Financial Management and Economic and Social
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FINANCIAL MANAGEMENT AND ECONOMIC 4 AND SOCIAL IMPACT Financial management In the 2005-06 academic year the 2005-2010 Galician Uni- versities Funding Plan came into effect, a plan that introduces re- search- and quality-based funding, rather than funding linked to student numbers. The contributions to the universities included in this plan are distributed through the following funds: Unconditional funding: aimed at funding running costs, in particular staff costs. In 2007 there was an 8.9% increase on the 2006 tax year. Quality fund: in which in addition to the sexenios (a supple- mentary salary scheme) and payment from the autonomous region, resources for programme contracts and unconditional research grants are included, both categories in which USC was awarded 16.89m euros in 2007 – a 35.8% increase on 2006. Investment fund: the amount awarded in this category remai- ned the same as in previous tax years at 5.04m euros. USC Restructuring fund: previous funding was complemen- ted by an additional contribution of 1.35m euros in order to support USC’s financial recovery, promoted by the Economic and Financial Budget-Balancing Plan. CHAPTER 4 FINANCIAL MANAGEMENT AND ECONOMIC AND SOCIAL IMPACT 93 Social Responsibility Report 2006-2007 University of Santiago de Compostela Participation in the Galician R&D&I Plan: the funding awar- ded to USC in this category increased from 14.44m euros in 2006 to 17.05m euros in 2007. Funding Plan Payments 2006-2007 CATEGORY 2006 2007 UNCONDITIONAL FUNDING 110,110,716.27 119,910,570.02 QUALITY FUND: 12,428,313.86 16,882,596.67 “Sexenios” 3,571,619.16 5,013,877.23* Payment from the autonomous region 3,983,104.70 5,895,537.00 Programme contracts1 1,335,950.00 1,435,985.44 Research grants 3,537,640.00 4,537,197.00 INVESTMENT FUND: 5,036,482.00 5,036,482.00 Building repair, enlargement and development plan (RAM) 1,971,320.00 1,971,320.00 New investment 3,065,162.00 3,065,162.00 USC Restructuring Fund 0,00 1,350,000.00 SERGAS (Galician Health Service) 4,451,734.20 4,659,122.52 GALICIAN R&D&I PLAN 14,438,190.93 17,044,803.49 1 These are contracts between the university and the public adminstration, similar to what is known as a “framework contract” in English *€3,770,914.08 of this amount correspond to 2007. The remaining amounts are arrears from previous years. We should highlight the fact that while USC is on the same level as other universities in the region in terms of staff numbers and results achieved, it receives less public funding. In 2006 and 2007 the costs budgeted by the Autonomous Region for the Gali- cian University System (SUG) stood at around 0.75% of the Region’s GDP, in the face of a Spanish average of 1% of the GDP of the differ- ent autonomous regions. These differences increase further when the level of the Galician GDP is taken into account. This structural imbalance between revenues and expen- ses made the implementation of a budget-balancing plan between 2004-6 necessary which, along with the cost containment and inco- me management process in order to improve efficiency, allowed for the creation of the first balanced budget in 2006. CHAPTER 4 FINANCIAL MANAGEMENT AND ECONOMIC AND SOCIAL IMPACT 94 Social Responsibility Report 2006-2007 University of Santiago de Compostela Budget priorities Within the framework of the cost containment process, USC concentrated its resources on the following priorities: Staff The consolidation of teaching and research staff, especially in matters related to the transformation of the pre-LOU (university law) contracts and the honouring of the commitment to job security and promotion mentioned in the Statutes, and the consolidation of administrative and service staff, through training and the job- securing process. Teaching and research The priority areas of teaching and research continued to ab- sorb considerable amounts of budgetary resources: › The actions forecast in the Quality Plan in terms of tea- ching, research and support services and the funding of mutual interest agreements deriving from our strategic planning that took place in the structural units were all boosted. › Resources were dedicated to taking steps forward in the process of progressive integration into the European Hig- her Education Area (EHEA). › Information and communication technologies remained a priority for action in the 2006 and 2007 tax years. Transfer of knowledge The processes relating to the transfer of knowledge and re- sults of technical development and the creation of an enterprise cul- ture were considered to be priority objectives. University Community We continued to explore the options for a better quality of life on campus and encourage the participation and integration of the university community in general and of the student body in particular. Social presence Actions were encouraged that would intensify the social and international presence of USC and its activities in its journey towards defining an Internationalisation and Communication Plan that will allow medium-term growth in terms of our work in these two spheres. Infrastructure Considerable resources were directed towards the ca- rrying out of a building repair, enlargement and development plan (RAM). In terms of new structures, resources were assigned to the following actions: the completion of the Health Sciences Lecture Building, the project definition and the beginning of the building process for The USC Chemical Research Centre (CIQUS), the deve- lopment of the plans and the beginning of restoration work on the Lugo Sciences Faculty, project specification and the beginning of construction of the building for the USC Medical Research Centre CHAPTER 4 FINANCIAL MANAGEMENT AND ECONOMIC AND SOCIAL IMPACT 95 Social Responsibility Report 2006-2007 University of Santiago de Compostela (CIMUS), the awarding of the first phase of restoration work for the Biology Faculty, to be executed during the 2006-07 academic year, project specification and awarding of the first phase of restructu- ring of the Education Faculty, building projects specification for the School of Nursing and the Dentistry building. Annual accounts Operational status The budget results for the 2006 tax year was 12.06m euros, which, when joined with the net variation of financial liabilities, which stand at 11.95m euros, came to a credit balance of 24.01m euros. The accounts results for the 2007 tax year were also posi- tive, at 22.12m euros, which, when added to the net variation of financial liabilities, created a credit balance of 30.23m euros. Operational status COSTS 2005 2006 2007 University teaching 4,460,381.90 4,249,316.01 4,495,987.01 Research 35,417,328.39 37,951,086.15 52,068,164.34 Infrastructure and teaching and research 151,129,848.33 158,547,174.25 173,665,381.86 services Assistance, extension and promotion of the 5,367,254.32 5,277,018.49 6,836,181.50 university community Financial costs and liabilities 1,231,169.49 1,969,400.72 7,102,733.55 Financial assets 0.00 0.00 0.00 TOTAL 197,605,982.42 207,993,995.62 244,168,448.26 REVENUES Public prices and other income 40,579,477.34 44,788,105.60 49,972,552.77 Current transfers 120,222,502.54 132,014,507.16 150,205,660.46 Income from own assets 533,399.38 1,063,650.13 1,832,300.54 Divestment of real investments 0.00 246,052.63 2,281.03 Transfers of capital 31,783,183.67 41,652,238.63 59,599,591.70 Variation of financial liabilities 8,552,630.00 12,241,043.80 12,790,143.53 TOTAL 201,671,192.93 232,005,597.95 274,402,530.03 BUDGET OUTCOME Budget outcome for the tax year (non-financial (-4,333,335.02) 12,063,101.23 22,119,657.24 operations + operations with financial assets) Net variation of financial liabilities 8,398,545.52 11,948,501.10 8,114,424.53 RESULT FOR THE TAX YEAR 4,065,210.50 24,011,602.33 30,234,081.77 CHAPTER 4 FINANCIAL MANAGEMENT AND ECONOMIC AND SOCIAL IMPACT 96 Social Responsibility Report 2006-2007 University of Santiago de Compostela Balance sheet The balance sheet reflects a completely sound patrimony with considerable strength in terms of assets. Caution in terms of the rhythm of growth of activities and strict control of all risks meant that total assets remained in 2006 at 512.98m euros, compa- red with 376.31m euros in 2005. At the end of the 2006 tax year, our share capital and reserves stood at 369.86 euros in the face of 376.31 euros in 2005. In 2007, total assets stood at 545.18m euros and our share capital and reserves at 377.78m euros. Balance sheet 2005-2006-2007 ASSETS 2005 2006 2007 FIXED ASSETS 436,050,104.13 437,047,997.08 440,491,714.45 Tangible fixed assets 2,343,026.37 1,331,706.63 1,196,113.90 Intangible fixed assets 432,534,453.85 434,106,532.84 437,590,041.08 Permanent financial investment 1,172,623.91 1,609,757.61 1,705,559.47 CURRENT ASSETS 49,992,094.54 75,930,450.77 104,685,850.31 Debtors 37,295,906.67 45,751,595.16 54,446,649.33 Temporary financial investment 400,336.38 400,201.36 399,887.59 Liquid assets 12,295,851.49 29,778,654.25 49,839,313.39 TOTAL 486,042,198.67 512,978,447.85 545,177,564.76 LIABILITIES 2005 2006 2007 EQUITY 376,311,153.85 369,860,954.11 377,775,204.72 Assets 407,153,148.96 407,153,148.96 407,153,148.96 Results of previous tax years -20,904,574.75 -30,841,995.11 -37,292,194.85 Results from this tax year -9,937,420.36 -6,450,199.74 7,914,250.61 PROVISIONS FOR LIABILITIES AND 510,860.29 947,976.15 995,364.44 CHARGES Provisions 510,860.29 947,976.15 995,364.44 LONG-TERM CREDITORS 52,026,165.20 58,987,756.30 65,760,743.46 Other long-term debts 52,026,165.20 58,987,756.30 65,760,743.46 SHORT-TERM CREDITORS 57,194,019.33 83,181,761.29 100,646,252.14 Debts with credit institutions 0.00 2,812,861.24 3,320,553.53 Creditors 14,768,376.81 21,513,665.02 21,697,345.19 End-of-period adjustment 42,425,642.52 58,855,235.03 75,628,353.42 TOTAL 486,042,198.67 512,978,447.85 545,177,564.76 CHAPTER 4 FINANCIAL MANAGEMENT AND ECONOMIC AND SOCIAL IMPACT 97 Social Responsibility Report 2006-2007 University of Santiago de Compostela Financial-patrimony results The difference between costs and revenues in the financial accounts produced a negative result (negative saving) of 6.45m euros in 2006, compared with 9.94m euros in the previous tax year.