General Recurrent Grant Account and other University Funds
The main source of funding for the general teaching-and-research activities of the University, and for support services for those activities, is the general recurrent grant provided by the Commonwealth Government under the States Grants (Tertiary Education Assistance) Act, on the recommendation of the Commonwealth Tertiary Education Commission (CTEC).
The final level of the general recurrent grant for 1986 was $122,981 million, as compared with $113,023 million for 1985. The increase of $9,958 million resulted from:
$ million
— an increase in respect of the higher first year intake in
1986 .380
— an increase in the earmarked grant for the Graduate
School of Management .250
— an increase towards the cost of payment in 1986 of the retrospective increase in academic salary scales for the period May 1984 to April 1985
— a net increase in special grants
— an increase, resulting from salary rises, in the CTEC reimbursement towards the cost of University superannuation contributions
— supplementation towards other costs of salary and price rises
In addition to the Commonwealth Government funding for an increase of 80 in the intake of first year students, the State Government provided a similar level of funds to enable the first year student intake to be increased by a further 80 students. The additional student intake of 160 made possible by these grants resulted in additional enrolments in the Science, Engineering, Commerce and Arts courses.
The following other Commonwealth Government Grants under the States Grants Act were provided for this University in 1986 for specific purposes:
$ million
Equipment Grant 6.787 Grant for University contributions towards certain
recurrent expenditure of Teaching Hospitals .634 Grant for the Key Centre in Statistical Sciences .041
Special Research Grant 2.206 Grant for Special Research Centres 1.432
Minor Works Grant 1.013 Grant for the new Zoology Building 1.161
1.485 .041
.125 7.677 9.958
It is part of the conditions of these grants that they be accounted for separately from the general recurrent grant, with an annual report to CTEC on the expenditure from each grant.
In addition to government grants under the States Grants (Tertiary Education Assistance) Act, the University receives government grants, donations, income from Trust Fund endowments and other income for specific research programs, scholarships and other University purposes. In most, but not all, cases, these amounts have been made available to the University for a specified purpose and can not be used for any other University purpose. It is necessary, therefore, to maintain separate accounting "Funds" for each of these amounts.
Although all the various Funds must be held and accounted for separately, it is necessary for some reporting purposes to aggregate the income and expenditure for all the Funds relating to the teaching and the research activities of the University and to support services for those activities. This is done through the following sections of the University's Financial Statements to be submitted to Parliament, after audit, as Part 2 of the Annual Report for 1986:
—1 Combined Statement—Summary
—2 Combined Statement—Income
—3 Combined Statement—Expenditure
The following paragraphs of the Finance Section of the Annual Report relate to the general recurrent grant, as the main source of funding for the University's general teaching-and-research activities and their support services.
Budgetary Planning for use of the General Recurrent Grant for 1986
The University's budgetary arrangements for the general recurrent grant have been based for many years on decentralisation to Faculties and other Budget Divisions of decisions on the use of the resources which can be made available for their activities.
After amounts have been reserved for earmarked grants, General University Costs (those not charged against allocations to Budget Divisions) and a Discretionary Fund, the balance of funds estimated to be available for the year concerned is allocated to the various Budget Divisions in lump sum amounts.
The use of its lump sum allocation within the Budget Division is decided by the Divisional Budget Committee, having regard to the Division's priorities and circumstances, and after taking account of on-going staffing commitments and Budgetary Guidelines issued by the Central Budgets Committee.
The initial Budget for 1986, developed in September 1985, was based on an estimate of the general recurrent grant at the CTEC salary index levels of 30 June, 1985, and the estimated level of the non-salary costs index for the December quarter 1985. Provisional allocations for Budget Divisions were updated on a similar basis. As in earlier years, it was assumed that, apart from a possible shortfall of the order of $.250 million, the 1986 costs for salary rises after 30 June, 1985, would be covered by later Commonwealth supplementation resulting from increases in the CTEC salary indices after that date.
After allowing for the updating of allocations to Budget Divisions, for special increases approved in the allocations for the Library ($230,000), the Research Vote ($50,000) and the Buildings Committee Vote ($75,000) and for a higher
estimate of total expenditure on General University Cost items, the projected commitments exceeded the funds available.
To reduce this projected overcommitment to a manageable level, the updated provisional allocations for all Budget Divisions were cut by one per cent ($1.053 million in total).
Net Result in the General Recurrent Grant Account for 1986
Non-salary supplementation for 1986, based on actual movements in the CTEC non-salary costs index to the December quarter 1985, proved higher than the estimates on which the initial Budget for 1986 had been prepared. This increase made it possible:
— to cover the balance of the initial projected overcommitment for 1986;
— to provide an increase of $200,000 in mid-1986 in the Library Materials Vote, in respect of the effects in 1986 of exchange rate increases in expenditure in the second half of 1985;
— to retain $134,000 towards meeting the part of the 1985 deficit which resulted from an overestimate of non-salary supplementation when the 1985 Budget was prepared.
Net savings in some areas of the Budget were almost sufficient to cover a further allocation of $300,000 for Library Materials (in respect of the effects of exchange rate changes in the second half of 1986) and some additional expenditure of Budget Divisions and Departmental Research Votes. This additional expenditure will be recovered from allocations to those Budget Divisions and Votes in 1987 and later years.
The net result of all the changes from the initial Budget for 1986 was a surplus of $106,557, which was applied to reduce the accumulated General Recurrent Grant Account deficit carried forward from 1985.
Summary of General Recurrent Grant Income and Expenditure for 1986 (with comparative amounts for 1985)
1985 1986
$ million $ million Expenditure
Academic Activities Teaching-and-Research Identified Research-Only Academic Services
Central and Branch Libraries University Computing Services
(Expenditure less amounts met from recoveries)
Other Centralized Academic Services Ancillary Student Services
Research Scholarships
Other Ancillary Student Services
*70.098 3.430
* 7.689
1.051 1.318 1.330 1.165
76.369 3.749 8.823
1.355 1.430 1.346 1.295 General University Services
Administration 10.492 11.703 31
Overheads
Buildings and Grounds Public Services
Independent Operations Total Expenditure
Less General Recurrent Grant for the Year Deficit for 1985
6.748 9.773 .265 .110 113.469 113.023 .446
6.188 10.241 .294 .081 122.874 122.981
Surplus for 1986, applied to reducing the accumu- lated deficit in the General Recurrent Grant
Account .107
* Adjusted amounts Notes:
1. The reduction of expenditure on Overheads resulted from two factors:
(a) the 1985 costs for the Managed Fund Workers' Compensation Insurance arrangements in force for the period 1 January to 31 August, 1985, were much higher than the WorkCare premium for the same period in 1986;
(b) the internal charge-out rate to all University accounts in respect of WorkCare arrangements was increased from the beginning of 1986.
2. The general recurrent grant for 1986 included $1,485 million towards the cost of retrospective academic salary increases paid in 1986 in respect of the period 1 May, 1984 to 30 June, 1985.
3. It is relevant to the above table that the general recurrent grant funds most of the infrastructure of Academic Services and General University Services, which support the research and other programs for which outside funding is received towards the direct costs.
Fall in the Level in real terms of the General Recurrent Grant Funding available for the University's Normal Programs
The Finance Section of the Annual Report for 1985 drew attention to the series of outside decisions and events which have resulted in reductions in the level of general recurrent grant funding in real terms, for the University's normal programs. Some of these factors were:
— the earlier decision that non-salary supplementation would not be available during a year in respect of price rises during that year;
— successive reductions by CTEC in the real level of the general recurrent grant of this University from the beginning of each of 1980, 1981, 1982, 1983 and 1985;
— cost rises not fully reflected in non-salary supplementation;
— additional costs incurred as a result of government or community initiatives (e.g. special admission scheme, equal opportunity off ice, child care facilities, freedom of information, occupational health and safety, animal
experimentation requirements, accountability requirements to Commonwealth and State authorities).
Although individually some of the grant reductions and additional costs may not be seen from outside as significant when compared with the overall level of the general recurrent grant, collectively they have resulted in real pressure on general recurrent grant funding for the University's normal programs and support facilities.
Some idea of the extent of that pressure can be gauged from the following comparative information for 1980 and 1986 (but excluding from 1980 the information for the RAAF Academy, which ceased to be affiliated with the University at the end of 1985):
1980 1986 Student Load— Weighted Student Units 15,097 15,404 Student/Staff Ratio
(in Weighted Student Unit Terms) 12.69:1 13.17:1 Full-time and Fractional Full-time Staff
Numbers at 30 April
(but excluding "Research-Only" staff) Academic Departments:
Academic Staff General Staff
1,013 766
985 676
Sub-Total 1,779 1,661 Non-Academic Support Departments
and Services 926 874 (excluding Auxiliary Operations)
Total 2,705 2,535
"Research-Only" staff have been excluded from the above table because in most cases the direct costs are funded from outside donations or government grants and not from the general recurrent grant. The "Research-Only" staff increased by 159, to 645, between 1980 and 1986. This increase has been of great benefit to the University's research programs, but of necessity it has increased pressure on the departmental and University infrastructure of support services—and thus on the University's general recurrent grant.