TATI University College (TATIUC) in Terengganu has failed to collect almost RM7 million in student fees and incurred losses for two years straight.

The first series of the 2016 Auditor General’s Report found that TATIUC had recorded losses amounting to RM1.55 million in 2014 and RM5.5 million in the following year.

“The performance and financial position of TATIUC is less satisfactory due to the losses incurred two years in a row,” said the report.

“Its accumulated profit also went down from RM54.83 million in 2013 to RM47.81 million in 2015.”

The institution was set up as the Terengganu Advance Technical Institute Sdn Bhd in November 1993 before being rebranded as TATIUC in May 2007.

It is wholly owned by Lembaga Tabung Amanah Warisan Negeri Terengganu (LTAWNT).

TATIUC, whose main income is from government grants and student fees, has been facing dwindling revenue in recent years.

Between 2013 and 2015, government grants contributed between 42.9% and 51.7% to the institution’s revenue.

It received RM20 million per year in 2013 and 2014 from the government, but the amount was reduced to RM17.32 million in 2015.

Revenue from student fees, which contributed between 38.9% and 45.5%, has decreased since 2013, from RM18.2 million to RM17.6 million in 2014 and RM15.84 million in 2015.

TATIUC also generates income from other sources, like building rental, management fees and course royalties, which contributes between 2.8% and 18.2% to the total revenue.

The institution’s expenses – mainly for salaries and school operations – increased from RM38.69 million in 2013 to RM40.32 million in 2015.

It spent more than it earned by 104% and 115.8% in 2014 and 2015, respectively.

As of December 31 last year, TATIUC had student fee arrears amounting to RM6.99 million, with graduates comprising more than half of the defaulters.

The report said the institution had not taken action to overcome the problem.

Additionally, it was found that TATIUC had failed to meet the student intake target of between 37.2% and 65.7% from 2014 to last year.

“There was a downward trend in student intakes, from 488 students in 2014 to 206 last year, when the target was between 595 and 650 students,” said the report.

“TATIUC said it had failed to meet the target because Majlis Amanah Rakyat and the National Higher Education Fund Corporation had limited their sponsorship and funding, and cited, too, competition from other government training institutions.”

The lecturer-to-student ratio for two of three levels at the institution also did not meet Malaysian Qualifications Agency standards for three programmes.

The oversupply of lecturers for some programmes, said TATIUC, was due to the low student intake.

The report found the institution’s corporate management practices to be unsatisfactory, such as the appointment of non-independent directors to the board and the internal audit committee having only one member, who is also a director of the board.

“The board member composition is not in line with the administrative code of ethics by the Securities Commission, while the membership of the audit committee is also not in accordance with the Green Book,” said the report.

It said the board chairman, who was a state government exco, and a majority of the board, which included assemblymen, were not independent directors.

It also took issue with TATIUC’s obtaining of a RM1 million loan from LTWANT to give funds to its subsidiary, Ruane-TATI Sdn Bhd, with a 60-month repayment period beginning October 2012.

However, TATIUC did not receive any repayment from Ruane-TATI in 2015 and last year. – August 1, 2017.