Page 33 - Keble Review 2014

College Financial Report
Roger Boden
Bursar
The Bursar, leans proprietorially against
the new boundary wall between the Acland site and the Royal Oak pub. The wall itself now stands on a ten metre deep foundation of concrete piles. When the main redevelopment project gets underway
the area to the north will be hollowed out to form
a sunken terrace in front
of the garden level of the planned Woodstock Road research building.
the audited accounts of Oxford colleges follow the format prescribed by the Charity Commission. Whilst, to an aficionado of GAAP and SORP, there may
be pleasure and enlightenment to be had in
such documents, for the rest of us significant information about how the College is really doing lies at least partly obscured in a forest of numbers. So I will not attempt a commentary on the statutory accounts. Instead I shall concentrate
on the College’s management accounts. These use the same inputs but, as the name implies, the reporting is structured to assist us in managing the business affairs of the College. Of course,
we are a charity and we exist to fulfil our Objects - the advancement of education and learning
and the promotion of research – not to generate profits. But that does not mean we should be any less efficient, cost conscious or entrepreneurial. The better we run the ‘business’, the more our resources can be applied to the pursuit of those Objects. (Indeed, the fact that we are a charity arguably places more responsibility on us to run the College well. Marginal expenditure is funded by marginal income, which in simple terms means that the least ‘necessary’ expenditure is being paid for by the hardest-earned income - the £10 per month from the retired Old Member who
can scarcely afford that sum but gives it out of a life-long commitment to Keble. That is a constant reminder to us all to ensure we achieve value for money.)
In order to keep the College’s finances sound the Governing Body, a decade or more ago, adopted four financial guidelines. These are that:
1. The Academic Account should break even
2. The Domestic Account should break even
3. We should achieve an Operating Surplus
4. We should have a positive Operating Cash Flow
The management accounts enable us to measure performance against these guidelines.
So how did we do in the financial year ended 31 July 2014?
The Academic Account was spot-on – it exactly broke even - the perfect result given that our
aim is to achieve our Objects, not to make a profit. Both income and expenditure amounted to £3.8m. Almost half the expenditure was on staff costs, with other direct academic costs (mostly student support, the JCR, MCR and Library) accounting for a further £900k.
The Domestic Account produced a deficit of £35k on a total spend of £2.9m. Of the four guidelines,
this is the one we have most difficulty meeting. Almost three-quarters of Domestic income is generated by student rents and each year there is a lively discussion about the level of those rents. The financial demands on junior members have
to be balanced against the need to pay our staff fairly and to maintain the financial stability of
the College. Successive generations of JCR and MCR officers have been impressively effective in representing their common rooms whilst at the same time having a proper regard for the finances of the College. The result, more often than not, is a deficit, but a modest one.
Despite the Domestic Account deficit, the Operating Surplus was a healthy £268k. This was entirely attributable to our Conference Business which had an outstanding year, generating £2.8m in gross income (25% above the previous record) and £1.2m in net contribution. This reflects exceptional effort on the part of all concerned to bring in the business, deliver a first-rate service and control costs. But it is also a consequence
of the sustained programme of investment in
our buildings, facilities and equipment which has made Keble one of the most attractive venues in Oxford for both conferences and bed & breakfast visitors (and, of course, the College with the best accommodation for its students).
That programme continued at full speed in the year to 31 July 2014, with capital expenditure approaching £1.7m. We completed Phase 4 of the 8-phase renewal of the Butterfield rooms and corridors, remodelled the Porters’ Lodge and undertook phase 1 of the Acland redevelopment project – a modest phase, but sufficient to activate the various planning consents before they expired. Capital spending is funded entirely from operating cash-flow and gifts explicitly intended to finance such projects. Happily, those proved sufficient to meet the very high level
of expenditure and we ended the year with a positive Operating Cash Flow of £39k.
So, in summary, we met three of our four financial tests and came close with the fourth.
Included in these results are two vital sources
of charitable income: transfers from the endowment and gifts to fund current expenditure. Endowment transfers amounted to £900k and income gifts to £700k. We also received £650k in new endowments, so that at year-end the College’s endowment had grown to £33m. Still very modest by Oxford standards but, thanks
to the generous support of our Old Members and a solid investment performance by Oxford University Endowment Management, continuing to move in the right direction.
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