Polytech facing a big deficit
Aoraki Polytechnic could fall 400 students short of its target of 1773 for the current year, with a potential deficit of $2 million.
Challenging times have continued for the institution, which is facing its third year of student losses and its second deficit.
The report of acting chief executive Alex Cabrera to the polytechnic council, which meets tomorrow, outlines the position and potential year-end losses.
"Not meeting our EFTS [equivalent fulltime students] targets for 2013 is having a negative impact on our financial performance. The most recent update forecasts an operating deficit of $1.6m, compared to a budgeted deficit of $0.8m. The position could potentially deteriorate significantly to negative 400 EFTS, which could equate to a more than $2m deficit," Mr Cabrera said.
"Operating expense restrictions will be put in place to alleviate some of the impact."
Enrolments had fallen 333 EFTS short of the budgeted 1547 for the end of July. Factors included a strong regional economy with low unemployment, he said.
Aoraki has $26m in reserves, and was able to use $1.5m in interest last year to offset losses. A drop in students will also see a drop in government funding and student fees, with a shortfall of $1.6m at the end of May.
This is on the back of a drop of 144 EFTS last year, though austerity measures enabled the polytech to achieve a break-even financial result.
In 2011, Aoraki had a $1.6m deficit and a shortfall of 232 EFTS against budget.
Mr Cabrera said strategic alliances and collaborations were being considered with an alliance with Lincoln University allowing Aoraki to offer degree programmes.
"The shortfall is largely driven by having a really good economy in South Canterbury and a lot of people in employment.
"Most of our programmes are Monday to Friday 9am to 3pm so we need to find a more flexible way to deliver these courses," he said.
"For 2014 we need to take into consideration the environmental factors mentioned above (economy, employment etc), as well as undertaking a detailed assessment of business operations to better inform our targets for next year."
A steering group comprising Aoraki council members, Mr Cabrera and management is overseeing the assessment of options.
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