Efforts to restore financial sustainability have to continue
Interim financial results show the University of Wollongong (UOW) is making positive progress towards restoring its financial sustainability in the wake of the financial impact of COVID-19, with substantial recovery efforts set to continue in 2021and 2022.
Interim financial results for the year ending 31 December 2020 estimate UOW’s operating result as a loss of approximately $40M – the product of a comprehensive mitigation strategy implemented early in 2020 when the full extent of COVID-19’s financial impact began to emerge.
This result, considered a relatively positive outcome under the circumstances, was achieved via tight expenditure controls. Reductions in non-salary expenditure in the vicinity of $32M were achieved with significant cuts made to travel and related expenses, student recruitment agent fees, facilities management, utility expenses and catering services.
Around $4M was saved in salary expenditure, achieved via the variation to enterprise agreements and Special Administrative Leave arrangement agreed to by staff in a vote held in July.
Also working in the University’s favour was increased funding from the Commonwealth government through its commitment to maintain the Commonwealth Grant Scheme at 2019 levels plus the addition of short course places. This combined to boost UOW’s income by $13M during the year.
These results were achieved despite significant increases in technology costs associated with the pivot to online course delivery and providing approximately $4M in grants to support students suffering financial hardship as a result of COVID-19.
UOW Vice-Chancellor, Professor Paul Wellings CBE, paid tribute to the efforts of all staff in achieving such a positive result under very difficult circumstances.
“Although these preliminary results are broadly in line with forecasts announced throughout the year by the University’s leadership team, no one should underestimate the efforts and sacrifice made by all staff to reduce expenses and contribute directly to confronting the financial impact of COVID-19.
“While we have made excellent progress together, the job of returning our University to a financially sustainable position and preparing for a post-COVID-19 world is far from finished. Efforts to transform our organisation and find further efficiencies will need to continue throughout 2021 and beyond,” Professor Wellings said.
Revenue was down an estimated $90M in 2020 and the University continues to forecast similar reductions for 2021 and 2022. Efforts are well underway across the University’s education and research activities to reach a financially sustainable position.
Continuing financial and economic recovery efforts
Increased interest from domestic students considering studying at UOW in 2021 has led to student enrolments currently tracking ahead of the same stage of the annual student recruitment cycle in 2020.
However, with borders remaining closed to international students, the University is expecting far fewer enrolments and income from this group of students in 2021 in comparison to 2020. The full extent of income impact is hard to assess until much closer to the March census date when student enrolments are confirmed.
The University is preparing for simultaneous on-campus and online course delivery during 2021, enabling as many students as possible to return to a vibrant campus life while retaining flexibility for students unable to attend campus or for the University to quickly respond to changing public health requirements to protect the safety of students and staff.
The University is also contributing to Australia’s broader economic recovery, offering 33 discounted short courses to help Australians retrain and investing in industry-focused research and innovation aimed at creating new jobs.
UOW launched its translational Research Initiative for Cell Engineering and Bioprinting (TRICEP) in Wollongong during November and an Industry 4.0 Agri-business Innovation Hub at its Shoalhaven Campus in September 2020. Progress is also continuing towards establishing a world-class Health and Wellbeing Precinct at its North Wollongong Innovation Campus.
The collaboration between UOW and industry and the role played by the Innovation campus will be critical to the city’s post COVID-19 economic recovery
“We are reducing operating expenses while setting out to maintain the quality of our student experience and continuing to direct research and innovation efforts towards addressing local and national economic recovery priorities and community health needs,” Professor Wellings said.
The University is in the process of finalising its 2020 accounts ahead of its annual audit review. The finalised and audited accounts will be published in its annual report in May. The interim results indicate the scale of the financial challenge at UOW and many other universities across Australia.