University of Ghana reports 709.5% increase in profit, surpassing GH¢673m in 2022
The Auditor-General's report on the audited consolidated financial statements of the University of Ghana and its subsidiaries for the year ending December 31, 2022, reveals a remarkable financial turnaround.
The University concluded the year with a surplus of GH¢673.94 million, marking an extraordinary 709.5% increase compared to the surplus of GH¢83.26 million recorded in 2021.
Total income for the University surged by 36.6%, reaching GH¢1,363.67 million in 2022, up from GH¢998.56 million in 2021.
This increase was primarily driven by a rise in revenue from research grants and contracts.
Correspondingly, total expenditure rose by 51.8% to GH¢1,320.24 million in 2022 from GH¢869.70 million in 2021, largely due to increased expenses related to research grants and contracts, employee benefits, and operating costs.
The University’s financial position as of 31 December 2022 shows a slight decrease in non-current assets by 0.03% to GH¢15,219.74 million, attributed to depreciation charges.
However, current assets saw a substantial increase of 40.3%, amounting to GH¢860.48 million, up from GH¢613.52 million in 2021.
This growth was mainly due to increases in cash, cash equivalents, and receivables from non-exchange transactions.
On the liabilities front, non-current liabilities increased by 14.6% to GH¢834.93 million in 2022, up from GH¢728.75 million in 2021, primarily due to an increase in restricted funds.
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Conversely, current liabilities decreased significantly by 48.6% to GH¢584.01 million in 2022, down from GH¢1,135.08 million in 2021, largely due to a reduction in the provision for compensation related to the termination of the Africa Integras contract.
The University's current ratio improved to 1.5:1 in 2022 from 0.5:1 in 2021, indicating a better capability to meet short-term financial obligations, although it still falls below the standard ratio of 2.0:1.
The report also highlighted that as of June 2023, the University had not collected a total of US$453,342.31 in overdue licensing and lease fees from thirteen institutions, with some debts dating back to 2013.
These overdue receivables pose a high risk of non-recovery, potentially leading to an overstatement of receivables in the financial statements.
The Auditor General recommended that the University’s management take steps, including legal action, to recover these debts and develop a Credit Control Policy to clarify credit arrangements and recoveries from third parties.
In response, the University’s management, through the Vice-Chancellor, has intensified efforts to collect all outstanding debts by establishing a task force dedicated to this task.
Additionally, a draft credit policy has been developed by the Finance Directorate and is pending management approval.
The Accounts Receivable office has also proposed a specific debt provision for aged debts, which will be reviewed by management for approval.
These measures indicate a proactive approach by the University of Ghana to strengthen its financial management and enhance its ability to recover overdue receivables, thereby improving its overall financial health.
In another issue, the report reviewed employees’ records and found that Kojo Agyeman, a Principal Research Assistant at the Noguchi Memorial Institute for Medical Research, was granted a five-year study leave with pay from August 1, 2017, to July 31, 2022, to pursue a PhD in Molecular and Cellular Bioscience at Wake Forest University, USA.
Mr. Agyeman was required to return to the University for a continuous period of not less than six years after completing his course.
However, he failed to return after his study leave ended on 31 July 2022 and resigned effective 30 April 2023.
The audit also revealed that Mr. Agyeman had previously been granted a three-year study leave with pay from 1 September 2011 to 31 August 2014 to study for a Master's degree at Tianjin University.
After completing this program, he only served the University for three years instead of the required six, resulting in an unserved period of three years.
In total, Mr. Agyeman resigned from the University despite being required to serve for a total of nine years due to the terms of his study leaves.
Management could not justify approving a second study leave when he had not completed his initial service period. Additionally, the University continued to pay his salary until April 2023, despite his absence.
The Auditor General recommended that Mr Agyeman be made to refund GH¢436,572.74 into the Auditor-General’s Recoveries Account at the Bank of Ghana and provide evidence for audit inspection.
The University is advised to consider legal action to retrieve the funds if all other efforts fail. Management reported recovering GH¢14,000 as of 3 April 2024 and has agreed on a repayment plan with Mr Agyeman for the outstanding amount.
Source: MyjoyOnline.com
