There’s a basic rule to risk management: if you’re the one who has to pay up when things go wrong, you’re the person who gets to set the rules about how you’re going to avoid things going wrong.
And thus we swing headfirst into the baffling world of higher education funding. Back in March, I wrote about block grants and how the calculations for them were bewilderingly complex. The basic message to take away from that post was: nobody is entitled to anything, you have to compete in order to get your slice of the pie.
Fast forward to now and we’re still in a confusing space about what precisely the facts are when it comes to university funding.
ANU, UniSyd, and Latrobe all claim to be in financial difficulty. This is where the story gets complicated. Hold on to your degrees, everybody…
In November last year, the National Tertiary Education Union wrote:
As the federal government itself recognises, our universities are already significantly underfunded, a situation made worse by the flat lining of the international student market.
When ANU announced that it was slashing jobs in the School of Music, the NTEU revised this position:
The NTEU strongly believes the so-called financial crisis being used by the Vice Chancellor to justify his strategy is a manufactured one.
Doesn’t just believe it. Strongly believes it. Strongly believes that the financial crisis (which they bemoaned less than six months earlier) is only so-called and manufactured. Strongly. Believes. It.
Enter into the fray is Senator Chris Evans (the Minister responsible for the Australian Research Council). This week, the Australian reported:
“It’s complete nonsense that universities are doing it hard,” Senator Evans told The Australian.
“They’ve had their funding increased by 50 per cent since 2007. They are positioning themselves for what they see as a Liberal government attack on university funding and they are attempting to mount an argument to increase the cost borne by students.”
So this lends weight to NTEU’s claim that it strongly believes it was incorrect six months earlier. On the other hand, there’s Access Economics’ report last year:
Current Commonwealth contribution rates appear to bear little relation to the actual cost of teaching or to any perceived notion of public benefit. Also, the range of maximum student contributions appears to have no solid empirical or policy foundation—the funding share paid by the student ranges from 27% for nursing to 84% for law, accounting, administration, economics and commerce. [p. 10]
So it all depends on whom you ask and what the conditions of their answer are. If you’re arguing to keep staff or if you’re trying to rubbish the LNP, universities are awash with funds. If you’re arguing that universities need more funding or that the Commonwealth should shoulder more of the burden of teaching undergraduates, universities are poor.
This confusing state of affairs is somewhat explicable if you read my earlier post carefully. You can see ‘streams’ of funds which relate to different activities. You can produce huge amounts of HERDC points (a bureaucratic points system) if you publish lots, or receive lots of grants for ‘HERDC-eligible research’ activities (including training PhD students). Then you get money from student fees.
To what extent should universities rob Peter to pay Paul? If you’re an academic with no teaching load, should the income from student fees be used to fund your position? If you’re an academic who runs a course with very few students and also publishes very little, should people with higher teaching loads and greater publication rates be paying your way? Do you institute a rule where funds arising from teaching are reinvested only in improving teaching? Would it be ‘robbing’ the researchers to pay for teachers?
Let’s add some more complexity to this horrible picture. It’s called the Australian Synchrotron.
Universities had been expected to stump up $25m as part of a multi-agency effort to keep open the Australian Synchrotron, which is next to Monash in Clayton.
So not only are universities paying their own staff and infrastructure, they’re now plugging gaps in the Commonwealth’s under-investment in Australian research.
In New Matilda this week, Professor Stewart Rees of the University of Sydney, wailed and gnashed his teeth that a ‘managerial’ style had overtaken the university sector. But it’s clear that this ‘managerialism’ (by which he appears to mean ‘ensuring that people do the job they’re paid to do’) is a response to the bewildering and baffling funding model of universities.
Economic rationalism and managerialism entrap students in a cage of “efficiency”. Aided by computer technology, efficiency can mean that they seldom read a complete book, let alone re-read it. Caught out by limited funding, the managerialist culture ensures that the days of time and space to enjoy university education — to read, discuss, experiment, write, re-write and be stimulated by the experience of face to face discussions in small tutorials — are over. Students’ stamina is being tested, not necessarily their intellects.
Professor Rees has a very clear idea of who is to blame:
The characters setting the fees would presumably be the same invisible, unaccountable managerialists who have already contributed to the financial woes of Sydney University and UNSW, among others.
Invisible and unaccountable managerialists? Who on Earth could he mean?
Later in his article, Professor Rees identifies some potential candidates:
At a time when staff were being told that the university was broke, an average $61,000 bonus was paid to each of five deputy vice chancellors.
At UNSW the governing body or Council has delegated its decision-making authority to three senior executives — of which Hilmer is one. The same pattern is repeated at the Faculty level, where Faculty Boards have disappeared, where a Dean’s role is to tell staff what’s happening and what they should do.
But Deputy Vice-Chancellors and Deans are hardly ‘invisible’. An earlier ‘satirical’ article seemed to suggest that these invisible managerialists were university administrators:
A serious disease has re-appeared at Sydney University. Like tuberculosis, as soon as a cure is found and staff have been inoculated, a more virulent strain emerges. It has been labeled “hyper managerialism” and its symptoms are “efficiency in the name of inexplicable time wasting”, “infinite make-work-form-filling” and “gobbledegook language to organise thinking”. So far no test has been found which might identify early onset of the disease.
It’s funny because the people hired to kowtow to the academics are just like tuberculosis. That’s how you know it’s satire.
So you’re in an extremely complicated funding model which relies heavily on reporting to the government on activities. Who is going to do the reporting? The academics themselves? The ones who are too busy to publish and are too stressed due to the massive class sizes?
Let’s say you’re an early career researcher. First, congrats on nailing one of the few postdoc positions available in Australia. Second, you’re probably freaking out from all the undergraduate teaching you’ve got to do. It’s hard to do all the research you’ve wanted to undertake when you’ve got four subjects to teach (along with grading) this semester.
Never fear. If you’ve (somehow) managed to keep your publication record strong (including publishing a book with a reputable publisher), you might want to apply for an ARC Discovery Early Career Research Award. That way, you won’t have to do the undergraduate teaching because you’ll have a grant and a salary to undertake research instead.
Too bad the application will be as much effort as writing a journal article. And the success rate is less than 13%.
But you’re a clever, up-and-coming early career researcher! You’ll be fine! And it’s not like there is 18 pages of rules relating to eligibility…
Oh, wait. There totally is.
A DECRA may be awarded ARC funding of up to $125,000 per year of funding. The per annum salary contribution from the ARC is fixed at $85,000, including 28 per cent on-costs, and up to a maximum of $40,000 project costs. Salary and/or project costs will not be awarded separately.
OH CHRIST WHAT THE CHRIST DOES THAT MEAN?!
Wait… Aren’t on-costs like 30% here in the ACT? So who’s paying the gap? And salary contribution is only $85k including that 28% on-cost rate… You’re currently paid $83k… Isn’t there a massive gap? So even if you’re successful in being awarded a grant, the university will still need to find additional funds to cover you.
And it still has to cover your teaching.
Don’t even get into the rules which change from year to year to year to year…
Aside from a small amount in endowments and consultancy fees, academics are funded by taxpayers and students. They operate in a complex funding environment where it’s not clear how to allocate the funds fairly. What happens when it all goes wrong?
The ARC does not enter into agreements with individual academics. The ARC enters into agreements with universities. If an academic honestly falls foul of the complicated rules governing their funding, it’s not the academic who pays. It’s the university.
And then we have staff — as in any large organisation — who deliberately don’t play by the rules.
So we’re back to the start of this post. It’s the university who wears the risk. It’s the university who has to find the money to cover budget shortfalls. It’s the university that has to find the cash if a budget unit doesn’t balance its books at the end of the year. As it’s the university that wears the risk, the university can set whatever risk mitigation strategies it likes.
So Professor Rees — completely honest, hard-working, and reasonable Professor Rees — sees a web of bureaucracy and all he can see is an unnecessary obstacle. What do the auditors think?
The Independent Commission Against Corruption (ICAC) began a public inquiry in March 2012 into allegations of corrupt conduct by a staff member at the University. The inquiry is investigating allegations that he engaged contractors or staff from two businesses that either he or his spouse had an interest in.
The University paid $1.8 million to these businesses/employees between January 2007 and June 2010. ICAC is investigating if services were actually received for all payments made and the extent of any possible loss incurred by the University.
The University has a complex procurement structure in place and is working to ensure control procedures are strengthened to prevent procurement frauds in the future. Management has advised that it has completed audits of vendor creation and the accounts payable process to identify internal control improvements. [p. 56]
Oh… Sure. Any organisation is going to have problems… Oh, there’s more?
The University does not maintain a single, complete and detailed listing of all contractors it has engaged during the year. It uses a decentralised approach to engage and record contractors.
The University was unable to provide the following information as at 31 December 2009:
- the cost of contractors engaged
- the number of contractors engaged
- the period of service of contractors engaged. [p. 77]
What sort of organisation can’t tell you how many staff it employs? Seriously? And Professor Rees is having a cry about having to fill in a few forms and undergo a budget check?
In short, university funding is a complicated affair (it doesn’t need to be, but that’s an entirely separate post) and the risks are squarely on the university. Universities need to report on a wide variety of difficult things and still can’t manage to report on simple things (like how many people it employs). If this means they need more bureaucrats to infect the place with the Tuberculosis of Knowing Things, so be it.