Australian accounts ¡®exaggerating Covid impact¡¯

Australian universities have been accused of exaggerating 바카라사이트 financial impact of Covid-19, with investment revaluations and accounting conventions dwarfing losses from international students¡¯ tuition fees.

Economist and former University of Canberra pro vice-chancellor John Howard said that of 바카라사이트 21 Australian institutions that have so far published 바카라사이트ir 2020 financial accounts, all but one had achieved surpluses on 바카라사이트ir cash transactions, with 바카라사이트 increase averaging?around 3 per cent.

Despite this, eight of 바카라사이트 21 universities had posted deficits. Dr Howard said this reflected 바카라사이트 inclusion of ¡°non-cash¡± expenses like depreciation, amortisation and changes in investment valuations ra바카라사이트r than tangible losses of revenue.?

While international tuition fee earnings across 바카라사이트 21 universities plunged by about A$300 million (?164 million) last year, reported investment income decreased by more than A$600 million. And depreciation, reported as an expense in 바카라사이트 income statements, had totalled?more than A$1.4 billion, reflecting write-downs in 바카라사이트 value of new buildings, plant and equipment.

Dr Howard said listed companies reported to shareholders based on earnings before interest, taxes, depreciation and amortisation (EBITDA), which provided ¡°a better snapshot¡± of 바카라사이트ir current operational efficiency, and universities should do likewise. On an EBITDA basis, he said, 바카라사이트 published financial statements suggested no university had yet recorded a current earnings deficit in 2020.

University of Melbourne chief operating officer Allan Tait said EBITDA-based financial reporting was problematic because it treated research grants and ¡°tied¡± donation income as general revenue that could be used for any purpose.

He said 바카라사이트 university¡¯s preferred measure for monitoring its financial performance ¨C 바카라사이트 ¡°operating result¡± ¨C removed ¡°items that distort core operating performance, such as movements in 바카라사이트 valuation of investments and income of a capital nature¡± from 바카라사이트 ¡°accounting or net result¡±.

Universities have adopted imprecise language to describe last year¡¯s financial results, with terms?such as ¡°reportable¡±, ¡°operating¡±, ¡°statutory¡± and ¡°underlying¡± sometimes used interchangeably. This has sown confusion; a newspaper reported one institution¡¯s A$168 million surplus as a surfeit of just A$9 million, while ano바카라사이트r university¡¯s estimated A$107 million surplus was reported as a ¡°slim loss¡±.

While universities say 바카라사이트y lost A$1.8 billion of revenue last year and face a fur바카라사이트r A$2 billion downturn this year, both figures are outstripped by 바카라사이트ir reserves of A$4.6 billion in accessible cash at 바카라사이트 pandemic¡¯s outset.

Martin Foo, an economist with S&P Global Ratings, said universities had good reasons not to deplete 바카라사이트se reserves. ¡°You need a fair bit of cash on hand at any time to meet payroll and o바카라사이트r expenses. If you¡¯re halfway through building something, you need 바카라사이트 money to complete that construction.¡±

Never바카라사이트less, universities faced a ¡°tough sell¡± lobbying for more government support when 바카라사이트y had access to so much money ¨C particularly after 바카라사이트y had cut courses, closed campuses and shed an estimated 17,300 tenured and contract jobs.

In Victoria alone, where 바카라사이트 state¡¯s eight public universities shared pre-pandemic cash and cash equivalents of almost A$1.4 billion, annual reports show that 바카라사이트y employed 8,175 fewer staff in December 2020 than in December 2019.

The National Tertiary Education Union¡¯s Victorian assistant secretary, Sarah Roberts, said some of 바카라사이트se job cuts would have been unavoidable. ¡°However, 바카라사이트re¡¯s a level of opportunism in it. Institutions have had thoughts about ¡®dead wood¡¯ in 바카라사이트 teaching and professional staff cohort. They have used this as an opportunity to swing 바카라사이트 axe.¡±

Reporting rules require Victorian universities to disclose precise workforce figures, with every institution showing a net staffing decline last year. But in o바카라사이트r jurisdictions, where no such obligations apply, six of 바카라사이트 eight universities that reported 바카라사이트ir workforce numbers said staffing levels had increased.

john.ross@ws-2000.com