budget and the previous year. This represented 4.2 percent of total revenue and is in line with the 3.5 percent target set in the University Strategic Plan. The surplus target is designed to fund development growth and to ensure sustainability of the University.
Total consolidated revenue of $183.5 million increased by 2.1 percent compared with 2005, slightly exceeding budget. International tuition fees were lower than budgeted by $5.4 million due to a 12.9 percent decrease in international student enrolments.
However, domestic student enrolments were only 1.8 percent- below budget due mainly to a 6 percent increase in new students. The increase in new domestic students, combined with an increase in the average tuition fees charged per student, resulted in an increase in domestic-student-related revenue of $2.1 million.
Improved returns from commercial activities resulted in an 8.1 percent increase in other revenue. Early in 2006, revenue was forecast to be $7.9 million under budget due to a decrease in equivalent full time student (EFTS) numbers. Initiatives were put in place to achieve targeted savings in operating expenditure, resulting in operating expenditure is 3.3 percent lower than budget.
Overall labour costs were $1.0 million lower than budgeted as the University delayed filling vacant positions or did not fill them at all. Other operating costs were closely managed to achieve $5.3 million savings on budget. This was mainly achieved through one-off expenditure savings and not utilising restructuring provisions.
The University is now financially well-positioned to face the challenges of 2007. Total international student enrolments are projected to continue to fall throughout New Zealand universities, and the Government is expected to announce this year the details of its new funding policy for the tertiary sector. It is unclear the extent to which the new funding regime will affect the University of Waikato.
In 2007, the University will launch a new capital works programme, beginning with construction of a new student "hub" at the centre of the campus. Plans are also underway for a new building to house the Law and Management Schools. These major developments will greatly add to the resources available to both students and staff.
Head of Corporate Services