UNIVERSITY FINANCE

Otago Daily Times, Issue 21543, 15 January 1932, Page 3

UNIVERSITY FINANCE

TREASURER’S REPORT NEED FOR ECONOMY URGED POST-GRADUATE SCHOLARSHIPS SUSPENDED Arising out of a proposal contained in the report on the finances of the University of New Zealand, submitted yesterday to the annual meeting of the University Senate by the treasurer (Mr von Haast), the suspension of several travelling scholarships was agreed upon by the Senate. Mr von Haast’s report stated “ Owing to the present depression the Government has been unable to make to the University since the year ended December 31, 1929 (the grant for which was paid), the annual grant of £3845, less 10 per cent., as provided by the Finance Act No. 1, 1931, to which it is entitled by section 7 of the New Zealand University Amendment Act, 1929, which directs that there shall be payable to the Senate of the University in each year for the general purposes of the University without further appropriation than this Act out of the ordinary revenue account of the Consolidated Fund, the sum of £3845. It seems clear that the University cannot expect to receive the grants due to it and in arrear, and that for some time to come, at all events, the University will have to arrange its finances so as to depend on its own resources apart from any statutory grant. Under these circumstances, it is satisfactory to be able to report that the draft statement of actual and estimated receipts and payments from April 1, 1931, to March 31, 1932, shows an estimated credit balance of £3147. As three months’ receipts and expenditure are estimated, this balance is approximate only. The wisdom of, the policy of the Senate in calling in its investments on mortgage and investing its funds in Government Inscribed Stock and debentures of local bodies is shown by the fact that only one mortgagor is in arrear.

“ I have endeavoured to make a comparison between the receipts and expenditure of the University for the year ended March 31, 1931, and those as estimated for that ending March 31, 1932, but such comparison may easily be misleading for the following reasons:—The receipts and expenditure estimated for the three months ending March 31, 1932, may easily differ substantially from the actual ones for the three months ended March 31, 1931. For instance, reconsideration fees received in the latter period amounted to about £SOO. This year, the total amount received in the corresponding period may be substantially less. It has been impossible to divide up the items in the trial balance sheet for the current year into actually the same heads as those that appear in the balance sheet for the previous year. The most that can safely be said is that the amount received in examination fees exceeds that received last year by over £1800; that there has been a substantial diminution in the expenses of conducting the examinations owing, doubtless, to the cut in the fees of examiners, supervisors and their assistants, and that there has been a reduction in the item of salaries owing to the 10 per cent, statutory ‘ cut.’ “ It would probably be unwise for the Senate to rely on its income for 1932 being equal to that of 1931, as the amount derived from examination fees may diminish at any time, and it should therefore keep liquid but earning interest a substantial sum to meet contingencies. After making such provision, it would be well to continue the policy inaugurated by Professor Shand and recommended by the chancellor in his address —namely, to add the remainder of the credit balance to the capital of the ordinary Scholarship Fund. There was, on April 1, 1931, a credit balance in the Post Office Savings Bank ordinary scholarship account of £2358 12s 6d, which sum is still in the bank with _ accrued interest. That sum, together with the credit balance transferred from the general account, should be invested as sound investments in stock, and debentures can be purchased to advantage at the present time. “The next question that arises is what steps the .Senate should take with regard to its scholarships in view of the loss of its statutory grant, £ISOO, of which it was in the habit of applying to the payment of such'scholarships. The Executive Committee, at its meeting on December 18, 1931, recommended the Senate to consider what travelling or post-graduate scholarships shall be awarded in April. The right policy for the Senate to adopt seems to be to regulate its finance so as ultimately to pay scholarships out of, the income derived from the investments of the ordinary scholarship fund, and not to have recourse to the general account at all. To give effect to this policy it is not suggested that any alteration in the internal scholarships should be made, but it seems to be necessary to curtail or abolish the travelling scholarships, and if this course is adopted it will result in a total annual saving of £2350. Taking the year 1930-31 as a typical year, we find: Cost of scholarships, £5332; interest from investments, £3064; balance paid out of general account, £2268; less proposed saving (no architecture scholarship 1930), £1500; estimated amount to be paid out of general account in 1934 if above scholarships are withdrawn, £768. “ A further saving will be made in the exchange at present paid on moneys transmitted to England for the purpose of paying scholarships there, which is at present paid out of the general account 1 and not charged to the scholarship fund. A matter that the senate might well eonis the question of readjusting the salaries of the staff either by statutory power or otherwise. So long as the University is independent of any Government grant it should not be hampered by any statute based upon the assumption that it is in receipt of such a grant. The whole question of staff arrangements and salaries was readjusted as recently as December, 1930, and every effort ought, to be made to give effect to that readjustment again as soon as possible.” Mr J. A. Hanan, M.L.C., moved that the report be received, and he congratulated the treasurer on his informative and analytical statement. Unfortunately, the senate had now three bodies that tied its hands to a certain extent when dealing with certain matters—the Academy Board, the Entrance Board, and the Council of Legal Education. Whether they liked it or not, they would be compelled to take action to reduce expenses. Professor J. Eight said that perhaps economies might be effected by reducing examination papers in numbers and length, and on his motion it was decided that the special committee set up to report should be asked to consider whether the cost of examinations could not be further reduced. He further suggested that some of the scholarships instead of being abolished should be suspended, as conditions might improve. The vice-chancellor (Professor T. A. Hunter) suggested that several travelling scholarships could be suspended and moved that the colleges should be advised that after the awards of the examination in April, two postgraduate scholarships in art and one in science, and travelling scholarships in French, law, architecture, engineering and medicine should be suspended. Mr T. B. Strong said he considered that it would be a more prudent policy on the part of the senate to draw its scholarship funds from the income derived from interest on accumulated funds. During the present period, when the country required all the assistance it could get, he thought that if material benefits were derived from university scholarships (as he considered they were) it would be bettor to increase rather than to reduce the scholarships. Professor Hunter pointed out that there would be no interference with scholarships that enabled students to go through their courses. If they did not take some action they would find themselves so crippled in a year or two that they would either have to cut down internal scholarships or draw on accumulated funds. The position was that they were spending £SOOO in scholarships and getting £3OOO in revenue, Mr Strong: The matter is so important that the senate should run the risk. Professor Hunter: If we get the Government grant there will be no question about our ability to pay the scholarships. On the suggestion of Sir George Fowlds, who said that such matters of finance should not be discussed in open meeting, the senate at this stage went into com-

mittee, and on resuming in open council, it was reported that the motion had been carried. Mr F. A. de la Mare proposed as an amendment that after the word “suspended ” there should be added the words “ unless in the opinion of the Executive Committee the state of the finances justifies the award.” This was agreed to, and the report as amended was adopted.