Unlike most other universities in Hong Kong, which are mainly publicly funded, the OUHK is a self-financed tertiary institution established by the Government. Its main source of income is from tuition fees, but it also relies upon donations from its many supporters and one-off government grants to fund various projects. Over the past two decades, the University has successfully provided opportunities of quality higher education to learners by leveraging on its unique flexibility and innovative use of technology in course delivery.
The ever-changing socio-economic environment has given universities increased challenges in offering new programmes to meet student and market demands. The OUHK has followed prudent financial management strategies to ensure that sufficient resources are available to fund its many programmes and activities.
Student enrolments rose to about 19,000 in the year, providing a stable stream of income for the University to further enhance the quality of its programmes and services. But the increased student population also put mounting pressure on the University to improve its teaching and student facilities, both in terms of quality and quantity of classes and educational resources. To alleviate the problem of space shortage, the OUHK-CITA Learning Centre in Lai King was established.
In spite of achieving an operating surplus of $78.9 million before interest and investment income – 129.4% higher than the previous year – the University has not been complacent. Every effort was made to contain costs in order to maintain the present level of tuition fees, as well as to help accumulate a reasonable amount of financial reserve for funding the many capital projects and development programmes in the pipeline.
Turnover
The fee income of the OUHK (Group) for the year amounted to $584.8 million, compared with $500 million in the previous year, representing a 17% increase. This was mainly attributable to the increase in the number of students from the face-to-face and Project Yi Jin programmes.
Expenditure
The total operating expenditure of the OUHK (Group) was $496.9 million, compared with $463.5 million in the previous year. The rise was mainly due to corresponding increases in direct and overhead costs brought about by the larger number of students in full-time courses.
Interest and investment income
The recovery of the world economy, the decrease in volatility of the financial market and the implementation of a prudent investment strategy helped the OUHK (Group) achieve a gain of $151.7 million in interest and investment income in the year.
Surplus for the year, and funds and reservese
Mainly due to a sizeable investment gain, an overall surplus of $229.6 million for the OUHK (Group) was recorded in the year, compared with a deficit of $94.1 million in the previous year. The total funds and reserves of the University (Group) as at 31 March 2010 stood at $1,354 million, compared with $1,131.4 million in the previous year.
Funding for course development
A total of $16.9 million was approved for the development and updating of 58 courses. The number of postgraduate, degree and sub-degree programmes stood at 209 in October 2009.
Retirement schemes
The University has been providing two defined contribution retirement schemes for staff, namely the Occupational Retirement Schemes Ordinance (ORSO) Scheme and the Mandatory Provident Fund (MPF) Scheme. At year-end, the 483-member ORSO scheme and 1,241-member MPF Scheme had a fund size of $302 million and $35.6 million, respectively.
Mainland activities
The University’s subsidiary in Shenzhen made a profit after tax of $4.1 million for the year, compared with $4.7 million in the previous year. A dividend of $3 million was declared by the subsidiary for the year.
Corporate governance
As a Government-established, financially independent university, the OUHK has always attached great importance to the quality of its governance processes and educational services. An Internal Audit Unit was established in October 2009 to help assess the University’s framework of risk management, internal control, financial management and monitoring, review its risk exposure and enhance efficiency.
Outlook
In the coming few years, the University anticipates increasing challenges not only from an increase in the number of private and self-financing tertiary institutions, but also from the changing and rising expectations from students and society. Delivering affordable, high quality programmes is not easy. However, equally important is the problem of space shortage and the need to provide more and better facilities for students to facilitate their pursuit of knowledge in an amicable and conducive environment. In this regard, the need to maintain a healthy level of University reserve, together with the support from donors from various walks of life, is vital in funding future campus development projects.
The recovering economy will very likely bring about a higher rate of inflation, which will raise the University’s operating costs. Useful cost control measures will continue to be implemented in order to keep tuition fees at a reasonable and affordable level. Resources will, subject to the availability of new facilities, be invested in the offering of new programmes to meet market demand. Building on its experience in the innovative use of technology in teaching and support services, the University is dedicated to providing a flexible, student-oriented learning environment and a greater choice of programmes and courses for aspiring learners.
