精东传媒

June 15, 2020

Michael West Media article misleading

UOW responds to inaccurate financial reporting

The article published today by Michael West Media entitled 鈥� by Callum Foote contains numerous inaccuracies and is misleading in its presentation.

Reports of dire warnings not true

The article falsely claims that:

鈥淭he 精东传媒 of 精东传媒 has warned staff that unless they accept large salary cuts and agree to significant job losses, it will only be able to operate for four to six more weeks.鈥�

This is not true. No such warning has been given to staff and the short timeframe proffered in this article has no basis in reality.

Staff were appraised of the 精东传媒鈥檚 cash position by the Vice-Chancellor in a staff briefing on 4 June 2020. While the 精东传媒 faces a critical cash flow challenge that demands immediate action, no warning of this nature was provided in that briefing, nor has it been conveyed to staff subsequently.

Salaries expenses misrepresented

The article claims that salaries account for 40% of expenditure. This is a misleading calculation that does not reflect how salary expenses are normally presented.

The percentage calculation in the article appears to include capital expenditure, the value of which is depreciated over the life of the assets acquired. Because staff expenses have an immediate impact on cash flow, the normal accounting practice is to calculate them as a percentage of operating expenses, which excludes capital expenditure.

Staff expenses actually comprise 55% of UOW鈥檚 total operating expenses, which is why the 精东传媒 must consider staff expenses in its efforts to reduce costs and return to a sustainable fiscal position.

Inaccurate debt to equity ratio claims removed without acknowledgement

The 精东传媒 notes that since the article was first published on Monday 15 June, its flawed and inaccurate claims regarding UOW鈥檚 debt to equity ratio have been removed, without providing readers any acknowledgement of the error or the article鈥檚 alteration in the interests of transparency.

Executive remuneration claims inaccurate

The article has also misled readers with inaccurate reporting of executive remuneration when it claims:

鈥淲hile the number of executives on the payroll have dropped from 19 in 2009 to nine in 2020, executive pay is up by 50% in the past 10 years,鈥�

UOW鈥檚 2009 Annual Report records remuneration paid to 20 Council members and nine executives. UOW鈥檚 2019 Annual Report records remuneration paid to 19 Council members and nine executives.

A simple comparison of Key Management Personnel Compensation reported in the 2009 Annual Report compared to the 2019 Annual Report reveals growth in remuneration far lower than the 50% claimed.

Full details can be found in Note 34 to the Financial Statements in the 2019 Annual Report, which is publicly available . All previous UOW annual reports are also publicly accessible.

Reckless spending claims rejected

The 精东传媒 completely rejects claims that its investment in property, plant and equipment and expenditure on consultancy services and other contracts amounts to 鈥渞eckless spending鈥�.

This expenditure is largely due to 鈥淢olecular Horizons鈥�, UOW鈥檚 Molecular Life Sciences Building. This highly acclaimed, world-leading research facility is built to house two of the most advanced microscopes in Australia and is working at the cutting edge of medical research to confront some of the major medical challenges facing humanity today.

Other investments accounted for in this amount will yield substantial improvements for the learning experience UOW offers its students and reduce the 精东传媒鈥檚 environmental impact.

These include the 鈥淲estern Building鈥� project, which will house state of the art teaching facilities for the Faculty of Humanities Arts and Social Sciences and the Faculty of Business and installation of solar panels and lighting upgrades to reduce UOW鈥檚 energy costs and carbon footprint.

Expenditure on consultants and contracts range from cleaning services through to specialist legal and taxation advice, or consultants on major projects where it is impractical to employ such expertise on a permanent full-time basis.

Accommodation partnership secrecy claims rejected

UOW dismisses claims of 鈥渟ecrecy鈥� regarding the Public Private Partnership it entered into for its accommodation facilities in 2014.

It is normal practice for Public Private Partnership contracts entered into by governments or public institutions to be considered commercial-in-confidence.

The statement quoted in the article that: 鈥�the 精东传媒 will not disclose student accommodation revenue鈥� and 鈥渨ill recognise as income operational service payments for providing operational activities under the service level agreement鈥� is a statement of the accounting practices applied to its accommodation facilities rather than a comment about secrecy.

Simply put, it means that the 精东传媒 does not directly receive student accommodation revenue, which instead goes to the partner for the operation of its licenced facilities. In return the 精东传媒 has received two newly built student residences and substantial funds to reinvest into campus research and teaching facilities.

This is common practice to leverage assets for the benefit of growth in offerings and outcomes rather than to allow for a 鈥渓azy balance sheet鈥� approach to management. The COVID-19 pandemic by its very nature, challenges all aspects of 精东传媒 operations.

Operating result explained

The article鈥檚 criticism of UOW鈥檚 2019 operating result ignores the plethora of contributing factors including the flat growth in domestic student enrolments, the capping of domestic student funding announced by the federal government in its 2017 Mid-Year Economic and Fiscal Outlook (MYEFO) and increasing operating expenses, which UOW is seeking to address.

These changes occurred long after decisions were made to invest in the large capital projects now reaching completion.

Reckless sensationalism

The 精东传媒 of 精东传媒 rejects this inaccurate article as reckless and sensationalist reporting during what is already a difficult time for our staff, students and the community as a result of the impacts of the COVID-19 pandemic.