Annual Report 2009 (PDF 2 MB) - Wellington Institute of Technology

Section (a) reconciles the reported profit to the ABM loss, while section (b) provides insight into the performance of the business by deliverymethod. Section (b) also highlights the level of cross-subsidisation that is required in an institute of technology to generate a profit while alsodelivering the programmes required to meet the demands of industry and the local community. Wellington Institute of Technology use theABM model information as part of its portfolio management framework to ensure the programmes delivered in future periods maintain a solidbalance of profitable programmes and delivery methods, while also allowing for the delivery of high-cost programmes, the need for which areconsistent with the government’s STEP objectives.2009 2009 2008Actual Budget Actual$000 $000 $000(a)Financial performance to ABM reconciliationFINANCIAL STATEMENTSProfit/(loss) 3,747 1,543 621less ABM adjustmentsQRP 3 operating grant - - (2,222)TEOC discretionary funding (2,471) (2,471) -Interest (550) (312) (1,038)Rent received (50) (20) (45)Course development 524 - -Transformation projects 1,446 1,947 466Asset base adjustment (1,549) (1,162) (1,139)ABM profit/(loss) 1,097 (475) (3,357)(b)ABM Performance by Delivery MethodDelivery Method 2009 Actual 2009 BudgetTotalTotalIncome Costs Profit/(Loss) Income Costs Profit/(Loss)Trades & Technicians - Capital intensive 22,772 23,474 (702) 23,687 24,150 (463)Other Offerings 20,924 19,125 1,799 19,528 19,540 (12)Total 43,696 42,599 1,097 43,215 43,690 (475)Delivery MethodIncome2008 ActualTotalCostsProfit/(Loss)Trades & Technicians - Capital intensive 17,656 21,302 (3,646)Other Offerings 22,767 22,478 289Total 40,423 43,780 (3,357)20. EXPLANATION OF MAJOR VARIANCES AGAINST BUDGETExplanations for major variances against the Council approved budget are as follows:Income statementTertiary fees produced a $522,000 positive variance to budget. This reflects the higher than budgeted domestic student numbers achievedin 2009, and a change in the mix of programmes being studied compared to budget. This positive domestic student variance was offset bylower than budgeted income and associated EFTS achieved from international students.Trading income produced a $836,000 positive variance to budget. This result was generated with a number of unplanned income streamsbeing obtained in 2009, including such things as the State Services Commission reimbursement of Kiwisaver Employer contributions,reimbursement of staff time spent on 3rd party developments, the sale of completed houses and the receipt of gifted assets.Employee benefit expenses finished 2009 $585,000 behind budget, and $1.002m behind the 2008 position. This positive result reflected theoutcomes of the 2008 restructuring programme, and the organisation's ability the meet the increased demand for education with a morefocused staffing compliment.Depreciation and amortisation finished 2009 $534,000 behind budget. This was the result of a reduced capital expenditure programme, withcampus development activities being limited to the purchase and partial redevelopment of previously leased premises in Petone.44WELLINGTON INSTITUTE OF TECHNOLOGY | 2009 ANNUAL REPORT