FINANCIAL MANAGEMENT AT STATE'S TERTIARY INSTITUTIONS SCRUTINISED BY AUDITOR GENERAL

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2 June 2004

FINANCIAL MANAGEMENT AT STATE'S TERTIARY INSTITUTIONS SCRUTINISED BY AUDITOR GENERAL

WA universities' income from student fees and charges has increased 38% over the last four years (from $177million to $245million), with students now directly contributing $1 in every $5 of total revenue.

And if higher education payments are added to this, West Australian students are contributing over 37%, or more than $1 in every $3 to universities' revenue.

The figures are contained in WA Auditor General Des Pearson's Report on Public Universities and TAFE Colleges, tabled in State Parliament today, which summarises the results of annual financial statement, controls and performance indicator audits at WA public universities and vocational education and training colleges last year.

Financial statistics in the report show that total revenue for our tertiary institutions was some $1,588million ($1,199.5million universities, $388.7million colleges) with the State Government contributing $53.4million to the universities and $303.6million to TAFE colleges.

Expenditure amounted to almost $1178million at universities and $386million at colleges, the majority going on employee expenses - $691million (58.7%) at unis and $237.5million (61.5%) at colleges.

Teaching-related expenditure per full-time student increased 25% for UWA, 10% for Murdoch and 5% for Curtin in the last five years; and 7% for Edith Cowan from 1999 to 2003.

In TAFE colleges the cost per student curriculum hour has fluctuated marginally over the last five years, with four colleges reporting reductions; however C Y O'Connor college reported a 19% increase between 2001 and 2003.

The universities employed 7,730 full-time staff to service 79,500 students, whilst colleges had 3,752 staff for their 80,540 students.

The audit results detailed in Mr Pearson's report reveal that one university and one college received a qualified opinion in relation to their financial statements and controls:

Curtin University's poor management of student fee collections resulted in the university being unable to determine the accuracy of student fee debts shown at $9.9million and subsequently it had to make a provision for $7.7million of this amount as being possibly unrecoverable. The Auditor General was unable to form an opinion whether the $9.9 million in student fee debts and the doubtful debts of $7.7million were fairly presented in the accounts.
Further, a reconciliation problem was found between Curtin's records and its bank's records and in this instance the Auditor General was unable to form an opinion whether general account cash assets of $18.4million were fairly presented.
Pilbara TAFE had inadequate controls over receipting and banking of moneys - checks of receipts were not carried out, a number of missing receipts could not be accounted for, and there was a lack of segregation of duties over banking, recording and reconciling revenues. As a result, the Auditor General was unable to determine if revenues from fee-for-service of $2,073,476, student fees and charges of $794,309 and ancillary trading of $295,203 were fairly presented.

The report also draws to Parliament's attention a number of accountability and management issues that need to be promptly addressed:

Key findings include:

Edith Cowan University and Curtin University were four and six weeks late, respectively, in submitting their certified financial statements and performance indicators.
Whilst all TAFE colleges met the statutory deadline for submitting their certified financial statements and performance indicators, many contained numerous errors, omissions and inaccurate supporting notes.
Ongoing deficiencies in information technology controls at universities and TAFE colleges, and their failure to implement remedial procedures, are leaving their IT systems and business operations vulnerable.

Ends/.

Media Contact: Peter Villiers, Manager Reporting and Communications
Tel: (08) 9222 7558. Mobile: 0417 936 171 Fax: (08) 9322 5664
4th Floor Dumas House 2 Havelock Street West Perth