Financial Report
AIT ASIAN INSTITUTE OF TECHNOLOGY
27 April 2006
Contents
• Financial Reporting – Main Issues, Initiatives & Results
• Net Loss Trend – Overview• Un-audited FY2005• Measures to Address Financial
Results• FY 2006 Proposed Budget
To ensure that financial statements: • provide a true & fair view of the financial
results and position • are presented in accordance with
generally acceptable accounting principles
Financial Reporting – Main Issues
Presentation of statutory reporting
is line with reporting of Higher Education Institutions in the US & UK and
IFRS
Rectify incorrect past accounting practices
- agency fund as custodian fund
- separation of UNEP.RRC.AP
- excess funds of active sponsored programs record as
advances/debtors
- all residuals in general reserve fund
Financial Reporting – Initiatives
Close inactive accounts & completed
sponsored programs
Identify overspending/losses in agency fund &
Baht 66 mil write-off
Revise management reporting
Financial Reporting – Initiatives
Financial Reporting – Results
Financial statements give actual state of
financial affairs
can be relied upon for future planning
Major factor: Tuition fees ↓ 20% in Aug 2003
Net tuition fees: ↓ Baht 260 Mio over 3 years
Student enrolments: ↑↑ but not enough
Other factors: AIT fellowships, salaries, overhead recovery from sponsored programs
AIT Fellowships: ↑↑
Salaries: ↑↑
Overhead recovery: ↓
Trend: NET LOSS ↑↑
Net Results Trend Analysis (2002–2005)
Student Enrolments(excluding students on exchange & extension)
0200400600800100012001400160018002000
2002 2003 2004 2005
AITCV
AIT Thailand
Net Tuition Fees
0
100
200
300
400
500
600
2002 2003 2004 2005
AITCV
AIT Thailand
Overhead Income(from sponsored programs)
0
10
20
30
40
50
60
2002 2003 2004 2005
Overhead Income
F10 Headcount(Faculty & Staff)
0
100
200
300
400
500
600
700
800
2002 2003 2004 2005
Staff
Faculty
Salaries – Operating Fund(Fund10)
370380390400410420430440450460470
2002 2003 2004 2005
Salaries
Profit & Loss – Operating Fund(Fund 10)
-200
-100
0
100
200
300
400
500
600
700
2002 2003 2004 2005
Revenue
Expenses
Net Results
Comparison of Semi-annual Results
(all funds)
-200
-100
0
100
200
300
400
500
600
700
800
1H2003 2H2003 1H 2004 2H2004 1H2005 2H2005
Revenue
Expenses
Operating Results
Net Results
Comparison of 1st Quarter Results
(all funds)
-50050100150200250300350400450500
1Q2003 1Q2004 1Q2005 1Q2006
Revenue
Expenses
Operating Results
Net Results
Announce financial problems in July 2005 2005 budget ↓ 10% Salary freeze in 2006 Recruitment freeze for resignations/retirements Set up 3 task forces Appoint KPMG Sweden for institutional assessment Restructure central administration Revise 2006 budget process Revise 2006 overhead recovery & faculty honorarium
formula for sponsored programs
2005 Measures Taken
Major Findings & Recommendations Governance, internal control & risk
management Efficiency of administrative processes Relations between schools & administration Roles of administrative offices Financial management processes Responsibility Centre Management concept
Institutional Assessment By KPMG Sweden
Major Findings Management information system Employee & compensation structure Program management processes AITCV Strategic planning & budgeting process
Implementation of recommendations by June 06
Institutional Assessment By KPMG Sweden
2005 Un-audited Results
Revenue ↓ Bht 29 Mio (3%) to Bht 1,121 Mio
Expenses ↑↑ Bht 1 Mio to Bht 1,222 Mio
Operating deficit ↑↑ Bht 30 Mio (42%) to Baht 101 Mio
Net deficit ↑↑ Bht 12 mio (8%) to Baht 172 Mio
Cash ↓ Bht 231 Mio (35%) to Baht 423 Mio
Reserves ↓ Bht 179 Mio (62%) to Baht 109 Mio
Financial Situation
CRITICAL
2006 interim cost budget ↓ 4% Provident Fund Contribution ↓ from 10% to
5% (savings Bht 13 mio) Salary ↓ by up to 10% (savings Bht 20 mio) Downsize admin & support staff headcount ↓
by up to 24% Tuition fees for new intake ↑↑ 14% in Aug 2006 Interim capital budget ↓ 43%
2006 Immediate Measures
Proposed 2006 Budget - Overview
• Total Operating Revenue Baht 1.3 Bil• Total Operating Expenses Baht 1.2 Bil• Operating Surplus Baht 56 Mil• Net Deficit Baht 42 Mil• Capital Budget Baht 25 Mil
2006 Proposed Operating Budget
-200
0
200
400
600
800
1000
1200
1400
2006 Proposed
Budget
2006 Interim
Budget
2005 Unaudited
Operating Revenue
Operating Expenses
Operating Results
Net Results
2006 Proposed Operating Budget by Fund
-200
-150
-100
-50
0
50
100
2006 Proposed Budget2006 Interim Budget 2005 Unaudited
F10
F21
F30
F41
Total
2006 Proposed School F10 Operating Budget(excluding indirect costs & depreciation)
0
100
200
300
400
500
600
2006 Proposed
Budget
2006 Interim
Budget
2005 Unaudited
Operating Revenue
Operating Expenses
Operating Results
2006 Proposed Admin Offices F10 Operating Budget(excluding depreciation)
0
50
100
150
200
250
2006 Proposed
Budget
2006 Interim
Budget
2005 Unaudited
Provision for downsizing
Net Operating Expenses
2006 Projected Cash & Reserves
0
100
200
300
400
500
600
2006 Proposed Budget 2005 Unaudited
Cash
Reserves
2006 Proposed Capital Budget
0
5
10
15
20
25
30
35
40
45
2006 Proposed Budget 2006 Interim Budget
Schools
Library
Centres/Offices
Total
AIT ASIAN INSTITUTE OF TECHNOLOGY
