by JAMES GUTHRIE

The University of Wollongong’s annual report discloses $814m in income, up from $785m in 2020. However, without abnormal earnings last year they were $740m, for an underlying loss of $21m. Overall staff costs were down 6 per cent in 2020, to $444m (CMM May 25). Academics accounted for all these staff savings (11 per cent lower) while professional staff costs increased slightly. The university reports FTE staff numbers were 2934 in 2019 and 2546 last year.

This summary is drawn from the financial statements and the report authored by university council members, who are responsible for the financial and non-financial information provided in the annual report. It should be noted that the abnormal earnings are from the sale of property and IDP dividend. However, these were matched by abnormal expenditures, such as the termination of a student accommodation partnership of $169M, the write-off of Education Australia at $48M, the termination of a city lease at $.5 mil and impairment of the university’s Hong Kong campus at $6.4m.

Accounting generally refers to the systems, methods and processes through which organisations measure, collect and report financial and non-financial information. In a narrow sense, accounting is often described as focusing on financial measures, and contemporary accounting is understood to refer to both financial and non-financial information. Accounting is generally defined as contingent; it reflects the context and purpose of its use, depending on the specific attributes of the accounting system.

I analyse the University of Wollongong’s annual report paying particular attention to specific issues. The first of these is the accounting for staff. The annual report has a headcount of 2432 yet the table shows FTE of 2 546. In using full-time equivalents, the table makes it difficult to measure how many people have lost employment at the university in recent years.[1]

Table 21: Fulltime and fractional fulltime staff 2018–2021

Staff Demographics (FTE)	2018	2019	2020	2021
Academic Activities	1876	1924	1942	1656
Academic Support	280	282	265	219
Institution Services	546	594	637	560
Other	128	134	127	111
Total	2848	2934	2971	2546

In the AR Table 21, based on this, 302 FTE lost employment over the period. The University of Wollongong charities commission report 2021 is not yet available, so in calculating staff numbers below, I have relied on the 2020 report, which highlights the number of people employed in various categories and is by headcount. It says that in 2020 there were: Full-time employees: 2,074, Part time employees: 685, Casual employees: 3,368, Full-time equivalent staff (FTE): 2,971

The second issue I consider is the accounting for casual staff and underpayment. Over the past two years, the university froze pay rises to defer 2019 enterprise agreement pay rises scheduled for 2020 and 2021 as COVID-19 savings measures (CMM July 30 2020), which they have now unfrozen.[2] Professor Probyn-Rapsey stated that “management benefits from this by shifting the narrative of Uni Wollongong from one where there has been no significant improvements (in spite of all the sacrifices and cuts) to one where remedial actions and sacrifices have produced real outcomes. The dire predictions of 2020 have not come to pass.”[3] The salary increases of 4.5 per cent arising from the Academic and Professional Staff Enterprise Agreements were finally applied in November 2021.

Third, in a very unusual accounting transaction, the University of Wollongong has been forced to amend its 2020 accounts and report the $169m cost to the university to withdraw from a public‒private partnership for student accommodation. CMM brought this issue to the attention of the New South Wales Auditor General last year.[4]

In the 2021 annual report, the Vice Chancellor states, “there is much to look forward to in planned future developments at the university. We are refining our strategic priorities in the health space, with construction on our Health and Wellbeing Precinct hopefully underway in late 2022.” This involves capital costs of $250m and a significant public‒private partnership using university land to build:

* an independent living retirement complex operated by Lendlease that will feature quality facilities for residents and up to 240 apartments;

* residential aged care facility with up to 144 beds;

* childcare centre with approximately 80-100 places;

* community facilities, including a wellness centre, café and community hub;

* neighbourhood retail to service the precinct;

This looks like property development business ‒ a substantial “mission drift” when we think of the core purpose of a university. Concerning finances, the university already has to service significant borrowings of nearly $.75bn concerning various projects.

A recent CMM article established that business people and consultants now dominate the Council membership of many public universities.[5] In recently published research, Pelizzon et al. (2022) examine the governance of Australian public universities and empirically establish the dominance of business leaders and consultants. They argue that this is not only a governance failure but a leadership failure. They apply a lens of Australian public universities’ statutory nature and governance structures, cast against contemporary rhetoric in which universities are metaphorically equated with commercial corporations. Their study seeks to determine the extent to which this metaphor is accurate and, ultimately (they contend), detrimental to an effective and efficient university sector.

In the case of the University of Wollongong, its purpose is laid out in the legislation under which it was established in 1975: the University of Wollongong Act 1989 (NSW) and the University of Wollongong By-law 2005 (NSW).[6]

6 OBJECT AND FUNCTIONS OF UNIVERSITY

(1) The object of the university is the promotion, within the limits of the university’s resources, of scholarship, research, free inquiry, the interaction of research and teaching, and academic excellence.

(2) The University has the following principal functions for the promotion of its object:

(a) the provision of facilities for education and research of university standard, having particular regard to the needs of the Illawarra region,

(b) the encouragement of the dissemination, advancement, development and application of knowledge informed by free inquiry,

(c) the provision of courses of study or instruction across a range of fields, and the carrying out of research, to meet the needs of the community,

(d) the participation in public discourse,

(e) the conferring of degrees, including those of Bachelor, Master and Doctor, and the awarding of diplomas, certificates and other awards,

(f) the provision of teaching and learning that engage with advanced knowledge and inquiry,

(g) the development of governance, procedural rules, admission policies, financial arrangements and quality assurance processes that are underpinned by the values and goals referred to in the functions set out in this subsection, and that are sufficient to ensure the integrity of the university’s academic programs.

Australian public universities should return to their core mission – teaching, research, academic freedom and the common good.

 

[1] https://campusmorningmail.com.au/news/universities-should-report-real-staff-numbers-not-accounting-abstractions/

[2] https://campusmorningmail.com.au/news/uni-wollongong-unfreezes-payrise/

[3] https://campusmorningmail.com.au/news/hard-times-or-not-so-much-at-uni-wollongong/

[4] James Guthrie (2021), Uni Wollongong’s 2020: a financial loss and staff gone: The university reports a negative net result of $48m compared to a positive result of $26m in 2019, Campus Morning Mail, https://campusmorningmail.com.au/news/uni-wollongongs-2020-a-financial-loss-and-staff-gone/

James Guthrie (2021), Uni Wollongong out of inns, Campus Morning Mail, August 6, 2021 https://campusmorningmail.com.au/news/uni-wollongong-out-of-inns/

[5] https://campusmorningmail.com.au/news/new-ways-to-make-university-managements-accountable/

[6] “To discover more about the legislation under which we operate,” see uow.edu.au/about/governance/ legislation