While the University of Otago is forced to make numerous budget cuts, the Otago Polytechnic is embracing its best annual financial performance for around 15 years.
Chief Operating Officer Philip Cullen says that the 2010 budget has been revised, meaning that there is now an expected budget surplus of $2.094m, which is $250 000 better than previously anticipated.
Cullen says that the surplus increase is due to increased enrolments, more funding from the Government, and profits from one-off and new activities. Equivalent full-time students (EFTS) are expected to surpass the initial budget by 124. This is partly due to an increase in enrolments from international students and in health-related courses. International enrolments have risen by almost 20 EFTS on the initial budget.
Because of the budget surplus, Cullen says that the Polytechnic will reduce its borrowings from $3.5 million to only $1.3 million. Capital expenditure is to stay at $5 million.
Although the surplus is positive, it will be countered by the increased costs associated with providing for additional EFTS. Further costs are expected from the introduction of the Emissions Trading Scheme and rent rises for leased property.
Despite a strong showing this year, Cullen does not expecting such a strong financial position for the Polytechnic next year. The Polytechnic will need to find a further $2.9 million to offset the Government’s cut in tertiary funding. As a result, the Polytechnic Council is considering an increase in student fees and levies to the value of an extra $1 million.
The Polytechnic’s finances have been all over the place in the past years, with a surplus last year and a large deficit in 2008. With a $337 000 deficit for group activities, and a $519 000 deficit for academic activities, 2008 was the Polytechnic’s worst financial result in five years.
Polytech Fortunes Continue to Yo-Yo.
