Resource Mobilization Directorate

CURRENT ACTIVITIES AND SOME IDEAS FOR FUTURE DEVELOPMENT

INTRODUCTION

The development of higher education is a key contributor for economic growth and development of countries. Despite the clear importance of higher education for economic growth and social development, investment in the sector is in crises in industrial as well as developing countries throughout the world. Developing countries have invested considerable resource in their higher education system often with the support of external aid and lending agencies. However, the number of students enrolled in higher education institutions continued to rise rapidly reflecting the pressure of growing enrollments at the secondary level and intensified demand for higher education. This adverse macroeconomic conditions and increased computation for scarce public funds have reduced government’s capacity to support higher education and public expenditures for higher education have fallen. The effect of the squeeze on resource availability has been exacerbating by inefficiency in resource utilization. Therefore, for higher teaching learning institutions our government gives the direction to mobilize resource as to be self supporting institutions in the long run and they were starting to develop their strategies to do so.

Hawassa University is one of the recently established but growing exceedingly higher teachings learning institution and has emerged as one of the largest education systems in the country. Now a days the University encompass three colleges, 13 Faculties and 46 Departments so as to play its great role in the developmental aspect of the country.  The major goals of the university are producing skilled manpower that will fit for the purpose of developing the country in different profession, undertaking and producing quality research and providing different social services to the community. To realize these objectives it requires funds. The university obtains these funds mainly from two sources i.e. government treasury and internal revenue.

As Hawassa University is under the federal government it receives annual budget that is aligned with its plan. But this budget is not enough to use its potential for achieving its plan successfully. Thus In line with duties and responsibilities vested upon higher education institutions by higher education proclamation no. 650/2009, Hawassa University generating its internal revenue by designing different strategies of providing various products and services to the surrounding community and the society at large. Hence, Hawassa University plays its role that caters to the developmental needs of the country. In doing so, Hawassa University can mobilize resources and generate income that is supposed to be reinvested for product and service rendering to the community and to support the teaching - learning process.

The proposal has six parts. Objectives and rationales of the paper is described next to this part which is followed by expected challenges and their suggested solutions. In the fourth part is organization structure of Resource mobilization directorate office is discussed. Next to organization structure of Resource mobilization directorate office descriptions of revenue generating projects in part five. Lastly, conclusions and recommendations are made in the six sections.

Objective and Rationales

With the rapid expansion of knowledge and the unprecedented scientific and technological progress, the universities are finding it difficult to keep pace with the changing need of society due to the inadequacy of financial resources. Given this growing demand for higher education and the increasing constraints on public funds, revenue diversification in both production and service is necessary and inevitable for Hawassa University. Thus the pursuit of nontraditional revenues and efficient utilization of the budget has some financial benefits for it. Therefore, the active mobilization of funds from the non-governmental sectors reduces Hawassa University’s dependence on government financing and also reduces their vulnerability to budget fluctuations, thus making our institution more responsive to market signals. Moreover, additional nongovernmental resources can help us to raise the salary of teachers and to improve teaching and research facilities, which is beneficial to the core activities of our institution.

Generally, Resource mobilization directorate office develops different strategies to achieve these revenue wise objectives:-

  • Encourage universities to mobilize resources by participation/contribution of society in their development;
  • Facilitate the teaching learning activity of the university in various dimensions.
  • Encourage and enhance the flow of resources coming from the society for university development;
  • Encourage university to provide consultancy ON PAYMENT BASIS not only to the industries but to the government, and other bodies and society at large on vital issues of national importance; and
  • Provide incentives to the university which involve society in their development activities.

Expected Challenges and Their Suggested Solutions 

The matter regarding financing our institution is a matter of great concern and is should be discussed at various platforms there might be some potential problems and hidden costs in revenue diversification of which policymakers and university leaders should be mindful. For instance there is an already given direction that higher teaching learning institutions can develop an Enterprise and can compete together with any country’s external traders with their products and services. But it is becoming difficult when we were coming to the practical aspect. It needs further dealing with ministry of Education and higher concerned government officials too. There is always a challenge when implementing a new system therefore it needs much endurance to cope up those challenges and it will be settled in the near future.

Another problem is the failure to understand the university as complex and unique organizations –the planning did not take into account whether projects were sustainable how different departments (especially departments that have close professional coherence/ are linked with the office (No clear linkage even with the main extremes of revenue generating institutions). There should be a continuous examination of project sustainability in addition to developing a clear linkage with institutions and departments.

There is also another internal problem that is existed in the internal work process/system. It should be revised to make it consistent i.e, there is communication gap on the amount of expenses that was taken out from each internal revenue budget account especially when the budget approvals were beyond the mandate of Resource Mobilization Directorate office. Therefore, the higher management officials should give an emphasis on providing the necessary information as soon as possible as they get approved. And it is helpful to get the exact financial report on each quarter and efficient & effective utilization of the budget that go in lined with its plan.

Organizational Structure - Resource Mobilization Directorate

As we are known resources are scarce especially the fiscal constraints and the University is grappling with the challenge of how to preserve or improve the quality of education as education budget & particularly expenditures per student are compressed. Therefore to cope up with this scarcity the University expected to generate excellent strategies to strengthen this internal revenue generating divisions by establishing clear sub structure / framework /in order for accomplishing this government direction of supporting treasury fund for the mean time and financing itself in the long run. Thus it is unquestionable to diversify the income generating activities by any means. Currently Research & Farm center, Agricultural Engineering management workshop (AgEM workshop), Continuous & distance education division (CDED) and Teaching model Hotel are Under Resource Mobilization Directorate office and are categorized under the main sources of the internal revenue for the university. However, these will not be sufficient since the need for fund increases in connection with its expansion; hence the university is planning to diversify revenue generating sources.

 

CURRENT ACTIVITIES AND SOME IDEAS FOR FUTURE DEVELOPMENT

INTRODUCTION

The development of higher education is a key contributor for economic growth and development of countries. Despite the clear importance of higher education for economic growth and social development, investment in the sector is in crises in industrial as well as developing countries throughout the world. Developing countries have invested considerable resource in their higher education system often with the support of external aid and lending agencies. However, the number of students enrolled in higher education institutions continued to rise rapidly reflecting the pressure of growing enrollments at the secondary level and intensified demand for higher education. This adverse macroeconomic conditions and increased computation for scarce public funds have reduced government’s capacity to support higher education and public expenditures for higher education have fallen. The effect of the squeeze on resource availability has been exacerbating by inefficiency in resource utilization. Therefore, for higher teaching learning institutions our government gives the direction to mobilize resource as to be self supporting institutions in the long run and they were starting to develop their strategies to do so.

Hawassa University is one of the recently established but growing exceedingly higher teachings learning institution and has emerged as one of the largest education systems in the country. Now a days the University encompass three colleges, 13 Faculties and 46 Departments so as to play its great role in the developmental aspect of the country.  The major goals of the university are producing skilled manpower that will fit for the purpose of developing the country in different profession, undertaking and producing quality research and providing different social services to the community. To realize these objectives it requires funds. The university obtains these funds mainly from two sources i.e. government treasury and internal revenue.

As Hawassa University is under the federal government it receives annual budget that is aligned with its plan. But this budget is not enough to use its potential for achieving its plan successfully. Thus In line with duties and responsibilities vested upon higher education institutions by higher education proclamation no. 650/2009, Hawassa University generating its internal revenue by designing different strategies of providing various products and services to the surrounding community and the society at large. Hence, Hawassa University plays its role that caters to the developmental needs of the country. In doing so, Hawassa University can mobilize resources and generate income that is supposed to be reinvested for product and service rendering to the community and to support the teaching - learning process.

The proposal has six parts. Objectives and rationales of the paper is described next to this part which is followed by expected challenges and their suggested solutions. In the fourth part is organization structure of Resource mobilization directorate office is discussed. Next to organization structure of Resource mobilization directorate office descriptions of revenue generating projects in part five. Lastly, conclusions and recommendations are made in the six sections.

Objective and Rationales

With the rapid expansion of knowledge and the unprecedented scientific and technological progress, the universities are finding it difficult to keep pace with the changing need of society due to the inadequacy of financial resources. Given this growing demand for higher education and the increasing constraints on public funds, revenue diversification in both production and service is necessary and inevitable for Hawassa University. Thus the pursuit of nontraditional revenues and efficient utilization of the budget has some financial benefits for it. Therefore, the active mobilization of funds from the non-governmental sectors reduces Hawassa University’s dependence on government financing and also reduces their vulnerability to budget fluctuations, thus making our institution more responsive to market signals. Moreover, additional nongovernmental resources can help us to raise the salary of teachers and to improve teaching and research facilities, which is beneficial to the core activities of our institution.

Generally, Resource mobilization directorate office develops different strategies to achieve these revenue wise objectives:-

  • Encourage universities to mobilize resources by participation/contribution of society in their development;
  • Facilitate the teaching learning activity of the university in various dimensions.
  • Encourage and enhance the flow of resources coming from the society for university development;
  • Encourage university to provide consultancy ON PAYMENT BASIS not only to the industries but to the government, and other bodies and society at large on vital issues of national importance; and
  • Provide incentives to the university which involve society in their development activities.

Expected Challenges and Their Suggested Solutions 

The matter regarding financing our institution is a matter of great concern and is should be discussed at various platforms there might be some potential problems and hidden costs in revenue diversification of which policymakers and university leaders should be mindful. For instance there is an already given direction that higher teaching learning institutions can develop an Enterprise and can compete together with any country’s external traders with their products and services. But it is becoming difficult when we were coming to the practical aspect. It needs further dealing with ministry of Education and higher concerned government officials too. There is always a challenge when implementing a new system therefore it needs much endurance to cope up those challenges and it will be settled in the near future.

Another problem is the failure to understand the university as complex and unique organizations –the planning did not take into account whether projects were sustainable how different departments (especially departments that have close professional coherence/ are linked with the office (No clear linkage even with the main extremes of revenue generating institutions). There should be a continuous examination of project sustainability in addition to developing a clear linkage with institutions and departments.

There is also another internal problem that is existed in the internal work process/system. It should be revised to make it consistent i.e, there is communication gap on the amount of expenses that was taken out from each internal revenue budget account especially when the budget approvals were beyond the mandate of Resource Mobilization Directorate office. Therefore, the higher management officials should give an emphasis on providing the necessary information as soon as possible as they get approved. And it is helpful to get the exact financial report on each quarter and efficient & effective utilization of the budget that go in lined with its plan.

Organizational Structure - Resource Mobilization Directorate

As we are known resources are scarce especially the fiscal constraints and the University is grappling with the challenge of how to preserve or improve the quality of education as education budget & particularly expenditures per student are compressed. Therefore to cope up with this scarcity the University expected to generate excellent strategies to strengthen this internal revenue generating divisions by establishing clear sub structure / framework /in order for accomplishing this government direction of supporting treasury fund for the mean time and financing itself in the long run. Thus it is unquestionable to diversify the income generating activities by any means. Currently Research & Farm center, Agricultural Engineering management workshop (AgEM workshop), Continuous & distance education division (CDED) and Teaching model Hotel are Under Resource Mobilization Directorate office and are categorized under the main sources of the internal revenue for the university. However, these will not be sufficient since the need for fund increases in connection with its expansion; hence the university is planning to diversify revenue generating sources.

 

Revenue Generating Institutions

Revenue Generating Institutions

The financial distress has predominated higher education finance as governmental funding available to higher education has declined. This financial distress created an impetus for institutions to develop various strategies to sustain the expansion of their education systems. Therefore to continue this supplementation of governmental with nongovernmental revenues the university had developed four major projects:-   

 CDED /continuous & distance education division/ tuition and fees.

  1. RFC ( Research & Farm center )
  2. AgEM workshop.
  3. Teaching Model Hotel.
  4. CISCO
  5. Others.

In general, Hawassa University is struggling to satisfy the ever-growing demand for education in the face of declining public funds. The issue of generating more additional revenues to keep its operation has become one of the fundamental aspects that were incorporated in the strategic plan.

Continuous and Distance Education Division (CDED )

Continuous & distance education division, which was established in 1995, to academically deserving undergraduates and postgraduates. The Government-Sponsored Students education Scheme has been the fundamental source of Income for running the programs.

Given the unmet demand of higher education and the limits on the expansion of public higher education, Hawassa University realized the necessity of allowing local governments, local communities and individuals to get the chance in more educational opportunities

Currently, CDED runs with four academic programs such as Evening, weekend, summer and distance programs/ while distance education is still in its infancy stage & we will actively involved in developing it, which will brings lucrative returns / with appropriate rate of payment to ensure higher education accessibility and equity. This helps low-income customers to adjust their time with the given program options.

The CDED has its own guidelines and Criteria to assign students that fulfill those criteria’s. For example students who complete their education within the new government policy expected to pass the COC examinations. To make our education scheme competent in Ethiopia as well as Africa the University incorporated in its strategic plan to work more on education quality and diversity of the existed and the newly launched academic programs.

Research and Farm (RFC)

The majority of internal revenue generation funds come from Farming activities which are categorized in to two major categories. Plant farming & animal farming plant farming includes seed multiplication, sugarcane production, grass production, vegetables …, and animal production includes dairy farm, poultry farm, Beef fattening and sheep and goat farmings. We are in the way to intensify this farm project with diverse products. There is also a plan to launch piggery and apiculture project as a source of generating more revenues for the University.

However, related processes that enhances or increases internal revenue, includes the production of biogas from dairy & fattening project waste products and business related to milk processing products, which are not categorized above, are designed to be launched in the near future.

As it is known our University is well established and excellent in Agricultural related professions and it is expected to be the symbol of Hawassa city development. Thus we are planning to work more on coordinating those professionals (most of them are PHD holders) to use their precious talents and experiences on escalating and diversifying this project

Agricultural Engineering and Management (AgEM)

This is one of the University income generating institutions that collects its revenue from wood & metal work products. The workshop organized with heavy duty machineries that have the potential to produce various standardized goods (home, office, student bed tables and chairs, and laboratory furniture’s) for the university, internal customers and outside community. To generate this revenue it incurs various major costs including costs of Raw materials. Other operating expenses include costs in respect of payments to contract staffs, expenditure on maintenance contracts and telephone costs, electric power if not charged to departments are also included in this category. Depreciation includes depreciation costs on equipment capitalized according to where the assets being depreciated are located.

Teaching Model Hotel

The revenue from this project includes all income generated in respect of services rendered to internal and outside customers .Currently it is on the way to establish fountain, traditional houses, fence, super market, bar and pizza houses to enable its services competent among similar service rendering organizations. Others includes compound management and security which are among the remaining tasks which has an effect in generating more additional revenues from this services.

CISCO

This project major source of income generated from all those full-time and part-time customers who have an interest with its short and medium term trainings. It develops revenue-generating programs in fields such as, -----------, for which there is strong demand from students who can afford to pay tuition. 

In addition to fee-paying students, CISCO is working to support students from outside who cannot afford the payment, free scholarship. In recent years, the number of students who gets scholarships has increased. In 2004, about ----- students were getting this scholarship and totally-----students enrolled at CISCO education institutions, and they represent an important source of revenue.

Others

Universities may mobilize external resources through participation/ contribution/ consultancy from individual residents or non-resident, Alumni Associations, public and family trusts, industrial/ business houses, cooperatives, professional associations, unions/association of employees.

Income generated from researches /research Business/ includes contract figures and income identifiable by the institution as meeting the specific research needs of external partners, excluding any already returned in collaborative research involving public funding and excluding basic research council grants. There is also an income generated from Research grants & contracts this includes all income in respect of externally sponsored research carried out by the institution or its subsidiary undertaking for which directly related expenditure has been incurred. Income generated from related to this is research out puts when they are commercialized and income generated from researchers when they get charged from using university laboratories and desired equipments for their research works.

It also include income generated from, the establishment of new projects, consultancies through Consultancy contracts in various issues desiring specific professional supports; this includes contract numbers and income associated with consultancy, which are crucially dependent on a high degree of intellectual input from the institution to the client (commercial or non-commercial) without the creation of new knowledge. Consultancy may be carried out either by academic staff or by members of staff who are not on academic contracts, such as senior university managers or administrative/support staffs. Staff administrative overhead costs also provide a framework for generating the university internal revenue.

Though our university has already started revenue generating activities 9 years ago, there are still some products and service providing projects which were not included in the process. This includes launching Laundry project, bakery project, biogas projects, community radio project, community school and daycare center project, printing press, Garage and fuel station project. Given these facts, In order to reinforce the existed once and ensure the feasible and smooth implementation of these proposed projects Resource mobilization directorate office should work more in launching and diversifying revenue generating scheme with intimate relation with the University top management.

Conclusions and Recommendations     

It is obvious that education is the base for one’s country development and thus Ethiopia has a great heritage of investment on it. A number of institutions of higher teaching learning came into existence during the past periods on the initiative of private individuals and voluntary organizations. This culture, however, experienced a decline in this days/ because of educational quality issues/ and financial support to educational institutions is considered in general a responsibility of the Government. In order to revive our tradition to support higher education, and to encourage the participation of society in the development of universities, Universities evolved a scheme entitled "Incentives for Resource Mobilization". In the fast changing scenario of education, if universities are to keep pace with development, they have to enlarge their resource base and make efforts to enlarge their internal resources by mobilizing participation of society in higher education.

Therefore, it was due to this reason Hawassa University already established this resource mobilization directorate office to fulfill those given government directions of covering the whole costs of the university in the long run. This will be achieved through escalating alternative mechanisms to develop, strengthen and expand the existing as well as the newly launched revenue generating institutions.

To achieve those desired targets it is indisputable to building capacities of resource mobilization directorate staffs with desired trainings in planning, finance and budgeting, forecasting, organizational analysis, public relations … should be put on the agenda of the university to diversify revenue sources.

There should also be a clear understanding of relationship between the University resource mobilization directorate office and revenue generating institutions of colleges as well as departments, different sections and university higher officials. This especially helps to get the plan of each revenue generating institutions and progress reports ahead and to prepare effective system for their major activities.

It will be better if the internal revenue finance department departed from university finance directorate office/treasury as well as project fund/ and should process the procurement, internal revenue payment transactions, internal revenue cash collections and related tasks. And I hope this minimizes the load of University finance Directorate transactions and facilitate the activities of revenue generating sections.

It will be better if all the income generated by each revenue generating sections should be utilized by themselves at least till they get stiffed or else It will better to inform to resource mobilization directorate office if some amount of cash desired to be utilized for some other university purpose and get approved by university top Leaders. This helps resource mobilization office to know the progress of each revenue generating sections and to take some desired preventive actions on them in addition to generating exact financial report.

Lastly, if possible the university should deal with country’s Misters, higher official’s, and policymakers to develop and implement mechanisms that can be used to facilitate this revenue generation scheme.

In summary, if the university will give a critical emphasis on this revenue generating scheme an innovative and entrepreneurial spirit needs to be cultivated at all levels of the university and revenue diversification is an unavoidable step in dealing with financial austerity. Not only can it reduce the pressure on public funds, but can also provide incentives for greater internal efficiency and accountability.

 

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