UCC now €50m in red as debt doubles

UNIVERSITY College Cork has a “serious imbalance” in its finances as its deficit hit €50 million, TDs heard yesterday.

Members of the powerful Dáil Public Accounts Committee (PAC) expressed concern at the way the institution’s shortfall has been allowed to more than double in the past three years.

UCC President Gerard Wrixon revealed it was “fair to say” the capital and current debts had now reached around €50m - up from €21m in September 2002 and €42m at the end of last year.

The Auditor General John Purcell told the committee UCC’s ambitious expansion programme had led to the deficit.

“One of the fundamental elements to sound financial management is that funding should be in place to meet commitments legally entered into.

“While it’s only to be expected that, say for reasons of timing, there will not always be an equivalent between funding and contractual commitments, what we have here is serious imbalance that has been building up over the last five years, and without really any effective corrective action being taken,” he said.

Mr Purcell made it clear Cork was not an example other Irish universities should follow in the way it structured its finances.

“Any tacit acceptance of the practice of knowingly incurring substantial unfunded capital expenditure might give rise to other universities adopting this approach with long term consequences for the taxpayer,” he said.

Green TD Dan Boyle expressed alarm at the “scale and speed” of the way the deficit had been allowed to escalate and treble since 2000.

Prof Wrixon said the financial situation had arisen due to the rapid expansion of the institution over the past five years, which will see the student population reach 22,000 by 2010 - double the 1999 figure.

“It’s a juggling exercise, both bringing the university forward and dealing with an inadequate level of funding,” he said.

Prof Wrixon told TDs Government funding for the university was not sufficient.

“The system is not putting enough money into capital aid. We are a land-locked city centre campus and any time space becomes available we have to buy it,” he said.

Prof Wrixon insisted structures were now in place to eliminate the deficit within three years and he claimed if it ever became an “issue”, the university could clear it by selling off land assets.

He indicated the deficit had been driven by the need to pursue strategic property purchases in order to expand the campus, including spending €11.5m on a six-acre site.

Prof Wrixon said the deficit could be seen as an “investment in the future”, and added that UCC’s assets had grown from €190m in 1999 to €292m in 2002.

Members of the PAC were told the university has an overdraft facility of €25m, but no more than €18m has been used.