2023 annual report: “A really good result for AU”

The financial forecast for the 2023 fiscal year presented to the Aarhus University board in late 2023 was positive. The forecast projected a significant improvement in the university’s finances after the large budget shortfall in 2022.

Now the ink has dried on the 2023 annual report, and the optimistic forecast has proven correct – and was even exceeded in the last few months of the fiscal year. Aarhus University reported a budget surplus of DKK 262 million for 2023.

This extremely positive development has two primary causes. First, the university achieved a significantly better operating result than expected. The university had budgeted with a negative operating result of DKK 31 million for 2023. In fact, the university came out of 2023 with a DKK 76 million budget surplus: in other words, a positive deviation of just over DKK 100 million. The main reasons for this are more positive developments in energy prices and inflation rates than anticipated, on top of the university’s general fiscal prudence in the wake of 2022, a financially challenging year.

Praise from the board

In regard to financial management, Aarhus University delivered a truly exceptional effort in 2023, stressed board chair Birgitte Nauntofte:

“The university took resolute action and succeeded in restoring balance in its fundamental operations. And we applaud the entire organisation for this. The board was quite insistent that this was a job that had to be done, and that goal has been achieved. Quite simply, an excellent job.”

The other major factor that contributed to a positive annual result is the university’s mandatory investments: in 2023, they generated a return of DKK 187 million, which was much higher than expected;. the estimated return on investment in the budget was DKK 40 million. Returns on investment were so much higher because both share and bond prices increased significantly in the last months of 2023.

“In this area as well, we are witness to an extremely positive development for the university,” Nauntofte said. All in all, 2023 was a good year for us financially.”

The annual result for 2023 is the final operating result plus returns on the university’s investments.

Finances are a means, not an end

Rector Brian Bech Nielsen is also pleased about the extremely positive development in the university’s finances – not least because achieving an operating surplus was a major challenge.

“I know that making ends meet has been difficult in many places, but a high degree of responsibility has been exercised, and I think it’s admirable that we’re in this position today,” he said.

He also noted that the university has demonstrated extremely skilful financial management, and that financial reserves are once again at a satisfactory level. This puts the university in a much stronger position to tackle the budgetary challenges on the horizon. One such challenge is the upcoming Master’s reform; we don’t yet know how it exactly what consequences it will have for the higher education sector in Denmark. And then there’s the ongoing development of the Aarhus campus. Both are unknowns that contribute to budgetary uncertainty going forward.

Nonetheless, the university expects moderate budget surpluses every year until 2027. The university also expects positive returns on investments, though nowhere near the levels seen in 2023, and will continue to focus on financial discipline in operations. The goal of all of this is to ensure the robustness of the university’s finances as a precondition for achieving the university’s central ambitions, the rector stressed:

“We were put on this earth to do research, educate and collaborate. So it’s first and foremost from the perspective of a researcher and educator that I think we have grounds to be pleased about this result for 2023 and the stability we’ve restored. Because it means that we will be able to continue to permit ourselves to be really ambitious about our contribution to society.”

Highlights from the annual report

• Aarhus University attracted DKK 2.7 billion in external research funding in 2023, which represents an increase of 8% over 2022.
• Forty-four per cent of this external funding was awarded by private Danish funders, and thirty-nine per cent by public Danish funders. Twelve per cent of this funding came from the EU. Aarhus University is ranked number 13 among universities who have received most funding from Horizon Europe.

Link to annual report (pdf in Danish; English version underway)