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The 2016 annual report: Healthy finances and significant academic achievements

Thanks to higher educational activity,increased interest income and restraint in administrative costs, the university’s 2016 annual report shows a budget surplus of DKK 200 million, an extraordinarily positive financial result for the year. These funds will be channelled into research and education initiatives to strengthen the university’s core activities.

2017.04.06 | Anders Correll

Photo: Anders Trærup, AU Foto

Aarhus University came out of 2016 with a budget surplus of DKK 200 million, according to the annual report just approved by the board.

"The financial situation has been tight in recent years, and the budget surplus in 2016 does not change the fact that we are still anticipating a decline in revenues in the coming years. And so we have reason to be pleased that the positive financial results for 2016 will enable us to make strategic investments in some of the academic activities that will drive the university’s continued development towards academic excellence,” states Connie Hedegaard, chair of the Aarhus University Board.

To a large degree, the improvement in the bottom line is a result of AU’s targeted efforts to reduce costs in recent years. At the same time, the study progress reform has meant that many students have completed their degrees early. This has resulted in more taximeter funding and more completion bonuses. In addition, the university had budgeted for a study progress penalty which was not imposed.  

The budget surplus will be invested in research and education

Taken together with existing savings, the 2016 financial result will give the university the opportunity to invest DKK 131 million in strategic initiatives at the faculties and add DKK 76 million to the university’s strategic fund (USM), which is used to fund research and education initiatives. These investments will put the university’s equity at 10 per cent of revenue, in accordance with the board’s target.

In addition to adjustments to falling revenues, the faculties will spend these funds on initiatives such as the recruitment of talented researchers, upgrades to research facilities and infrastructure, improvements to the study environment and support for interdisciplinary projects aimed at increasing contact with business and industry and establishing collaboration between research groups.

The strategic initiatives to be funded by USM will be selected in the spring of 2017. 

Important strategic initiatives

The annual report just approved by the board is marked by the strategic initiatives approved by the board in the summer of 2016: More engineers, improving the quality of the language degree programmes, the establishment of the National Centre for School Research, strengthening the research foundation of the business programmes and strengthening the commercial orientation of healthcare research and education.

“It’s clear that universities must budget conservatively when we don’t know the amount of income from sources such as student FTEs until the eleventh month. In a responsible manner, AU has complied with our politicians’ desire for more of our students to finish their studies more quickly, and this is a substantial part of the explanation for our budget surplus. The healthy financial situation will now give AU the opportunity to invest more in quality and strategic initiatives,” explains Hedegaard.

Generally speaking, the targets in the university’s development contract in relation to education have been met, as have the targets for attracting external grants from international sources.

However, some targets will require an extra effort. For example, international research impact, production of scientific publications and attracting Danish research funding. The faculties have launched initiatives aimed at improving their results in these areas, including recruitment of top researchers and more focus on quality assurance of publications.  

The DKK 200 million budget surplus is the result of the following factors:
• Increased educational activity (DKK 131 million)
• General budgetary restraint (DKK 21 million)
• Interest income and refunded energy taxes (approx. DKK 47 million) 





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