Khawaja Zahid Hussain,

Financial Management Specialist

Higher Education Commission
03:00 PM 1
Framework for Financial Autonomy through
Revenue Enhancement and Fund Generation
 CONTENTS
Introduction and Objective
Consultations
Existing Autonomy and Legal Boundaries
Framework for Financial Autonomy through
Revenue Enhancement, Fund Generation and
Financial Management
Capacity Building Strategy and Modules
Performance Indicators
Timelines
 Introduction and Objective
The HEC Ordinance Section 10 –J “the
Commission shall advise Institutions in raising
funds from sources other than Government.
Development Objective(s) of HEDP project
“strengthening the governance in higher
education sector and supporting the financial
autonomy of universities.
Government Grants -Vulnerable to the overall
fiscal situation of the country.
Objective is Financial Sustainability
 Introduction and Objective
 Federal Government Recurring Grants for HE Sector-
Recent Trends
 FY Budget Allocation(Rs) Inflation Real Terms
 2018-19 65.00 Base Yr 65.00 b
 2019-20 59.10 billion 11.00% 53.24 b
 2020-21 64.10 billion 11.10% 57.70 b
 2021-22 70.21 billion 12.07% 62.29 b
 2022-23 66.05 billion 21.30% 54.45 b
 Financial Sustainability Depends on Revenue
Enhancement and Fund Generation other than
Government Sources
 Consultation with universities

17 Member Committee

Consultation -120 plus universities and DAI
Suggestion from 50 universitas
Final Draft for revenue enhancement endorsed by
Committee- Approved by ED.
Received signed MOU from 54 institutions
Drafted framework for Financial Autonomy.
Hiring of firm is in progress to improve the draft
framework for financial autonomy and help
implementation.
 Existing Autonomy under Legal Boundaries -

Following existing laws and statutes allow Revenue Enhancement

and Fund Generation
University Charters/Acts/Ordinances
University Statutes, Rules and Regulations
• Development Fund Rules;
• Endowment Fund Rules;
• Financial Rules and Delegation of Powers Rules;
• Acquisition of land and property
• Office of the Research, Innovation &
Commercialization (ORIC)
Public Private Partnership (PPP) Authority Act 2016
Existing Autonomy - Authorities having powers for
Revenue Enhancement
The Senate
The Syndicate
The VC/Rector
Finance and Planning Committee
Treasurer/Director Finance
The Framework for Revenue Enhancement and Fund Generation

Universities to Enhance Revenues and

Generate Funds from:
Physical Assets
Financial Assets
Intellectual Assets.
PHYSICAL ASSETS
 Fund Generation- Possession of Physical Assets

Survey of physical assets and preparation of the list of

university physical assets
List of property seized by un-authorized occupants
Status of current Lawsuits - Expedite existing cases
Initiate legal action where required for possession
Take help from District Administration for appropriate
administrative measures to avoid law & order
situation
Identify areas having potential for rental income
 Fund Generation from Physical Assets – Rental Income

List of university property on rent

Review existing rates of rent Vs market rates
List of university property occupied on low rent
Conduct revision of rent agreement to enhance
rentals – negotiations, persuasions, notices
Initiate legal action for vacation if rentals not revised
Analyze existing and future lawsuits if any and
expedite cases for rent enhancement

 Fund Generation from Physical Assets – Rental Income

Rooms/blocks to private educational institutes,

evening coaching & tuition centers
Halls
Sports facilities and
A gym for males and
A gym for females
Parking facilities
Gust Houses
Cafeteria
 Fund Generation – Commercial Use of Existing Physical Assets

High-tech labs
Diagnostic and Research Lab, Forensic Labs, Radiology
Services.
Health care services by university hospitals, Trauma
Centers
Agriculture land
Cattle and poultry farms
Convert electricity on Solar or initially Solar panels for
one (additional) block
Other avenues specific to the university
FINANCIAL ASSETS
 Revenue Enhancement –Financial Assets

Donations from Alumni

• Keep up-to-date record of alumni
• Engage alumni through emails or social
medial groups
• Keep track of alumni
• Arrange regular annual get-togethers
• Obtain donations from Alumni
 Revenue Enhancement –Financial Assets

Each University to arrange annual

meetings for fund raising
Friends of the University reflected in its
calendar of activities.
All local businesses etc. be invited.
 Revenue Enhancement –Financial Assets

Endowment Funds to be created

Efficient Investment of temporary idle
funds (Surplus working balance)
Cost effective measures
Better Financial Management
Cost benefit analysis - per student cost
of Departments, Sub-Campuses.
INTELLECTUAL ASSETS
 Revenue Enhancement –Intellectual Assets

Commercial research
On-Line & Distance Learning
Testing Services
Diplomas and short courses
Trainings and Capacity Building
CAPACITY BUILDING
STRATEGY
 Capacity Building Strategy

Modules
 Overview Of HEDP Project
 HEC Organizes Revenue Enhancement Framework
 Public Financial Management
 Improvement in Governance
 Audit
 Tax Matters
 Aasan Assignment Account
 Feedback on draft Framework for Financial Autonomy
(Governance)
 Financial Management

Features of “HEC Organizes Revenue

Enhancement Framework”
Avenues of Revenue Enhancement
Revenue Enhancement Physical Resources
Financial Resources,
Intellectual Resources
University Development Office UDO
Memorandum of Understanding MOU
 Capacity Building Strategy - Audit

 Audit by Auditor General Office, Constitutional

requirements
 Structure of the department Auditor General of
Pakistan
 Audit Plan
 Observations and settlement
 DAC and PAC
 Value addition by audit in areas concerning
economic, efficient, and effective utilization of funds
 Capacity Building Strategy - Audit

Internal audit department of university

Internal Controls and Effectiveness of
internal audit
Other aspects of audit
Internal Audit Standards for Government
Departments and Offices
 Capacity Building Strategy - Taxation

 Overview of Income Tax Ordinance as amended

 Basic Concepts of Taxation

 How to apply Section 100C for NPO's

 Status of Tax Exemption to public sector universities

 Applying Exemption Certificate for the universities

 On-line Income Tax Return for university

 Capacity Building Strategy - Taxation

Notices , Responses
Appellate Forums, Appeals & Stays
Withholding Tax statements/Regime
Implications of withholding tax on Bank’s
profit
Preparation and on-line submission of Tax
statements for withholding taxes
Retainership Consultancy as advised by HEC
Roadmap and Timelines
 Roadmap and Timelines

Framework “HEC Organizes Revenue

Enhancement and Fund Generation” – Jan
2022
Consultations with universities
Endorsement by the Committee
Approval by ED HEC – April 2022
First Draft Framework for university
Financial Autonomy May 2022
 Roadmap and Timelines

Capacity Building – May 2022 Onwards

Framework for Revenue Enhancement
Discussion by stake holders on Draft
framework for Financial Autonomy for
further Improvement

 Roadmap and Timelines

Signing of MOUs by participating

universities–May June 2022 – 50 universities
Transfer of funds to universities First week
of June 2022
Establishment of University Development
Office and constitution of committee July
2022
Endowment Fund by
 Roadmap and Timelines
Baseline line data actual revenues from non-traditional 31st August
sources, if any, as of June 30, 2022. 2022
A minimum incremental target of not less than 5 %
List of property on rent -current rent vs. assessed 31st August
market rental value with proposed steps to enhance 2022
the rent to bring it at par with market.
a. List of university assets not under their physical 30th
control September
b. Status of current legal cases for vacation with 2022
proposed legal and administrative steps
Creation of specific endowment fund with the seed Nov 01,
money of Rs. 51.90 million provided by HEDC having 2022
sole objective of utilizing its proceeds for revenue
enhancement
 Roadmap and Timelines

Hiring of firm for Improvement and

Implementation of Framework for
University Financial Autonomy
 July 2022 Onwards
Completion of Assignment by Firm latest
May 2024
Key Performance
Indicators
 Key Performance Indicators (KPIs)

PPT shared with universities for Framework

for Revenue Enhancement.
Memorandum of Understanding (MoU) signed
Capacity building program is operational
HEC transferred funds to universities
Establishment of University Development
Offices
Establishment of Endowment Fund
 Key Performance Indicators (KPIs)

 List of University property Grabbed by land

Mafia
List of rental Property
Implement the action plan with timelines
Initiate new Legal and administrative Action
to get back possession of university property.
vacate or enhance rent
 Key Performance Indicators (KPIs)

Framework for Financial Autonomy

Improvement in university governance
Evaluation of risks of university’s existing
and future physical assets from seizure –
tenants, partners under PPP mode or other
entities.
Propose all remedies available to mitigate
risk
 Key Performance Indicators (KPIs)

A baseline actual data for Revenue, if any, from non-

traditional sources as on June 2022 has been collected
with achieved amounts and shared with HEC.
The annual Target for revenue enhancement in
subsequent years has been set by participating
university based on its own conditions and
opportunities.
A minimum incremental target of not less than 5 % has
been achieved and reported to HEC in subsequent
years after implementation of the framework.
THANK YOU

QA