The University of Melbourne. Response to TEQSA Discussion Papers. 3 December 2013
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1 The University of Melbourne Response to TEQSA Discussion Papers 3 December 2013 Summary The University of Melbourne welcomes the opportunity to provide its views to the Tertiary Education Quality and Standards Agency (TEQSA) regarding the Future Directions for Regulatory Processes and Future Directions for TEQSA's Regulatory Risk Framework Discussion Papers. The University of Melbourne has combined its response to both papers to reflect the proposition that TEQSA should apply a risk-based approach to regulating the higher education sector and risk assessment. This approach would enable higher education providers with both a good standing and a long history of operation and compliance with the Higher Education Support Act (HESA), and other relevant legislation, to be exempt from providing information and data to TEQSA for re-registration, risk assessment and quality assurance purposes. Background A risk based approach to regulation and risk frameworks Higher education has become an important part of the nation s competitive advantage. Australia s international education activities generate over $15 billion of export income annually and this revenue supports more than 100,000 jobs. 1 Research productivity has increased to the point where publications per research dollar have almost doubled, and by important measures, the sector publishes more per capita than the US, the UK and other leading countries 2. Universities have also educated a rapidly rising number of Australians, despite public funding per student still being below the peak funding rate of the late 1980s and roughly 30% below the OECD average. Australian universities have rigorous, self-accreditation processes for ensuring quality. The University of Melbourne deploys a rigorous range of quality assurance, risk management, course quality and review practices as outlined in the Annual Performance Review framework. The institution has a coordinated annual program of corporate strategic planning and review, academic divisions and degree reviews, divisional business planning, budgeting and operational performance monitoring and reporting, quality assurance and risk management. As a long established higher education 1 Australia Educating Globally Report, Advice from the International Education Advisory Council, February Croucher G, Marginson S, Norton A, Wells J, 2013, The Dawkins Revolution 25 Years On 2013, p Page 1 of 5
2 institution, the University of Melbourne has a strong and proud tradition of such practices and this performance is on the public record over a long period of time. The University of Melbourne s governance arrangements provide transparency and accountability to ensure the appropriate management of activities including councils, advisory boards, elections and government appointments. Many of these bodies comprise membership individuals with local and national reputations with experience in assuring probity for large and complex organisations. Additionally, universities are already subject to a vast array of regulation and reporting requirements ensuring they achieve minimum standards as articulated by the Commonwealth. In the 2012 report authored by Phillips KPA, they found that a typical Australian University spent something in the order of 2,000 days (equivalent to $800,000 - $900,000 in staff costs) collecting information and reporting against the eighteen (former) Department of Industry, Innovation, Science Research and Tertiary Education (DIISRTE) reporting areas in scope for the review. It is estimated that in total universities allocated around 66,000 staff days, equating to $26 million to meeting the eighteen identified sets of DIISRTE reporting requirements 3. For these reasons, the University of Melbourne believes that TEQSA should apply the principle of earned autonomy to institutions, thus determining those which need a rigorous registration process compared to those with self-accrediting authority, given their good standing, robust governance, sound risk management processes and long history of operation. Proposal A risk based approach to regulation, re-registration and risk frameworks The University of Melbourne proposes that TEQSA implements a bifurcated approach to better utilise resources and apply a tailored, risk-based approach to regulating the higher education sector. This approach would enable higher education providers with good standing and a long history of operation and compliance with all applicable legislation such as the Higher Education Support Act (HESA) and the Education Services for Overseas Students (ESOS) Act and associated legislation to be exempt from providing information and data to TEQSA for re-registration, risk assessment and quality assurance purposes. These providers could be categorised as low-risk providers. The University of Melbourne recognises the need for a single regulator to monitor the deployment of minimum standards across the higher education sector. However, a one-size-fits-all approach to regulation is inconsistent with TEQSA s risk based mandate and does not align with a cutting red tape agenda for the sector. TEQSA s response to the recent reform agenda in relation to red-tape reduction is welcomed and the University of Melbourne believes that further red tape reduction can be achieved by developing the notion of earned autonomy for self-accrediting institutions. This would enable a risk-based approach to regulation, allowing resources and regulatory efforts to be targeted more effectively and efficiently. By applying this framework, low-risk institutions would no longer be required to apply for reregistration. TEQSA would retain the reserve power to investigate those institutions with a record of serious breaches of the Higher Education Standards, such as potentially serious risks to students suggested by evidence in the institutional risk assessment. Where TEQSA identifies a serious breach of the Higher Education Standards, TEQSA could also exercise its reserve power to impose conditions on registration, require re-registration or suspend or terminate registration. 3 PhillipsKPA Review of Reporting Requirements for Universities Final Report, December Page 2 of 5
3 If this approach were to be adopted, the status of all providers would need to be reviewed annually, as good standing would not apply in perpetuity. This would be necessary to ensure that TEQSA was confident that the risk and re-registration processes were based on the most current evidence to assess whether or not providers posed a significant or negligible risk. Reforming TEQSA s Regulatory Risk Framework Reconfiguring the risk based approach to regulation Reconfiguring the risk based approach to regulation would entail TEQSA using the framework outlined above to differentiate those providers with a) good standing and b) a long history of compliance from those who are not, and recognising the former as low risk, self-accrediting providers. Low risk, in this instance, refers to self-accrediting higher education institutions that do not have a history of serious breaches with relevant legislation. A similar approach has worked effectively in relation to accrediting employers who sponsored employees via the 457 visa scheme. Employers with a good history of compliance with the Department of Immigration can apply for accreditation that doubles the time a business can sponsor overseas employees and provides that business with priority processing for all nominations and visa applications. As discussed above, the University of Melbourne proposes that TEQSA consider a bifurcated approach to risk management so that attention can be paid to those providers posing significant risk to students. The University of Melbourne believes that TEQSA should continue to conduct risk assessments for the following purposes: To be able to convey to the international community that the Australian higher education sector has a single regulator that assesses risk across the sector to monitor and take a proactive approach to serious risks arising; Enable providers to self-assess their own risk environment ; and To assure the Minister and the Government that risks to students in the higher education sector are being monitored and addressed. There is a wealth of information, data and performance metrics already in the public sphere on institutional performance that TEQSA should utilise in building its risk profile of higher education providers and no new information should be sought. Future directions for TEQSA's Regulatory Risk Framework Question 1. Does the proposed approach reflected in Figure 1 offer an improvement to the current approach? If not, why and what changes would you propose? Regarding specific risk areas and indicators proposed in the Discussion Paper, the University of Melbourne believes that TEQSA should pursue a simplified risk framework that allows institutions to Page 3 of 5
4 self-assess against the risk indicators. This approach could be strengthened by ensuring that the criteria, risk ratings and framework used to measure the risk category (e.g. students, staff, etc.) is transparent and easily interpreted. The methodology that will be used to dictate the rating for an institution against these assessable criteria should also be provided. This is critical as it is not an individual indicator that deems a provider at risk but the culmination of red flags reflecting poor or declining performance over a period of time. To derive ratings, TEQSA should compile the available data and use it to make a single, holistic, reasoned judgment of risk. The data and the judgment (and its underpinning reasoning) should be shared with the institution. The currently proposed indicators do not provide a transparent approach to TEQSA s assessment of risk. This limits the ability for TEQSA and institutions to work together on issues of risk and enable these to be proactively addressed and managed. Regarding regulatory history and standing, the University of Melbourne, like most other low risk providers, devotes a section of its Annual Report to University Governance outlining in detail the governance arrangements in place to ensure risk mitigation and quality assurance. Along with considering any breaches of relevant legislation the existence of long standing governance arrangements should prove sufficient to address an institutions regulatory history and standing. Student profile and Outcomes The seven indicators proposed under the Student Profile and Outcomes section in the Discussion Paper are not transparent measures for assessing risk to students. The first indicator, Cohorts Completed, seems to only relevant to new entrants to the sector, thus making it largely irrelevant to most institutions. If this indicator does only apply to institutions that have been in operation for less than three years, it would be useful to clarify this. It is also unclear as to whether this applies to courses as well as universities. The second indicator, Student Load proposes to assess risk based on a significant percentage change of total student load. Without stating what significant constitutes, it is difficult for institutions to self-assess. Other questions arise from this section such as how TEQSA would determine what percentage increase or decrease in student load results in a green, orange or red flag in an institution s risk assessment. There seem to be a range of qualitative assertions here which could be bolstered by stating what materiality TEQSA will apply to generate a rating. A recurring theme in this section is the assertion that significant load increases lead to a diminution of quality and the student experience. This is not supported by any definitive literature or outcomes surveys and points to the challenges faced when trying to align the appropriate indicators to the appropriate risk. It could point to a range of other risks such as whether there was appropriate infrastructure planning, student accommodation etc but it is vital that the risk indicators selected do appropriately measure the stated risk area. Regarding the indicators titled Attrition, Progress Rates and Completions TEQSA should stipulate the percentage change or range would prompt a red or yellow flag in an institution s risk assessment. The Staff Resources and Profile risk indicators in the Discussion Paper fail to stipulate how they would be used to ascertain a risk to students. The ratio of senior academic leaders to total teaching staff does not provide a compelling rationale as to the reasons for an institution wanting (a presumably) high percentage of senior academic leaders to its total proportion of staff, and what a suitable proportion might be. Similarly with Student to Staff Ratio, TEQSA should take note that the Government recently moved to have student to staff ratio information removed from the MyUniversity website due to the common misinterpretation that the ratio has a direct correlation to teaching quality. Page 4 of 5
5 The University of Melbourne believes that Financial Sustainability and Viability are useful risk indicators, but the proposed risk indicators in the Discussion Paper do not explain what constitutes sustainability or viability in a largely publically funded sector that re-invests most of its income back into the provision of teaching and research. The University of Melbourne suggests that TEQSA develop a risk framework and indictors with a view to providing a transparent set of indicators and measurements that use appropriate indicators to measure what is actually at risk. This is to ensure that each risk area is being monitored by the appropriate measure. Question 2. Is the reduction in the number of risk indicators and the proposed selection of indicators at Attachment B appropriate for capturing key risks of non-compliance in the sector? If not, why and what changes would you propose? Please note the response to question 1 above. Question 3. Should information about risk thresholds be released by TEQSA? If yes, what information would strike an appropriate balance in supporting providers to understand risk assessments, while preventing the potential misinterpretation or misuse of the thresholds? TEQSA should use publically available information such as Annual Reports, Excellence in Research for Australia (ERA) data, University Experience Survey results and student and staff data collected through the Higher Education Information Management System (HEIMS) to assess risk to students. Whilst TEQSA may like to share the risk profile with the institution being assessed, TEQSA should only request a response from low risk higher education providers regarding risk assessments in circumstances where TEQSA has evidence that a provider poses a severe risk to the sector s reputation, staff, students or financially. New and emerging higher education providers and those with a history of non-compliance with the HESA or the ESOS Act may be subject to requirements to provide TEQSA with additional information such as internal risk framework documentation and evidence of processes to rectify breaches of the HESA. Articulating the overall methodology and information about how each component risk determines an overall rating is crucial to enabling self-assessment and transparency. Question 4. Apart from better information about the nature of information TEQSA takes into account in finalising risk ratings, are there other areas of the risk process and/or profile that would benefit from further explanation by TEQSA? Please note the response to the questions above. Ian Marshman Senior Vice Principal The University of Melbourne Page 5 of 5
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