The New South Wales Auditor-General’s Universities 2020 audit is just released. It notes that there are ten public universities in NSW with 51 local controlled entities and 23 overseas controlled entities. Total combined revenue in 2020, $10.9bn, was a decrease of only  $538.5m (4.7 per cent) from 2019. Overseas student enrolments in 2020 of 106,984 resulted in a decrease of 8,310 students (7.2 per cent) from 2019. Also, the 2020 total combined expenditure was a decrease of $147.8m (0.9 per cent) from 2019.

The following Table 1 for the report provides an overview of the New South Wales public university system.

10 universities

51  local controlled entities

23  overseas controlled entities

 59   inqualified audit opinions

two audits in progress 23* not audited

289,667** student enrolments (EFTSL) – down 3.3 per cent from 2019

63.1 per cent domestic

36.9 per cent overseas

17,729***    academic staff (FTE) –  down7.6 per cent from 2019

down  23,212***    general staff (FTE) down 7.9 per cent from 2019

* Of the 23 entities not audited, 22 were relieved from reporting requirements and one entity did not comply with requirements to provide financial statements to the Audit Office of NSW. Further details are in Section 2.1 of the report.

**  Equivalent Full-Time Student Load (EFTSL) represents the equivalent full-time study load for one year.

***  Full-Time Equivalent.

Source: Student and staff numbers are provided by universities (unaudited).

As we know, the outbreak of the COVID-19 pandemic presented challenges for the public university sector business model in 2020. (Carnegie, G. and Guthrie, ‘Financial risks of key universities in international student markets’, Campus Morning Mail, August 14 2020,)

Up to December 2019, our public universities relied upon fee-paying onshore international students to support operations, infrastructure development and research expenditures. However, international border restrictions reduced some enrolments of overseas students. As a result, there were 106,984 overseas students enrolled at universities in NSW in 2020 compared to 115,294 in 2019, a decline of 8,310 students. The income stream associated with this was not significant in 2020 for forward projected budgets.

As we know, public sector universities responded in 2020 by mainly cost-cutting, in the form of staff redundancies, reducing teaching and units offered and reducing certain other controllable costs. The federal government in 2020 imposed further austerity measures on Australian public universities by reducing its contribution to local students fees and increasing the cost of education for many local students. (Guthrie, J. Andrews, J. and Baker, M. (2020), ‘The Government’s higher education policy programme and the pea and thimble trick’, Campus Morning Mail, September 10, 2020)

Several brief observations concerning public university in New South Wales sector in this audit report can be made.

First,  concerning universities cost-saving measures, the cost of redundancy programmes increased employee-related expenses in 2020 by 4.4 per cent to $6.5 bn ($6.2 bn in 2019). The cost of redundancies offered in 2020 across the universities totalled $293.9m. Most savings are within this category. Other expenses decreased to $2.8 bn in 2020, reducing $436m (13.4 per cent). Negative operating results in many universities in 2020 were because of the staff redundancy programme. Therefore, most New South Wales public universities were cash surplus for the 2020 financial year.

Second, the actual number of people made redundantly or not employed in 2020 compared to 2019 cannot be determined as they are disclosed in full-time equivalent staff. The audit report states that, “in all, some 2,162 positions were made redundant”. However, this cannot be correct as a review of Table 1 has over 3000 full-time equivalent positions lost in 2020. As we know from previous Campus Morning Mail articles, this could be equivalent to 6,000 to 7000 actual people.

Third, concerning funding before the COVID-19 pandemic, combined Federal Government grants as a proportion of the total revenue of universities in NSW was reducing, 37.1 per cent in 2016 to 31.1 per cent in 2019. By far, the most significant revenue in 2020 for public universities in New South Wales were local and international students paying fees.

Fourth, public universities in New South Wales have significant investments in shares and other cash-like items. In 2020 investment income in total was $1.1 bn. At the end of 2019, New South Wales public universities in cash and cash equivalent had about $6 bn in investments and other cash equivalents. Also, vice-chancellors continue in 2020-21 to build new infrastructures such as student accommodation, commercial property, and on-campus facilities. These investments was not spent on expanding their academic workforces or improving staff-student ratios, or providing adequate teaching and learning support for students.

Fifth, the focus of the Audit Report is a traditional business audit of accrual financial statements and accounting practices. This is what we call false accountability as it masks the significant issues facing vice-chancellors. What is missing from the analysis is an in-depth understanding of the financial and social risks going forward. The cost reduction programmes were mainly characterised by job losses,  with broad social ramifications for Australian society. Other social implications include changing employment conditions, mental health issues for students, academics, and other staff, including casual staff, online learning shortfalls, and students’ expectations of their university experience not being satisfactorily met. (Smith and Guthrie, Campus Morning Mail, September 16)

In 2021 the austerity pain is being experienced by staff and students.

What is evident from this NSW Auditor General report is that the previous business model of relying on international student revenue will never return to the 2019 position. Last year’s New South Wales Parliamentary enquiry into New South Wales universities Future development of the NSW tertiary education sector raised many vital issues CMM November 1 , to which the current government is yet to respond.

Previously, I wrote to the New South Wales auditor-general that she should urgently conduct a performance audit of the NSW public sector university system. This would examine whether the NSW public university system is carrying out its activities economically,  efficiently, and effectively and in compliance with relevant laws. In New South Wales, we need a conversation about how our public universities are being managed and the financial and social risks going forward.


See the following academic articles covering many of the above points.

Martin-Sardesai, A., Guthrie J. and Parker, L. (2021), “The neoliberal reality of higher education in Australia: how accountingisation is corporatising knowledge”, Meditari Accountancy Research, Vol. ahead-of-print No. ahead-of-print.

Carnegie, G.D., Guthrie, J. and Martin-Sardesai, A. (2021), “Public universities and impacts of COVID-19 in Australia: risk disclosures and organisational change”, Accounting, Auditing & Accountability Journal, Vol. ahead-of-print No. ahead-of-print.

James Guthrie is a Macquarie University Business School distinguished professor


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