With the University of Guyana (UG) in debt to the tune of around $250M at the end of last year, Bursar John Seeram has indicated that a significant increase in the institution’s budgetary subvention is needed to solve its financial woes.
This is according to correspondences, seen by Stabroek News and which show arrears to the National Insurance Scheme (NIS), the Guyana Revenue Authority (GRA) and the UG Pension Scheme totalling $251M. As a result of the situation, the Ministry of Education has urged the Bursar to address UG’s arrears, which constitute a breach of its statutory obligations. The University of Guyana Senior Staff Association last year highlighted UG’s cash flow problem, saying that the administration was forced to make a choice of paying salaries to staff or NIS, GRA and pension contributions.
In a letter to the Committee of Deans on UG’s Financial Statement, dated January 21, 2013, Seeram said that for the past six years the university’s income has been unable to cover its expenditures, which continue to increase.
“At the end of December 2012, there were liabilities of approximately $250m… The University does not have the income to clear these liabilities over the next three (3) months,” he wrote.
Seeram indicated that considerations were being made to cover liabilities incurred in 2012 with the subvention to be given in the 2013 budget. He also highlighted the fact that proposals to increase the annual subvention have been submitted every year for the last six years, but that all have been rejected.
He said that the Ministry of Finance instead opts to clear the liabilities by granting advances from the Student Loan Capital Account, which have to be repaid. He noted that at the end of December 2012, the $250M given in May of 2012 had been repaid to the Student Loan Agency, but said that the liabilities at 31 December 2012 could have been reduced significantly if the $250M was given as an increased subvention.
He added that the solution to this financial conundrum was a significant increase in the 2013 subvention.
Meanwhile, correspondence between Seeram and Education Ministry Permanent Secretary Delma Nedd point to UG being urged to address the large level of arrears to the NIS, GRA and the UG Pension Scheme.
Nedd, in a letter dated January 16, 2013, voiced the ministry’s displeasure with the amount of arrears —which Seeram put at $228.7M in addition to $22.4M owed for the month of December of the same year—while stating that the payments were statutory and that failure to comply constituted a “breach of regulations.”
As such, she urged the university to resolve the issue as soon as possible since failure to do so may invoke penalties at the least and legal ramifications at the worse.