The University of Otago remains in a ''very sound'' financial position, but departments are aware money will be tight next year.
Financial services director Grant McKenzie said in a report tabled at this week's university council meeting that the operating surplus of $18.832 million for the year to the end of August was $7.120 million more than budgeted and $5.509 more than at the corresponding time last year.
Income, at $407.015 million, was $8.251 more than at the corresponding time last year and expenditure, at $388.183 million, was $2.742 million more than last year.
Mr McKenzie said the university continued to be in a ''very sound'' position. The larger-than-forecast surplus was due in part due to savings in consumables.
''The savings currently being made by almost all areas of the university are seen as essential to offset the risk of funding pressures in 2014 and beyond.''
''It is clear that the financial impact of declining student numbers and reduced externally funded research is making academic departments extremely cost-conscious,'' he said.
Council member Michael Sidey commented on the savings by congratulating financial staff for fostering a ''very good culture'' of financial responsibility at the university.
Mr McKenzie replied by saying that departments were preparing for tight times next year.
Later in the meeting vice-chancellor Prof Hayne noted the difficult financial environment meant the university might not meet its internal operating surplus targets for next year.
