The Funding Challenge for The African Universities

Edulink-AUDISInformative seminar K.U.Leuven

4-6 June 2008

By Angelo MacuacuaVice-Rector for Adm. and Resources

Eduardo Mondlane UniversityMaputo - Mozambique

Objectives

To discuss how the international challenges in High education funding is affecting EMU.

To present the EMU experience of university activities funding.

To present the EMU Financial strategy to address the lack of funds.

To receive the participants insides to improve the EMU funding mechanisms.

Presentation Outline

The Funding challenge for the African Universities.

EMU background The Funding Model of Eduardo Mondlane

University Fund Raising at Eduardo Mondlane

University: Past and Future Perspectives. EMU Financial Strategy.

Challenges of African Universities for Funding The presures of expansion and massification. The economic problems facing most African

countries. A changed fiscal climate and policy direction induced

by multilateral agencies. The presure of other social and health issues (e.g.

HIV-AIDS, frequent natural disasters, etc.) on the State Budgets.

The inability of students to pay tuition rates. Misallocation of the available financial resources.

Evolution IndicatorsIndicators 1998 2006

Number of Faculties 9 13

No of Undergraduate courses 22 56

No of Master Program 0 6

No of undergraduate Students 6.500 13.914

No of Master Students 0 344

Number of Academic staff 711 1.170

No of Non-academic Staff 1.518 2.367

University Budget (1,000 USD) 17.895 39.125

UEM Funds Allocation Model

State Funds, Central Research Programs and Loans All resources are received by the Center and then

allocated to Departments and Services, which have management power (Decentralized bureaucracy).

Strategic decisions are taken at the Rectorate level but routine decisions and implementation are made by Departments (Decentralized Bureaucracy).

Donations and self-regenerated income: Income is earned by the departments and is taxed to

cover the central administration expenses and the remainder is spent by departments (Managed Entrepreneurialism).

Income is earned by departments and retained by the them (Laissez-faire model).

Funds Allocation Model

Limitations of the Current Model

Higher number of Bank accounts making very difficult the cash control.

Inability of better cash reserve management. Difficulties on financial reporting. Difficulty of financial planning, management

and control.

Funds Allocation: Future Model

State Donors Creditors

Clients

Programs

Activities

Faculties

Directorates

Centers

UEM Budget

Evolution of Consolidated EMU Budget in 2002 - 2006

7,8%

2006 EMU Funding

Pág. 3

EMU Funding em 2006

State budget57%

Donations11%

Credits17%

Own revenues15%

State budget Donations Credits Own revenues

EMU Financial Strategy

1. Principles

2. Institutional Strategies

3. Diversification of funds sources

4. Distance Learning for financial presure reduction

5. Effective financial management of the EMU.

6. Cooperation and Partnership

EMU Financial Strategy: Principles1. The University is one organization, not a collection of competing

business units (Faculties and Divisions).

2. The Budget is a strategic instrument to drive the University’s future direction and the changes necessary to ensure the University’s strategic objectives are met.

3. The budget model should be fair and equitable, as simple as possible, transparent and responsive to change.

4. There will be a Strategic Planning Fund which, at the discretion of the Vice-Chancellor will be applied to University strategic priorities.

EMU Financial Strategy: Principles (cont.)

5. Faculties may decide to allocate budgets on a different basis from the central allocation to their Departments based in their unique teaching, research and community service contributions to achieving the strategic priorities of the University.

6. The financing of major capital projects will be assessed on a case-by-case basis.

7. There will be a reserve for contingencies of a minimum of 1% of budgeted income. The reserve may be used to buffer income fluctuations or to meet unforeseen expenditures.

EMU Financial Strategy: Institutional Strategies Integrate financial planning with institutional policies. Facilitate generation of income and cost recovery at

the basic unit level. Reduce costs and increase efficiency trough better

utilization of resources. Develop appropriate administrative structures. Develop and appropriate management information

system. Provide appropriate training for the staff.

EMU Financial Strategy: Diversification of Funds Sources Fees from continuing education programs organized

for industries and professions. Income from tailor-made program Profits from retailing through shops. Income from rents of conference facilities, sports

facilities and equipments for external use. Income from rents of residential facilities during

holidays. Research patents, licenses, royalties and overheads.

EMU Financial Strategy: Distance Learning role The distance learning as way to meet the

massive expansion of the University with relatively less funding.

The availability of ICT and easy access to training material as a way of reducing the cost of higher education.

The training material prepared by the staff could improve the teaching/learning strategy of regular program.

EMU Effective Management: Doing More With Less Financial Resources Rational allocation of funds Management of cash reserves Production and monitoring of financial

indicators Better utilization of resources Evaluation and auditing Protection of funds from fraud.

EMU Financial Strategy: Cooperation and Partnership

Cooperating and partnership within the university: Faculties, schools, departments, lectures and students.

Cooperation and partnership with other national and international education institutions.

Cooperation with government agencies, NGO and private sector entities.

Aspects for Assistance in Financial Management Operationalization of income generation

diversification. Strengthening cooperation management Capacity development of fund rising at

Faculty and academic Department level. Training the financial management staff at

Centre and Local level.

Finally

Muito Obrigado

Thank Very Much

Merci Buku