Mon | Sep 27, 2021

Editorial | Hold hearings on UWI report

Published:Sunday | February 28, 2021 | 12:11 AM

One of the best-kept recent secrets about The University of the West Indies (UWI), despite its open availability on the Internet, is a report delivered more than six months ago on how the university manages its affairs, and of the dire state of its finances.

“Based on the trending of the CFI (composite financial index) score, The UWI appears to be heading towards financial exigency, which calls for rigorous restructuring in all segments of the institution to reduce operating costs, while pursuing feasible means of increasing revenues,” wrote the authors of the document, a commission chaired by former president of the Caribbean Court of Justice, Dennis Byron, and including Bank of Jamaica governor, Richard Byles. “The trend suggests that institutional re-engineering, substantive programmatic adjustments, and a structured cash conservation programme, in combination, are now probably all due.”

In plain speak, the big takeaway from this report is that The University of the West Indies faces an existential crisis. The fact is The UWI’s CFI score, based on the matrix non-profits often apply in measuring their financial health, is minus 1.21. The minimum score universities normally use as indicative of reasonable financial health is 3.0.

Jamaica’s policymakers, and Jamaicans generally, have good reason to be concerned about the commission’s findings, beyond its implications for The UWI. It should be seen as part of a broader debate on how, or who should pay for university education – an issue broached by this newspaper a week ago with our report on the financial stringencies facing tertiary institutions, including The UWI’s Mona campus.

But The UWI has a special context. Owned by 17 regional governments, including Jamaica’s, it is the English-speaking Caribbean’s only world-ranked academy, listed in the top five per cent of the global league table of universities. It is consistently number one in the Caribbean. Moreover, the more than 70-year-old UWI, despite increasing competition from domestic institutions and foreign universities operating in the island, remains the university of choice for most Jamaicans.

For instance, the nearly 17,000 Jamaicans (of 18,382 students) enrolled at The UWI, Mona, in 2018-19 were nearly a quarter more than at the University of Technology (UTech), where the bars to entry are lower. Moreover, Jamaicans accounted for 38.4 per cent of UWI’s 47,654 students, a smidgen (0.2 per cent) more than Trinidad and Tobago. Approximately 92 per cent of Jamaicans attending The UWI are enrolled at Mona.

LOW GROWTH, HIGH DEBT

The problem now faced by UWI is the deepening inability of Caribbean governments, hampered by low growth, high debt and limited fiscal room, to fund the university as they used to. In 2018-19, UWI, on an expenditure of Bds$925.8 million, recorded a deficit of Bds$91.2 million, a marginal improvement on the year before. But as the Byron commission observed, its equity position eroded by Bds$284.8 million, or 28 per cent.

Clearly, the university cannot continue to take such hits, occasioned in part by write-offs of debt owed by regional governments and exacerbated by tuition arrears by students (Bds$40.25 after impairment cost of Bds$51.79). Jamaican students owed 83 per cent of the nett tuition arrears after impairment. The prospect down the road, if nothing happens, is insolvency. Or, as the issue was put by the commission: “The continued inability of the key contributors – regional governments – to honour their obligations under the current 80:20 funding model has created a build-up in receivables and significant liquidity risk for the institution.”

The Byron commission, in proposing a new financing model, noted the practical difficulties, in the near term, of previous recommendations, such as the establishment of a trust fund, seeded by governments, or big endowments from private interests. Its core suggestion, therefore, is that students be asked to pay more to the economic cost of their education: 40 per cent against the notional 20 per cent. This adjustment, it was proposed, would be accompanied by mortgage-type, long-term borrowing schemes with “graduated payments that are aligned with the graduates’ ability to repay”.

UNACCOUNTABLE MANAGEMENT SYSTEMS

There are two critical provisos to these suggestions. One is that Caribbean governments develop policies to increase the availability of students’ loans and perhaps grandfathering of existing students, by phasing in a new regime.

The second and, in many respects, more important precondition, is where the Byron commission started its analysis, and the reason why the university’s chancellor, Robert Bermudez, commissioned the analysis: the state of governance at the institution. The university’s management systems, judging from this report, are, even by the standards of a turgid bureaucracy, Byzantine, unresponsive, opaque and often unaccountable. There are several suggestions for its overhaul. Said the commission: “Importantly, in terms of equity, and before any new funding model is subscribed, the university must demonstrate moral and fiduciary responsibility, and ethical guardianship in its effective and efficient use of institutional resources. Further, it should clearly show how these resources are being maximised to increase the greater good of Caribbean society.”

Jamaicans have a major interest in what emerges from this report. Our Government should, therefore, table it in Parliament and have it forwarded to a special select committee for hearings and debate. That should happen now. The matter is urgent.