The TEC monitors the financial, educational, governance and capital asset management performance of TEIs. In doing so, the TEC is seeking to gain assurance that the TEI council is robustly and appropriately leading and monitoring its TEI.
One of the statutory duties of a TEI council is to ensure the institution operates in a financially responsible manner, to ensure the efficient use of resources and the maintenance of the institution’s long-term viability (s 181(e), Education Act 1989).
The ability of a TEI to manage within budget and approved funding is a critical element of its accountability as a Crown entity, and as a recipient of funding through the Investment Plan.
The TEC’s functions include monitoring the financial performance of TEIs, and the statutory duties of the Chief Executive of the TEC include assessing whether the operations or long-term viability of TEIs are at risk (s 159KBA, Education Act 1989). The purpose of this duty is to protect the public investment in TEIs, the interests of students and the national interest in the tertiary education system.
The financial monitoring by the TEC occurs within a financial monitoring framework that uses several financial indicators and targets to assess the financial viability and financial sustainability of each TEI on a scale of “minimum” to “high” risk.
The TEC has introduced a set of educational performance indicators for all TEIs that are funded through the Student Achievement Component (SAC), and publishes annually the educational performance of each TEI and its performance in comparison with other TEIs. The educational performance indicators include successful course completions, student retention, qualification completion and student progression. To strengthen educational performance over time, a portion of TEC funding is linked to a TEI’s performance against these educational performance indicators.
The council is the governing body of each TEI, and is responsible for its own performance and for the financial and educational performance of its TEI.
Effective councils provide clear strategic leadership and set and monitor the achievement of challenging targets. They have well-informed members who have a good understanding of stakeholders and the institution’s strengths and areas for improvement, and who challenge the management team about the institution’s performance. Effective councils also self-review or reflect on their performance on a regular basis.
It is important that TEI councils adopt best practice in carrying out their governance roles, have systems and processes to support those roles and a structure that facilitates best practice. Positive dynamics within the council, and between the council and Chief Executive, are major contributors to the overall effectiveness of the council and performance of the TEI as a whole.
To help the TEC with its assessment of the governance performance of TEIs and to help TEI councils with assessing their own performance, the TEC has developed a self-assessment tool. This comprises six key sections:
Within each section are several subsections and specific questions.
The TEC has been giving closer scrutiny to the capital asset management of TEIs in an endeavour to get better use of existing asset portfolios and value for money from major new capital asset investments. There are five components to the expectations of state sector agencies, including TEIs: