University Management
OFFICE OF FINANCE
During the academic year 2021/2022, the Office of Finance and the Campus Bursaries continued to effectively manage the financial affairs of The University of The West Indies (The UWI), to improve the financial health of the University to fulfill the objective of “Agility”, a component of the 2017–2022 Strategic Plan.
The UWI was again impacted by severe funding challenges. Some contributing governments experienced challenges in honouring their financial obligations, with respect to the payment of subventions and tuition fees to the University. Several students were also unable to settle their outstanding liabilities for fees. The UWI nevertheless expanded its offerings of online programmes, strengthened its entrepreneurial thrust, and implemented additional cost containment measures to ensure it remained viable and maintained the high quality of teaching, learning and research.
FINANCIAL HEALTH
The audited financial statements for the financial year 2021/2022, showed that the operations of the University resulted in a deficit of BDs$26.2 million, representing a 10.6% reduction in the deficit of BDs$29.3 million recorded in 2021, after finance costs, depreciation and post-employment pension and medical benefits expense. Prior to inclusion of these items of expenditure, the operations showed a surplus of BDs$65.2 million (2021: BDs$67.8 million).
Other comprehensive income was BDs$31.7 million (2021: BDs$103.8 million), comprising primarily a gain of BDs$34.7 million (2021: BDs$80.8 million) from the actuarial re-measurement of the post-employment pension and medical benefits liability. Contributing factors were the increase in discount rates used to measure the liability as well as experience gains resulting from a significant reduction in actual premium rates in 2021 for medical insurance, compared to that previously expected. Currency translation adjustments reflected a loss of BDs$1.1 million (2021: BDs$19.6 million gain) and the loss from changes in fair value of debt instruments amounted to BDs$1.9 million (2021: BDs$3.4 million gain). Total comprehensive income for the year therefore stood at BDs$5.5 million (2021: BDs$74.5 million). Total income for 2022 was BDs$840.6 million, a reduction of 0.9% from BDs$847.8 million in 2021. The sources of income for the year were: government contributions 47% (2021: 46%), tuition and other student fees 16% (2021: 16%), special projects and other projects 30% (2021: 29%), commercial operations 3% (2021: 4%) and other income 4% (2021: 5%).
For the year ended July 31, 2022, government contributions (net of capital grants), the most significant source of income, totalled BDs$393.6 million, an increase of 0.4 % over BDs$391.9 million in 2021. Income from tuition and other student fees for UGC funded programmes totalled BDs$130.4 million in 2022 and showed a decrease of 5.2% from BDs$137.5 million in 2021. Student enrolment declined by approximately 4% in 2021/2022 compared with the prior year. Tuition fees remained unchanged at all campuses except the Mona Campus, which was granted a 1.9% increase in tuition fees.
Income from commercial operations showed a decline of 12% when compared with the results for 2021, as halls of residence and other income generating ventures ceased or curtailed operations during the COVID-19 pandemic. The total of other sources of income showed a decline of 0.7% from that reported in 2021. Total expenditure for 2022 was BDs$866.9 million, a reduction of 1.2% from BDs$877.1 million in 2021. The categories of expenditure and their percentages of the total were: departmental 46% (2021: 47%), administrative 13% (2021: 13%), central 14% (2020: 15%), special and other projects 21% (2021: 20%) and commercial operations 6% (2021: 5%).
The two items of expenditure which continued to be drivers of the deficit shown in the financial statements of The UWI from time to time were: (i) postemployment pension and medical benefits expense and (ii) impairments. Actuarial valuations, conducted by an independent actuary and in accordance with International Accounting Standard 19 (IAS19), determined that for 2022 the cost of post-employment benefits (pension supplementation and medical benefits) for all campuses and the University Centre, and the costs associated with the defined-benefit scheme for administrative staff at the St. Augustine Campus, totalled BDs$41.4 million (2021: BDs$45.2 million). The pension supplementation element of the Federated Superannuation Scheme for Universities (FSSU) is unfunded.
Impairments recorded in accordance with International Financial Reporting Standard 9 (IFRS9) accounted for BDs$6.7 million of the deficit in 2022 (2021: BDs$16.3 million). Impairments were recorded primarily on student and government receivables outstanding for several years, but there was also an impairment provision recorded on some categories of investments. These two items of expenditure, which continued to influence the results adversely each year, are being reviewed by a Special Committee of the University Grants Committee (UGC) formed in 2020. The Committee is chaired by The Honourable Mia Amor Mottley, Prime Minister and Minister of Finance, Economic Affairs and Investment, Barbados, and is comprised of government representatives, members of the private sector and The UWI’s leadership team. A costing is currently being done to determine the impact of implementing certain recommendations provided by a consulting actuary. Dr. Dodridge Miller of SAGICOR Financial Company Limited, as a member of the Special Committee, has been assisting with this exercise.
The UWI maintained a positive working capital position, and an increase of 19.5% was seen in 2022 when compared to 2021. Current assets increased by 9.2% while current liabilities showed a 3.5% increase. However, some entities of The UWI continued to experience cash flow shortages, primarily from the inability to collect receivables on a timely basis.
Total reserves of The UWI showed an increase of 4.9%, from BDs$314.9 million in 2021 to BDs$330.2 million in 2022.
ACCOUNTS RECEIVABLE
Government receivables and student receivables accounted for the majority of the receivables at July 31, 2022.
Receivables from contributing governments
The contributing governments have a significant role to play in maintaining the financial health of The UWI, as to date government contributions contribute 47% of total income and remain the most significant source of the income of The UWI. Over the years, Caribbean governments have relied on The UWI as the institution of choice to educate their people. This ultimately helps to address the needs of the Caribbean economies and bolsters economic growth. The development of the region has benefited significantly from governments’ investment in education.
During the year 2021/2022, emphasis was placed on maintaining dialogue with contributing governments, to encourage payments of their committed and assessed contributions for economic cost to The UWI on a consistent basis. In an effort to recover outstanding debt, The UWI continued to submit payment plans accompanied by monthly or quarterly invoices and statements to the contributing governments. This has assisted somewhat in reducing the receivables of most governments. The total net receivable of government contributions for economic cost at July 31, 2022 was BDs$96.6 million, a decrease of 6% from BDs$102.7 million (net) at July 31, 2021. Other amounts receivable from governments for tuition fees and other items were progressively received throughout the year, but at the year-end, there were balances that were not settled. Dialogue has continued with governments regarding recovery of the amounts outstanding.
Student receivables
Student receivables as at July 31, 2022 stood at BDs$96.8 million, a decrease of 6.6% from BDs$103.6 million at July 31, 2021. This primarily resulted from additional measures implemented to collect student fees within the semester for which they were due.
APPROVAL OF THE BUDGETS FOR THE BIENNIUM 2022/2023 AND 2023/2024
The Technical Advisory Committees (TACs) of The UWI met on March 8 and 9, 2022 virtually, to deliberate on the budgets of The UWI and the University Hospital of the West Indies (UHWI) for the Biennium 2022/2023 and 2023/2024. The opening ceremony was hosted virtually by the government of the Turks and Caicos Islands. The Campus Grants Committees (CGCs) and the University Grants Committee (UGC) subsequently met virtually on April 6, 2022 to further review and approve the biennial estimates for 2022/2023, based on the recommendations of the TACs, and the estimates for 2023/2024 were considered indicative for noting. Fifteen of the seventeen contributing governments were represented. Updates on the activities of the SubCommittees of UGC were also given. The meetings of the TACs and Grants Committees had representatives from the ministries in the contributing countries responsible for tertiary education and finance; the Ministry of Health and Wellness in Jamaica, The UWI and the UHWI.
The UGC meeting was chaired by the Honourable Colm Imbert, Minister of Finance, Trinidad and Tobago. An expenditure budget of BDs$646.2 million was approved for all campuses and the University Centre but excluded the Five Islands Campus, which is funded solely by the government of Antigua and Barbuda.
The approved budget was to be funded by government contributions totalling BDs$475.3 million, tuition fees of BDs$104.1 million and the balance of BDs$66.8 million from other sources of income. A budget of BDs$3.1 million (TT$10.4 million) was approved for the Seismic Research Centre, to be funded by government contributions.
An expenditure budget of XC (East Caribbean dollar) $49.9 million was approved for the Five Islands Campus. The budget of the Five Islands Campus was expected to be funded in the amount of XC$41.5 million by government contributions from the government of Antigua and Barbuda. Tuition fees of XC$7.6 million and other income of XC$0.8million were expected to provide the balance.
INCREASED AGILITY TO NATIONAL, REGIONAL AND GLOBAL OPPORTUNITIES
Research grants
The total value of research grants received for the 2021/2022 financial year totalled US$20 million (2020/2021: 22.7 million). The total reflects a 12% decrease from the prior year. The distribution of these grants is graphically represented below.
To sustain the level of grant funding received, the research accounting team continued to enhance processes for award acceptance, financial management and project closeout that together provided better service to the departments, research administrators and principal investigators and ultimately the donors.
EXPANSION OF ACCESS TO TERTIARY EDUCATION
Tuition Fees
The UWI has managed to keep tuition fees affordable and hence widen access to students regionally and internationally. For the year 2021/2022, tuition fees for University Grants Committee (UGC) funded programmes at the Mona Campus were increased by 1.9%. Tuition fees at the Cave Hill and St. Augustine Campus as well as the Open Campus and Five Islands Campus remained the same as in 2021.
Scholarships
During the 2021/2022 academic year, scholarships to deserving students were provided from funds raised through The UWI Regional Endowment Fund, the American Foundation of The UWI, the British Foundation of The UWI, The UWI Toronto Benefit Gala and gifts from individuals and the private sector. Awarding of scholarships from these sources was managed by the Institutional Advancement Division.
The UWI, from its UGC budget, also offered open scholarships to undergraduate students, and postgraduate students were also provided with scholarships and grants for research and publications.
INITIATIVES FOR IMPROVEMENT OF OPERATIONAL EFFICIENCY
Banner Finance
Staff members university-wide are tasked with ensuring that the Banner Finance system is optimally used. The use of the Banner Finance System and its interfacing with other Banner Modules, particularly the Student Administration System and the Research Accounting and Grants Management module, allowed The UWI to continue to improve efficiency in the accounting operations, and generated timely and accurate financial information to support major initiatives across The UWI.
Staff across the campuses attended the Ellucian annual conference to improve their knowledge on the use of the Banner System and to develop useful contacts from other universities.
Digital Transformation Initiative
This is a University-wide implemented project, which on completion is expected to strengthen the institution’s delivery of teaching, learning and research, as well as its operational efficiency in several areas, its resilience and global competitiveness.
The project is being financed initially by a loan of US$6 million and a grant of US$190,000 from The Caribbean Development Bank (CDB). The first tranche is expected to be received before July 2023. The loan is guaranteed by SAGICOR Financial Company Ltd. and two contributing governments.
The proposed project is part of an overall Digital Transformation Programme, which will enable The UWI to implement a shared services operating environment which will enhance student experience. The programme will allow The UWI to provide consistent and reliable services to all stakeholders and will achieve greater operational efficiencies and economies of scale. This digitally transformed environment will contribute significantly to The UWI achieving its strategic goals as outlined in the ‘Triple A’ Strategy 2017–2022. The Office of Finance and Campus Bursaries will be engaged in the implementation of various initiatives for shared services, which will provide significant reduction in the cost of operations.
The current phase of the programme focuses on expanding online delivery of academic programmes to accommodate the strategic enrolment target and enhancing the infrastructure required for Business Continuity and Resilience
Revenue Revolution
The Revenue Revolution, which is the second phase of the Strategic Plan 2017–2022, will focus on maintaining and improving continued partnerships with key stakeholders of The UWI community, including Caribbean governments, regional and international corporations, and development partners, and will seek to yield substantial net income over the next five years, 2022–2027.
Revenue generating initiatives being explored include roll out of the Global Campus and the Global School of Medicine. Several new self-financing programmes are also being offered.
Cost saving measures
The UWI is seeking to use a variety of measures to adjust its operational model, to close the gap between revenues and expenditures on an ongoing basis, by reducing costs and enhancing operational efficiency. In light of the budget cuts experienced over the years, The UWI is implementing several cost saving measures. One that will have the most significant impact is implementation of a Shared Services Model of operation (which includes the roll out of Shared Teaching and Shared ICT and Administrative Services UWI-wide) to be facilitated by system enhancements from the Digital Transformation Initiative.
Rationalisation of programme offerings and the reduction of staff costs, capital expenditure, travel costs, office expenditure and utilities are some of the measures being undertaken.
Costs related to pension and post-employment benefits are being reviewed for more cost-effective arrangements to be implemented.
Progressively, The UWI has been reducing its cost to operate in line with available income. The UWI continues to seek opportunities for operational efficiency in order to reduce cost.
Pension administration
The UWI operates defined-contribution pension schemes for its academic and senior administrative staff and some non-academic staff. The St. Augustine Campus administers a defined-benefit plan for its administrative and technical staff.
The Federated Superannuation Scheme for Universities (FSSU) for academic and senior administrative staff has a defined-benefit element, which provides qualifying retirees with a supplement to pension on retirement. During the financial year, the Trustees of the FSSU Pension Scheme reviewed the investment options available to members along with investment advisors, Dean Wetton Advisory. Recommendations were provided on restructuring the FSSU investment portfolio in order to give members better yields on their contributions invested, and reduce the FSSU Supplementation liability. Following these recommendations, the decision was made to proceed with a two-tranche investment transition, carried out by Investment Managers (Blackrock) and the Pension Scheme Administrators (Capita). Additionally, the members of the FSSU Pension Scheme were briefed and engaged regarding the proposed changes through a series of workshops and webinars. The first transition occurred in October 2022 and the second in March 2023.
THE WAY FORWARD
The UWI appreciates the financial support received from contributing governments, funding agencies — particularly donors to research projects, the private sector, alumni, staff, students and other stakeholders, without whom it could not achieve its current commendable ranking as being among the best in the world.
The efforts of all members of staff in the Office of Finance and the Campus Bursaries are appreciated, for maintaining sound financial practices and contributing to the achievement of the financial goals of The UWI. Stewardship of the University’s resources and improving the financial health of The UWI remains a priority, and The UWI will therefore continue to focus on revenue generation and cost containment. The finance team remains committed to the success of the “Triple A Strategy” and its 2022–2027 “Revenue Revolution”, which is the current roadmap for The UWI, as it seeks to deliver quality service and drive Caribbean development.
