13 August 2003

FINANCIAL MANAGEMENT AT STATE’S TERTIARY INSTITUTIONS GETS A TICK FROM AUDITOR GENERAL, THOUGH SOME CONCERNS REMAIN.

The WA Auditor General’s Report on Public Universities and TAFE Colleges, summarising the results of annual financial statement and performance indicator audits at WA universities and vocational education and training colleges last year, was tabled in State Parliament today.

Des Pearson’s report shows that audit opinions at the State’s four universities and 11 of the 12 TAFE colleges (the one exception being the Eastern Pilbara College) were clear in relation to both financial statements and performance indicators.

However, Mr Pearson also draws to Parliament’s attention a number of accountability and management issues that need to be promptly addressed, especially since a number of the issues had been identified and commented upon in previous years.

Key findings in the report include:

• The controls and financial statements of Eastern Pilbara College were qualified as the asset register was not a complete and accurate record of the college’s assets.
• Asset management controls and procedures at TAFE colleges still require improvement, despite this issue being reported last year.
• Performance indicators relating to the effectiveness of the services delivered by TAFE colleges need to be improved to provide more meaningful indicators.
• Concerns expressed in last year’s report about the control systems and procedures for offshore programs run by the universities were addressed during 2002.
• TAFE colleges have still not satisfactorily conducted IT disaster recovery testing despite both the 1999 and 2001 reports highlighting this deficiency.
• C Y O’Connor and Kimberley colleges continue to operate with Interim Governing Councils.

Details of key financial statistics in the report reveal that State Government funding for our tertiary institutions totalled $49 million for the universities and $290 million for the colleges, with another $1,126 million coming from the Commonwealth ($1044 million for universities and $82 million for colleges).

Universities’ revenue from other sources increased from $331 million in 1999 to $439 million in 2002 (an increase of 33 per cent) through diversifying their operations, including offshore teaching projects.

In those four years, the proportion of expenditure on employee related costs remained relatively constant at around 60 per cent of each university’s annual expenditure – these expenses increased by $111 million or 21 per cent.

State Government funding of TAFE colleges increased from $215 million in 1999 to $290 million in 2002 (an increase of 35 per cent), but for the same period college revenue from ordinary activities, including fee for service and student fees and charges, only increased by five per cent with six colleges recording decreases in these revenues.

The proportion of expenditure on employee related costs reduced from 66 per cent to 62 per cent of college annual expenditure while staffing expenses increased by $36.6 million or 19 per cent over the same period.

Ends/.

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