CONTENT
01 Vice Chancellor’s Introduction and Overview 02 2015 at a Glance 03 Vision, Mission and Values 04 Executive Summary 05 AP2015 Framework and Process 06 Activities and Outputs of the AP2015 07 Funding the Priorities and Activities 08 Operating Budgets and Financial Commentaries 09 Financial Targets and Ratios 10 Capital Plan and Infrastructure Developments 11 Risks and Mitigation Strategies 12 Monitoring and Evaluation Mechanisms 13 Appendices 14 List of Tables and Figures 15 Abbreviations and Acronyms
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THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
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01
VICE CHANCELLOR’S INTRODUCTION AND OVERVIEW
Professor Rajesh Chandra Vice-Chancellor and President
01
VICE CHANCELLOR’S INTRODUCTION AND OVERVIEW
This Annual Plan for 2015 projects the activities and
based on Quality of Teaching Survey. Improving graduation
funding of the third year of the University’s ambitious and
completions will be a major priority for 2015 and 2016. A
transformative Strategic Plan 2013-2018 that will take the
number of remedial plans are being implemented to improve
University to its 50th anniversary in 2018. It will also be the
completions in the remaining years of the Strategic Plan.
end of the mid-term of the current Strategic Plan. This makes Annual Plan 2015 a crucial plan that comes at a critical juncture when the University needs to review its performance and funding needs before it embarks on the second triennium 2016 to 2018.
The
University
has
built
144
additional
beds
for
accommodation but this is still short of the target to meet the 2018 target of 2,000 additional beds. The priority in 2015 will be the approval and commencement of an international student hostel to provide excellent facilities to attract more
The University has achieved a number of milestones in the
international students. This will not be enough, though, so
first two years of the strategic plan. Significant improvements
the Commercial Division and the Finance Division will need
have been made in the quality of teaching and learning during
to work much harder to ensure that the KPI in relation to
2013 and 2014. The University completed an institutional
additional student accommodation is met by the end of the
quality audit by the Academic Quality Agency for New
SP.
Zealand Universities (AQA) in December 2013, in which the Strategic Plan was strongly endorsed. The University received commendations and affirmations in a number of areas from AQA. It also made a number of recommendations that are being addressed. The implementation of these recommendations, all in line with the Strategic Plan, will help further improve the quality of the University’s programmes and delivery. An external review of the Strategic Total Academic Review (STAR) was also completed and the University is implementing the recommendations of the report.
Over the last two years, the University has embedded the seven (7) research themes and has provided additional funds and support to enable the achievement of the ambitious research-related objectives of the SP. The University has been hiring more professors with proven research outcomes as a major method of promoting greater research output and impact, and will continue this in 2015. Additional efforts will be made in 2015 to reach the targets for greater research output and impact, research degrees, and international student enrolment, although the major bottleneck to this—the acute
The University continues to pursue international accreditations
shortage of residential accommodation for international and
of its programmes. It was delighted to obtain accreditation in
postgraduate students will need to be resolved in 2015. The
2013 of its MBA programme from the Association of MBAs
University has also established the new Centre for Economic
(AMBA). In 2014, the University achieved a major milestone
Policy and Modelling and is seeking a suitable Director to
by receiving recognition in Australia of its law Programme.
lead the center.
During the year, the University was also re-accredited with CPA for its accounting programme. The University is currently pursuing accreditation with the American WASC Senior College and University Commission (WSCUC) and received its first visit from WSCUC in October 2014. It plans to progress this further in 2015, with plans to also accredit other programmes, especially for Pacific TAFE programmes. Additional funds are provided in 2015 to invest in engineering labs and facilities, in preparation for its first site visit in 2015. A review of the flexible delivery was also completed in 2014 and the recommendations are now being considered for implementations from 2015.
A large part of student support is provided via USPNet. Major improvements have been made to the USP network (USPNet) with the reengineering of the overall architecture, systems and processes. The satellite component of the system has been also reengineered, with a rebalancing of C band and Ku band broadband. Additional bandwidth has also been acquired. Further improvements to further consolidate student satisfaction with USPNet services will be a priority in 2015. Three member countries, Tonga, Marshall Islands and Vanuatu, now have access to fibre-optic cables, while two others, Samoa and Solomon Islands are planning to establish marine fibre connections in 2015. These are exciting
The University has made significant progress in improving
developments and will open up possibilities for USP to
student support by investing in additional first year support
leverage new technologies in the delivery of its programmes
systems and mechanisms, developing early warning systems
and courses in order to reach more people faster and at
and online support, and putting in place a student mentoring
affordable cost. A concept plan was also developed in 2014
system. The University is meeting its student satisfaction KPI’s
for the knowledge hub. This will need substantial funding.
6
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
01
VICE CHANCELLOR’S INTRODUCTION AND OVERVIEWcon’t
The initial proposal for funding from Japan was unsuccessful.
Overall, Annual Plan 2015 aims to continue with the
Other options will be explored in 2015.
momentum achieved in the implementation of the Strategic
A review is currently being commission to review the operations,
management
and
functions
of
Regional
Campuses. This is aimed at improving the cohesion of the University’s overall operations, empower regional campuses, and enable regional campuses to perform better and better respond to national needs. The construction of the new Kiribati Campus has started and planned to be completed for second semester 2015. The expansion of the Vanuatu Campus was completed in 2013 and preparations for the new campus in Solomon Islands in close consultation with the
Plan and remedy shortcomings in the achievement of some of the SP KPIs. It also aims to prepare the University fully for the next triennium through the UGC mechanism, promote better budget management, and further differentiate the University from other providers as the premier provider of higher education in the region through further enhancement of quality and achievement of further accreditations. This will require continued efforts to further cohere the University around the University’s vision of excellence and the delivery of greater value and confidence to its stakeholders.
ADB continued throughout 2014. The University appreciates the major investment by the Government of the Republic of Marshall Islands in 2014 to purchase the Long Island Hotel as the new campus facility. Renovations are now being
Professor Rajesh Chandra
planned to convert the hotel into teaching facilities in 2015.
Vice-Chancellor and President
Increasing the number of graduations at regional campuses has contributed to the strengthening of the regionality of the University and the embedding of our regional campuses more deeply into the national systems and consciousness. There are plans to continue to improve efficiency and productivity of the University in 2015 by implementing a revised workload model for academics, and a fundamental review of administration sections with a clear focus on benchmarking with appropriate comparators, productivity and efficiency. The iPerform system has been successfully rolled out for faculties and will be rolled out for administration sections from 2015. The University Senior Management Team was also strengthened in 2014 by the appointment of two additional Vice Presidents, the upgrade of the position of Pro-Vice-Chancellor Research and International to that of Deputy Vice Chancellor Research and International and appointment of a new Deputy Vice Chancellor for Learning and Teaching, who will join the University in January 2015. A review of the Strategic Plan KPI’s has highlighted a number of gaps and remedial plans that the University will implement in 2015. The University will undertake a review of its funding formula in 2015 to inform the funding arrangements for the next triennium. It is already clear from the rising enrolments and resultant demand for a high quality learning environment and facilities that the University will need to raise additional funds in future years for its quest for excellence.
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THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
02
2015 AT A GLANCE
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THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
02
2015 AT A GLANCE
Students 2015 FORECAST EFTS BY MODE
EFTS by mode 2012
2013
Forecast 2014
AP2015
Blended
1,091
1,211
1,138
1,125
Face to Face
6,331
6,568
6,825
6,830
Mode
7%
37%
45%
10%
Online
Blended
Face to Face
Online
364
537
1,058
1,491
4,796
5,332
5,357
5,655
Total
12,582
13,648
14,378
15,101
Research USP PUBLICATIONS 2013
3% 3% 10% 1% 10% 1% 1% 2% 2% 3% 10% 3% 3% 10% 3%
Publications
2012
2013
133
192
145
5
18
4
Book chapters
10
20
28
Book reviews or comments
14
10
4
Conference Proceedings
27
60
27
Professional & Technical Reports
23
30
7
Journal articles
18%
Books
53%
2%
18% 18%
53% 53%
10% 10%
2011
Creative Works
Journal articles (145)(145) Journal articles
Books (4) (4) Books
BookBook chapters (28) (28) chapters
BookBook reviews or scholarly comment (4) (4)Other Publications reviews or scholarly comment
Conference Proceedings (27) (27) Conference Proceedings
Professional & Technical Reports (7) (7) Professional & Technical Reports
Creative Works (9) (9) Creative Works
Other Publications (49) (49) Other Publications
Total
1
11
9
63
93
49
276
434
273
Note: 2014 publication numbers will be known in 2015
Staff STAFF COMPONENTS AP2015
Staff Numbers
21% 21% 39%
21% 39%
39%
15%
25%
21%21% 25% 39%39% 15%
15%15%
15%
Academic Academic AcademicProfessional Intermediate Professional Academic Professional Intermediate & Junior & Junior
Academic
25%25%
25%
Academic
2012
2013
Forecast 2014
AP2015
418
422
405
415
Professional
187
213
245
255
I&J
598
626
634
642
333
323
332
339
1,536
1,584
1,616
1,651
Professional Professional Hourly Paid Hourly Hourly PaidPaid Total
Intermediate &Intermediate Junior &Hourly Junior Intermediate & Paid Junior Hourly Paid Hourly Paid
Finances 1% INCOME, EXPENDITURE, SURPLUS AP2015 49% 1% 49% 50% 50%
Income and Expenditure 2012
2013
Forecast 2014
AP2015
Income
161.8
172.7
176.4
181.9
Expenditure
157.1
174.4
171.1
178.9
4.7
(1.8)
5.3
3.0
Â
Operating Surplus
10
Income
Expenditure
Surplus
Income
Expenditure
Surplus
F$ m
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
03
11
VISION, MISSION AND VALUES
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
12
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
03
VISION, MISSION AND VALUES
Our Vision Achieving excellence and innovation for sustainable development of the Pacific Island Countries.
Our Mission •
To provide Pacific people with a comprehensive range of excellent and relevant tertiary qualifications;
•
To deliver the benefits of advanced research and its applications;
•
To provide communities and countries in the Pacific region with relevant, cost effective and sustainable solutions, including entrepreneurship, to their main challenges;
•
To be an exemplar of tertiary education for Pacific Islands in quality, governance, application of technology, and collaboration with national tertiary institutions.
Our Values •
The highest standards and quality of education in the region;
•
The highest standards of performance; innovation and teamwork; management change; flexibility, and achievement of excellence;
•
Investing, supporting, empowering, developing, and rewarding excellent staff;
•
Commitment to creativity and innovation;
•
Distinctiveness and diversity in our Pacific heritage with investment in its development and preservation;
•
Regional cooperation and integration;
•
Positive and inclusive learning environments, including welcoming campus life activities;
•
Support for flexible learners in all locations to enable them to be successful in work, life, and citizenship;
•
The highest standards of good governance, leadership and transparency, integrity, and honesty through the implementation of professional and ethical processes and behaviours by all in the USP community;
•
13
Protecting and nurturing the environment in all our activities.
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
04
14
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
EXECUTIVE SUMMARY
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THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
04 4.1
EXECUTIVE SUMMARY
The Annual Plan 2015 (AP2015) is the third annual plan developed to give effect to the vision and strategy in the Strategic Plan which aims at moving the University from good to excellent when it turns 50 in 2018. The key priority in 2015 will be to address the gaps in achieving the mid point targets of the Strategic Plan. These include setting aside significant funds for increasing the number of graduates and completions, ensuring student success through effective first year supports and peer mentoring, continuing to invest in flexible and quality programmes and student support services, increasing research outputs that meet the needs of member countries, an increased emphasis on performance and productivity, enhancing efficiency through automation, improving the performance management and development of staff, investing in improving the physical and virtual infrastructure for the students and commencing the processes of encouraging entrepreneurship in our students and our generation.
4.2
The plan builds on achieving the long term financial sustainability of the University. It will provide an operating surplus which will generate adequate cash to contribute to our capital programme for the year. The University will also be able to add to our cash reserve to meet our increasing need for re-investments in infrastructure for teaching and research. To achieve this, the University will find new ways to ensure value for money in all its purchases and improve the efficiency of operations. The programme to reduce costs includes achieving lower prices through better procurement and compliance with preferred purchasing while also noting that the main savings come from good expenditure decisions: considering if particular costs need to be incurred at all. Expenditure management is an important aspect of this plan. An outsourcing and savings plan is being developed to implement this. Management will be aiming to raise more income to fund strategic initiatives and be strategic and mindful in all expenditure decisions, noting that all staff contribute to financial sustainability. A strong monitoring and accountability mechanism for all fund controllers will be introduced. The University will be placing investment into areas that have full alignment to the USP Strategic Plan and discontinuing activities that are low priority and not adding value.
4.3
The long term financial sustainability of the University needs to be addressed. The process has already begun for the review of the funding formula of member countries’ contributions. This is being done after assessment in 2014 on course, programme and campus costings. The shape of the funding formula for Fiji from 2016 is yet to be known. The perceived inequity of fees for different member countries also needs to be resolved. These will all be a part of the considerations for the triennial funding for 2016 to 2018.
4.4
The AP2015 aims at generating an operating surplus of $3.0m or 1.7% of income. A surplus is critical to allow reinvestment in our capital programme ensuring USP is an exciting and high quality place to study. This 2015 target is $1.5m higher than the UGC approved financial target of $1.5m for 2015 in the Financial Plan (FP2015). The University will aim to move it towards the 5% benchmark by 2018. The table below provides a summary of financial performance and projections for 2015
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THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
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EXECUTIVE SUMMARY con’t
Table 1 Financial Performance 2012 - 2015 2012 Actual $m
2013 Actual $m
Income
161.8
172.7
174.5
181.9
180.6
Expenditure
157.1
174.4
172.9
178.9
179.1
4.7
(1.7)
1.6
3.0
1.5
3.0%
(1.0%)
0.9%
1.7%
0.8%
Operating
Surplus/
2014 AP $m
2015 AP $m
2015 FP $m
(Deficit) Operating Surplus %
4.5
The plan will generate net cash flow from operating activities of $8.6m, to contribute $7.95m to the capital programme and add to the cash reserve of the University with the aim of moving towards meeting the UGC cash reserve target of two months of operating costs; generate sufficient cash to invest in infrastructure for teaching, research and regional support; and add to cash reserves in meeting short and long term borrowing commitments.
4.6
The major capital projects for the year will be the completion of the Kiribati campus and commencement of the Solomon Islands campus, through ADB loan funding. A plan will be developed during the year for the development and funding of additional student accomodation, with the aim of providing an additional 2,000 beds by 2018. The plan to build Lautoka Campus has been revised and a new plan will be presented in the new year. The plan will also complete the renovations and equipping of a new facility purchased by the Government of Marshall Islands. The University is also contributing $7.95m towards the capital programme from its cash to be generated during the year. A further allocation of $1m is provided in the operating budget for deferred maintenance in 2015.
4.7
Management will strengthen its accountability processes and closely monitor the progress of the plan during the year. It’s important that mitigation processes are put in place to ensure the risks of not meeting these targets are successfully mitigated.
17
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
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18
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
AP2015 FRAMEWORK AND PROCESS
19
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
05 5.1
AP2015 FRAMEWORK AND PROCESS
Planning Framework: This plan was developed through the integration of the planning and budgeting process and included:
5.2
•
preparation of faculty and section plans in line with the Strategic Plan;
•
allocation of financial and human resources to Strategic Plan priorities;
•
clearly defining measureable targets for each priority;
•
supporting clear management accountability and measurement of performance on a regular basis.
Principles and Guidelines: During the planning process, further steps were taken to identify and create key principles which align the University’s financial plan directly to the strategic objectives. The table below lists the budget principles which underpin the financial plan for 2015 and beyond.
Table 2 Financial Principles for 2015 Financial Principles
20
Established in Prior years
Support the University’s Strategic Plan
√
Faculty Internal Funding Model
√
Resource Allocation Methodology
√
Meet financial benchmarks and targets
√
Cash reserves
√
Performance funding
√
Donor Incentives
√
Investment in scholarships
√
Administration effectiveness and efficiency
√
Compliance
√
Prudence
√
User Pay
√
Value for money
√
Contingency and risk pools
√
Departmental carry forward of retained earnings
√
Re-invest in infrastructure
√
New
Commercial and investment strategy to maximize returns
√
P & F recharging of project work
√
New funding model for the University
√
Enhance Risk Managament
√
Outsourcing to achieve efficiency
√
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
05 5.3
AP2015 FRAMEWORK AND PROCESS con’t
Drivers: The 2015 Annual Plan aims to continue the progress of the Strategic Plan 2013-18. The 2015 plan has been constructed to achieve the goals set by the University for itself in the third year of the new triennium. The University will prioritise the year to address the gaps in its Strategic Plan in order to achieve the milestones set in the plan for 2015. This plan is also driven by the need to support growth and invest in infrastructure to support teaching, research and community support.
5.4
Levers: The following key levers the University needs to invest in are identified in this plan in order to achieve the plan within available resources:
Revenue Growth: There will be vigorous efforts to increase international students and post-graduate students (high level streams), to successfully implement the Alumni Strategy and develop a winning team of fundraisers. With the Commercial section adequately resourced to implement the commercial plan, commercial income is expected to reasonably increase.
Improve Productivity: Staff profiling and knowledge of workload is important to identify areas of performance improvements and maximization of current staff resources. This includes investments in technology to automate manual processes to drive efficiency and effectiveness in the delivery of teaching, research and regional support services. The use of Open Educational Resources (OERs) and e-Learning will be strongly promoted. Outsourcing and savings initiatives will be rigourously pursued.
Invest in Strategic Plan Initiatives: The plan must generate sufficient cash to invest in Strategic Plan initiatives, capital works, infrastructure and add to cash reserves for future investments and growth.
5.5
Assumptions: The assumptions made while formulating the Financial Plan 2013-2018 serve as a starting point. These assumptions have been revised given the current year trends, changes to USP’s internal and external environment and other factors: •
Members’ contributions to continue at the same level as 2014;
•
Enrolments growth of 5%;
•
Development assistance income to slightly increase from 2014 level, as per assistance confirmed by the Australian and New Zealand governments;
•
Commercial income to increase by 12%;
•
Staff costs to be funded at 95% for sections having more than five staff, based on history of 5% savings over full year due to vacancies, and 100% for sections having five or less staff, with all new positions funded at 75%;
•
A small provision for salary adjustments, as per agreements with staff and unions;
•
Additional funds of $1m for deferred maintenance work to be funded for the second year in 2015;
•
Put in place savings target for each section and by expense type;
•
Contingency fund set aside for unknown occurrence increased by $1.6m, with a further savings contingency to fund sections genuinely not able to meet the savings targets;
•
Capital programme includes developments of major campuses in Kiribati, and Solomon Islands, with the additional student accommodation in Laucala planned to commence from end of 2015.
21
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
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AP2015 FRAMEWORK AND PROCESS Con’t
5.6
Financial Targets: AP2015 has maintained the following financial targets:
Table 3 Targets for AP2015 Institutional Targets •
Increase the operating surplus percentage towards the benchmark of 5%.
•
Exceed cash margin of 16%.
•
Generate enough cash from operating activities to pay for capex of $7.95m.
•
Sectional Targets •
Spend within approved budget.
•
All Commercial and Self-Funding Units to contribute 20% of their total expenditure to the University’s Recurrent Fund.
•
expenditure to the Recurrent Fund.
Add to unencumbered (cash reserve) balance and move it towards UGC approved level of two months of operating expenditures.
All Institute funds to contribute 15% of their total
•
All non-recurrent USP activities, other than project funds, will each generate a 4% surplus (surplus over total income) after the required overhead recovery to the recurrent fund.
22
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
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23
ACTIVITIES AND OUTPUTS OF THE AP2015
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
24
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
06 6.1
ACTIVITIES AND OUTPUTS OF THE ANNUAL PLAN 2015
The University’s efforts and activities in 2015 will be driven by the Strategic Plan 2013-2018. The focus under each of the seven Priority Areas is to enhance efforts that commenced in 2013 to shift the University from good to excellent.
6.2
All the plans of faculties and sections will be aligned to this plan and will be monitored closely by management to ensure success.
6.3
25
The key targets under each Priority Area are provided in Tables 4 to 10.
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
26 3
AMBA accred for MBA & Provisional accred - BNetCentCom & BSoft Eng
7
1
BCom Acc and all Tourism & Hospitality Progs
Institutional 2,649 (20102012 cumulative)
9% (as at end 2011)
35% (as at end 2011)
7 out of 32 programmes (end 2012) – 22%; completed by 2012 (LLB; B. Ed Primary); GCTT; B. A. Pacific Policing; B. A. Social Work; B. A. (Computing Science); B. A. (Economics))
1 (law) out of 32 programmes (end 2012) – 3%
Fully accredited Tourism programmes
Postgraduate completions
10 year PhD completion rates
10 year Research Masters completion rates
Numbers of UG programmes with flexible learning
Numbers of UG programmes online
Programme Accreditation
3.1
3.2
4.1
4.2
5.1
35%
9%
1,042
4
34%
17%
1,089
1,525
2
1,484
Institutional 5,283 (20102012 cumulative)
Undergraduate completions
1
Actual 2012 Actual 2013
SP Baseline 2011
Key Performance Indicators
Priority Area 1: Learning & Teaching
Table 4 2015 KPIs and Targets for Priority Area 1: Learning and Teaching
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015 Full recognition of Law Programme in Australia.
Re-accreditation of Accounting Programme with CPA.
1
2
30%
14%
1,127
1,508
Projected 2014
2
2
30%
13%
1,170
1,499
AP2015
7
15
3,386
4,532
Maintain full accreditation of all Tourism programmes, accredit 6 additional programmes
5 programmes
13 programmes
45%
18%
3,462
6,015
Projected SP Target Cumulative Cumulative (2013-2015) 2013-2015
06 ACTIVITIES AND OUTPUTS OF THE ANNUAL PLAN 2015 Con’t
27
61% (half year data, end 2012 )
Graduate employment 4 months after completion
6
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015 61%
61%
start-up delay
WASC Accreditation
5.3
Initial discussions with WASC agency
Initial discussions with NZUAAU (end 2012)
Initial discussions with WASC (end 2012)
Self-review report, site visit and final report from AQA with recommendations
Actual 2012 Actual 2013
Initial discussions with AQA
SP Baseline 2011
AQA Audit
Key Performance Indicators
5.2
Priority Area 1: Learning & Teaching
Institutional Stage 4 and 5
Complete (1) 5 year WASC accreditation Project plan, (2) initial application submitted, (3) diagnostic visit by WASC in the pipeline, (4) Awareness sessions are being conducted throughout the University
64%
Implement recommendations of AQA
To be done: (1) planned project/ activities to achieve 30 recommendations, (2) load planned projects/activities on SPOMS and book resources, (3) track completion, presently 0%, (4) achieve 100% completion by end of 2015, which is only 16 months away
61%
AP2015
Projected 2014
Table 4 2015 KPIs and Targets for Priority Area 1: Learning and Teaching con’t
64%
Complete Stage 4 & Stage 5 of WASC accreditation
Implement NZUAAU audit recommendation
SP Target Projected Cumulative Cumulative (2013-2015) 2013-2015
06 ACTIVITIES AND OUTPUTS OF THE ANNUAL PLAN 2015 Con’t
28
2013 develop additional online support 2014
GDS S7 Q19 87% (mid 2012)
919 beds (end 2012)
Increase online student support
Overall student satisfaction
Number of accommodation units facilitating interaction of students
7
8
9
919
91%
Online student support visible in 2 out of 11 categories (18%)
96
90%
m-learning system, SMS notifications, early warning systems, and peer mentoring.
Developed online student mentoring system,
Actual 2012 Actual 2013
Concept for 350 beds
48
Develop additional online support and 2014 survey of satisfaction level
Projected 2014
42
$7.9m
93 (cumulative 20092011) -
11m/yr (end 2011) definition of research income
High Quality A/A*Journal Outputs
Levels of external research income
10
11
Actual 2012
SP Baseline 2011
Key Performance Indicators
Priority Area 3: Research and Internationalisation
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015 $5.8m
29
Actual 2013
$10.5m
36
Projected 2014
Table 6 2015 KPIs and Targets for Priority Area 3: Research and Internationalisation
SP Baseline 2011
Key Performance Indicators
Priority Area 2: Student Support
Table 5 2015 KPIs and Targets for Priority Area 2: Student Support
90%
$11.7m
38
AP2015
Complete business case & commence 350 bed hostel
AP2015
144
1,041 beds
90%
Achieve 80% of comparator satisfaction
SP Target Cumulative 2013-2015
103
15m/yr
111
Projected SP Target Cumulative Cumulative (2013-2015) 2013-2015
Projected Cumulative (2013-2015)
06 ACTIVITIES AND OUTPUTS OF THE ANNUAL PLAN 2015 Con’t
29 Existing Postgraduate research space
Existing Postgraduate research space audit across USP
Better research facilities
12
Projected 2014
Complete Research Space Audit
Actual 2013 Adopted the TEFMA definition of “research facilities”. Developed proposal for Central Scientific Instrumentation Facility Institutional Research Facilities Plan
AP2015
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
13
Knowledge hub
Priority Area 4: InforKey mation and Performance CommunicaIndicators tion Technologies
SP Baseline 2011
Components of knowledge hub identified, business case, staff appointment made
Actual 2012 Actual 2013
Concept developed and accepted. Funding to be confirmed.
Projected 2014
Implement subject to funding
AP2015
Table 7 2015 KPIs and Targets for Priority Area 4: Information and Communication Technologies
Actual 2012
SP Baseline 2011
Key Performance Indicators
Priority Area 3: Research and Internationalisation
Full operationalization of USP knowledge hub & USP to provide leadership to Pacific Academic & Research Network
Projected SP Target Cumulative Cumulative (2013-2015) 2013-2015
Expand research space audit across USP & develop research facilities plan
Projected SP Target Cumulative Cumulative (2013-2015) 2013-2015
06 ACTIVITIES AND OUTPUTS OF THE ANNUAL PLAN 2015 Con’t
30
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
15
16
Priority Area 6: Our People
Professors
Key Performance Indicators
Professors Emeritus – 3, Professors faculty – 21, Professors adjunct – 9, Professors visiting – 5, Professors senior management – 3 (end 2012)
SP Baseline 2011
Maybe same as baseline - 3 active collaborating work streams and 10 members
Only 1 out of the 9 planned tasks completed. No new members or new collaborating work streams in the last one and half years
25
21
24
Projected 2014
35 tasks to complete between 2014 and 2015
Projected 2014
34 of 69 tasks completed
Actual 2013
Actual 2012 Actual 2013
Table 9 2015 KPIs and Targets for Priority Area 6: Our People
3 active collaborating work streams and 10 members (end 2012)
Association of heads of Tertiary Institutions in the Pacific Islands (AHTIPI)
14
Campus plans developed and Finances approved (1. DVC for breakdowns, 2. breakdowns to Deans for appropriate)
Actual 2012
SP Baseline 2011
Upgrading & expansion of Regional Campuses
Priority Area 5: Key Regional and Performance Community Indicators Engagement
Table 8 2015 KPIs and Targets for Priority Area 5: Regional and Community Engagement
24
AP2015
Maybe same as baseline - 3 active collaborating work streams and 10 members
35 tasks to complete by end of 2015
AP2015
Projected Cumulative (2013-2015)
Projected Cumulative (2013-2015)
30 Professors
SP Target Cumulative 2013-2015
5 active collaborating work streams and 15 members
Three new campuses (Solomon Islands, Kiribati, Lautoka) and major renovations and expansions to Tonga, Vanuatu, Tuvalu and Marshall Is
SP Target Cumulative 2013-2015
06 ACTIVITIES AND OUTPUTS OF THE ANNUAL PLAN 2015 Con’t
31 16%
Staff climate survey completed
14%
19%
To undertake the inaugural staff climate survey in 2013
Associate Professor - 10% vs Comparator Universities Benchmark - 5.66%
Professor - 25% vs Comparator Universities Benchmark - 5.96%
To undertake the inaugural staff climate survey in 2013
18.3
19
3%
15%
Establishment of institutional targets relative to comparator Universities
Same as current as all tasks have been completed and yet some fundamentals in relation to this KPI is still incomplete
7%
10%
20%
AP2015
17%
8%
12%
20%
Projected 2014
Projected Cumulative (2013-2015)
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
Income diversification commercial income
Operating surplus
Total administrative review
20
21
22
Priority Area 7: Governance, Key Leadership, Performance Management Indicators and Continuous Improvement
4.3% (2011)
$14.9m/yr (end 2011)
SP Baseline 2011
2.9%
$16.7m
(1.0%)
$18.7m
Actual 2012 Actual 2013
TOR advertised
3%
$19m
Projected 2014
Complete and implement review recommendations.
1.7%
$20m
AP2015
Establishment of institutional targets relative to comparator Universities
7.46%
7.25%
7.07%
17% academic staff non-Laucala
SP Target Cumulative 2013-2015
Review & initial implementation completed
3%
$20m/yr
Projected SP Target Cumulative Cumulative (2013-2015) 2013-2015
Table 10 2015 KPIs and Targets for Priority Area 7: Governance, Management, Leadership and Continuous Improvement
Staff satisfaction
Staff turnover
18.2
10%
25%
Senior Lecturer - 11.48% vs Comparator Universities Benchmark - 5.66%
18.1
20%
Actual 2012 Actual 2013
13.5%
Non-Laucala Academic Staff
17
SP Baseline 2011
59 out of 437 academic staff non-Laucala - 13.5% (end 2012)
Key Performance Indicators
Priority Area 6: Our People
06 ACTIVITIES AND OUTPUTS OF THE ANNUAL PLAN 2015 Con’t
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FUNDING THE PRIORITIES AND ACTIVITIES
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FUNDING THE PRIORITIES AND ACTIVITIES
Resourcing the Plan: The initiatives contained in this plan will require substantial investments to ensure the targets are achieved. Given that no increase in member country contribution is being sought, the University will maximize its current resources through efficiency and transformation, and raise additional revenues from development assistance, research and commercial activities. Borrowing will also be sought during the year to fund the development of the Kiribati and Solomon Islands Campus.
This plan is projecting an income of $181.9m to fund the expenditure plan of $178.9m, generating an operating surplus of $3.0m. After adding back non-cash items, the plan will generate $8.6m cash from operating activities, which will allow investment of $7.95m in the capital programme and add the balance into cash reserves.
7.2
Funding the Priority Areas: In its Annual Plan for 2015, the University has set aside $6.125m from its own resources to invest in Strategic Plan initiatives. Other funds will be sourced from borrowings and development assistance to fund certain strategic initiatives. Table 11 below shows the breakdown of funds being allocated.
Table 11 Funding Sources of Costs of SP Initiatives for 2015 Descriptions
Pay
Non-Pay
Capex
Totals
($’000)
($’000)
($’000)
($’000)
University Funds
1,965
3,660
500
6,125
Totals
1,965
3,660
500
6,125
The SP fund of $6.125m from University Funds has been earmarked to address the gaps in meeting the KPI’s up to 2015.
7.3
Faculties’ Funding Plan: The Faculties have been allocated operational funding of $40.7m for 2015, an increase of $7.5m or 23%, when compared to the 2014 budget of $33.2m. The increase is to pay for academic staff salary increase of 12% ($5m), support the increase in student numbers and additional viable courses as projected in the plan ($1.8m), and additional funds were added to provide first year support to students, enhance student online learning and address Occupational Health and Safety (OHS) staffing concerns in science laboratory classes ($0.7m). In addition, another $1.63m is made available under various centralized funds such as Reward Funds for faculties achieving and exceeding their KPIs, reinforcing the reward driven nature of AP2015. The summary is recorded in Table 12 below:
Table 12 Faculties Recurrent Funding Plan Faculty
AP2015
AP2014
($)
($)
Arts, Law and Education
11.0m
8.9m
Business and Economics
13.3m
11.4m
Science, Technology and Environment
15.5m
12.2m
0.9m
0.7m
40.7m
33.2m
PACE-SD Total (Note: excludes Strategic Support, Reward Funds and Self-Funding Activities)
34
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The faculties will continue to increase their efforts in 2015 to improve productivity and remove unviable courses. This will release much needed resources to enhance quality of learning and teaching.
The total 2015 funding for each faculty is provided in Table 13 below:
Table 13 Total Faculty Funding 2015 Â
Recurrent Funds ($)
Reward Funds ($)
Department* Funds ($)
Total ($)
Arts, Law and Education
11.0m
0.5m
1.8m
13.3m
Business and Economics
13.3m
0.6m
3.6m
17.5m
Science, Technology and Environment
15.5m
0.4m
0.6m
16.5m
0.9m
0.1m
0.5m
1.5m
40.7m
1.6m
6.5m
48.8m
PACE-SD Total
*Department Funds are made up of flexi school, consultancy and fundraising activities, and are self-funding.
7.4
The funding plan for the strategic support areas under the control of the Vice Chancellor and Deans is summarized in Table 14 below. The recurrent funding for Institutes is to cover the management costs and administrative support while all other operating costs are covered by the Institute income.
Table 14 Recurrent Funding Plan for Institutes and Centres Strategic Plan Support Area
AP2015
AP2014
($)
($)
Oceania Centre for Arts, Culture and Pacific Studies (OCACPS)
0.734m
0.370m
Centre for Pacific Languages
0.191m
-
Institute of Education
0.192m
0.123m
Institute of Marine Resources
0.125m
0.145m
IRETA
0.127m
0.116m
Herbarium
0.135m
0.131m
Institute of Applied Science
0.182m
0.158m
Total
1.686m
1.043m
The plan seeks to enhance Pacific Arts and Culture and also establish a new Centre for Pacific Languages.
7.5
Regional Campuses: Regional Campuses have been provided with funding of $10.8m (excluding course materials expenses), an increase of $0.9m compared to $9.9m in AP2014. The additional resources are mainly to cater for growth and resource requirements in Samoa, Solomon Islands and Vanuatu. The table below shows the allocation by campus.
35
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FUNDING THE PRIORITIES AND ACTIVITIES Con’t
Table 15 Recurrent Funding for Regional Campuses Campus
AP2015
AP2014
($)
($)
Cook Islands
0.523m
0.551m
Kiribati
0.764m
0.805m
Labasa
0.572m
0.496m
Lautoka
0.801m
0.888m
Marshall Islands
0.481m
0.453m
Nauru
0.273m
0.306m
Niue
0.261m
0.272m
Samoa
1.388m
1.125m
Solomon Islands
1.280m
1.016m
Tokelau
0.058m
0.092m
Tonga
0.630m
0.650m
Tuvalu
0.344m
0.312m
Vanuatu
3.397m
2.937m
10.773m
9.903m
2.000m
2.000m
12.773m
11.903m
Sub Total Course materials for all campuses Total
Other funds for Regional Campus Support include: •
Further allocations to be made from Strategic Plan funding;
•
$0.3m for possible new centres to be opened in 2015;
•
Access to reward funds for non-academic sections;
•
Major capital expenditure funds for Kiribati and Solomon Islands through ADB loan and Marshall Islands through member capital grant.
36
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07 7.6
FUNDING THE PRIORITIES AND ACTIVITIES Con’t
Support Sections’ Funding Plans: The total funding for support sections is $88.4m for 2015, a decrease of $2.0m when compared against the AP2014 figure of $90.4m as summarized in table 16.
Table 16 Recurrent Funding Plans for Support Sections Section
AP2015 ($)
AP2014 ($)
1.446m
1.451m
Development, Communications and Marketing
1.792m
1.562m
Council Secretariats
1.387m
1.296m
0.449m
0.275m
0.707m
0.890m
10.123m
7.783m
ICT Centre
0.784m
0.910m
Library
4.904m
4.668m
Human Resources
3.728m
4.263m
3.469m
2.604m
12.773m
11.903m
5.481m
4.586m
2.210m
2.854m
Centre for Flexible Learning
2.371m
2.190m
Students’ Academic Services
1.278m
1.172m
Campus Life
3.987m
3.012m
DVC/Research and International
3.443m
2.990m
Finance Section
2.352m
2.069m
Centrally Held Funds (Initiatives & Provisions) *
25.761m
33.925m
Total
88.445m
90.404m
VC’s Office
Vice President Administration Planning and Quality Information & Technology
Vice President Regional Campuses and Properties and Facilities Regional Campuses Properties & Facilities DVC Learning, Teaching and Student Services Office
*Includes General Insurance Costs, Audit/Accounting Fees, Bank Fees, Depreciation, Provision for Doubtful Debts, Foreign Exchange Losses, Fringe Benefits Tax, Strategic Plan Costs, VC’c Strategic & Initiatives Fund, Rewards & Incentives Funds, Contingencies, Provision for Ombuds Services, and Provision for Energy Savings.
The saving of $2.0m is largely due to the savings initiatives planned and targeted in AP2015, and recognized savings in recruitment, passages and baggages. The drop in provisioning largely reflects the movements of funds from SP (previously funded from AusAID incentives) to recurrent funds.
7.7
Non-recurrent Funds: All other funds have been allocated budgets (both income and expenditure) in keeping with their contribution and surplus targets. These operations are expected to run as self-funding or breakeven operations. Commercial and self-funding units are to contribute 20% and Institutes and projects contribute 15% to the recurrent fund as overhead charges. The total contribution for 2015 is projected to be $7.1m. Appendices D, E and F show the 2015 budgets for these operations. This is summarized in table 17.
37
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FUNDING THE PRIORITIES AND ACTIVITIES Con’t
Table 17 Other Funds - Income and Expenditure Fund
AP 2015 Income
AP 2014
Expenditure *
Income
Expenditure
Self-Funding
$17.0m
$13.6m
$16.3m
$14.4m
Commercial
$18.0m
$13.4m
$18.7m
$15.3m
Institute
$3.7m
$3.5m
$3.7m
$3.5m
Project **
$16.7m
$16.7m
$20.0m
$20.0m
*Expenditures include contributions to the recurrent fund.
**Project incomes are realized when the expenditures related to those project activities are incurred. Unspent project funds are not recorded as surplus but as deferred revenue liability and recorded in the Balance Sheet.
7.8
Other Provisions: The following Provisions have been made in AP2015:
Table18 Other Provisions Fund
Purpose
Amount
Budget Controller
Strategic and Initiatives
To fund any activities that meet the Strategic Plan
Fund
targets
$0.5m
Vice Chancellor and
Provision for Energy
To fund initiatives to realize energy savings
$0.2m
VP RC & P&F
For any unforeseen costs that might arise during the
$2.6m
Vice Chancellor and
President
Savings Operating Contingency
year Savings Contingency
To be made available to sections genuinely not able to
President $0.5m
meet their savings targets for accepted reasons Provision for Regional
To funds regional initiatives including new regional
Initiatives
campus sub-centres
Provision for Ombuds
To fund ombuds services for the university
Vice Chancellor and President
$0.3m
VP RC & P&F
$0.1m
EDHR
Services
7.9
Other Efficiency and Monitoring Initiatives •
User Pay:
With telephones and electricity costs now charged directly to users, the same will be done in 2015 for recruitment costs and depreciation.
•
Monthly Projections:
The University will prepare month-by-month forecast of AP2015 based on the three year averages and actual spread and expectations of receipts and payments. This distribution will be done in January 2015 and submitted for FIC approval at its February 2015 meeting. Upon FIC approval, the month by month Income and Expenditure Budget and Cash Flow Budget will be used for monthly reporting purposes in 2015.
38
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FUNDING THE PRIORITIES AND ACTIVITIES Con’t
•
Incentives Structure:
As per the rewards criteria, the plan has set aside $1.830m as rewards budget for 2015 that has $1.630m earmarked for the faculties and the remaining $0.2m for non academic sections. Rewards have been distributed based on SMT approved criteria being followed in 2014.
•
39
Other Initiatives planned: •
Outsourcing of certain USP services which can be better facilitated by external service providers;
•
Review of P & F operations, Regional Campuses and ITS services to achieve efficiency;
•
Establishment of Trust Funds;
•
Review Investments Strategy to maximize return on investments;
•
Review member country contributions funding formula and prepare for UGC submission 2016 to 2018;
•
Develop and implement a new intergrated Commercial Plan;
•
Complete and roll out new finance system reporting system.
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08
40
OPERATING BUDGETS AND FINANCIAL COMMENTARIES
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08 8.1
OPERATING BUDGETS AND FINANCIAL COMMENTARIES
The University is budgeting a projected income of $181.9m and expenditure of $178.9m, generating a surplus of $3.0m. Table 19 below presents the proposed operating budget for AP2015. Detailed summaries of income and expenditure forecasts are presented in Appendices A to F at the end of this report
Table 19 Income and Expenditure 2012 - AP2015
Actual 2012
Income
Actual 2013
(All amounts in $’000)
Forecast 2014
AP2014
AP2015
Government Grants
47,946
47,946
49,565
47,946
49,522
Tuition Fees
37,379
39,265
42,695
42,723
44,170
Development Assistance - Recurrent
16,291
22,331
31,258
28,622
32,893
Development Assistance - Projects
29,556
28,752
19,035
17,600
18,151
Trading Activities
16,704
18,454
18,098
18,868
20,230
Consultancy Income
2,186
1,534
1,852
1,642
1,878
Other Income
6,464
8,993
9,381
10,197
9,738
Release of Deferred Revenue
4,462
4,633
4,343
2,804
4,543
684
760
694
800
800
161,769
172,670
176,420
174,529
181,925
Net realised exchange gain
97
Interest Income Total – Income Expenditure Staff Costs
(67,432)
(78,511)
(81,001)
(78,280)
(83,809)
Operating Costs
(80,014)
(84,394)
(78,589)
(83,199)
(83,112)
(9,275)
(9,437)
(10,477)
(10,050)
(10,358)
Provision for doubtful debts
1,180
(1,613)
(1,265)
(770)
(970)
Write-downs and write offs
(119)
(8)
(28)
(1,426)
(461)
200
(500)
(500)
(75)
(126)
Depreciation
Realised exchange loss Interest Expense Total – Expenditure
(157,086)
(174,425
(171,159)
(172,875)
(178,875)
4,683
(1,755)
5,261
1,655
3,049
Operating Surplus Commentaries on Major Income and Expenditure 8.2
Operating Surplus: The proposed operating surplus of $3.0m is $1.4m better than the AP2014 target of $1.6m. The surplus margin is 1.7% of total income, and is higher than the FP target of 0.8%. The University is committed to moving this towards the FIC benchmark of 5% by 2018. A review of the funding levels for the triennium 2016 to 2018 will be important in ensuring these targets are achieved. Figure 1 shows the operating surplus trend for the University from 2011 to target 2015.
42
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08
OPERATING BUDGETS AND FINANCIAL COMMENTARIES Con’t
Figure 1 Operating Surplus/(Deficit) for 2011 to AP2015
F$ $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $-$1.0 -$2.0
2011
2012
Actuals
2013
2014 Forecast
AP2015
Budget
After adding back non-cash items in the financial statements (add back depreciation and less release of deferred revenue), the plan will generate unencumbered cash of $8.9m to help contribute to the capital programme and add to the cash reserves to meet short and long term borrowing requirements.
8.3
Funding Entity Budgets: The overall budget is comprised of five funding operations: recurrent; departmental; trading; institutes; and projects. The first two deal with activities associated with the University’s core activities of teaching and learning. Trading activities are commercial in nature but support the core activities of the University. Institutes are research and community support arms of the University. Project funds are for specific purposes, are controlled and received in the form of grants and donations, and must be spent within the terms and conditions or wishes of the donors. Appendix A illustrates the overall contribution of these activities for AP2015.
8.4
Income: The Annual Plan 2015 is projecting an income of $181.9m, an increase of $7.4m or 4% compared to the AP2014 figure of $174.5m. The major components of incomes are as follows: •
Member country contributions are maintained at $49.5m in line with the Strategic Plan, while each member’s contribution might change slightly from previous years depending on the allocation method, based on students enrolled and staff employed by the University at each campus.
•
Tuition fees income increases by $1.4m or 3% from AP2014. The 2014 fee income is forecasted to be 7% above 2013, with 2015 assuming a further 5% increase in enrolments. This will have a 3% increase in fees projected for 2015 due to 60% of fee paying students and 40% are government sponsored which do not pay fees. Further increase are budgeted for tuition fee for all MBA courses, professional law courses, College of Foundation Studies courses, and all 400-level Postgraduate courses.
43
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
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OPERATING BUDGETS AND FINANCIAL COMMENTARIES Con’t
Table 20 EFTS – 2012 – AP2015
2012 Actual
2013 Actual
AP2014
2014 Forecast
AP2015
14
7
7
7
7
100
3,532
3,799
3,670
4,030
4,231
200
2,672
3,211
3,149
3,420
3,591
300
2,003
2,088
2,169
2,219
2,330
Postgraduate (taught)
647
797
786
887
976
Master (Research)
145
152
151
171
189
52
66
54
70
73
9,065
10,120
9,986
10,804
11,397
Eng. Lang.
14
11
-
11
-
CCE
94
108
135
115
121
Preliminary
1,073
1,106
1,228
1,094
1,116
Foundation
2,066
2,067
2,365
2,107
2,213
PDLP
82
88
90
90
90
MBA
188
148
221
156
164
3,517
3,528
4,039
3,574
3,704
12,582
13,648
14,024
14,378
15,101
Recurrent Funded (IFM) Certificate Undergraduate
PhD
Self-funded Courses
TOTAL EFTS •
Development assistance increases by $1.5m or 3% from AP2014, in line with funding support confirmed by Australia and New Zealand for 2015. The increase mainly comes from project incomes with expectation of raising additional development assistance revenue to fund the unfunded Strategic Plan priorities and complete current projects that are deferred from 2014.
•
Consultancy income increases slightly by $0.024m or 14% from AP2014 with more emphasis placed on consultancy as a commercial activity. In addition, the University is working on strengthening its policy to increase consultancy income by incentivizing staff to carry out more consultancy works for the University.
•
Commercial income increases by $1.4m or 7% from AP2014, mainly due to current trend of computer sales by the Book Centre, with inclusion of the full year income from the new students accommodation block. The increase is further supplemented by increases in the Halls of Residence rates, Staff Housing rates, and general increase in other commercial income.
•
Other income decreases by $0.5m from AP2014, largely due to reduced income targets for institutes in light of their current performances. This is offset by some increases in targets for CVCE with increased delivery of community training planned for 2015 in recognition of the accreditation of their courses.
•
44
Interest income remains at the AP2014 level, given the relatively low interest rate in the market.
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
08
OPERATING BUDGETS AND FINANCIAL COMMENTARIES Con’t
Figures 2 below brings out total USP income and its components respectively, for 2012 to 2015 period. Figure 3 shows the share of total income expected in 2015.
Figure 2 Total Income for 2012 to AP2015
F$m $180
$140
$6.50 $7.20 $16.70
$8.90 $4.60 $18.40
$120
$29.50
$26.60
$160
$100 $80
$10.10 $2.80 $18.90
$9.40 $4.30 $18.10
$9.80 $4.50 $20.20
$20.90
$18.50
$18.10
$28.60
$31.30
$32.90
$16.30
$20.00
$37.40
$39.20
$42.70
$42.70
$44.20
$47.90
$47.90
$47.90
$49.60
$49.50
$60 $40 $20 $2012
2013
Govt. Grants Development Assistance (Projects) Other Income
AP2014
2014 Forecast
Student Tuition Fees Trading Activities Consultancy Income
AP2015
Development Assistance (Recurrent) Release of Deferred Revenue Interest Income
Figure 3 Income Summary AP2015
11%
9% 27%
28% 25%
Member contributions
45
Tuition Fees
Development Assistance
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
Trading Income
Other Income
08 8.5
OPERATING BUDGETS AND FINANCIAL COMMENTARIES Con’t
Expenditure: Total expenditure budgeted for 2015 is $178.9m, compared to $172.9m for AP2014, an increase of $6.0m or 3%.
Figure 4 below shows total USP expenditure and its components respectively, for the 2012 to 2015 period. Figure 5 shows the costs components for AP2015.
Figure 4 Total Expenditure 2011 to AP2015
F$m 180.0 160.0
10.4
9.4
10.0
10.5
84.0
83.3
78.6
83.1 81.5
78.6
78.3
81.1
83.8
9.3
140.0 120.0
80.0
100.0 80.0 60.0
67.9
40.0 20.0 -
2012
(20.0)
2013 Pay
Operating costs
AP2014
2014 Forecast
Depreciation
Figure 5 Expenditure Summary AP2015
Other provisions
6%
AP2015
1%
46% 47%
Pay
46
Operating costs
Depreciation
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
Other provisions
08 8.6
OPERATING BUDGETS AND FINANCIAL COMMENTARIES Con’t
Staff costs are budgeted at $83.8m, an increase of $5.5m or 7% compared to AP2014 figure of $78.3m. This increase is due to provision of budget at 95% compared to 90% provided in AP2014. Additional pay budget has been allocated to recruit additional academic staff to cater for student growth and additional support staff as required in the plan. Total staff numbers will grow by 1.3% in 2015.
The faculties will implement the University agreed academic workloads in 2015, which will re-allocate staffing budgets to make professorial and senior staff appointments to enhance quality and research. The challenge for the University in 2015 is to understand the workload of staff to a greater extent, and then drive increases in productivity by ensuring that staff time is allocated productively and efficiently. To meet our financial performance targets and drive staff productivity, management is only funding 100% of the staffing budgets for sections having five or fewer staff. Funding is provided at 95% of the budget submitted for 2015 for sections having more than 5 staff. This is already reflected in the current staff cost of $83.8m in AP2015.
Table 21 Staff FTEs and Staff Costs 2012-AP2015
Actual 2012
Actual 2013
AP2014
2014 Forecast
AP2015
Academic*
35,006
40,246
40,746
35,435
42,709
Professional
12,832
15,729
15,524
20,802
16,698
Intermediate & Junior
13,745
15,252
14,540
17,271
16,683
6,966
7,284
7,470
7,063
7,719
68,549
78,511
78,280
80,572
83,809
Academic
418
422
453
405
415
Professional
187
213
201
245
255
Intermediate & Junior
598
626
619
634
642
Hourly Paid
333
323
357
332
339
1,536
1,584
1,630
1,616
1,651
Staff Costs ($’000)
Hourly Paid
Staff numbers
*Includes academic consultancy costs, which were recorded as non-pay costs up to 2013
8.7
Non salary expenses are projected to be $95.1m, when compared against the AP2014 figure of $94.6m, an increase of $0.5m or 0.5%. There are planned increases for the year, offset by a planned drop in cost of sales due to expected drop in cost of sales of text books, with more students moving into book rental plans.
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Table 22 Operating Costs 2012-AP2015
(F$’000)
Expenditure Type
Actual 2012
Actual 2013
AP2014
Forecast 2014
AP2015
Cost of Sales
11,095
11,594
11,397
9,503
9,935
5,214
4,272
3,621
3,103
2,911
Travel – Projects Related
10,107
8,625
6,726
6,594
6,185
Student Expenses
11,358
11,840
10,107
10,564
10,773
Grounds and Maintenance
3,198
4,764
4,452
4,687
4,901
Consultancy*
4,243
3,195
2,684
3,082
3,223
Utilities
4,457
5,409
5,050
5,292
4,879
Telecommunications
3,960
4,331
4,559
5,490
5,640
Library Books
2,340
1,642
2,411
2,279
2,384
Staff Recruitment
1,050
1,277
1,590
1,075
1,058
Printing and Stationery
2,910
2,623
2,057
1,479
1,678
Workshop Expenses
1,626
1,839
2,219
1,878
2,164
Others
18,456
22,983
26,401
23,563
27,381
Total
80,014
84,394
83,274
78,589
83,112
Travel – University Related
*Consultancy costs now exclude academic consultancy costs for comparison purposes. This cost was previously recorded as part of nonpay costs (up to 2013) but has been recorded as pay cost from 2014.
The following major changes explain the movement in AP2015 operating costs compared to AP2014: •
A reduction in cost of sales from Book Centre and Computer Shop, due to a decline in sales from the Book Shop;
•
Travel costs will reduce based on realization of the travel savings plan for sections as outlined by the Budget Efficiency Committee;
•
Students expenses to slightly increase as a result of increase in student numbers and additional student graduations earmarked for other campuses;
•
Grounds and maintenance, includes deferred maintenance;
•
Consultancy expense will increase overall from projects related activities, offset by reduction of consultancy expenses for academic areas as costs of part time staff will now be a new category of staff costs;
•
Telecommunications will increase to cover additional costs of bandwidth to enhance ICT delivery to campuses;
•
Staff recruitment and passage costs will decrease based on review of current recruitment processes and redesigning the passages for new staff to achieve effieciency and savings for the University;
•
The reduction in “other” expenses are expected to be derived from the various savings and efficiency initiatives for 2015.
8.8
Statement of Financial Position: This shows the value of the University at any given point in time. Table 23 shows the projected financial position of the University at 31 December 2015.
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Table 23 Statement of Financial Position Description
(F$’000)
Actual 2012
Actual 2013
AP2014
Forecast 2014
47,549
45,263
44,629
45,871
46,425
Inventories
5,708
3,636
5,339
4,363
5,069
Accounts Receivable
6,989
13,307
7,187
9,774
10,268
Accounts Receivable - Projects
5,455
5,754
6,000
8,777
8,804
432
574
556
294
837
66,133
68,535
63,711
69,080
71,404
CURRENT ASSETS Cash and Cash Equivalents
Prepayments Total Current Assets NON-CURRENT ASSETS
AP2015
Property, plant and equipment
203,245
204,870
213,034
209,388
210,807
Total Non-Current Assets
203,245
204,870
213,034
209,388
210,807
TOTAL ASSETS
269,378
273,405
276,745
278,468
282,211
19,106
23,730
18,524
23,781
24,042
4,463
4,633
5,643
4,691
4,738
Project Funds Unexpended
19,720
21,014
15,917
19,541
18,983
Total Current Liabilities
43,289
49,377
40,084
48,012
47,762
1,108
1,218
1,266
794
824
117,575
116,983
142,526
112,583
108,040
11,900
5,700
11,056
CURRENT LIABILITIES Creditors and Accruals Deferred Income
NON-CURRENT LIABILITIES Creditors and Accruals Deferred Income Borrowings
Total Non-Current Liabilities
118,683
118,201
155,692
119,077
119,920
TOTAL LIABILITIES
161,971
167,578
195,776
167,089
167,682
TOTAL ASSETS LESS LIABILITIES
107,407
105,827
80,969
111,379
114,528
93,548
91,793
67,532
97,054
100,103
Endowment Capital
5,918
6,093
5,494
6,385
6,485
Other Contributed Equity
7,940
7,940
7,940
7,940
7,940
107,407
105,827
80,966
111,379
114,528
Represented by: FUNDS AND RESERVES Statement of Income & Expenditure
Total Funds and Reserves
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OPERATING BUDGETS AND FINANCIAL COMMENTARIES Con’t
8.9
Financial Position Commentaries:
The plan projects the following movements in financial position of the University.
Current Assets – will increase from $69.1m forecast at end of 2014 to $71.4m in 2015, flowing from net cash flows added from operations and additional student debtors expected due to increase in student numbers.
Non-Current Assets – will increase from $209.4m forecast at end of 2014 to $210.8m, with capital developments in Kiribati and Solomons campuses, less depreciation.
Current Liabilities –will decrease from $48.0m forecasted at end of 2014 to $47.8m, due to a decrease in project funds unexpended in 2015.
Non-Current Liabilities – will increase from $119.1m forecast at end of 2014 to $119.9m due to additional borrowings expected during the year for the building of Kiribati and Solomon Islands Campuses, offset by release of deferred income.
8.10 Cash Flow Projections: Table 24 shows the projected cash-flow position of the University during AP2015, with a net increase in cash and cash equivalents of $0.6m, taking the projected cash balance to $46.4m at end of December 2015.
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Table 2 Statement of Cash Flows Description
(F$’000)
Actual 2012
Actual 2013
AP2014
Forecast 2014
AP2015
Government Contributions
46,930
48,288
47,946
49,065
49,522
Student Fees
36,285
36,545
39,506
39,839
44,738
Development Assistance
41,511
52,377
50,593
55,726
47,994
Trading Activities
17,575
17,604
18,868
18,098
20,230
5,158
8,022
11,839
11,628
11,616
692
784
800
694
800
148,150
163,620
169,552
175,049
174,900
Salaries
(68,212)
(74,598)
(77,980)
(82,958)
(82,971)
Other Expenses
(80,201)
(84,450)
(82,428)
(82,956)
(83,300)
(148,413)
(159,049)
(160,408)
(165,914)
(166,271)
(263)
4,571
9,144
9,135
8,629
(9,712)
(6,858)
(18,900)
(12,327)
(11,777)
(9,712)
(6,858)
(18,900)
(12,327)
(11,777)
11,900
3,800
3,827
Interest expense *
(75)
Net Cash flows from Financing Activities
11,825
3,800
3,701
Operating Activities
Other Receipts Interest Received
Net Cash flows from/(used in) Operating Activities Investing Activities Purchase of Fixed Assets Net
Cash
flows
used
in
Investing
Activities Financing Activities Loan Proceeds * Advance to Member Country (126)
Net Increase/(Decrease) in Cash & Cash Equivalents
(9,975)
(2,286)
2,069
608
553
Cash & Cash Equivalents at 1 January (**)
57,525
47,550
42,560
45,263
45,871
Net Increase/(Decrease) in Cash & Cash
(9,975)
(2,286)
2,069
608
553
47,550
45,263
44,629
45,871
46,425
Equivalents Cash & Cash Equivalents at 31 December
(**) Cash balance as per 2011 end $57,525k
*There were no loans in 2012 and 2013, and therefore no interest expense. Interest expense in 2014 and 2015 will all be capitalized, except for FNPF loan on students accommodation.
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OPERATING BUDGETS AND FINANCIAL COMMENTARIES Con’t
8.11 Cash Flow Commentaries:
Cash Balance: The plan projects an ending cash balance of $46.4m by end of 2015.
Net Cash Flow: The projected cash surplus generated from normal operating activities is $8.6m, and after deducting $7.95m for projected capital expenditure, a net increase in cash and cash equivalents of $0.6m is projected.
Available cash: After adding the available bank overdraft facility, the cash available balance of the University is projected to reach $21m ($16.0m of unencumbered cash and $5m of available overdraft), sufficient to operate the University for 1.9 months, excluding project activities.
Figure 6 Unencumbered Cash Levels 2009 – 2015
UnencumberedCash Cash Balance Balance Unecumbered $20.0
$20 $18
$16.2
FJD ($) millions
$16
$17.3 $15.7
$16.0
$15.3
$14.7
$14 $12 $10 $8 $6 $4 $2 $2009
2010
2011
2012
Year
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2013
Forecast AP2015 2014 Unencumbered Cash
09
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FINANCIAL TARGETS AND RATIOS
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09 9.1
FINANCIAL TARGETS AND RATIOS
Financial Targets as per AP2015: The financial performance of the University is benchmarked against certain ratios set by the Finance and Investments Committee, with the goal of ensuring long term financial sustainability of the University.
55
Table 25 shows the table of financial ratios from 2013 to AP2015 against the benchmarks.
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
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7.) Debt & Borrowings
6.) Cash Availability
5.) Financial Liquidity
4.) Asset Sustainability
3.) Asset Funding
2.) Cash Margin
Performance
1.) Financial
Financial Ratio
been generated to fund capital investments
USP funded capital expenditure
donor capital contributions to fund its overall
expenditure sufficient to maintain its ‘stock’ of
Depreciation expense
financed by borrowing.
non-current assets)
Measures how much of USP’s assets were
Total debt (current & non-current)
Total assets (net current assets and
USP funded capital cash outflows)
capital cash outflows
(ie, uncommitted cash) to meet operating and
funds - all creditors + all debtors)
(Non-project operating cash outflow +
Measures whether USP has sufficient free
(Total cash & bank balance - endowmt
cash outflows
access to sufficient cash to meet its operating
funds + unutilized overdraft limit
Operating cash outflows
Measures whether USP has sufficient cash or
Total cash & bank balance - endowment
assets used by depreciation expenses.
Measures whether USP is investing in capital
Total USP funded net capital additions
capital expenditure requirements.
Measures the extent to which USP relies on
Total net capital additions
Total USP funded net capital additions
required to protect and grow its asset base.
Measures the net operating cash flow that has
level of re-investments to meet capital needs.
on incomes and expenditures and indicates
income each to provide a buffer on variations
Measures the level of surplus generated from
Measurement
Net non-project operating cash flows
Total USP income
Operating surplus
Formula
Table 25 Financial Ratios 2013 – AP2015
20.0%
benchmark
No
16.0%
115.0%
benchmark
No
110.0%
5.0%
Benchmark
5.3%
28.5%
72.7%
100%
102.9%
-1.0%
2013 Audited
5.0%
6.8%
27.8%
69.7%
270.0%
105.7%
0.9%
2014 AP
4.7%
6.5%
27.0%
76.7%
132.5%
105.2%
1.7%
2015 AP
09 FINANCIAL TARGETS AND RATIOS Con’t
57
ii.) Operating Ratio
i.) Debt to Net Revenue
9.) ADB Related Ratios:
ii.) Interest Coverage
i.) Debt Servicing
Rpmts
8.) Debt & Servicing
Financial Ratio
that can create a buffer to repay the loan
Total Revenue - Prov for D/Debts –
Release of Deferred Income
Measures cash profitability of the University
Total Exp - Depreciation - Interest exp
Interest Expense + Loan Repayments
interest and loan repayment requirements
sufficient cash from operations to meet the
(Total Expenses - Depreciation - Other Non-cash)
Measures whether USP is able to generate
requirements on borrowings.
enough revenues to meet interest payment
Measures whether USP is able to generate
sufficient cash to service the debt
Measures whether USP is able to generate
Measurement
(Total Revenue - Prov for D/Debts) -
Interest Expense
Operating Surplus + Interest Exp
- (Interest exp + loan repayments)
- USP funded capex)
(Net non-project operating cash flow
Formula
Table 25 Financial Ratios 2013 – AP2015 con’t
<100%
3
3
3
Benchmark
99.0%
2013 Audited
95.2%
28.0
2014 AP
95.4%
178
25.2
4.0
2015 AP
09 FINANCIAL TARGETS AND RATIOS Con’t
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
09 9.2
FINANCIAL TARGETS AND RATIOS Con’t
Surplus ratio: This ratio indicates the level of retained earnings the University can generate to meet its investments needs. The current benchmark is 5% and the University plans to move towards achieving this benchmark by 2018. This plan is budgeting 1.7% in 2015.
Almost all Universities in the world are facing funding challenges in the midst of global financial situations and the changing demand of students and the higher education environment. The University is limited in its ability to grow its income substantially, so needs to adjust its cost structure to respond to change more quickly. While the current surplus margin is below the prudent benchmark, it is worth noting that it is comparably performing better than some other Universities. Figure 7 below shows its surplus margins against University of West Indies (UWI) and Canberra University (CU). The two comparator Universities were chosen for this purpose due to UWI’s regional nature and CU’s almost similar size as USP.
Figure 7 USP Financial Performance Ratios Vs Comparable Universities
Financial Performance 15.0%
5.0%
-5.0%
USP
UWI
2013
2012
2011
2010
2009
2008
2007
2013
2012
2011
2010
2009
2008
2007
2013
2012
2011
2010
2009
2008
0.0% 2007
Percentages
10.0%
CU
-10.0%
-15.0% Universities
9.3 Liquidity Ratio: This ratio reflects the ability of the University to pay its short term liabilities using liquid assets easily convertible to cash. The benchmark is 16% while this plan is projecting it to be 27.0%. Figure 8 below shows that the liquidity position (cash and available borrowings over operating cash outflow) has generally improved over the years, and is also slightly above average when compared against other universities. Except for 2010, USP’s liquidity ratio never fell below benchmark since 2007.
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FINANCIAL TARGETS AND RATIOS Con’t
Figure 8 Financial Liquidity Comparisons against Other Universities
Financial Liquidity 90.0% 80.0%
Percentages
70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0%
USP
UWI
2013
2012
2011
2010
2009
2008
2007
2013
2012
2011
2010
2009
2008
2007
2013
2012
2011
2010
2009
2008
2007
0.0%
CU
Universities
9.4
Debt serviceability: this measures the ability of the University to meet its borrowing obligations. Two important ratios are: i.)
Debt servicing ratio – measures ability of the University to generate cash to service debt. The plan for end of 2015 is 4.0 which is above the benchmark of 3.
ii.)
Interest coverage ratio – measures ability of the University to generate enough net revenues to meet the interest payments. The plan for end of 2015 is 25.2 and is above the benchmark requirement of 3.
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10
60
CAPITAL PLAN AND INFRASTRUCTURE DEVELOPMENTS
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10
CAPITAL PLAN AND INFRASTRUCTURE DEVELOPMENTS
10.1 Capital Programme: The Strategic Plan put in place a capital development programme for all its campuses envisaged to assist the process of moving the University to excellence. With the Strategic Plan decision not to ask member countries to contribute more into capital developments, the University has built a stronger financial position to be able to borrow to enable some of these major priority developments to take place. The University will generate free cash from its operations during the year to contribute $7.95m to the capital programme. An additional $3.8m is planned to be utilized during the year from borrowings approved in prior years for Kiribati and Solomon Islands Campus. Table 26 below shows the capital expenditure plan for approved projects and projected expenditure by year.
Table 26 Capital Expenditure Plan 2015 - 2017
Capital Projects
Approved Budgets 2013 to 2014 $m
AP2015 University Funded $m
Projected Expenditures 2016 Forecast $m
2017 Forecast $m
5.0
10.0
Records Building
0.2
0.3
Emalus Campus Renovation
2.0
1.2
4th Year BE & Research Lab
0.32
0.23
2015 AP $m
1. Known Building Projects: Kiribati Campus Solomon Islands Campus *
5.6
1.8
17.0
2.0
Students Hostel Lautoka Campus**
6.7
Marshall Islands Campus***
2. ICT Infrastructure and Developments Computers
1.3
1.3
1.0
1.3
0.75
0.75
3.4
1.2
3. Vehicles and Tractor
0.15
0.15
0.2
0.3
4.
5.75
5.75
2.12
1.06
7.95
11.75
14.24
15.59
ICT Development
Furniture, Equipment and Minor
Renovations Totals
29.3
*Solomons campus development estimate based on original cost, costs expected to increase due to change in project site. The additional cost is expected to be funded by allocating funds from other projects within the current approved loan limit.
**Lautoka Campus deferred due to change in project need and requirements, budget and estimates to be known in 2015.
Note: All individual projects more than $100k will require a full business case and the approval of the Finance and Investments Committee.
10.2 Building Projects in 2015: The major capital projects for 2015 are completions of the Kiribati Campus and the commencement of the new campus in Solomon Islands. The Kiribati and Solomon Islands projects are funded through ADB loans, while Marshall Islands Campus was purchased by the Government, with USP contributing in 2015 for equipment.
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10
CAPITAL PLAN AND INFRASTRUCTURE DEVELOPMENTS Conâ&#x20AC;&#x2122;t
10.3 Information Technology: The Strategic Plan has placed emphasis on leveraging ICT to deliver outcomes that enhance the student experience and the teaching and research outcomes and support the achievements of the strategic objectives of the University.
The University has planned $1.3m for PC replacements with more allocations for student PCs to improve the student/ computer ratio. A further $750k is provided under the recurrent fund to replace some ageing IT infrastructure, operational and network upgrades and to enhance the connectivity to all campuses. Additional campuses will be earmarked to move from satellite to fibre. The year will also see the final output of the Banner road map project, which is currently progressing well. Funding for this has already been received from AusAID for the automation and re-engineering projects to improve the teaching, research and administrative core systems and build reporting capabilities to aid decision making.
10.4 Vehicles, Furniture and Equipment: The University has set aside $750k to replace science lab equipment, $200k to address flammable risks in science labs, purchase a new vehicle for the new DVC â&#x20AC;&#x201C; LTSS and replace an aging FSTE vehicle, purchase IRETA chicken sheds, carry out perimeter fencing of Laucala Campus, and continue with regional campus development plans. 10.5 Infrastructure Plan: The University will assess the space requirements during the year and develop a capital and funding programme to respond to its current and future growth. The campus master plans have been developed with an aim to finalise these in 2015.
The University has approved its new Asset Management Framework to govern the utilization of facilities and spaces. The University is also implementing a Space Management Policy with accompanying Facilities Management Manual to set the standards and benchmarks for space allocation, space use, and standards for design and layout. This plan has allocated an additional $1m to complete a two year programme of addressing high priority deferred maintenance.
10.6 Other Building and Funding Plans: A plan will also be developed and funding sourced in 2015 for the developments of the remaining blocks of student hostels required to achieve the target of an additional 2,000 beds by end of 2018. This includes identification of appropriate International Students accommodation to provide excellent facilities that will attract international students. There was also a commitment to commence building of the Tonga campus on its new land and funding will need to be sourced in 2015 to progress with this.
10.7 Funding the Capital Programme: The table below shows the funding sources of the known capital programme for the year, with forecasts to 2017.
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CAPITAL PLAN AND INFRASTRUCTURE DEVELOPMENTS Conâ&#x20AC;&#x2122;t
Table 27 Capital Expenditure Funding Summary 2015 - 2017
Project
University Surplus ADB Loan* Totals
2015 AP $m
2016 Forecast $m
2017 Forecast $m
7.95
7.24
4.39
3.8
7.0
11.2
11.75
14.24
15.59
*Loan approved in prior periods but projected to be disbursed as per this plan.
10.8 Capital Expenditure Borrowing: In 2013, the University signed a loan agreement with the ADB to build the Kiribati Campus for $5.6m, with $3.8m expected to be drawn by end of 2014 and $1.8m to be drawn in 2015. The loan is for a period of 32 years, with interest payments of only 1% for the first eight years, and interest rate of 1.5% and principal repayments for the remaining 24 years.
In August 2013, additional borrowing was secured from the Fiji National Provident Fund (FNPF) of $3.6m to build a student accomodation block in Laucala Campus. The loan is over 15 years, with the interest rate fixed at 3.5% over the first five years, and the rate to be set for every five year period based on 0.5% below the FDL rate applicable at the beginning of the new five year period.
Additional borrowings and Public Private Partnership schemes are now being pursued for the additional student hostels in Laucala.
10.9 The projected debt at end of 2015 is $11.1m, and will be secured by government guarantees (for the ADB loan), while FNPF loan is secured through mortgage over the Statham Campus.
The cost of borrowing is expected to be less than 0.05% over the course of 2015 and the majority of interest expense for the period would be capitalised.
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11
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RISKS AND MITIGATION STRATEGIES
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11
RISKS AND MITIGATION STRATEGIES
11.1 USP recognizes the importance of risk management and has an enterprise wide appropriate risk culture that ensures financial risks will be managed with strong governance principles, practices, and systems. The effective management of risk requires both top-down oversight and bottom-up involvement and understanding to develop a strong risk culture.
11.2 In the current environment there are key risks that can impact on the University in achieving our financial targets. These can impact on our financial sustainability and involve both short term operational risks and risks to our longer term Strategic Plan objectives.
11.3 The University considers the management of the following risks will be key in achieving the 2015 financial targets and USP short and long term financial sustainability.
Table 28: Risks to Financial Targets THE RISK
RISK IMPACT
RISK MITIGATION
Member country contributions. Changes proposed to Fiji
FHEC
funding and effect it will create for other members. Ability
to
honour
Reduction in per capita student
VC engagement with Fiji Govt over
funding.
funding model.
Reduction in income and liquidity.
VC engagement with member countries.
commitments
Frequent monitoring of payments and
and timely payments from Member
timeliness.
countries. Development assistance. Political changes and variations to
Reduction in income and liquidity.
Continued
engagement
funding levels committed or in future.
Delay and/or ceasing of some
Development
assistance
strategic initiatives.
Monitoring any political and fiscal
with partners.
changes. Tuition Fees. Student volumes not achieved. Loss of students to competing Pacific
Reduction in income and impact
Regular
on liquidity.
enrolment levels.
HE institutions.
monitoring
to
manage
Maintain quality competitiveness of course offerings.
67
Underperformance from
Reduced income and increased
Comprehensive and frequent monitoring
Commercial, Institutes and Centres.
risk if deficits in these areas.
of these areas to mitigate impacts early.
Staff Costs affordability to USP and
Increased
Budget areas.
potential loss of staff.
outstanding performers.
Ability to attract excellent staff to
Frequent Monitoring for all Budget
support Strategic Plan.
areas.
expenditure
and
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
Implement iPerform system and reward
11
RISKS AND MITIGATION STRATEGIES Con’t
Table 28: Risks to Financial Targets Con’t THE RISK
RISK IMPACT
RISK MITIGATION
Increased operating costs.
Monitor on frequent basis and manage
Operating costs. Inflation increases above that budgeted.
Budget areas do not absorb inflation as Budget planned.
areas
incur
deficit
positions.
Fraud and litigation cases, and their Increase
expenditure. Comprehensive reporting and monitoring
costs
and
creates
impact to the reputation of the University. reputational risks.
for all Budget areas. Ongoing monitoring of risk exposure areas, strengthen internal audit and ensure insurance protection in place.
Liquidity. Income cash receipting below planned Liquidity levels.
benchmarks
not All income streams frequently monitored for collection and risk. Debt collection
achieved.
Expenditure
incurred
earlier
than Delay in payments to creditors.
planned.
Solvency risk for USP.
across students’ fees and commercial / Institute income be enforced consistently and frequently. Procurement processes monitored for compliance and meeting agreed terms.
Capital Programme. Financial Performance below planned Delay in and/or potential decrease Comprehensive level
in level of capital projects.
Ineffective
management
of
Strategic
Delays in project schedule.
Plan
targets
and
management of Financial performance.
major Results in major cost overruns.
projects.
monitoring
not
achieved.
Proper
Service
Level
Agreements
with contractors and regular reviews performed during project period.
Other Risks Exposure for
to
member
fees,
currency
fluctuations Foreign
contributions,
development
assistance
Natural
disasters
gains/ Currency maintained in local country for
and performance and Liquidity.
expenditures with operations across 12 member countries
exchange
student losses impacting on Financial expenditure incurred in same currency.
Implications
on
cause re-establishment.
infrastructure damage or failure
68
management
tools
used
as
business appropriate.
continuity and financial costs of could
Forex
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
Proper
disaster
awareness
and
preparedness. Appropriate levels of insurance to be in place.
12
MONITORING AND EVALUATION MECHANISMS
Mr Kolinio Boila Executive Director Finance
69
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
70
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
12
MONITORING AND EVALUATION MECHANISMS
12.1 The Senior Management Team (SMT) shall be responsible for the full implementation, monitoring, and evaluation of AP2015. The following reporting and monitoring structure will be in place; 1. The Finance Section will prepare and distribute Monthly Management Accounts to the SMT, Heads of Schools and other Heads of Departments. 2. The Finance Section will prepare and submit Financial Reports to FIC at each of its meetings. 3. The Finance Section, through the FIC, will prepare and submit externally audited six-monthly financial report to the Council. 4. The Finance and Planning and Quality Office will work in coordination to put together progress reports and present to SMT on a monthly basis. 5. Monitoring through the Planning Officeâ&#x20AC;&#x2122;s online system (SPOMS 2). 6. The CAPEX Progress Review Group will monitor quarterly progress of spend against capital budgets. 7. The progress will be reported to the FIC and Council continuously throughout 2015. 8. Regular meeting of the Budget Efficieciency Committee to evaluate budget availability and identify savings and efficiency mechanisms. The Committee will monitor budget variances and propose options to ensure sections stay and manage within allocated budget.
12.2 In addition, there will be greater focus on analysis of financial information, particularly variances. The implementation of the finance reporting software and the full staffing of the Financial Planning Unit in 2015 will enable this.
71
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
13
72
APPENDICES
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
73
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
13
APPENDICES
Appendix A – Statement of Comprehensive Income (by Fund) – AP2015
Appendix B – Recurrent Budgets AP2015
Appendix C – Recurrent Fund Summary by Section – AP2015
Appendix D – Departmental Budget AP2015
Appendix E – Commercial Budget AP2015
Appendix F – Institute Budgets AP2015
74
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
75 29,685 32,893
Tuition Fees
Development Assistance
4,443
Release of Deferred Revenue
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
Total Pay
(67,081)
(300)
Provision for Leave
Provision for Restructure
(1,965)
(500)
(64,816)
126,573
Pay - Strategic Plan
Provision for Salary Adjustments
Pay
Pay
Total - Income
Net Realized
800
7,120
Contribution to Recurrent Fund
Interest Income
2,111
Other Income
Consultancy Income
Trading Activities
49,522
Recurrent Fund
Government Grants
Income
Description
(7,833)
(7,833)
16,899
(2,723)
4,909
228
14,485
Department Funds
(2,556)
(2,556)
18,029
(2,201)
20,230
Trading Activities
(1,924)
(1,924)
3,740
(528)
2,718
1,550
Institute Funds
(3,915)
(3,915)
16,683
100
(1,668)
100
18,151
Project Funds
(83,809)
(300)
(1,965)
(500)
(81,044)
181,925
800
4,543
9,738
1,878
20,230
51,044
44,170
49,522
AP2015
Appendix A: Statement of Income & Expenditure (By Fund) - AP2015
(78,280)
(400)
(300)
(3,490)
(74,090)
174,529
800
2,804
10,197
1,642
18,868
49,549
42,723
47,946
AP2014
(81,001)
(429)
(1,049)
(79,523)
176,420
694
4,343
9,381
1,852
18,098
49,793
42,695
49,565
Forecast 2014
(78,511)
(1,263)
(486)
(76,762)
172,670
760
4,633
8,993
1,534
18,454
51,083
39,265
47,946
Actual 2013
(All amounts in F$’000)
13 APPENDIX A STATEMENT OF COMPREHENSIVE INCOME (BY FUND) – AP2015
76 (200)
Energy Savings Initiatives
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015 (5,103) (4.1%)
Operating Margin
(131,676)
(64,095)
(500)
Operating Surplus / (Deficit)
Total - Expenditure
Total Non Pay
Write off
Savings Contingency
Contingency
(2,576)
(1,830)
Rewards & Incentives Fund
Interest Expense
(500)
(500)
(970)
(10,058)
Strategic & Initiatives Fund
(Loss)
Provisions for Exchange Gain /
Other Provisions - Book Centre
Provisions & Accruals
Depreciation
(3,660)
(43,300)
Recurrent Fund
16.7%
3,286
(13,613)
(5,780)
(5,780)
Department Funds
23.0%
4,649
(13,380)
(10,824)
(126)
(10,698)
Trading Activities
5.1%
216
(3,523)
(1,599)
(1,599)
Institute Funds
: Statement of Income & Expenditure (By Fund) - AP2015 Con’t
General Expenses - Strategic Plan
General Expenses
Non-Pay
Description
Appendix A
0.0%
0
(16,683)
(12,768)
(300)
(12,468)
Project Funds
1.7%
3,049
(178,875)
(95,066)
(500)
(2,576)
(126)
(200)
(1,830)
(500)
(500)
(970)
(10,358)
(3.660)
(73,846)
AP2015
0.9%
1,655
(172,875)
(94,594)
(1,000)
(75)
(200)
(2,000)
(500)
(500)
(770)
(10,050)
(9,952)
(69,547)
AP2014
3.0%
5,261
(171,159)
(90,159)
(28)
(1,133)
200
(1,265)
(10,477)
(5,315)
(72,141)
Forecast 2014
(1.0%)
(1,755)
(174,425)
(95,914)
(8)
(1,601)
(461)
(291)
(1,614)
(9,437)
(2,717)
(79,785)
Actual 2013
(All amounts in F$’000)
13 APPENDIX A STATEMENT OF COMPREHENSIVE INCOME (BY FUND) – AP2015 Con’t
13
APPENDIX B – RECURRENT BUDGETS 2013 - AP2015
Appendix B :
Recurrent Budgets 2013 – AP2015 Actuals 2013
AP2014
AP2015
F$’000
F$’000
F$’000
Government Grants
47,946
47,946
49,522
Tuition Fees
25,538
31,690
29,685
Development Assistance
22,331
28,622
32,893
50
Other Income
4,345
2,386
2,111
Contribution to Recurrent Fund
4,815
6,673
7,120
Release of Deferred Revenue
4,633
5,857
4,443
574
800
800
110,232
123,974
126,573
Arts, Law & Education
11,653
8,868
11,047
Business & Economics
12,666
11,415
13,267
Science, Technology & Environment
13,409
12,162
15,458
578
784
973
38,306
33,229
40,746
587
1,043
1,686
Vice-Chancellor & President
3,753
4,309
4,624
DVC (LTSS)
9,136
9,228
9,846
VP Regional Campuses, P&F
26,254
23,761
26,627
VP Administration
13,083
9,859
12,062
DVC (Research & International)
2,946
2,990
3,443
EDF
2,175
2,069
2,352
EDF - University Costs
2,855
2,947
3,001
EDHR
3,608
4,263
3,728
Sub-Total: Administration
63,812
59,426
65,684
Other Budgets & Provisions
19,314
30,978
23,560
Sub-Total: Other Budgets
19,314
30,978
23,560
TOTAL EXPENDITURE
122,018
124,677
131,676
SURPLUS/(DEFICIT)
(11,786)
(703)
(5,103)
Description
INCOME
Development Assistance unfunded Consultancy Income
Interest Income TOTAL RECURRENT INCOME EXPENDITURE Faculties
PACE SD Sub-Total: Faculties Strategic Supports Administration Support
77
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
78
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
RECURRENT
11,047
967
TOTAL NON PAY
TOTAL
411
82
Others
stationery
and
-
Staff recruitment
Printing
-
33
-
76
20
Library books
Telecommunication
Utilities
Consultancy
maintenance
and
139
Student expenses
Grounds
206
Travel
Cost of Sales
-
10,080
TOTAL PAY
NON PAY
369
Hourly Paid
8,737
974
&
FALE
I&J
Professional
Academic
PAY
Description
15,458
1,968
915
95
-
-
36
-
131
23
142
626
-
13,490
161
1,412
11,917
FSTE
13,267
1,284
260
110
-
-
26
-
134
18
132
604
-
11,983
148
1,575
10,260
FBE
973
150
73
18
-
-
8
-
-
-
-
51
-
823
11
120
692
PACE
1,686
82
82
-
-
-
-
-
-
-
-
-
-
1,604
-
50
1,554
Strategic Supports
4,624
2,163
1,083
118
-
-
19
6
286
13
-
638
-
2,461
62
802
1,597
VC
21,723
13,431
2,356
295
55
704
1,436
3,042
155
3,145
525
1,718
-
8,292
1,765
3,244
3,283
VP RC & P/F
16,966
10,082
2,432
139
-
1,437
3,536
597
269
-
-
1,672
-
6,884
264
2,335
4,285
VP Admin
Appendix C : Recurrent Fund Summary by Section - AP2015
9,846
4,812
913
181
-
-
47
1
113
-
2,391
1,166
-
5,034
113
2,160
2,761
DVC LTSS
3,444
2,543
611
44
-
-
5
-
213
-
1,438
232
-
901
29
252
620
DVC R&I
5,353
3,232
3,096
32
-
-
6
16
39
3
-
40
-
2,121
-
880
1,241
EDF
3,728
2,585
1,607
8
891
-
-
-
-
-
-
79
-
1,143
-
490
653
EDHR
17,936
17,136
11,516
-
-
100
-
250
-
200
4,820
250
-
800
-
500
300
Provisions
5,625
3,660
1,329
20
-
-
-
-
561
-
860
890
-
1,965
219
406
1,340
SP
131,676
64,095
26,684
1,142
946
2,241
5,152
3,912
1,977
3,422
10,447
8,172
-
67,581
3,141
15,200
49,240
TOTAL
(All amounts in F$’000)
13 APPENDIX C – RECURRENT FUND SUMMARY BY SECTION – AP2015
79 905
Total Pay
75
Grounds and maintenance
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015 54 72
Printing and stationery
Others
1,838 382
Total Expenditure
Surplus/(Deficit)
306
16
Staff recruitment
Contribution to Overheads
23
Library books
627
61
Telecommunication
Total Non Pay Expenditure
32
Utilities
157
49
Student expenses
Consultancy
88
Travel
Cost of Sales
-
27
Hourly Paid
NON-PAY
36
I&J
Academic & Professional
842
2,220
INCOME
PAY
FALE
Description
72
576
96
303
38
26
8
11
30
10
100
36
24
20
-
177
5
11
161
648
FSTE
718
3,622
604
1,355
176
77
33
49
132
43
57
163
79
124
422
1,663
50
133
1,480
4,340
FBE
18
485
81
138
12
5
1
-
3
20
82
-
5
10
-
266
-
53
213
503
PACE
262
2,680
447
1,629
202
141
41
59
159
52
538
195
127
115
-
604
115
338
151
2,942
REGIONAL
6
138
23
115
44
20
-
-
1
-
35
-
-
15
-
0
-
-
-
144
CFL
Appendix D : Department Funds Budget - AP2015
7
25
4
21
13
8
-
-
-
-
-
-
-
-
-
0
-
-
-
32
LIBRARY
755
1,406
234
591
76
30
1
-
8
19
104
-
4
13
336
581
52
99
430
2,161
CVCE
201
230
38
126
40
-
-
-
-
-
5
-
-
81
-
66
-
66
-
431
ITS
814
5,288
881
835
259
65
12
1
10
-
6
15
38
202
227
3,572
20
414
3,138
6,102
CFS
50
50
8
42
35
5
-
-
2
-
-
-
-
-
-
-
-
-
100
DMCA
3,286
16,339
2,723
5,782
967
431
112
143
406
176
1,084
484
326
668
985
7,834
269
1,150
6,415
19,623
Total 2015
(All amounts in F$’000)
13 APPENDIX D – DEPARTMENT FUNDS BUDGET - AP2015
80
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
1,024
6,142
2,099
Total Expenditure
Surplus/(Deficit)
4,518
275
Contribution to Overheads
Expenditure
Total Non Pay
Others
8
Printing and stationery
35
Utilities
7
13
Grounds and maintenance
Telecommunication
10
Travel
Cost of Sales
4,170
600
Total Pay
NON PAY
75
331
I&J
Hourly Paid
194
8,241
146
227
38
122
15
4
-
5
-
-
98
67
19
48
-
373
9
73
12
40
3
3
-
1
-
-
33
21
-
21
-
82
Alafua
Book Centre
Laucala Emalus
Academic & Professional
PAY
REVENUE
Description
271
3,327
158
2,909
117
9
5
15
1
12
2,750
260
-
147
113
3,598
1,208
1,790
298
996
155
15
30
350
300
30
116
496
241
181
74
2,998
60
1,171
195
917
507
15
15
180
200
-
-
59
24
-
35
1,231
47
133
22
80
25
-
-
15
40
-
-
31
21
-
10
180
Residential Computer Shop Laucala Emalus Alafua
Appendix E : Trading Budget – AP2015
202
119
20
69
6
-
-
15
47
1
-
30
15
15
-
321
Rental
397
449
75
260
58
5
2
30
160
5
-
114
22
42
50
846
171
342
57
223
73
2
3
64
81
-
-
62
30
17
15
513
(79)
79
13
66
26
3
2
15
15
5
-
-
-
-
-
-
44
424
71
159
33
7
2
-
57
10
50
194
126
56
12
468
Commercial Laucala
Laucala
Laucala
Gym
Director
Housing Lodges
73
1,306
218
467
(614)
7
2
23
47
2
1,000
621
241
276
104
1,379
Other
4,648
15,582
2,201
10,826
679
78
68
748
961
75
8,217
2,555
814
1,134
607
20,230
2015
Total
(All amounts in F$’000)
13 APPENDIX E – TRADING BUDGET – AP2015
13
APPENDIX F – INSTITUTES BUDGET – AP2015
Appendix F : Institutes Budget – AP2015
(All amounts in F$’000) IAS
IMR
IOE
IRETA
Total 2015
3,100
50
521
595
4,266
Academic & Professional
719
-
325
62
1,106
I&J
313
77
82
74
546
Hourly Paid
253
-
-
17
270
1,285
77
407
153
1,922
Cost of Sales
400
-
-
333
733
Travel
150
-
14
12
181
-
-
-
34
34
150
-
12
-
162
25
-
4
14
43
5
-
4
5
14
15
-
7
5
27
350
10
5
40
405
1,100
10
46
443
1,599
358
13
68
89
528
2,743
100
521
685
4,049
357
(50)
0
(90)
217
REVENUE PAY
Total Pay NON-PAY
Grounds and maintenance Consultancy Utilities Telecommunication Printing and stationery Others Total Non Pay \Expenditure Contribution to Overheads Total Expenditure Surplus/(Deficit)
81
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
14
LIST OF TABLES AND FIGURES
Table 1
Financial Performances 2012 - 2015
Table 2
Financial Principles for 2015
Table 3
Targets for AP2015
Table 4
2015 KPIs and Targets for Priority Area 1
Table 5
2015 KPIs and Targets for Priority Area 2
Table 6
2015 KPIs and Targets for Priority Area 3
Table 7
2015 KPIs and Targets for Priority Area 4
Table 8
2015 KPIs and Targets for Priority Area 5
Table 9
2015 KPIs and Targets for Priority Area 6
Table 10
2015 KPIs and Targets for Priority Area 7
Table 11
Funding Sources of SP Initiatives for 2015
Table 12
Faculties Recurrent Funding Plan
Table 13
Total Faculty Funding 2015
Table 14
Recurrent Funding Plan for Institutes and Centres
Table 15
Recurrent Funding Plan for Regional Campuses
Table 16
Recurrent Funding Plan for Support Sections
Table 17
Other Funds – Income and Expenditure
Table 18
Other Provisions
Table 19
Operating Budgets 2012-2015
Table 20
EFTS 2012 - 2015
Table 21
Staff FTE’s and Staff Costs 2012 - 2015
Table 22
Non-Pay Costs 2012 – 2015
Table 23
Statements of Financial Positions 2012 - 2015
Table 24
Statement of Cash Flows 2012 - 2015
Table 25
Financial Ratios 2012 - 2015
Table 26
Capital Programme 2015- 2017
Table 27
Capital Programme Funding 2015 - 2017
Table 28
Risks to Financial Targets
Figure 1
Operating Surpluses (Deficits) 2011 – AP2015
Figure 2
Total Income 2012 – AP2015
Figure 3
Income Summary AP2015
Figure 4
Total Expenditures 2012 – AP2015
Figure 5
Expenditure Summary AP2015
Figure 6
Unecumbered Cash 2009 – AP2015
Figure 7
Financial Performance Ratio vs Comparable Universities
Figure 8
Financial Liquidity vs Comparable Universities
(Includes abbreviations and acronyms used in the electronic collection of Faculty and Section 2015 Annual Plans)
82
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
15
ABBREVIATIONS AND ACRONYMS
ADB
Asian Development Bank
AHTIPI
Association of Heads of Tertiary Institutions in the Pacific Islands
AP2014
Annual Plan 2014
AP2015
Annual Plan 2015
ARC
Audit & Risk Committee
AusAID
Australian Agency for International Development
CAPEX
Capital Expenditure
CFDL
Centre for Flexible and Distance Learning
CFS
College of Foundation Studies
DVC (LTSS)
Deputy Vice Chancellor (Learning, Teaching and Student Services)
DVC (R & I)
Deputy Vice Chancellor (Research & International)
EDF
Executive Director Finance
EDHR
Executive Director Human Resources
EFTS
Equivalent Full-Time Student
FALE
Faculty of Arts, Law and Education
FBE
Faculty of Business and Economics
FIC
Finance and Investment Committee
FSTE
Faculty of Science, Technology and Environment
FP2015
Financial Plan 2015
GCTT
General Certificate for Tertiary Teaching
ICT
Information and Communication Technologies
I&J
Intermediate and Junior (Staff)
ITS
Information Technology Services
KPI
Key Performance Indicator
MOU
Memorandum of Understanding
OHS
Occupational Health and Safety
P&Q
Planning and Quality
QTS
Quality of Teaching Survey
SAS
Student Academic Services
SMT
Senior Management Team
SP
Strategic Plan
SPOMS
Strategic Plan Online Monitoring System
STAR
Strategic Total Academic Review
TVET
Technical and Vocational Education
USP
University of the South Pacific
VC
Vice Chancellor
VP Admin
Vice President – Administration
VP (RC & P&F)
Vice President – Regional Campuses & Properties & Facilities
WASC
Western Association of Schools and Colleges
83
THE UNIVERSITY OF THE SOUTH PACIFIC | ANNUAL PLAN 2015
The University of South Pacific Private Mail Bag, Suva Fiji Telephone: (679) 323 1000 Website: www.usp.ac.fj