Don’t ‘muscle up’ Australian regulator, governance inquiry told

Concerns about Australian university governance will not be resolved by “muscling up” the sector regulator, a Senate committee has been warned.

Jim Barber, a former vice-chancellor of the University of New England, says the Tertiary Education Quality and Standards Agency (Teqsa) has “more than adequate” powers to address corporate governance shortcomings at higher education institutions.

“The solution does not lie in muscling up Teqsa. There is ample scope within the current framework for Teqsa to stand over and cajole providers,” Barber says in a submission to the Senate Education and Employment Legislation Committee. “Higher education providers in this country are already dedicating far too much…time and money to compliance and appeasement at the expense of learning and teaching.

“What is required is not more regulation but a better resourced, better informed and more collaborative regulator.”

The committee, which is chaired by Labor senator Tony Sheldon, is conducting an inquiry into higher education institutions’ financial reporting, their compliance with legal requirements and the composition and transparency of their governing councils. Executive remuneration, teaching quality and universities’ use of consultants are also being scrutinised.

Under the inquiry’s terms of reference, the committee is specifically investigating whether Teqsa has adequate powers to oversee such issues. While Senate legislation committees generally inquire into bills and estimates of government expenditure, a standing order also extends their scope to the performance of departments and agencies.

Including Teqsa in the terms of reference has ensured that the inquiry remains in the hands of Sheldon’s committee rather than a sister “references” committee, which is chaired by Liberal senator Matt O’Sullivan.

But Universities Australia warns that the focus on Teqsa could “underplay the role of other jurisdictions”. Chief executive Luke Sheehy points out that universities were bound by state or territory governance rules as well as federal legislation.

Michael Tomlinson, a former director of assurance at Teqsa, says his erstwhile employer already has “full authority” to inquire into the standard and accuracy of universities’ and colleges’ financial reporting.

Tomlinson, now an adviser on higher education governance and quality, says Teqsa monitored institutional finances as part of its annual risk assessments and could put financial reports under the spotlight any time it chose. “[This] is one of the strongest areas of university governance…and Teqsa does not need any additional powers to monitor [it],” his submission says.

Tomlinson says the agency also has “full power” to inquire into institutions’ compliance with legislative requirements, including workplace laws, but staff remuneration was beyond the scope of its act.

He says vice-chancellors’ salaries could be limited to multiples of average staff earnings, under a model devised by the proposed Australian Tertiary Education Commission, but this should be legislated through the Higher Education Support Act – and not the Teqsa Act – “as these are financial matters rather than quality matters”.

“Parliament [should] take an economical approach to regulation of the sector and avoid intervening in internal governance unnecessarily,” he says.

But Peter Tregear, an adjunct professor at the University of Adelaide, says Teqsa should be empowered to ban “gagging clauses” in university employment contracts, mandate whistleblower protections, enforce an upper limit on all senior executive salaries and require university governing bodies to mostly be composed of elected academic and student representatives.

“The very fact that this committee believes it needs to consider whether [Teqsa] currently has adequate powers…is a clear admission that university governing bodies are failing in their core function,” his submission says.

john.ross@timeshighereducation.com