Higher Education Support Act 2003 Amendment No. 5 to the Commonwealth Grant Scheme Guidelines (26/11/2005) (Cth)
Commonwealth of Australia
Higher Education Support Act 2003
COMMONWEALTH GRANT SCHEME GUIDELINES
Amendment of Guidelines pursuant to section 238-10 of the Higher Education Support Act 2003
I, BRENDAN NELSON, Minister for Education, Science and Training, pursuant to section 238-10 of the Higher Education Support Act 2003, make the attached amendments to the Commonwealth Grant Scheme Guidelines for the purposes of Part 2-2 of the Act.
Dated this..26th....day of...November..2005.
_________________________________________
BRENDAN NELSON
Minister for Education, Science and Training
Amendments to Commonwealth Grant Scheme Guidelines
COMMONWEALTH OF AUSTRALIA
Higher Education Support Act 2003
GUIDELINES FOR COMMONWEALTH GRANT SCHEME
Amendment Number 5
(i) CITATION
These guidelines may be cited as Amendment Number 5 to the Commonwealth Grant Scheme Guidelines.
(ii) AUTHORITY
These guidelines are made under section 238-10 of the Higher Education Support Act 2003.
(iii) DATE OF EFFECT
These guidelines shall come into effect the day after registration on the Federal Register of Legislative Instruments.
PURPOSE
· The purpose of these guidelines is to amend the Commonwealth Grant Scheme Guidelines made on 2 June 2004.
· The Commonwealth Grant Scheme Guidelines are amended as follows:
Item 1
Delete Chapter 7, “Increases in Assistance for Higher Education Providers Meeting Certain Requirements (Section 33-15)” and replace it with the following:
CHAPTER 7 INCREASES IN ASSISTANCE FOR HIGHER EDUCATION PROVIDERS MEETING CERTAIN REQUIREMENTS (section 33-15)
7.1 PURPOSE
7.1.1 The purpose of this chapter is to set out the requirements known as the:
National Governance Protocols
that higher education providers eligible for grants under the Commonwealth Grant Scheme need to satisfy under section 33-15(1)(a) of the Act and to specify a date (the “Protocols Compliance Date”) for higher education providers to meet these requirements under section 33-15(1)(c) of the Act; and the
(HEWRRs) that higher education providers eligible for grants under the Commonwealth Grant Scheme need to satisfy under section 33-15(1)(b) of the Act and to specify a date (the “HEWRRs Compliance Date”) by which higher education providers must meet the HEWRRS to the Minister’s satisfaction as part of the requirements for receiving an increase in the basic grant amount for a year under section 33-15(1)(c) of the Act.
Higher Education Workplace Relations Requirements
7.1.2 For the 2006 grant year, the Protocols Compliance Date is 30 September 2005. However, where a higher education provider’s compliance with the Protocols requires changes to its enabling legislation, the legislation implementing those changes (the “Change Legislation”) may allow the provider a period of not more than 12 months, ending after 30 September 2005 (the “Transition Period”), within which the provider must implement any particular change. Provided the Change Legislation commences on or before 30 September 2005, the Protocols Compliance Date for that change is the date of the last day of the Transition Period.
7.1.3 For the 2006 grant year, the HEWRRs Compliance Date is 30 November 2005 and for later years it will be 31 August of the year prior to receiving the increase in assistance funding.
7.1.4 In this chapter, all references to the Corporations Act are to the Corporations Act 2001 (Commonwealth) as in force from time to time.
7.5 NATIONAL GOVERNANCE PROTOCOLS FOR HIGHER EDUCATION PROVIDERS LISTED IN TABLE A OF THE ACT
In the case of the Australian Catholic University, where a Protocol refers to enabling legislation, it is taken to mean its constitution and/or where applicable, the Corporations Act.
7.5.1 Protocol 1: the higher education provider must have its objectives and/or functions specified in its enabling legislation.
7.5.5 Protocol 2: the higher education provider’s governing body must adopt a statement of its primary responsibilities, which must include:
(a) appointing the vice-chancellor as the chief executive officer of the higher education provider, and monitoring his/her performance;
(b) approving the mission and strategic direction of the higher education provider, as well as the annual budget and business plan;
(c) overseeing and reviewing the management of the higher education provider and its performance;
(d) establishing policy and procedural principles, consistent with legal requirements and community expectations;
(e) approving and monitoring systems of control and accountability, including general overview of any controlled entities. A controlled entity is one that satisfies the test of control in s.50AA of the Corporations Act;
(f) overseeing and monitoring the assessment and management of risk across the higher education provider, including commercial undertakings;
(g) overseeing and monitoring the academic activities of the higher education provider;
(h) approving significant commercial activities of the higher education provider.
7.5.10 The higher education provider’s governing body, while retaining its ultimate governance responsibilities, may have an appropriate system of delegations to ensure the effective discharge of these responsibilities.
7.5.15 Protocol 3: the higher education provider must have the duties of the members of the governing body and sanctions for the breach of these duties specified in its enabling legislation. Other than the Chancellor, the Vice-Chancellor and the Presiding Member of the Academic Board (s) each member must be appointed or elected ad personam. All members of the governing body must be responsible and accountable to the governing body. When exercising the functions of a member of the governing body, a member of the governing body must always act in the best interests of the higher education provider.
7.5.20 Duties of members must include the requirements to:
(a) act always in the best interests of the higher education provider as a whole, with this obligation to be observed in priority to any duty a member may owe to those electing or appointing him or her;
(b) act in good faith, honestly and for a proper purpose;
(c) exercise appropriate care and diligence;
(d) not improperly use their position to gain an advantage for themselves or someone else; and
(e) disclose and avoid conflicts of interest (with appropriate procedures for that purpose similar to those for public companies).
7.5.25 There should be safeguards, exemptions and protections for members of a higher education provider’s governing body for matters or things done or omitted in good faith in pursuance of the relevant legislation. Without limitation, this should include such safeguards, exemptions and protections as are the equivalent of those that would be available were the member a director under the Corporations Act. The higher education provider (with the exception of those subject to the Corporations Act) must have a requirement that the governing body has the power (by a two-thirds majority) to remove any member of the governing body from office if the member breaches the duties specified above included in its enabling legislation. A member must automatically vacate the office if he or she is, or becomes, disqualified from acting as a Director of a company or managing corporations under Part 2D.6 of the Corporations Act.
7.5.30 Protocol 4: each governing body must make available a programme of induction and professional development for members to build the expertise of the governing body and to ensure that all members are aware of the nature of their duties and responsibilities. At regular intervals the governing body must assess both its performance and its conformance with these Protocols and identify needed skills and expertise for the future.
7.5.35 Protocol 5: the size of the governing body must not exceed 22 members. There must be at least two members having financial expertise (as demonstrated by relevant qualifications and financial management experience at a senior level in the public or private sector) and at least one member with commercial expertise (as demonstrated by relevant experience at a senior level in the public or private sector). Where the size of the governing body is limited to less than 10 members, one member with financial expertise and one with commercial expertise would be considered as meeting the requirements. There must be a majority of external independent members who are neither enrolled as a student nor employed by the higher education provider. There must not be current members of any State or Commonwealth parliament or legislative assembly other than where specifically selected by the governing body itself.
7.5.40 Protocol 6: the higher education provider must adopt systematic procedures for the nomination of prospective members of the governing body for those categories of members that are not elected. The responsibility for proposing such nominations for the governing body may be delegated to a nominations committee of the governing body that the Chancellor would ordinarily chair.
7.5.45 Members so appointed must be selected on the basis of their ability to contribute to the effective working of the governing body by having needed skills, knowledge and experience, an appreciation of the values of a higher education provider and its core activities of teaching and research, its independence and academic freedom and the capacity to appreciate what the higher education provider’s external community needs from that higher education provider.
7.5.50 To provide for the introduction of new members consistent with maintaining continuity and experience, members’ terms must generally overlap and governing bodies must establish the maximum period to be served. This should not generally exceed 12 years unless otherwise specifically agreed by the majority of the governing body.
7.5.55 Protocol 7: the higher education provider is to codify its internal grievance procedures and publish them with information about the procedure for submitting complaints to the relevant ombudsman or the equivalent relevant agency.
7.5.60 Protocol 8: the annual report of the higher education provider must be used for reporting on high level outcomes.
7.5.65 Protocol 9: the annual report of the higher education provider must include a report on risk management within the organisation.
7.5.70 Protocol 10: the governing body is required to oversee controlled entities by taking reasonable steps to bring about the following:
(a) ensuring that the entity’s board possesses the skills, knowledge and experience necessary to provide proper stewardship and control of the entity;
(b) appointing some directors to the board of the entity who are not members of the governing body or officers or students of the higher education provider, where possible;
(c) ensuring that the board adopts and regularly evaluates a written statement of its own governance principles;
(d) ensuring that the board documents a clear corporate and business strategy which reports on and updates annually the entity’s long-term objectives and includes an annual business plan containing achievable and measurable performance targets and milestones; and
(e) establishing and documenting clear expectations of reporting to the governing body, such as a draft business plan for consideration and approval before the commencement of each financial year and at least quarterly reports against the business plan.
7.5.75 Protocol 11: A higher education provider must assess the risk arising from its part ownership of any entity (including an associated company as defined in the Accounting Standards issued by the Australian Accounting Standards Board), partnership and joint venture. The governing body of the provider must, where appropriate in light of the risk assessment, use its best endeavours to obtain an auditor’s report (including audit certification and management letter) of the entity by a State, Territory or Commonwealth Auditor-General or by an external auditor.
7.10 NATIONAL GOVERNANCE PROTOCOLS FOR HIGHER EDUCATION PROVIDERS NOT LISTED IN TABLE A OF THE ACT
7.10.1 Protocol 1: the higher education provider must have its objectives specified in a constitution or such other document that establishes the higher education provider as a legal entity.
7.10.5 Protocol 2: the governing body of the higher education provider must adopt a statement of its primary responsibilities, which must include:
(a) appointing the chief executive officer of the higher education provider and monitoring his/her performance;
(b) appointing, where necessary, the secretary or public officer of the higher education provider;
(c) ensuring that the processes of the governing body are carried out in accordance with the constitution of the governing body;
(d) approving the mission and strategic direction of the higher education provider, as well as the annual budget and business plan;
(e) appointing an external auditor;
(f) appointing, where necessary, an audit committee that consists of at least three independent members (excluding the chair) of the governing body;
(g) establishing policy and procedural principles consistent with legal requirements and community expectations;
(h) approving and monitoring systems of control and accountability, including general overview of any controlled entities. A controlled entity is one that satisfies the test of control in s.50AA of the Corporations Act;
(i) overseeing and reviewing the management of the higher education provider and its performance as a higher education provider;
(j) overseeing and monitoring the assessment and management of risk across the higher education provider, including commercial undertakings;
(k) overseeing and monitoring academic activities of the higher education provider; and
(l) approving significant commercial activities of the higher education provider.
7.10.10 The higher education provider’s governing body, while retaining its ultimate governance responsibilities, may have an appropriate system of delegations to ensure the effective discharge of these responsibilities.
7.10.15 Protocol 3: the higher education provider must have the duties of the members of the governing body and sanctions for the breach of these duties specified in its constitution or other such document of the higher education provider. Other than the Chair of the Governing Body, Chief Executive Officer and the Presiding Member of the Academic Board (or the equivalent officer) each member must be appointed or elected ad personam. All members of the governing body must be responsible and accountable to the governing body. When exercising the functions of a member of the governing body, a member of the governing body must always act in the best interests of the higher education provider.
7.10.20 Duties of members must include the requirements to:
(a) act always in the best interests of the higher education provider as a whole, with this obligation to be observed in priority to any duty a member may owe to those electing or appointing him or her;
(b) act in good faith, honestly and for a proper purpose;
(c) exercise appropriate care and diligence;
(d) not improperly use their position to gain an advantage for themselves or someone else; and
(e) disclose and avoid conflicts of interest (with appropriate procedures for that purpose similar to those for public companies).
7.10.25 There should be safeguards, exemptions and protections for members of a higher education provider’s governing body for matters or things done or omitted in good faith. Without limitation, this should include such safeguards, exemptions and protections as are the equivalent of those that would be available were the member a director under the Corporations Act. The higher education provider (with the exception of those subject to the Corporations Act) must have a requirement that the governing body has the power to remove any member of the governing body from office if the member breaches the duties specified above included in its constitution or other such document of the higher education provider. A member must automatically vacate the office if he or she is, or becomes, disqualified from acting as a Director of a company or managing corporations under Part 2D.6 of the Corporations Act.
7.10.30 Protocol 4: each governing body must make available a programme of induction and professional development for members to build the expertise of the governing body and to ensure that all members are aware of the nature of their duties and responsibilities. At regular intervals the governing body must assess both its performance and its conformance with these Protocols and identify needed skills and expertise for the future.
7.10.35 Protocol 5: the size of governing body must not exceed 22 members. There must be at least two members having financial expertise (as demonstrated by relevant qualifications and financial management experience at a senior level in the public or private sector) and at least one member with commercial expertise (as demonstrated by relevant experience at a senior level in the public or private sector). Where the size of the governing body is limited to less than 10 members, one member with financial expertise and one with commercial expertise would be considered as meeting the requirements. A majority of the members must be external independent members who are neither enrolled as a student nor employed by the higher education provider. There must not be current members of any State or Commonwealth parliament or legislative assembly other than where specifically selected by the governing body itself.
7.10.40 Protocol 6: the higher education provider must adopt systematic procedures for the nomination of prospective members of the governing body for those categories of members that are not elected.
7.10.45 Protocol 7: the higher education provider is to codify its internal grievance procedures and publish them with information about the procedure for submitting complaints to the relevant ombudsman or the equivalent relevant agency.
7.10.50 Protocol 8: the annual report of the higher education provider must be used for reporting on high level outcomes required by the Commonwealth.
7.10.55 Protocol 9: the annual report of the higher education provider must include a report on risk management within the organisation.
7.10.60 Protocol 10: the governing body is required to oversee controlled entities by taking reasonable steps to bring about the following:
(a) ensuring that the entity’s board possesses the skills, knowledge and experience necessary to provide proper stewardship and control of the entity;
(b) appointing some directors to the board of the entity who are not members of the governing body or officers or students of the higher education provider, where possible;
(c) ensuring that the board regularly adopts and evaluates a written statement of its own governance principles;
(d) ensuring that the board documents a clear corporate and business strategy which reports and updates annually the entity’s long-term objectives and includes an annual business plan containing achievable and measurable performance targets and milestones; and
(e) establishing and documenting clear expectations of reporting to the governing body, such as a draft business plan for consideration and approval before the commencement of each financial year and at least quarterly reports against the business plan.
7.10.65 Protocol 11: the higher education provider and its associated entities shall be audited by an external auditor and the auditor’s report (including audit certification and management letter) provided to the higher education provider’s governing body or the higher education provider’s audit committee.
7.15 DATE TO MEET THE NATIONAL GOVERNANCE PROTOCOLS REQUIREMENTS (PARAGRAPH 33-15(1)(c))
7.15.1 Dates to meet the National Governance Protocols requirements (“Protocols Compliance Dates”) for a higher education provider to receive an increase in its basic grant amount for a year under the Commonwealth Grant Scheme are:
Grant year Funding Increases Dates for meeting the requirements 2006 5.0% 30 September 2005 2007 and later years 7.5% 31 August 2006 and 31 August in later years
7.20 HIGHER EDUCATION WORKPLACE RELATIONS REQUIREMENTS FOR PUBLICLY FUNDED INSTITUTIONS AND PRIVATE PROVIDERS WITH APPROVED NATIONAL PRIORITY PLACES - PREAMBLE
7.20.1 Access to increased Commonwealth Grant Scheme funding is determined annually. Higher education provider’s workplace arrangements, including collective and individual workplace agreements and workplace policies and practices, are to comply with the HEWRRs as detailed below.
7.20.2 The HEWRRs apply to all workplace agreements made and approved or certified after 29 April 2005.
Requirements for increases in 2006
7.20.5 Higher education providers, with existing agreement(s) which are collective agreement(s) that have been subject to a concluded ballot as at 29 April 2005 and have subsequently been certified by the Australian Industrial Relations Commission, with a nominal expiry date on or before 30 September 2005, must have in place, on or before 30 November 2005, a certified agreement(s) and workplace policies and practices that comply with the HEWRRs.
7.20.10 Higher education providers, with existing agreement(s) which are collective agreement(s) that have been subject to a concluded ballot as at 29 April 2005 and have subsequently been certified by the Australian Industrial Relations Commission, with a nominal expiry date on or after 1 October 2005, must have in place, on or before 30 November 2005, workplace policies and practices that comply with the HEWRRs, except where compliance with the HEWRRs would be directly inconsistent with the higher education provider’s obligations under its existing agreement(s) as at 29 April 2005.
7.20.11 A higher education provider may not contravene the requirements of 7.20.5, 7.20.10 and 7.25.1 because it did not offer to an employee and Australian Workplace Agreement before 30 November 2005 for the reason only that the employee had left employment with that higher education provider before an Australian Workplace Agreement was in operation or could have been offered to that employee.
Requirements for increases in 2007 and later years
7.20.15 To qualify for the increase in Commonwealth Grant Scheme funding available in 2007 and later years, higher education providers must by 31 August of the year prior have in place certified agreement(s), individual agreements and workplace policies and practices that comply with the HEWRRs.
Private Providers
7.20.20 Higher education providers which operate as non-Table A providers with funding for national priority places, who employ all staff on individual arrangements, will be assessed on the content of their workplace policies and practices, for compliance with the HEWRRs. Table A providers are specified in section 16-15 of the Act. These non-Table A providers will be required to comply with the HEWRRs by 30 November 2005, and by 31 August in later years, to qualify for the increase in Commonwealth Grant Scheme funding available in 2006, and later years respectively.
Qualifying for Increases
7.20.25 In order to qualify for any given year’s increase in Commonwealth Grants Scheme funding, submissions must be supported by a statement signed by the Vice-Chancellor, or person in an equivalent position, of the relevant higher education provider at the relevant time outlining their compliance status with each of the HEWRRs. The submission must include reference to relevant clauses and sections in workplace agreements and in other relevant documents, such as workplace policies, practices and guidelines. Higher education providers must provide the Department of Education, Science and Training with access to the relevant documents, including any template for and or common elements of their individual agreements, as requested.
7.20.30 A higher education provider must comply with the HEWRRs during any year in which the Provider receives an increase in the basic grant amount under section 33-15.
7.20.31 At the request of the Department of Education, Science and Training, a higher education provider must at any time (and whether before or after the Minister makes a determination under section 33-15(c)):
(a) allow the Department or its representative full access to the premises and staff of the higher education provider; and
(b) during the access described above, provide all assistance requested,
to enable the Department or its representatives to undertake a detailed specific assessment of the higher education provider’s compliance with the HEWRRs.
7.20.32 The Department of Education, Science and Training may choose not to undertake a specific assessment or to undertake more than one assessment. Assessments may be undertaken at any reasonable time. Assessments may be used by the Minister for Education, Science and Training to decide if he or she is satisfied that the higher education provider has complied with the HEWRRs for the purposes of making a decision under section 33-15(c) of the Act, or otherwise to asses compliance by the higher education provider with the HEWRRs.
7.20.33 If a higher education provider succeeds in meeting the HEWRRs and the National Governance Protocols in 2005 and receives the increase in assistance (being the basic grant amount) in 2006 but then cannot, for whatever reason, continue to meet the requirements of section 33-15(1) for 2006, an increase in assistance will not be approved for 2007. The same principle will apply with respect to later years. There will be no retrospective increases in assistance.
7.20.35 Any statement found to be false and misleading relating to the higher education providers compliance with the HEWRRs may result in the requirement to repay the Commonwealth Grant Scheme increase, or a reduction of future Commonwealth Grant Scheme funding, at the discretion of the Minister for Education, Science and Training.
7.25 HIGHER EDUCATION WORKPLACE RELATIONS REQUIREMENTS (HEWRRs)
7.25.1 HEWRR 1 Choice in Agreement Making: the higher education provider must provide employees with genuine choice and flexibility in agreement making by offering Australian Workplace Agreements (AWAs) to all new employees employed after 29 April 2005 and to all other employees by 31 August 2006. Until 30 June 2006, higher education providers are exempt from offering Australian Workplace Agreements to casual employees engaged for a period of less than one month.
7.25.5 The higher education provider’s certified agreements, made (or varied) and certified after 29 April 2005, are to include a clause that expressly allows for AWAs to operate to the exclusion of the certified agreement or prevail over the certified agreement to the extent of any inconsistency. The following clause is recommended:
The [insert higher education provider’s name] may enter into AWAs with its employees. Those AWAs may either operate to the exclusion of this certified agreement or prevail over the terms of this certified agreement to the extent of any inconsistency, as specified in each AWA.
7.25.10 HEWRR 2 Direct relationships with employees: the higher education provider’s workplace agreements, policies and practices must provide for direct consultation between employees and the higher education provider on workplace relations and human resources matters. The involvement of third parties representing employees must only occur at the request of an affected employee.
7.25.15 Workplace relations consultative committees and associated committee processes must include direct employee involvement. Employee involvement in negotiations and discussions on workplace relations and human resources issues must not be restricted to third party representation only.
7.25.20 HEWRR 3 Workplace Flexibility: the higher education provider’s workplace agreements, policies and practices are to facilitate and promote fair and flexible arrangements. Higher education providers must have working arrangements and conditions of employment which are tailored to the circumstances of the higher education provider and which benefit both the higher education provider and its employees.
7.25.25 The higher education provider’s workplace agreements should expressly displace previous workplace agreements and relevant awards.
7.25.30 The higher education provider’s workplace agreements, policies and practices are not to inhibit the capacity of the higher education provider and its employees to respond to changing circumstances. The higher education provider’s workplace agreements, policies and practices must not limit or restrict the higher education provider’s ability to make decisions and implement change in respect of course offerings and associated staffing requirements, including not placing limitations on the forms and mix of employment arrangements.
7.25.35 The higher education provider’s workplace agreements must be simple, flexible and principle-based documents which avoid excessive detail and prescription.
7.25.40 HEWRR 4 Productivity and Performance: the higher education provider’s workplace agreements, policies and practices must support organisational productivity and performance.
7.25.45 The higher education provider’s workplace agreements, policies and practices must include a fair and transparent performance management scheme which rewards high performing individual staff. Consistent with this, the higher education provider’s workplace agreements, policies and practices must also include efficient processes for managing poor performing staff.
7.25.50 HEWRR 5 Freedom of Association: the higher education provider’s workplace agreements, policies and practices must be consistent with freedom of association principles contained in the Workplace Relations Act 1996. Higher education providers must neither encourage nor discourage union membership.
7.25.55 The higher education provider must not use Commonwealth Grant Scheme funds to pay union staff salaries, or fund union facilities and activities.
7.30DATE TO MEET THE HIGHER EDUCATION WORKPLACE RELATIONS REQUIREMENTS (PARAGRAPH 33-15(1)(c))
7.30.1 Dates to meet the Higher Education Workplace Relations Requirements (“HEWRRs Compliance Dates”) for a higher education provider to receive an increase in its basic grant amount for a year under the Commonwealth Grant Scheme are:
Grant year Funding Increases Dates for meeting the requirements 2006 5.0% 30 November 2005 2007 and later years 7.5% 31 August 2006 and 31 August in later years
The increases for each year are specified in subsection 33-15(2) of the Act.
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