Universities defy public norms of transparency and accountability

CAPA applauds the ninth recommendation of the Senate Committee report, Universities in Crisis, that a formal inquiry be conducted into the auditing requirements of universities.

"For too long, the senior managers of universities have regarded themselves as exempt from requirements for financial transparency and accountability that are the norm for every other public organisation", said CAPA President, Mr John Byron.

"This is public money, yet it is being spent with little public accountability. University accounts are not effectively audited, and student stakeholders in universities are being increasingly excluded from the financial decision-making process".

State legislation currently requires universities to provide annual audited reports. Universities must also comply with DETYA's guidelines for annual reports. However, there is currently no uniform auditing process, and the sector lacks consensus on accounting standards.

In particular, concerns have been expressed over the standard of auditing procedures for newly-established commercial arms of universities.

"Our universities are embarking upon complex, sometimes high risk, commercial ventures with inadequate and ill defined financial regulation", said Mr Byron.

The Howard Government's reduction of university operating grants has forced universities to solicit private investment to cover basic operating costs. CAPA notes that in an environment of declining public investment it is not surprising that universities are adopting inappropriate corporate governance models.

"A number of Australian universities conduct their financial affairs as though they are private corporations rather than public institutions", commented Mr Byron.

"This is especially apparent in those universities which have most zealously adopted the ideology of the so-called enterprise university.

"Senior management in these universities seem to feel little obligation to make decisions in a transparent manner and frequently resort to removing student representation from key university committees, meeting in camera, and using spurious claims of "commercial-in-confidence' to avoid complying with Freedom of Information legislation.

"An effective financial decision-making process requires democratic participation by stakeholders, greater transparency and above all public accountability for the public money that is invested in each university. Instead, the Coalition Government has promoted an "enterprise university' model with auditing mechanisms that are woefully inadequate".