Report snapshot: Universities 2025

Overview

This report presents key findings and recommendations from financial audits of NSW public universities for the year ended 31 December 2025.

Key findings

Clean audit opinions were issued for all 10 universities.

Control deficiencies were most common in IT/cyber security, governance and payroll

There were 94 reported audit findings and most related to poor monitoring of IT/cyber security risks, inadequate governance oversight and deficiencies in payroll management.

Nearly 24% of consultancy engagements reviewed were directly sourced

Direct procurement sourcing minimises the opportunity for competition and value for money. All engagements directly sourced were approved within the university’s procurement policy exemptions except in one instance. Universities spent $139 million on consultant expenses, including $46.2 million collectively on 2 firms.

Lack of oversight for contingent labour hire

Universities collectively spent more than $217 million on contingent labour. However, central oversight is limited. Only 3 universities had formal policies governing contingent workers and 4 maintained a register of all contingent workers.

Domestic student revenue does not cover operating costs

Operating costs per student of $37,868 exceeded the average revenue per domestic student of $25,213, representing a 33% deficit margin. In contrast, average overseas student revenue of $41,381 exceeded cost, representing a 9% surplus margin.

Processes to obtain conflict of interest declarations are inadequate

Four universities did not require annual conflict of interest declarations from all employees and did not update their central conflicts of interest registers annually. Three universities did not require nil returns from senior executives, elevating the risk of undeclared conflicts.

There were undeclared employee interests in companies that are university vendors

We identified over 790 instances of employees with directorships in companies that were university vendors, of which 30% of instances reviewed could not be found on the conflict of interest register.

Weaknesses in managing legacy system risks

One university has no processes to manage IT legacy systems, and 6 universities have not formally assessed legacy system risks.

Universities continue to grapple with the complexities of adopting artificial intelligence

Three universities still do not have a formalised AI policy. Only 2 universities had procurement guidance in place for AI-related procurement.

Recommendations

The report makes 6 recommendations to improve procurement processes, strengthen contingent labour hire management, enhance policies and procedures for managing conflicts of interest and progress AI governance maturity.

Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.