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Assessing the Financial Health of a University

Date Released: Tue, 29 April 2014 16:25 +0200

Prof Mark Bunting was invited by the Department of Higher Education and Training to deliver a presentation at their Ministerial Council Appointees Capacity Building Seminar, held in Johannesburg on 26 March.

Prof Bunting’s presentation, entitled “Assessing the Financial Health of a University”, addressed aspects of his ongoing research into the development of a financial analysis framework appropriate for South African universities.  A key intended outcome for this research endeavour is a parsimonious and decision-useful set of financial health indicators that is understandable to as wide a range of potential stakeholders as possible.

In his presentation, Prof Bunting noted that there are a number of normative frameworks with demonstrated acceptance in the broader nonprofit financial analytical literature. However, none has been studied in the specific context of South African higher education.  In making a start towards addressing this gap, Prof Bunting demonstrated the application of four possible candidate models, using the audited annual financial statements of Rhodes University for the period 2006 to 2012 as his example.  

He concluded by observing that the preliminary results of these analyses for just one South African university are already showing highly encouraging signs that this research project is both feasible and worthwhile.

 

Source:Commerce Faculty