Government and Governance In Australian Higher Education

Good governance initiatives within the Australian higher education sector are largely driven by Federal Government initiatives rather than by initiatives from the States and Territories (equivalent to the Provinces), as is the case in Canada.

In Canada over 90 higher education institutions are the responsibility of Provincial Governments, which control use of the term “university”. Each Provincial Government has its own quality assurance mechanism, and to date there is little coordination between the Provinces of these mechanisms. There is no formal national recognition system of accreditation or recognition for post-secondary institutions, although some influential provinces are beginning to concert their efforts in this area.

In Australia 36 universities and higher education institutions are established by State or Territory legislation but are publicly funded by the Australian (Federal) Government. The legal ownership of these universities lies with the respective State or Territory Government.

In essence, every Australian university must be mindful of requirements coming from both Federal and State Governments. By virtue of being statutory bodies established under State and Territory legislation, they have accountability requirements imposed by the State and Territory governments. In addition, they also have accountability requirements imposed by the Federal Government, the single most important source of their revenue.

In recent times, the Federal Australian Government has become much more active in its enforcement of good government principles within universities that it funds. In a policy statement in 2003 (Our Universities: Backing Australia’s Future), the Federal Government tied funding increases under the Commonwealth Grant Scheme (CGS) to adherence to a set of National Governance Protocols (NGP) and developed a well-defined framework (the Institution Assessment Framework) for monitoring and assessing universities’ performance to the NGP. Actually, funding increases under the CGS are conditional on adherence to the NGP.

Principally, the Federal Government is enforcing adherence in the following areas:

Organizational sustainability – The Federal Government wants assurance that universities will be able to continue delivering the services it is funding. The NGP lay down specific requirements designed to ensure that:

universities have a sound documented strategic direction;
universities have implemented risk management programs which are documented, monitored and reviewed at least annually;
universities have sound internal control mechanisms in place; and
universities practice sound financial management.

Achievements in higher education provision – Universities have delivered the required number of FTE places in accordance with the Government’s higher education objectives in the following areas:

teaching and learning;
research and research training initiatives; and
equity and indigenous access.

Quality of outcomes - As well as quantity, that Universities have met predefined quality standards for their systems and processes, in teaching and learning programs and research. Universities must be prepared to undergo Australian Universities Quality Agency audits.

Compliance – Ensuring that institutions have used their funds for the purposes for which they were provided and have complied with legislation. Universities must demonstrate the measures that they have in place to comply with the various pieces of applicable state and federal legislature. This covers all legislated areas, including financial, occupational health and safety, dangerous goods, workplace equity etc.

The NGP also stipulate that universities must submit an annual report containing audited financial statements, performance information, compliance data and information on specified financial and/or business dealings. The reporting framework may mandate that such matters as occupational health and safety, freedom of information requests, referrals to the ombudsman, and other aspects of a university’s operations are to be included in the report.

Adherence to the NGP puts universities in conflict with their respective States. Some specific State requirements for statutory authorities have been found to be in conflict with the requirements of Australian Government guidelines, in relation to universities. For example, the Australian Government issues a set of guidelines for the preparation of annual financial statements by universities. In particular, the time-line for preparing audited financial statements differs between jurisdictions. Universities in particular States have had their financial statements qualified by their State Auditor-General as a result of complying with Australian Government requirements, whilst institutions in other States have not.

Despite such issues and the reporting workload imposed by the NGP, there has been a net positive effect on governance within the Australian higher education sector. All universities have taken action to improve their internal governance processes. A review of Australian university websites will reveal that they now all have risk management and compliance programs in place to some degree. Additionally, State and Territory Governments have agreed to make the necessary legislative changes in order to allow universities within their jurisdictions to comply with the NGP.

Keith Old
CEO
Bishop Phillips Consulting Canada