Roberto Escarré, Oana Driha, Maryna Makeienko & Dimitrios Doukas, Claudia Linditsch Project Coordinator Dimitrios DOUKAS, Mag. [email protected] +43 (0)316 5453 6816 Graz, February 2018 This project has been funded with support from the European Commission. This publication reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. Project number: 561905-ePP-1-2015-1-AT-EPPKA2-CBHE-JP ‟Higher education can be a powerful engine for building a stronger society [...]. It can serve the community by contributing knowledge and advanced skills as well as basic competencies and research through its so-called third mission . ” (World Bank) Table of Content Executive Summary ........................................................................................................................ 1 Introduction ..................................................................................................................................... 2 Detailed Macro Analysis .................................................................................................................. 7 Main national sources for financing of public higher education ............................................... 15 Methods/Models for assigning state resources to higher education ........................................ 17 Reforms in the higher education system in the last 15 years .................................................. 18 Strengths and weaknesses in the financing system of higher education ................................. 20 Favorable opportunities for the financing system of higher education ..................................... 22 Threats to the financing system of universities ....................................................................... 22 Principal trends with regards to the financing of higher education .......................................... 23 Detailed Micro Analysis ................................................................................................................. 24 Other Funding Sources .......................................................................................................... 27 Legal Forms of the Universities .............................................................................................. 28 Internal Procedure for Budgeting ............................................................................................ 34 Distribution of Budget to individual Departments .................................................................... 37 Accountancy Standard (National, IFRS, USGapp, Other…) ................................................... 38 IT Systems for Accountancy ................................................................................................... 38 Controlling unit/department within the Institution and outside of it ........................................... 39 Budget Cycle Time - Controlling Cycle ................................................................................... 40 Form of Partnership with Industry Partners............................................................................. 40 IPR policies ............................................................................................................................ 41 IPR Valorization Policies ........................................................................................................ 42 Number of Patents ................................................................................................................. 43 Annual Revenues from marketing Patents or other IPR ......................................................... 43 IP Management Unit/Office .................................................................................................... 43 Intellectual property rights (IPR) ............................................................................................. 44 Good Practices and Case Studies ................................................................................................. 45 Sustainable Financial Management – a Good Practice by FH Joanneum – University of Applied Sciences – Austria ......................................................................................................................... 45 Sustainable Financial Management – a Good Practice by University Alicante – Spain .................. 57 Financial Management at Saarland University at a Glance – a Good Practice by University of Saarland – Germany ..................................................................................................................... 66 Best practice for financial management and disbursement of government budget – Naresuan University – Thailand ..................................................................................................................... 68 Budgeting of Thai Autonomous University: Case Study of Thaksin University – a Good Practice by Kasetsart University – Thailand ..................................................................................................... 71 Comparative Analysis Study by Universiti Putra Malaysia – Malaysia ........................................... 81 Sustainable Procurement Management as Part of Financial Management Practices – a Good Practice by UiTM Puncak Alam – Malaysia ................................................................................... 90 Accountable Financial Report as Part of Financial Management Practices – a Good Practice by USU – Indonesia ........................................................................................................................... 96 UGM’s Integrated Financial Management Systems (Simkeu) – a Good Practice by Universitas Gadjah Mada – Indonesia ........................................................................................................... 101 Executive Summary ADVANSE’s overall objective is to promote the modernization of financial management (FM) practices and income diversification strategies in Southeast Asian (SEA) higher education institutions (HEIs), with a view to sustainably strengthen the Higher Education systems and maximize the social return on investment in Higher Education (HE). Further, the project has two specific objectives: a) to enhance human, organizational and technical capacities of Southeast Asia countries HEIs to increase efficiency in FM and income diversification, promoting accountability and transparency through systematization and promotion of good practice; b) to promote regional integration through creating a network of financial managers pursuing modernization of FM systems and practices. The present study is included in the analysis work package of the ADVANSE project. The study contemplates data gathered from three European countries (Austria, Germany, and Spain) and three from Southeast Asia (Indonesia, Malaysia and Thailand). The period covered is from 2013 to 2015 and include both macro and micro approaches. In the first part of the document a detailed Macro Analysis is presented, covering economic and social indicators from the various partners of ADVANSE. Each university partner representing its own country filled a macro analysis format with data from their own region. This data was complemented by proper research on reliable alternative resources (mainly from international organizations like the World Bank, OECD, etc.). The collected information includes various socio- economic indicators, such as GDP per capita, population, unemployment rate, etc. For each of the macroeconomic indicators, the study includes a matrix of data for the countries during the analyzed years and a graph illustrating the average behavior of the variables for all the countries. The results were compiled according to social and economic indicators and constitute a diagnosis of the financing mechanisms of higher education institutions. The second part of the document includes a detailed Micro Analysis from the seven HEIs participating in the study. The collected data covers crucial financial and institutional management topics like funding sources, internal procedures for budgeting or IPR Policies. Finally, the third part of the document includes relevant Good Practices and Case Studies at institutional level. Each ADVANSE partner has included the most relevant experiences in the area, which in most of the cases have interesting reproducibility potential. 1 Introduction Under a favorable economic context and counting with improvements of their economic growth potential in the medium run (i.e., global competitiveness), human capital and global talent competitiveness, emerging economies are growing in the last decades at a faster rhythm compared to advanced economies. Among emerging countries, the Association of Southeast Asian Nations (ASEAN) members are experiencing also a great progress registering a GDP growth of over 5% in the last years, a trend that seems to be maintained at least up to 2023 (IMF, World Economic Outlook 2018). The ASEAN-5 economies (Indonesia, Malaysia, Philippines, Thailand, Vietnam) has a growth projection of 5.3% in 2018 and 5.4% in 2019. Indonesia and Malaysia are expected to grow at similar average rate (5%) while Thailand is supposed to grow under 4%. Deepening globalization does not mean only economic increase and life standards improvements. Talent mobility is becoming a relevant element of dynamism, innovativeness and competitiveness (World Economic Forum,