The OUHK is a self-financing tertiary institution established by the Hong Kong Government in 1989. Its principal source of income is from tuition fees, but it also relies on donations from its many committed supporters and one-off government grants to fund various projects. By practising prudent financial management strategies over the years, the University has been able to maintain a healthy financial position and offer quality higher education.

The year recorded a small decrease in the number of distance learning students while the number of full-time face-to-face students stabilized, with a total student enrolment of about 18,000. To address the decline in the distance learning population and meet the changing needs of learners, the University has enriched its programme offerings and educational resources, and strengthened learning support for students.

Turnover

The OUHK (Group) recorded a fee income of $601.3 million for the year, a decrease of 1.8% compared with $612.2 million in the previous year. The drop was mainly due to a decrease in the enrolment for the distance learning programmes and also, as a result of the gap-year effect, in the Project Yi Jin.

Expenditure

The total operating expenditure of the OUHK (Group) was $581.0 million, compared with $514.2 million in 2010–11. The increase was primarily due to an increase in staff costs resulting from a pay rise in line with the civil servant pay adjustment and an increase in staff numbers to provide more academic programmes and enhance support services.

Interest and investment income

Despite the volatile financial market, the OUHK (Group) managed to achieve a gain of $31.0 million interest and investment income with its prudent investment strategy.

Surplus for the year, and funds and reserves

An overall surplus of $52.5 million for the OUHK (Group) was recorded in the year, compared with $246 million in the previous year. The total funds and reserves of the University (Group) at 31 March 2012 stood at $1,647.5 million, compared with $1,590.3 million in the previous year.

Donations

In recognition of its commitment to providing innovative learning and teaching to its students and the public, the University received donation from The Hong Kong Jockey Club Charities Trust for the establishment of the Jockey Club Audio-Visual Production Centre. The Centre is equipped with state-of-the-art facilities for the production of high-quality educational TV programmes and the enrichment of our audio-visual materials.

Donations amounting to $7.6 million for student scholarships and bursaries were received from various philanthropists, corporations, charitable foundations and friends.

Funding for course development

A total of $20.3 million was approved for the development and updating of 55 courses. In October 2011, there were 222 postgraduate, degree and sub-degree programmes.

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 524-member ORSO scheme and 1,244-member MPF Scheme had a fund size of $358.9 million and $43.2 million, respectively.

New College on Chung Hau Street

The development of the New College on Chung Hau Street in Ho Man Tin – for which the total project development cost is estimated to be more than $720 million – is making steady progress. The University has secured an interest-free loan of $317 million from the Government, and a total grant of $200.7 million has also been approved by The Hong Kong Jockey Club Charities Trust for the project. Out of the grant, $190 million will be used to fund the construction of the New College and the remaining $10.7 million will be used to launch the Jockey Club Community Healthcare Education Programme. In addition, a number of donors have pledged to support the New College project.

A 12-storey building will be built to offer degree programmes in medical services, creative arts, and testing and certification, in support of the development of three of the six major industries promulgated by the Hong Kong SAR Government. Piling and demolition work for the project commenced in March 2012 and it is expected to be completed by late 2013.

Mainland activities

The University’s subsidiary in Shenzhen achieved a profit after tax of $4.1 million for the year, compared with $4.4 million in the previous year. A total dividend of $3.8 million was declared by the subsidiary for the year.

Outlook

The prevailing inflationary trend has led to an upsurge in operating costs, and the University anticipates increasing challenges to its operation under a self-sustaining model. To cope with the pressures of the double cohort in September 2012 arising from the new ‘3+3+4’ academic structure, the University is committed to a slight increase in its in-takes, while maintaining a well-rounded, balanced educational experience for its students. Keeping student fees at a reasonable, affordable and yet competitive level vis-à-vis other self-financing institutions is always a challenge. Sufficient resources will continue to be allocated to enhance teaching and learning activities, but with the need to support the new campus development project on Chung Hau Street, it is crucial for the University to maintain a healthy financial position.

In the face of greater market competition resulting from an increase in the number of private and self-financing institutions, the University is dedicated to providing a flexible, student-oriented learning environment for aspiring learners while adopting prudent financial management practices to maintain a balanced operating budget.