The Court of Audit feels that universities are not providing sufficient transparency on the financial risks they incur through their real estate investments. Therefore, it has called on Jet Bussemaker, the Minister of Education, to establish stricter requirements with regard to the universities’ annual reports.
Between 2015 and 2018, universities will invest about two billion euros in their properties. The education institutions are currently providing insufficient information on the risks associated with these investments. They must do a better job of doing so, the Court states in a report published today. How else will supervisory boards, accountants and the Dutch Inspectorate of Education be able to monitor the universities’ situations?
Different financial pictures
The thirteen Dutch universities present significantly different financial pictures. Ten of them – including Erasmus University – expect to be in the red in 2017. They have different sources of income, too. For instance, last year, EUR earned 32 percent of its income by performing assignments for third parties, e.g. by carrying out research.
The Court of Audit has advised the Minister to tighten up the requirements for annual reports, stating that five-year plans do not look far enough into the future. “Real estate is always about the long term,” a spokesperson was quoted as saying. “Which means that you must keep an eye on your expenditures and income for a longer period of time.”
Five-year plans should suffice
Minister Bussemaker agrees with the findings presented in the report. She has advised the universities to take a good look at their income and the amount of money they can spare for their property. She also feels that the Inspectorate of Education should focus on this in a follow-up study.
However, the Minister does not feel it is necessary that annual reports be required to look farther ahead: five years suffices for her.