1 Jun 2018

Mismanagement under scrutiny after Unitec deficit

4:46 pm on 1 June 2018

Governance and management of the country's largest polytechnic, Unitec, is under scrutiny after it ran up a $31 million deficit and incurred a warning from its auditor.

Tertiary Education Union national president Sandra Grey.

Tertiary Education Union national president Sandra Grey. Photo: Supplied

The Tertiary Education Commission has appointed an independent advisor to the institute in light of the deficit, which followed a fall in student numbers and an ongoing rebuilding project. Unitec had put on hold a "transformation" project which staff blamed for declining enrolments and the institute's drop in Qualifications Authority ratings.

Tertiary Education Union president Sandra Grey said poor management decisions had contributed to Unitec's deficit.

Aall polytechnics were struggling with falling student numbers but Unitec's decision to outsource enrolments - reversed last year - made it worse, she said.

"The drop in student numbers is even greater because that system wasn't well managed - it wasn't connected to the academics, to the tutoring staff, and that created a whole lot of issues on that campus.

"So they're worse off than everyone else because of poor decisions made a few years ago."

Unitec needed to reassess its past decisions, she said.

Tertiary Education Commission chief executive Tim Fowler said the advisor from Price Waterhouse Coopers would consider Unitec's accounts and also the way it was being run.

"The first issue is primarily going to be a financial analysis to understand especially the cash-flow issues.

"But I'm expecting that they'll be providing us with a wide-ranging amount of information that looks at issues around the governance and management as well."

Unitec Campus signage in Mt Albert

Photo: RNZ / Cole Eastham-Farrelly

The results would inform a conversation between the commission and Unitec about what was next, Mr Fowler said.

"This is a large complex organisation and I think it's worthwhile putting in somebody like that to provide an independent assessment."

It was too early to tell how seriously to take the warning from Unitec's auditors of material uncertainty about factors affecting its ability to operate, he said.

The entire sector was struggling with low enrolments due to high employment and a fall in the number of young people leaving school.

Unitec's risk rating "was not great" and the question was what Unitec was doing to mitigate the risks facing it, Mr Fowler said.

The commission had also appointed an advisor at the Western Institute of Technology at Taranaki, which recorded a $3.6 million deficit last year after student numbers fell 21 percent.