The University has been financing its recurrent operational expenses mainly from tuition income, with occasional one-off grants from the Government and generous donations from the community. To uphold its principle of offering sustainable and affordable high-quality programmes and courses to meet the needs of lifelong learners, the University has adopted prudent financial management strategies to ensure that sufficient resources are channelled to support its many programmes and activities.
The year saw a small decrease in the number of distance learning students while the total student enrolment stood at about 19,000. To address the reduction in the distance learning population and meet the needs of aspiring learners, the University put in significant resources to enrich its programmes and courses, and strengthen its support services for students.
Turnover
The OUHK (Group) recorded a fee income of $612.2 million for the year, an increase of 4.7% compared with $584.8 million in the previous year. The growth was attributable mainly to the encouraging enrolment for the face-to-face and Project Yi Jin programmes.
Expenditure
The total operating expenditure of the OUHK (Group) was $514.2 million, compared with $496.9 million in the previous year. The increase was due primarily to a corresponding increase in direct costs and overheads brought about by the larger number of students in the full-time courses.
Interest and investment income
The rebound of the financial market coupled with a prudent investment strategy enabled the OUHK (Group) to achieve a gain of $89.1 million interest and investment income in the year.
Surplus for the year, and funds and reserves
Due to investment gain, an overall surplus of $246.0 million for the OUHK (Group) was recorded in the year, compared with $229.6 million in the previous year. The total funds and reserves of the University (Group) at 31st March 2011 stood at $1,590.3 million, compared with $1,354 million in the previous year.
Donations and matching grant
Under the Government’s Fifth Matching Grant Scheme, the University received matched grants of $46.4 million from the Government for a total of $49.1 million donations received from many alumni, students, staff and friends in the community. Except for those with designated purposes, the matching grants and donations will be used for financing our campus expansion plans and other endeavours to enhance academic development, new course development and student support.
Donations amounting to $4.2 million for student scholarships and bursaries were received from various philanthropists, corporations and charitable foundations.
Funding for course development
A total of $9.5 million was approved for the development and updating of 35 courses. The number of postgraduate, degree and sub-degree programmes stood at 216 in October 2010.
Retirement schemes
The OUHK has been providing two retirement schemes for staff, namely the Occupational Retirement Schemes Ordinance (ORSO) Scheme and the Mandatory Provident Fund (MPF) Scheme. At the year-end, the 498-member ORSO scheme and 1,215-member MPF Scheme had a fund size of $353.6 million and $41.6 million, respectively.
Campus expansion
With the continued growth in the full-time student population in recent years, it is imperative for the University to provide more campus facilities to enhance the learning environment for all students. The University is delighted with the successful bid for a land grant on Chung Hau Street in Ho Man Tin. It plans to build a new college to offer new degree programmes which will contribute to three of the six major industries promulgated by the Government. Construction is expected to start in late 2011 and be completed by the end of 2013. The University has secured an interest-free loan of $317 million from the Government for this purpose. As with our Phase One and Two campuses, the development of the new campus will have to be supported through a fund-raising campaign.
Mainland activities
The University’s subsidiary in Shenzhen achieved a profit after tax of $4.3 million for the year, compared with $4.1 million in the previous year. A total dividend of $8 million was declared by the subsidiary for the year.
Outlook
The inflationary situation brought about by the recovering economy has posed increased challenges to the operation of a self-sustaining model. The University will continue to exercise effective cost control measures to keep tuition fees at a reasonable and affordable level. In support of new initiatives, particularly the new campus development project on Chung Hau Street, it is crucial to maintain a healthy financial situation.
To retain our competitive edge in the face of increasing market competition arising from an increase in the number of private and self-financing institutions, the OUHK will continue to explore new initiatives to enhance its teaching and learning activities while adopting prudent management practices to maintain a balanced operating budget. Building on its experience in the innovative use of technology in teaching and support services, the University will remain steadfast in its mission of providing quality, flexible and innovative education for all.
