Corporate Governance Arrangements in Large Government Agencies and Universities	Page
Our survey of large New South Wales Government agencies’ and universities’ key corporate governance arrangements identified gaps in:	3
§    key stakeholder communication §    continuous disclosure of performance §    management sign‑offs on the adequacy of internal controls §    managing compliance with laws and Government directions §    fraud control.
Audit of Members’ Additional Entitlements
The Legislature did not have any formal process to monitor and ensure members’ loyalty or incentive scheme accounts are used for Parliamentary purposes only.	11
Electoral Mail Account (EMA) entitlement spending is mostly concentrated at the end of each financial year. In 2008, 46 per cent of EMA expenditure was spent in June.	12
Office of the Protective Commissioner – Common Fund
Control weaknesses relating to the payment of client expenses were identified in 2007 and considerably delayed finalising the audit. While most recommendations to address these weaknesses have been implemented, some actions are incomplete and corrective action is continuing.	19
Universities Overview
The combined universities incurred an operating loss of $65.7 million compared to a surplus of $388 million in 2007, largely as a result of the global financial crisis and volatility in financial markets. The 2008 losses include unrealised investment losses of $407 million and a reduction in investment income of $88.4 million.	34
Unfunded superannuation liabilities increased by $1.8 billion to $3.1 billion. These liabilities are to be funded by the Australian Government, but there are no funding agreements with the universities.	35
Overseas students now represent 19.7 per cent of all enrolled students. Revenue from these students is 48.4 per cent of total student revenue indicating increased reliance by universities on this source of revenue.	40
Excessive annual leave balances for academic staff are increasing, indicating universities need to manage academic leave more effectively to minimise costs and Occupational Health and Safety implications.	43
Universities control 125 separate entities increasing compliance costs and governance risks.	45
Two universities have yet to implement asset management plans to ensure the construction and procurement of assets is planned and managed effectively.	47
Backlog maintenance for all universities is estimated at $983 million.	48
Capital works expenditure across all universities totalled $794 million in 2008 and $1.7 billion is projected to 2010. Under the current economic conditions, universities will need to continuously review and carefully manage these projects to ensure adequate funding/cashflows are available.	48
Macquarie University
The University’s corporate structure is large and complex and should be reviewed to ensure it is in line with the University’s strategy.	59
The University of Sydney
The University incurred an operating loss of $160 million for 2008 compared to a surplus of $187 million in 2007, largely as a result of the global financial crisis and volatility in financial markets.	69
The value of the University’s investments fell by 23 per cent or $271 million from $1.15 billion to $884 million at 31 December 2008.	69
It has been over ten years since the University conducted a comprehensive valuation of the collection assets in the Nicholson and Macleay Museum.	70
Annual Leave balances for 1,501 academic and general staff (22 per cent of all staff) exceed the maximum allowed threshold.	71
The University is still determining the full financial impact of employer superannuation underpayments and the individuals affected.	71
University of New South Wales
The University lost $6.3 million because it did not hedge all its foreign currency exposures.	81
Despite an increase in total revenue, the University has incurred an operating loss of $87.3 million for 2008 compared to a loss of $6.5 million in 2007. This was largely as a result of the global financial crisis, volatility in financial markets and additional depreciation expenses. Included were unrealised investment losses of $91.0 million.	82
Superannuation liabilities requiring funding by the University increased by $45.4 million to $58.3 million.	83
Annual leave balances for 683 staff (13.5 per cent of all staff) exceed the maximum allowed threshold.	84
The complexity of the University group structure continues to pose significant challenges. There were 29 controlled entities at 31 December 2008. Management has commenced voluntary liquidation on four of these entities.	85
Disciplinary action was taken against a staff member following a six year investigation into matters relating to Co-operative Research Centre for Eye Research and Technology.	86
University of Technology, Sydney
The sale of the its Ku-ring-gai campus was suspended because the New South Wales Government has claimed an interest in the property.	95
The University’s operating result benefited from the timely movement of its investments into cash which significantly minimised the impact of the current global financial crisis on its operating result.	96

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