No organisation can survive for long without a proper financing model to cater for its running costs, capital expenditure and, in the case of a university, funding its research activities. The University of Malta is a non-profit making autonomous organisation that depends on public funding to carry out its important functions.

Currently the bulk of its funding comes from the annual government budget. According to Education Minister Evarist Bartolo who launched a consultation document on a new University of Malta Act, this model will be altered in the coming years as the new Act “seeks to provide long-term structures for the institution and will modernise the standards of good governance in order to preserve the University’s autonomy and accountability”. If good legislation could guarantee good governance, then people need not worry too much about getting value for money spent on our ‘free’ tertiary educational system.

But good governance is not only dependent on good intentions expressed in model legislation. The political will to ensure that public officials act in an exemplary way in the management of public funds is essential to guarantee good governance of public organisations.

Under the new law, the University will enter into a funding agreement contract with government for three years. While this financing model can hardly be defined as long-term, it is an improvement on the present system of annual allocations. The acid test of this new financing model will consist of the adequacy of the funding to cater for the University’s multitude of objectives – the main one being to continue to provide ‘free access to higher education’.

When one adds other important objectives like “offering high-quality experiences while safeguarding inclusion, social equality and opportunities” it immediately becomes evident that the University’s management have a tall order to achieve the planned success.

While the concept of a service contract between the government and the University is a sound one, it gives no guarantees that the problem of under-funding the University has suffered from for many years will be addressed. Most universities including those offering ‘free’ education now have to make ends meet by attracting private financing mainly from the business world.

The new Act will allow the University to borrow money. If this borrowing is aimed to resolve short-term cash flow deficiencies, then borrowing could help. But long-term capital expenditure can hardly be financed by borrowing unless a regular steady income over a number of years is guaranteed.

In the context of recent alleged mismanagement of the procurement system in various government entities, it is good to know that public procurement regulations and an “efficient and robust” internal audit system will have to be adopted by the University.

While the University authorities still need to comment on the adequacy of this new Act to address the current underfunding problems, only time will tell whether the new funding model will improve the quality of tertiary education in Malta.

Malta spends as much on free public education as most EU countries.

It just needs to prove that this expenditure gives the best value for taxpayers’ money.

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