The University of Guyana (UG) recently received $500 million from government to pay off its debts but a delay in the release of the money cause the university to rack up $150 million in additional debt.
This is according to Vice Chancellor (VC) Jacob Opadeyi who told Stabroek News that government released the money to the university about two weeks ago. He said the money has gone towards servicing payments to the Guyana Revenue Authority (GRA) and the National Insurance Scheme (NIS) for amounts they were owed.
Opadeyi became aware of the true size of the university’s debt following an audit carried out by University of the West Indies (UWI) auditors last year. Several financial irregularities were discovered and it was determined that he university’s debt was in the vicinity of $500 million.
Opadeyi had announced his intention to approach the government for the money and he told Stabroek News last week that the money was approved since last December. However, “administrative” setbacks within the Ministry of Finance contributed to a delay in the release of the funds, he said.
He also said that government required a commitment from the institution that its debt would not grow. But by the time the money was finally released the debt had incurred about $150 million interest. He said the university is having consultations to determine how to best get rid of the existing debt.
The university is still unable to make current payments to the GRA and NIS. This means that though UG’s academic and support staff are receiving their net salaries, the deductions are not being forwarded to the respective agencies. Staff are therefore unable to benefit from the services available through the NIS, such as sick leave and medical benefits.
According to the VC, the proposal to adjust tuition fees to represent the actual exchange rate is one way the university is seeking to curtail the accumulation of debt, although he made it clear that whatever extras would be garnered via the adjustment of fees would not go toward debt servicing.
The university has been holding consultations since last Tuesday with various stakeholders, including students, staff and the private sector.
Fee adjustment not imminent
The university’s administrators are seeking to adjust tuition fees to reflect the 1994 decision to peg fees to Guyana’s exchange rate with the US dollar. In 1994 the exchange rate was $127 to US$1, which put the fees at $127,000 per year. Today the exchange rate is closer to $210 to US$1, meaning the adjusted tuition would stand at around $210,000.
Although steps to adjust fees are moving apace Opadeyi says the adjustment is not imminent.
“The university is not in a position to say that the increase is compulsory, that it is starting this year…it is not imminent…it will be based on the outcome of consultations,” he stated.
During the consultations, which ended on Friday, students demanded that the university’s administrators provide a plan to curtail future maladministration as it is seen as part of the reason the university is in the situation it is currently. Meanwhile, one of the university’s unions has demanded that salaries be increased by no less than 60 per cent in exchange for its support.
