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)