At temples in Taiwan, visitors can find a donations box through which they can give as they please. Some temples make considerable amounts from this “incense money,” which raises questions over how they use the funds. For the nation’s universities, income from donations solicited as part of the endowment fund system is essentially their version of incense money and, similarly, there are questions over how this money is used.
Prior to 1999, budgets for national universities came entirely from the Ministry of Education, with a requirement that surplus income be returned to the state coffers at the end of the year. With the establishment of the university endowment fund, institutions were expected to manage donations and were allowed to solicit funds, giving them more financial flexibility.
Before the National University Endowment Fund Establishment Act (國立大學校院校務基金設置條例) was amended in 2015, endowment fund management committees were responsible for the money. The seven to 15 members of such committees were to form an auditing body to supervise the committee and to do post-auditing tasks. This arrangement worked well from 1999 to 2015.
However, the legislature, which was controlled at the time by the Chinese Nationalist Party (KMT), introduced amendments removing the requirement for a committee and instead allowed university heads to allocate auditing personnel themselves. From that point on, endowment funds became the piggy banks of university presidents.
Sources of money include government budgets, tuition and miscellaneous fees, income from continuous education, academia-industry cooperation, facility management income and donations. The combined operating fees for next year for Taiwan’s 50 state-backed institutions is more than NT$100 billion (US$3.28 billion), of which NT$56.3 billion is to come from government subsidies, with the rest from self-solicited sources, including operating subsidies for government programs.
University presidents say that they face stress because they lack the funds to hire faculty or provide subsidies to students and assistants.
According to the ministry’s university open data platform, in 2017 the institute with the highest debt-to-asset ratio was National Chengchi University (NCCU) at 34.72 percent, which just happened to have former minister of education Wu Se-hwa (吳思華) as a previous university head and lecturer at the time. Wu as minister had advocated for the amendment abolishing the need for auditing committee oversight. NCCU was followed, in order, by National Tsing Hua University, National Taiwan Normal University and National Cheng Kung University.
Taiwan’s elite institutions are in arrears because most of the money is plowed into constructing new buildings or extending campus grounds. If a new financial oversight and management mechanism is not put in place, before long national universities might be facing a crisis of credit overextension.
New Power Party Legislator Cheng Hsiu-ling (鄭秀玲) has called for an amendment to the act to reinstate oversight and auditing of the committee’s endowment fund to prevent fraud, but the Association of National Universities of Taiwan is only willing to agree to university presidents nominating auditing personnel to be approved by a committee, which would rob them of genuine independence.
If national universities refuse to be transparent about their use of endowment funds, people should consider not donating to them, so they are no longer supporting a few individuals controlling university incense money.
Tai Po-fen is a professor in the sociology department at Fu Jen Catholic University.
Translated by Paul Cooper
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