Cash crunch grips universities - UWI against the ropes but UTech holding its own
Published:Sunday | April 7, 2013 | 12:00 AM
Tyrone Reid, Senior Staff Reporter
Strapped for cash, the University of the West Indies (UWI), Mona campus has been having difficulties paying its bills on time.
The administrators of the university have blamed the cash crunch on the Students' Loan Bureau (SLB) and the failure of some students to pay their fees on time.
"The UWI, Mona, has not been able to pay some of its creditors as quickly as it has done customarily, largely as a result of delays in outstanding amounts due to the Campus," Dr Carroll Edwards, director of the marketing and communications office at UWI told The Sunday Gleaner.
"The UWI, Mona, is not unique in this regard and is working to address this situation," explained Edwards as she reiterated that the university receives most of its funding from the Government and from student fees.
Edwards said this year has been financially challenging to the university due in part to the gap created by reduced funding from the Government.
"There have also been delays in payments from the Students' Loan Bureau. Though the expected revenues from the SLB for this year are approximately 13 per cent higher than last year, the Mona campus has, to date, received about 50 per cent of the amount due, with no firm schedule for the remaining balance," lamented Edwards.
"Additionally, the inability of some of our students to meet fee payments within stipulated deadlines has caused a level of unpredictability in the rate of cash-inflows," Edwards added.
The university pointed out that for the most part, the majority of students pay their fees on time.
However, more students are now taking a longer time to make the payments, making inflows unpredictable.
According to Edwards, in order to mitigate the effects of the cash flow problem, the university has been undertaking a number of income-generating activities which "have been producing good results".
In addition, efforts are being made to identify new financing options for students as well as appropriate sources of funding to ease cash flow pressures that might arise.
In the bid to improve the university's financial health, the Mona campus is also focusing on cost reduction in its utilities and other operating expenses.
"The UWI, Mona, like all institutions, is impacted by Jamaica's economic climate, and must make adjustments which take the challenging economic environment into account.
"The campus has introduced new procedures to improve inflows from fees and other sources. However cash constraints have arisen from time to time, which in no way have affected the quality of education offered to our students," argued Edwards.
The UWI is a regional institution supported by the governments of the contributing countries.
Each year, the governments approve budgetary allocations to assist individual campuses in financing their goals.
In the meantime, the University of Technology (UTech) says it is managing financially despite the harsh economic times.
Dr Kofi Nkrumah-Young, associate professor of education financing and vice-president of planning and operations at UTech, said it is not having financial troubles or difficulties paying its creditors on time.
"If there are no issues with the invoices that are presented, we would settle within two weeks. If problems are found, for example, verification of items and procedural issues, it would take longer," said Nkrumah-Young.
The associate professor pointed to a published report which showed that despite a challenging year that ended in March 2012, UTech recorded a slight deficit of $227 million on a turnover of $5.47 billion.
"Notwithstanding, our investment portfolio remained virtually unchanged from the previous year's level (and) preliminary estimates for the current year indicate that March 2013 would show either break-even or a small surplus."
However, like the UWI, Mona Campus, UTech is having trouble getting timely payments from the SLB.
"We are not having a cash flow problem. Our biggest debtor is the SLB and because of their difficulty in settling their commitment to us we have had to dip into pour reserves," said Nkrumah-Young.
The associate professor also admitted that there has been an increase in the number of students who fail to pay their tuition and that it has impacted the UTech's ability to pay its bills.
"Yes our receivables have increased and could lead eventually to using the full limit of credit terms with our suppliers. However, we keep a constant and careful monitoring of the situation and we would not allow it to result in breaching credit terms," said Nkrumah-Young.