The academic year 2022/2023 marked the beginning of the execution of the 2022–2027 Strategic Plan of The University of the West Indies (The UWI). During the year, the Office of Finance and Campus Bursaries continued to provide careful stewardship of the University’s resources to improve the financial health of the University.

TThe UWI continued to experience funding challenges throughout the academic year. This was partly due to challenges faced by some contributing governments in honouring their financial commitments to pay subventions and tuition fees to the University. We are immensely grateful to the contributing governments who provided ongoing support. Grappling with the global economic crisis, several students had outstanding liabilities for fees which remained as receivables at the end of the 2022/2023 academic year.

TIn an effort to improve its financial position, The UWI developed innovative initiatives and strategic partnerships to aid with funding the enterprise and to support the teaching, learning and research activities. The University continued to boost its entrepreneurial thrust, expanded its offerings of online programmes, and implemented further cost containment measures to maintain its viability.

ACCESS

FINANCIAL HEALTH

A summary of the financial performance of The UWI for the year ended July 31, 2023 is provided below.

The audited financial statements for the financial year 2022/2023, showed that the operations of the University resulted in a deficit of BDS$37.2 million (2022: BDS$26.3 million, deficit), after finance costs, depreciation and post- employment pension and medical benefits expense.

The government funded activities (UGC) resulted in a deficit of BDS$98.2 million (2022: BDS$74.7 million) while the income generating initiatives provided a surplus of BDS$61million (2022: BDS$48.4 million).

Prior to the inclusion of finance costs, depreciation and post-employment pension and medical benefits expense, the operations showed a surplus of BDS$46.4 million (2022: BDS$65.2 million).

Other comprehensive income was BDS$15.5 million (2022: BDS$31.7 million), comprising currency translation gain of BDS$11.3 million (2022: BDS$1.1 million loss) and a gain of BDS$8.5 million (2022: BDS$34.7 million gain) from the actuarial re-measurement of the employee benefits liability. The key contributing factor was the increase in discount rates used to measure the liability, resulting in financial gains. The loss from changes in fair value of debt instruments amounted to BDS$4.3 million (2022: BDS$1.9 million loss). Total comprehensive income for the year, therefore, showed a loss of BDS$21.7 million (2022: BDS$5.4 million gain).

Total income for 2023 was BDS$860.9 million, an increase of 2.4% over BDS$840.6 million in 2022. The sources of income for the year were: Government Contributions 47% (2022: 47%), Tuition and Other Student Fees 14% (2022: 16%), Special Projects and Other Projects 30% (2022: 30%), Commercial Operations 5% (2022: 3%) and Other Income 4% (2022: 4%).

For the year ended July 31, 2023, government contributions (net of capital grants), the most significant source of income, totalled BDS$403.9 million, an increase of 2.6% over BDS$393.6 million in 2022. Income from tuition and other student fees for UGC funded programmes totalled BDS$122.3 million in 2023, and showed a decrease of 6.2% from BDS$130.4 million in 2022. There was an overall decline by 6.7% in student enrolment in 2022/2023. Tuition fees increased by 5% at the Mona Campus and the Open Campus (now the Global Campus); and remained unchanged at all of the other campuses.

Income from commercial operations showed an increase of 52.8% when compared with the results for 2022, as activities were returned to full capacity with campuses resuming face-to-face classes, full operations at halls of residence and other income generating ventures post the COVID-19 pandemic. The total of other sources of income showed an increase of 1.2% from that reported in 2022.

Total expenditure for 2023 was BDS$898.1 million, an increase of 3.6% over BDS$866.9 million in 2022. The categories of expenditure and their percentages of the total were: Departmental 46% (2022 : 46%), Administrative 12% (2022 : 13%), Central 15% (2022 : 14%), Special and Other Projects 21% (2022 : 21%) and Commercial Operations 6% (2022 : 6%).

The two items of expenditure which continued to be drivers of the deficit shown in the financial statements of The UWI were: (i) post-employment 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 2023 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$36.6 million (2022: BDS$41.4 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 (IFRS 9) accounted for BDS$7 million of the deficit in 2023 (2022: BDS$6.7 million). Impairments were recorded primarily on student and government receivables outstanding for several years, but there was also a net impairment provision recorded, as required, on some categories of investments.

A Special Committee of the University Grants Committee (UGC) was formed in 2020 to review and recommend options to mitigate these two main items of expenditure which continued to drive the deficit. Proposed options relating to the FSSU, its unfunded supplementation scheme benefits, as well as the medical scheme benefits provided to staff and retirees have been received from consultants. These options are being evaluated by the University for implementation.

The UWI maintained a positive working capital position, although a reduction of 9% was seen in 2023 when compared to 2022. Current assets decreased by 0.9% while current liabilities showed a 4.3% increase. Some entities of The UWI, however, continued to experience cash flow shortages, primarily from the inability to collect receivables on a timely basis.

Total reserves of The UWI showed a decrease of 6.9%, from BDS$330.2 million in 2022 to BDS$307.4 million in 2023. Net assets decreased by 1.9%, moving from BDS$1.31 billion in 2022 to BDS$1.29 billion in 2023.

 

CONTRIBUTING COUNTRIES SUPPORT BUDGET MEETINGS

All 17 of The UWI’s contributing countries were represented at the kick-off of the two-day annual budget meetings on March 7, 2023. The 2023 budget sessions were hosted by Belize.

Speaking in the context of The UWI’s celebration of its 75th Anniversary, Vice-Chancellor, Professor Sir Hilary Beckles praised the contributing nations for their committed support over the decades. “Without the firm and sustainable contributions of our people and our governments ... we would not be here today.”

He noted, however, that The UWI is focused on its future. “We are looking into the trajectory of our communities, our nations; we are imagining the best-case scenarios for our people, and we are meeting to discuss how best we can serve imaginatively with innovation and greater efficiency.”

The budgets for 2023 to 2025 for the five campuses, the University Centre, the Seismic Research Centre and the University Hospital of the West Indies were presented. Representatives of the contributing countries deliberated on whether the University’s requests were fair and reasonable to fulfil its mandate.

Recommendations were made to the Campus and University Grants Committees (UGCs) in April where the TAC’s recommendations were reviewed and approved before advancement to The UWI’s Annual Business Meeting of Council for final approval.

Mindful of the economic challenges faced by contributing countries, Mrs. Andrea McNish, University Bursar/Chief Financial Officer and Chair of the meeting, called on governments to settle their accounts, since 47% of the University’s income still comes from contributing countries.

The University remains committed to the ‘Revenue Revolution’, which will see it reducing costs while seeking to become more entrepreneurial to increase revenue.

ACCOUNTS RECEIVABLE

Government receivables and student receivables accounted for the majority of the receivables at July 31, 2023.

Receivables from contributing governments

The contributing governments play a significant role in maintaining the financial health of The UWI as to date, government contributions comprise 47% of total income and remain the largest source of income for The UWI. Caribbean governments have, over the years, relied on The UWI as the institution of choice to educate their people. Ultimately this helps to address the needs of the Caribbean societies and bolsters economic growth. The development of the region has benefited tremendously from governments’ investment in education.

During the year 2022/2023, maintaining dialogue with contributing governments was emphasised, 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 in reducing the receivables of most governments.

The total net receivable of government contributions for economic cost at July 31, 2023 was BDS$96.7 million (net), a marginal increase of 0.08% over BDS$96.6 million (net) at July 31, 2022. Other amounts receivable from governments

for tuition fees and other items were gradually received throughout the year, but at the year-end, there were balances that had not been settled. Payment plans have been provided and dialogue has continued with governments, regarding recovery of the amounts outstanding.

Student receivables

Student receivables as at July 31, 2023 stood at BDS$101.2 million, an increase of 4.5% over BDS$96.8 million at July 31, 2022. This resulted from delays in students honouring their financial obligations as they continued to grapple with post pandemic economic conditions.

APPROVAL OF THE BUDGETS FOR THE BIENNIUM 2023/2024 AND 2024/2025

The Technical Advisory Committees (TACs) of The UWI met on March 7 and 8, 2023 virtually, to deliberate on the budgets of The UWI and the University Hospital of the West Indies (UHWI) for the Biennium 2023/2024 and 2024/2025. The opening ceremony was hosted virtually by the Government of Belize.

The Campus Grants Committees (CGCs) and the University Grants Committee (UGC) subsequently met virtually on April 14, 2023 to further review and approve the Biennial Estimates for 2023/2024, based on the recommendations of the TACs, and the estimates for 2024/2025 were considered indicative for noting. Sixteen of the seventeen contributing governments were represented at the meeting. The meetings of the TACs and Grants Committees were attended by 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 Gaston Browne, Prime Minister and Minister of Finance, Corporate Governance and Public Private Partnerships, Antigua and Barbuda. An expenditure budget of BDS$641.45 million was approved for all Campuses and the University Centre, but excluded the Five Islands Campus that is funded solely by the Government of Antigua and Barbuda.

The approved budget was to be funded by government contributions totalling BDS$484.85 million, tuition fees of BDS$133.73 million and the balance of BDS$22.87 million from other sources of income. A budget of BDS$3.26 million (TT$11 million) was approved for the Seismic Research Centre, to be funded by government contributions.

An expenditure budget of EC$ 38.87 million was approved for the Five Islands Campus. The budget of the Five Islands Campus was expected to be funded in the amount of EC$ 31.92 million by government contributions, from the Government of Antigua and Barbuda. Tuition fees of EC$ 6.0 million and other income of EC$ 0.95 million 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 2022/2023 financial year was BDS$66.8million (US$33.4 million); (2021/2022: BDS$39.9 million (US$19.95 million). The total reflected a 67% increase over the prior year. The five-year trend in receipt of research grants is shown in Chart 1.

The distribution of areas of focus of projects from these grants is graphically represented in Chart 2.

EXPANSION OF ACCESS TO TERTIARY EDUCATION

Scholarships

During the 2022/2023 academic year, the University in alignment with its alumni, donors, corporate partners and other stakeholders, was able to provide scholarships to students in an attempt to expand access to higher education.

The UWI Regional Endowment Fund (UWIREF) which started in 2008 has grown tremendously over the years, and reported a value of J$1.55 billion (US$10 million) at July 31, 2023. Alumni, staff, students and friends of The UWI have made generous donations to support specific scholarships. The UWIREF has a diversified investment portfolio with the goal of growing the original gifts to provide an ongoing income stream to support the specific endowed purposes.

The UWIREF continues to transform the lives of many students by providing financial aid.

New funds injected during the year totalled J$71 million (approximately US$463,000), most of which was received from The UWI Medical Alumni Association (UWIMAA) which recently came on board during the academic year 2022.

Scholarships were also provided by 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. The awarding of scholarships received from these sources was managed by the Institutional Advancement Division.

The UWI, from its UGC budget, also offered Open Scholarships to undergraduate students, and post- graduate students were also provided with scholarships and grants for research and publications.

INITIATIVES FOR IMPROVEMENT OF OPERATIONAL EFFICIENCY

Revenue Revolution

The 2022 –2027 Strategic Plan, aimed at improving the University’s financial health, is the second phase of The UWI “Triple A Strategy” and focuses on revenue generation. In aligning with the strategic objectives of the Plan, there was an increased effort to manage stakeholder relationships which included Caribbean Governments, regional and international corporations, development partners, and higher education institutions.

During the year 2022/2023, planning continued for the expansion of the University through the establishment of The UWI International School for Development Justice (ISDJ) which is considered to be a major milestone achievement for the University in achieving its globalisation objectives. The ISDJ was conceptualised to adopt a for-profit income generating model and will leverage the infrastructure and services provided by the Global Campus, to launch its operations.

The UWI campuses also embarked on a number of innovative and impactful initiatives under their entrepreneurial thrust, including commercialisation of research and technology. Rental of space to facilitate operations of Business Processing Outsourcing Centres also boosted the revenues for the reporting period. Revenue was also received from various licensing agreements.

Digital Transformation Project

The Digital Transformation Project is being financed through a loan of up to US$6 million and a grant of US$190,000 from the Caribbean Development Bank (CDB). The loan was guaranteed by Sagicor and two contributing governments. The University received US$2.3 million as the first tranche of the loan in April 2023, for execution of specific areas of the project. The procurement process is now in progress.

The project will be implemented University- wide and is aimed at strengthening the institution’s delivery of teaching, learning and research, as well as its operational efficiency in several areas, including its resilience and global competitiveness. Implementation will allow The UWI to provide consistent and reliable services to all stakeholders, and will achieve greater operational efficiencies and economies of scale.

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.

Cost saving measures

Several cost saving measures were implemented by The UWI during the 2022/2023 academic year. 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.

Costs related to pension and post-employment medical benefits are being reviewed for more cost-effective arrangements to be implemented.

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.

Pension administration

The UWI administers a defined-contribution pension scheme, The Federated Superannuation Scheme for Universities (FSSU) for its academic and senior administrative and professional staff (ASAP). There is a defined benefit component of the FSSU Pension Scheme for the ASAP staff which provides eligible retirees with a supplement to their pension on retirement. A defined- contribution pension scheme is also operated for some non- academic, administrative and technical staff (ATS) and a defined benefit scheme is operated at the St. Augustine Campus for administrative and technical staff.

Following a review of the investment options available to members of the FSSU Pension Scheme, the Trustees under the advisement of investment advisors, Dean Wetton Advisory, decided to proceed with a two-tranche investment transition. The aim of the restructuring of the FSSU investment portfolio was to give members better yields on their contributions invested and reduce the FSSU Supplementation liability. During 2023, the two- tranche investment transition was successfully implemented by investment managers, BlackRock United Kingdom (UK) and the pension scheme administrators, Capita Employee Benefits Limited, UK.

Several sensitisation sessions and training in the form of workshops and webinars were organised for the benefit of the members of the pension schemes, as well as the University administrators involved in managing the schemes.

Commercial operations

Commercial activities increased during the 2022/2023 financial year, as face-to-face classes resumed and the corporate partners resumed face-to-face engagements, resulting in a demand for use of the University’s facilities. An increase in revenues from rental of properties was realised over that which was received during the previous reporting period. This was primarily due to the rental of the conference rooms and other facilities and higher occupancy levels within the residences which were leased to students and others during the 2022/2023 financial year. Additional revenues were also earned from operating the bookshops at the campuses.

THE WAY FORWARD

Financial viability of the University depends on the continued partnership between the University, its contributing governments, alumni, donors to research projects students, staff and other stakeholders.

The UWI appreciates the financial and other support received, which has enabled it to maintain 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.

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 achieving the targets of the 2022–2027 Strategic Plan, the second phase of the “Triple A Strategy”, dubbed the “Revenue Revolution”, as The UWI seeks to deliver quality service and drive Caribbean development.