Universities and TAFEs in Victoria should tighten up their use of creditor management systems to avoid the consequences of late payment, the state’s Auditor-General has recommended in his latest review of tertiary education institutions.
The report, tabled on 25 May, said that while 100 percent of universities and 79 percent of TAFEs use creditor management systems that are capable of scheduling payments to meet deadlines set by creditors, 25 percent of universities and 57 percent of TAFEs didn’t have the capability to capture information on the rate of compliance with these deadlines.
The monitoring of payment over time was a key topic of concern for the Auditor-General.
“Delays in paying suppliers can have repercussions, including the loss of early payment discounts, impacts on cash flow projections, the need to access short-term borrowing for working capital purposes, and potential damage to an entity’s reputation,” said the report.
While many accounts payable systems have the capability to provide an automated ageing analysis of creditor balances, it was found that this function was rarely used in both TAFEs and Universities.
In Victorian universities, the average number of creditors paid within 30 days in 2010 dropped to 81 percent, from 85 percent in 2009. The average still awaiting payment after 120 days jumped to 1.1 percent from 0.8.
The Auditor General said that many institutions were being left behind when it comes to moving to electronic processes, at their own expense.
The report showed that universities were missing out on the efficiency gains generated by paying their invoices by electronic funds transfer, with just 53 percent employing electronic payment methods rather than cheque or a corporate credit card. TAFEs, on the other hand, have a 77 percent usage rate when it comes it electronic payments.
It said that only 49 percent of TAFEs send remittance advice by email, while universities emailed remittance notices 84 percent of the time.
“Administering creditor payments is an important responsibility of universities and TAFEs and the technology supporting the activity is constantly evolving,” said the report.
“Universities and TAFEs are not receiving the full benefits of this technology,” it said.
In response to the findings, the Auditor-General recommended that governing bodies and management of universities and TAFEs improve their controls of creditor management, including:
- Establishing comprehensive creditor management policies and procedures and reviewing them periodically; and
- Requiring comprehensive creditor payment and aged analysis reports to be regularly provided to governing bodies.
In NSW, an equivalent report was tabled by Auditor-General Peter Achterstraat on the same day.
The audit of the ten universities established under NSW state legislation gave little mention to information technology issues, in spite of high profile security breaches having taken place within the tertiary sector in the past 12 months.
In January 2011 a systems breach allowed the landing page of the University of Sydney website to be vandalised, with the page temporarily being temporarily replaced by a written attack on the University’s system administrator.
The report did, however, make mention of significant ICT activity underway at the University of Newcastle.
Of the university’s $102.3 capital expenditure budget for 2011, $7 million has been put aside for information technology projects.
A spokesperson for the university told Intermedium that the money would be spent on a range of projects covering:
- Infrastructure upgrades
- Improving applications and platforms for use by staff and students
- Continuing upgrades to telephony systems
- Improving digital information sharing between campuses
All of the universities covered in the audit reports will have their performance information ranked on the Federal Governments ‘My University’ website, which is due to go live to the public in time for prospective students to make decisions regarding semester 1, 2012.
The website is projected to cover performance indicators, such as:
- Course information;
- Campus facilities;
- student/staff ratios;
- results of student satisfaction surveys;
- measures of graduate skills;
- graduate outcomes;
- information about fees;
- information about access to student services; and
- the quality of teaching and learning outcomes.
“The My Universitywebsite will make the information centrally accessible in a format that allows comparisons between institutions,” said the Department of Education, Employment and Workplace Relations.
“Up to $3.0 million each year in 2012 and 2013 has been provided to develop multiple platforms and fund higher education providers to implement the required additional data collection,” it said.