Report calls GMIT sustainability into question as deficit mounts
A ‘slash and burn’ policy of deep cutbacks, including at least 50 job losses, is proposed in a dossier being considered by Galway Mayo Institute of Technology (GMIT).
The new report, seen by the Galway City Tribune, calls into question the future sustainability of the institute, and warns that drastic cutbacks are necessary to arrest the perilous financial decline faced by GMIT.
The third level college’s cash reserves will dry-up completely in three years, and it “will become technically insolvent”, if corrective action is not taken, it says.
GMIT, according to the report, has made an operating loss for the past four years, and has accumulated operating deficits of €6.7 million during that time.
On current trends, “the viability and sustainability of its core operations in the longer term will be threatened”, according to the report’s author, Michael O’Connell.
Mr O’Connell – a former financial controller at Limerick IT, when he was a colleague of Fergal Barry, the current GMIT President – recommends cost reductions and income generation totalling €5 million for 2015-2020. This is to be achieved through a reduction in staff numbers with redundancies, termination of contracts and non-replacement of staff including retirements.
He said a combination of a reduction in exchequer funding, an “unprecedented decline” in student numbers and research investments was partly to blame for the money crisis at the college.
“For the past four years, GMIT reserves have had to absorb ongoing losses where costs have exceeded income because . . . perhaps most crucially pay and non-pay costs not being reduced sufficiently or quickly enough to match the reality of declining income.”
Mr O’Connell, in particular, pinpoints payroll costs as the area most in need of attention to combat its ‘financial vulnerability’.