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BUDGET STRATEGY & FINANCIAL
SUSTAINABILITY
SHARIFAH ‘ALWIAH BTE SYED ALWIBURSAR
OVERALL UTM FINANCIAL STANDING
2016 BUDGET ESTIMATION
OPERATING BUDGET
ALLOCATON
RM535 MIL
BUDGET ALLOCATION OF
RMK-11
RM165 MIL
BUDGET ALLOCATION ON
TABUNG AMANAH
RM100 MIL
BUDGET ALLOCATION ON
RESEARCH GRANT
RM100 MIL
GRAND TOTAL RM900 MIL
RMK – 11 : RM165 MIL
Teaching & learning Equipment
Upgrading faculty and hostel building including infrastructure
Procurement -MJIIT instruments
(Repayment JICA Loan)
Fellowship programs MJIIT
RM25 mil
RM20 mil
RM100 mil
RM20 mil
MAIN CONTRIBUTOR
Tabung Amanah
LONG-TERM LIABILITY
PREPAYMENT OF EPF LOAN 1 & INCOME FOR HOSTEL FEES
(RM ‘ MIL)
SAC
0.0
5.0
10.0
15.0
20.0
25.0
2012 2013 2014 2015 2016 2017 2018
12.8 12.9 11.6 11.2 11.3 11.3 11.3
19.417.3 16.9
13.1
21.0 21.0 21.0
Bayaran balik Pinjaman 1 Yuran Asrama
-
5.0
10.0
15.0
20.0
25.0
2015 2016 2017 2018 2019 2020
0.6
14.0
21.5 20.8 20.2 19.5
-
13.0 15.5
18.0 18.8 18.8
Bayaran balik Pinjaman 2 Hasil Penyewaan
PREPAYMENT OF EPF LOAN 2 & INCOME FROM RENTAL OF
SPACE (RM ‘’MIL)
RM826.4 MilApplication to MOE
RM726.8 MilDeclaration by MOF during
the Budget Revision Meeting
RM535.6 MilFinal approval on 2016
budget
(OPERATIONAL EXPENDITURE)
OPERATING ALLOCATION (ABM7)
2015 & 2016
GOVT. GRANTS
INTERNAL SOURCE FUND
RM ‘MIL RM ‘MIL RM ‘MIL
VARIANCE
EMOLUMENT
OPERATING EXPENSES
INCOME 2014ESTIMATED
2015ESTIMATED
2016
A. GOVT. GRANTS 614.92 526.73 415.64
B. HASIL LANGSUNG
1) FEES 76.85 70.00 80.00
2) ROI (FD) 19.50 20.00 20.00
3) RENTAL & MISC (0.75) (0.60) 0.50
95.59 89.40 100.50
C. TABUNG/KUMPULAN WANG - 58.00 61.00
GRAND TOTAL (A+B+C) 710.51 674.13 577.14
OPERATING ALLOCATION
2014 HINGGA 2016
Review appointment of contractual staff
Maximizing the utilization of Tabung Amanah
Active income generation activities (review target / Focus Area)
Focus on Teaching & Learning, term contract, committed expenses
Prudent spending by all PTJ
Strategy on budget allocation 2016
RM577 milEstimated on operational income 2016
RM849 milApplication on Budget 2016
RM661 milCommitted Expenses 2016
RM577 milProposed allocation 2016
DEFICIT BUDGET
(RM84 MIL)
BALANCED BUDGET
EMOLUMENT – 78%
RM455.6 mil• Permanent Staff : RM 415 mil
• Contract staff : RM40 mil
OVERHEAD – 24%
RM160.3 mil
Special Programme– 5%
RM27.3 MilPTJ’s Operation –3%
RM18 Mil
1
2
3 4
BUDGET ALLOCATION
REQUIREMENT 2016
(DEFISIT BUDGET)
RM661 mil
• Utility
• Term Contract
• Campus maintenance
• Staff benefits (Medical)
• Leasedline/software
• Journal/Books
• Staff development (Training)
• Gratuity
• Students scholarship
• Operation COE/RA
• Ranking / GOP
• Student activities
DEFICIT(RM84 MIL)
EMOLUMENt – 75%
RM435.6 mil• Permanent: RM 415 mil
• Contract Staff: RM20 mil
OVERHEAD – 20%
RM115.3 mil
SPECIAL PROGRAMME– 3%
RM15.1 mil
PTJ’s OPERATION– 2%
RM11 mil
1
2
3 4
Budget Allocation 2016
(Balance)
RM20 mil
RM50 mil
RM12 mil RM7 mil
RM40 milEmolument of contract staff (KPT)
RM9 milPayment to concession company– UTM Pagoh (KPT)
RM7 milSubcription of Journal by Library (RU Budget)
RM5 milMaintenance and renovation work (Development budget)
RM6 milPTJ’s operational expenses(Amanah Budget – Tabung Kewangan/Seminar/Consultation PTJ)
RM20 milIncome Generation
INITIATIVES ON THE
ADDITIONAL ALLOCATION
RM 100 milRanking activities (KPT)
RM18 MILEmolument of contract staff & Operation expenses of MJIIT(KPT)
EMOLUMENTCONTRACT STAFF
PRUDENT SPENDING
INCOME GENERATION
Utilizing cash from grants other than operating grants
Application on additional funding from MOHE
CONTRACTUAL
STAFF EMOLUMENT
Review the requirement of contract staffs.
Review the Salary scheme of contractual staffs
Put on hold all new appointment
Ensure that the appointment is arranged based on actual necessity , impact to UTM and current work load.
Review all appointment of contractual staff via Tabung Amanah
PRUDENT
SPENDING
To stress on prudent spending
DO MORE WITH LESS
Review the eligibility on air ticket
Savings on stationery supply ie: paper
Campaign on energy saving-utility
Income generation
Income generation as part of KPI of PTJ / Faculty
To introduce more Strategic Business Unit (ie: PKU)
Target on student enrolment should be clearly conveyed to SRAD/faculty
Initiative on Financial Sustainability should be more aggressive
Incentive to PTJ that is able to achieve the target (KPI) that has been assigned. Incentive to PTJ that adopt prudent spending
UTILIZING BUDGET FROM
OTHER AVAILABLE
GRANTS
Renovation, maintenance work on infrastructure :
Lab, class, offices, residential college
① Subscription on Journal
② Payment of incentive③ Visiting Professor /
guest④ International Student
Scholarship
To cover part of the operational expenses
through income generation by seminars ,
consultation, & etc
Development Grants Research GrantsTrust Fund
PTJ/Faculty
OPERATION ALLOCATION
STARATEGY PTJ/FAKULTI
25PTJ/Office (JB & KL)
23Faculty (JB & KL)
RM17 milBudget allocation for
operational expenses
No. of Staff
No. of Students
Collection of tuition fees
Contribution of income generation to University
Actual achievement on KAI that been set to PTJ
STRATEGIC BUSINESS UNIT
(PUSAT KESIHATAN UTM)
Allocation by UTM
• Health Officer(RM360k)
• Medicine(RM 1.4 mil) • Emolument• Overhead
Contribution to UTM
• Tab. Universiti(RM163k)
• Tab. Penjanaan(RM286k)
Income generation by Health Center
• Oct 2015 - RM813k• 2014 - RM1.2 mil
RM1.76
mil RM1.26 mil
7 New KPI by MOHE
(MESY JPKA BIL. 4/2015)
TECHNICAL VOCATIONAL EDUCATION & TRAINING (TVET)
Publication & CITATION
SUBJECT RANKING
INTERNATIONAL STUDENT
INCOME GENERATION
COST PER GRADUATE
RM638
milThe total budget for 2016
that will be distributed to
UA is based on
achievement of the 7 KPIs
FINANCIAL SUSTAINABILITY INITIATIVE
Academic Programmes
Research & Innovation
Asset & Land Bank
DevelopmentBusiness Entity
Medical Services, Hostel & Facility
ManagementEndowment
Human Capital Development
UTM had identified several main focus areas to facilitate the financial sustainability
planning and to ensure all avenues for income generation have been explored.
These focus areas are:
Target 2016RM 170.65 Mil
Challenges in Public University
Land Legislation
Economic stability
No. of student enrolment
Restriction on investment
Reduction in government
Grants
Immigration issues
Value for money
GST implication
Fees structure restriction
Competition among Public
University
How to overcome challenges
• Due to limited funding and fiscal challenges, UTM have undertaken various initiatives with streamlining, optimizing and leveraging available resources.
• Major Strategy
1. Self income generation
2. Cost cutting and saving
3. External funding & Financing
4. Optimization of resources
5. efficiency
How to overcome challengesShort term /
easier to implement
Long term
/complex to
implement
IMMEDIATE• Short tem /
Easy to implement
INCREMENTAL• Intermediate
to implement
TRANSFORMATIONAL• Long term /
complex to implement
Three type of evolutionary process to overcome challenges on
nowadays issues
How to overcome challenges
Type of evolutionary process
1 Immediate
• Empowerment Strategic Business Unit (SBU)
• Electrical saving plan-temperature control
• Revised on educational fees• Optimisation of space• Integrated, decentralised billing
system• Creation of UTMStep• Low Hanging Fruit
• Central usage of laboratory instruments
• Across the board budget cut (prudent spending)
• E-procurement• Increased external funding for
grant research• Various investment instrument• Embedding enterprise risk
management across the University
Short term / easier to
implement
Long term
/complex
to
implement
How to overcome challenges
Type of evolutionary process
2 Incremental
• Increase no. of SBU• Increase no. of local and
international student through target market expansion
• Deferred non-priority upgrading• Value for money activities• Advertisement through digital
signage
• Market at world large through Advertisement
• Unlocking of asset• High performance delivery• Increased endowment fund• Improve relation with local and
central government
3 Transformational
• UTM’s water treatment plan• Privatisation of Special Project
• Revised student Fees structure-credit based
• Comprehensive waste management
Short term /
easier to
implement
Long term /complex to implement
Critical Success Factor
Student enrolment
Engagement with stakeholder
Value for money activities
Transformational Leadership
All level Entrepreneurial mind set
Green effort initiative - Automated power controls, Temperature control
Strong alumni relationship
Integrated financial system
2016 strategic initiative toward financially sustainable
• Office of TNC (P) / BDU / Harta Bina / Bursar:
– To cascade the distribution of income generation to offices
– To produce a module on budget distribution, based on past years spending of the office
– To revise the rental charges of the arcade
– Study on the saving of water consumption
– Policy on the management of UTM’s real estate
– Study on the production of compost fertilizer from the arcade’s food waste.
– Study on the ‘miscellaneous charge’ charged to students.
• TNC (HEMA) Office :
– Revision of the hostel fees
– Revision/ study of the bus service fee charged to student
• TNC (P&I) Office :
– Revision/ study on the profit distribution of the consultancy activities
• TNC (A&A) Office :
– Revision on the methods of charging study fees students.
How Finance Can Lead
AnalysisAnalysisAnalysis
Linking Financial Plan to Strategic
Plan
Improve Decision Making
Timely Forecasting
CostingBuilding Financial
CapabilitiesEducation
BudgetingReporting
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
2010 2011 2012 2013 2014 OKT 2015
3.59 3.65 4.04
3.65
3.03 2.79
1.05 1.46
2.13 1.98 1.48
0.40
RM
'Ju
ta
Travelling Expenses 2010-OKT 2015 (RM‘mil)
Perjalanan Dalam Negara Perjalanan Luar Negara
-
0.50
1.00
1.50
2.00
2.50
2010 2011 2012 2013 2014 OKT2015
2.36
1.89
1.70
1.51
1.19
0.83 RM
'Ju
ta
Stationeries, Toner, Paper Expenses 2010-OKT 2015 (RM 'Juta)
-
0.50
1.00
1.50
2.00
2.50
3.00
2010 2011 2012 2013 2014 OKT2015
2.23
2.49 2.58
2.47
1.83
1.43
RM
' Ju
ta
Refreshment Expenses 2010-Okt 2015 (RM ‘mil)
Total Saving
RM1.46m
Total Saving
RM0.8m
Total Saving
RM1.53m
REPORT ON SPENDINGS OF EQUIPMENT BY BUDGET
FOR 2011 –2015 (AS AT OCT)
14.1
16.9
42.0 42.3
39.1
11.6
9.1 8.2
6.4
4.5
6.4
9.7
11.8
14.2
10.5
4.1
2.3
5.7 5.9
4.0
7.4 7.2
5.7
8.1
5.5
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2011 2012 2013 2014 2015
D
U
Q
A
R
TOTAL EXPENSES 2011 UNTIL OCTOBER 2015
DEVELOPMENT (D) RM154.35 MIL
OPERATIONAL (U) RM39.85 MIL
RESEARCH UNIVERCITY(Q) RM52.50 MIL
AMANAH (A) RM21.92 MIL
REASEARCH (R) RM33.84 MIL
TOTAL RM302.45 MIL
RM JUTA
UTM Special
Project
Student Accommodation Complex
PROPOSAL ON THE DEVELOPMENT OF SPECIALIST
HOSPITAL IN UNIVERSITI TEKNOLOGI MALAYSIA, SKUDAI, JOHOR DARUL TAKZIM
HOSTEL @UTMJbSTUDENT ACCOMODATION
COMPLEX HOSPITAL UTM-KPJ
• EPF Loan 1 :
RM160 mil
• Tenure : 1999-2024
• Prepayment of loan
from income
generated from
hostel fees
• Income from hostel
fees(Average RM18
mil/year)
• EPF Loan 2 :
RM180 mil
• Tenure : 2015-2030
• Prepayment of loan
from rental tenure of
rooms & commercial
lots
• Rental income
(Average RM21
mil/year)
• Construction cost:
RM128.76 mil
• Manage by JV Co.
• Sub Lease term –
30 years
• Capital by UTM =
valued at RM13.5
mil @ Land of 5
acres
UTM Special Project
UTM SUBSIDIARY COMPANY
UTMSPACE• Turnover 2014 : RM45million• Conducting quality Professional &
Continuing Education Programme
GLOBAL TECHNOLOGY & INNOVATION• Turnover 2014 : RM0.44 million• Research & development in the field of science &
technology & the rendering of commercialization, consultancy, advisory & management services
SPARKLE PRECISION S/B• Turnover 2014 : RM1.3 million• Trading & manufacturing of plastic
products
PHYTO BIZNET S/B• Turnover 2014 : RM2 million• Marketing & business management arm
to the principle
UTM SOUVENIR SHOP S/B• Turnover 2014 : RM0.45 million• Business of souvenir & other products
UNI-TECHNOLOGIES S/B• Turnover 2014 : RM13.9million• Render consultancy services on projects &
research, project management services & to organize seminar & conference
ARGUMENTED INNOVATION S/B• Turnover 2014 : RM0.46million• Commercialization of research &
development and educational advancement
Financial trend and estimated for 2011-2030(RM ’mil)
Revenue Streams
No Income Generation Key Focus Area (KFA)
No. of initiative 2014(Mil)
2015(Mil)
2016(Mil)
2017(Mil)
2020(Mil)
1 Academic Programmes 7 80.8 104 112.2 119 143
2Medical, Hostel & others student facilities
9 6.9 24.9 22.0 28.5 34.5
3 Business Entities 7 - 6.7 7.75 12.1 20
4 Endowment 6 7.3 10.0 10 20.0 30
5Consultation, Commercialization & R&D Grants
5 6.3 9.2 9 10 20
6 Asset & Land Banks 7 10.9 6.8 7.2 7.6 10
7 Human Capital Development 7 0.2 2.5 2.5 4.0 6.0
Total 44 112.4 164.0 170.65 201.1 263.5
CURRENT STATUS FOR 2015 (UP TO NOV)
Bil Key Amal IndicatorPencapaian
2014
Sasaran
2015
(a)
Sasaran
Jan-nov
(b)
Pencapaian Jan-
nov
(c)
Peratusan
Pencapaian (%)*
(c ÷ b × 100%)
Peratusan
Pencapaian (%)**
(c ÷ a × 100%)
1.
F1.1Peratusan (%) defisit bagi kos
operasi Universiti
KAI baharu 4% Annual 5% Annual Annual
2.
F2.1
Pendapatan dalaman yang
dijana daripada program /
aktiviti berasaskan
perkhidmatan akademik (RM
juta)
KAI baharu 145 132.92 72.78 54.75% 50.19%
3. F2.2 Endowment (kumulatif) (RM
juta)
54 80 73.33 85.24 116.24% 106.55%
4. F2.3 Sumbangan entiti perniagaan
(RM juta)
KAI baharu 3 Annual 1.05 Annual Annual
5. F3.1 Pendapatan yang dijana
daripada aktiviti unlocking of
assets (RM juta)
KAI baharu 20 18.33 27.29 148.88% 136.45%
KAI Owner: office Timbalan Naib Canselor (Pembangunan) & Bursar
40
Bil. Key Amal Indicator (KAI) Revised 2016 2017
1. F 1.1 % of Operation Budget Deficit -5% -5%
2. F 2.1 Income generated from academic
based activities*150 mil 160 mil
3. F 2.2 Endowment (kumulatif) 90 mil 100 mil
4. F2.3 Contribution from business entity* 4 mil 5 mil
5. F3.1 Income generated from unlocking
of assets*35 mil 45 mil
REVISED KAI 2016 - 2017
UNJURAN SUMBER DALAMANSumber Dalaman 2014 2015 2016 2017 2018 2019 2020
Hasil Langsung (H) 95.59 88.4 100.5 100.0 100.0 100.0 100.0
Kumpulanwang Pendapatan - 14.0 14.0 14.0 14.0 14.0 14.0 NOTA 1
Sumber Penjanaan Tabung Amanah *
1) Tab Amanah Lain/Khas (08415) 8.9 1.5 2.0 2.0 2.0 2.0 2.0 NOTA 2
2) 60% - cost recovery 1.5 1.9 2.5 2.5 2.5 2.5 2.5 NOTA 3
3) Tabung PTJ Yang Menjana Pendapatan 22.7 9.9 13.3 13.3 13.3 13.3 13.3 NOTA 4
Jumlah 128.6 115.7 132.2 131.7 131.7 131.7 131.7
NOTA 1 : Trend KWP (2010-2014) tidak termasuk sumbangan UTMSPACE (23juta) adalah RM13.8 juta
NOTA 2 : Pelarasan baki2 tabung amanah yang dibuat pada tahun 2014 (RM8 juta) & Portion Universiti (08415).
Unjuran hasil setahun RM2 juta berdasarkan tahun 2015
NOTA 3 : Hasil Cost Recovery portion universiti (seminar/perundingan/Penjanaan PTJ). Unjuran hasil setahun RM2.5 juta berdasarkan 2015
NOTA 4 : Tabung2 PTJ/Fakulti yang menjana pendapatan (kewangan/seminar/perundingan/School KL/Penginapan/Projek Khas)
* Sumber Amanah 2015 adalah sehingga Sept 2015. Bagi Tahun 2014 adalah baki akhir kumulatif)