Strategy and Resources Committee Meeting 3-2009

Meeting 3/2009 of the Strategy and Resources Committee commenced at 4.00 pm on Thursday 9 April 2009 in the STRIP Meeting Room, Building 75, Clayton campus.

Rhonda Hinds
Secretary

MINUTES

1.    Attendance and apologies

There were present:
Professor Richard Larkins AO, Professor Helen Bartlett, Professor Bill Charman, Professor Edwina Cornish, Professor Merran Evans, Professor Rae Frances, Professor Arie Freiberg, Professor Jayne Godfrey, Professor Rod Hill, Professor Max King, Mr Peter Marshall. Professor Rob Norris, Mr David Pitt, Professor Tyrone Pretorius, Professor John Redmond, Professor Adam Shoemaker, Professor Kim Langfield-Smith (representing Professor Stephen King), Professor Tam Sridhar, Professor Phillip Steele, Professor Ron Weber, Professor Steven Wesselingh, Professor Sue Willis.

Apologies were received from:
Professor Stephanie Fahey, Mr Ron Fairchild, Professor Stephen King, Professor Robin Pollard.

2.    Formal Items

The Committee agreed that all items on the agenda not starred be adopted without discussion, and the action recommended be taken or the information therein noted.

3.    Minutes of Meeting 2/2009

The Committee confirmed the Minutes of SRC Meeting 2/2009, held on 12 March 2009.

4.    Matters arising from the Minutes

4.1   Senior Management Summit 2010 (item 6.2)

Referring to the Committee’s recommendation that the views of the incoming Vice-Chancellor on the size and format of the 2010 Summit be sought, Professor Evans reported that Professor Byrne had expressed a preference for a small executive retreat at one of the outer campuses and that planning would, therefore, proceed on that basis.

For information: Professor M Evans

5.    Vice-Chancellor’s Business

Professor Larkins reported on several matters of current interest, including:

• Recent impairment of investments, resulting in a write down of approximately $60M (University) and $80M (consolidated).
• Ongoing Enterprise Bargaining negotiations.
• The forthcoming round of VCG-Faculty visits.

Members proceeded to discuss issues relating to the impairment of investments, noting that:

• It was expected that other Go8 universalities would return a significant loss – Monash had, in the circumstances, returned a comparatively good result. The Office of the Vice-President (Finance) had taken a considered and strategic approach to investment in a climate of market volatility.
• Where markets were unstable, the Auditors-General interpretation of “significant” and “prolonged” decline in the value of investments may have the effect of masking institutions’ underlying performances.
• Responding to concern regarding the consistency of application of provisions relating to impairment, the Chair reported that there was recognition by the Auditors-General of the need to review the international financial reporting standards (IFRS) and their Australian interpretation.
• From a public relations perspective, it was not necessarily negative for universities to be seen to have investments being written down.
• It was most unlikely that Monash would be in breach of its loan covenants (relating to interest cover ratio) with the NAB, even if the market lost further ground.

6.    Planning and Monitoring

6.1   Financial Services Enhancement Project

Mr Pitt introduced the Financial Services Enhancement Project update, explaining that:

• The key to the framework for the process analysis was to take a strategic view of finance processes, focussing on opportunities and problems.
• Expressions of interest had been sought from a range of consultants. Following short listing, Ineum (with Jay Segeth), financial specialists with strong references, had been selected as consultants to the project.

Responding to a member question regarding alignment with the review of research contracts, Mr Pitt confirmed that research financial transactions were embedded in the FSE project.

The Committee:

• Received the Financial Services Enhancement Project update and noted Mr Pitt’s advice.
• Noted the appointment of Ineum (with Jay Segeth), as consultants to the Project.

For information: Mr D Pitt, Ms L Miller

6.2   Federal Government Policy Changes

Professor Merran Evans spoke to the analysis from University Planning and Statistics of recent Federal Government announcements regarding policy changes in the tertiary education sector.

She noted that, whilst the specific structure of the national accreditation body proposed by the Bradley Review was still unclear, it would encompass quality agency functions and consequently, AUQA. There were a number of discussions to be had before agreement between stakeholders could be reached – consequently, it was assumed that Monash’s 2012 Audit would go ahead as per the current schedule.

Other key issues considered by members included:

• The potential for greater flexibility consequent upon the lifting of caps on discipline clusters.
• Lack of specifics on whether the increase in CSPs also related to GPG places.
• Some inaccuracy in the Bradley Review discussion around participation rates of disadvantaged students.
• Other concerns arising from the Bradley Review, in particular, the number of bodies to be funded by a relatively small pool of funds and lack of specifics regarding research.
• Given the potential for growth implicit in the Bradley Review recommendations, it would be useful to consider what Monash’s direct competitors were doing.

Members were advised that part of the forthcoming discussions between faculties and VCG would be around the desirability and limits of growth.

The Committee received the analysis and noted Professor Evans’ advice.

For information: Professor M Evans

6.3   Workforce Movements (confidential)

7.    Budget and Financial Performance

7.1   Budget 2010

Mr Pitt presented the changes proposed to the 2010 Budget explaining that five issues had been identified for consideration:

• Review of space charging, which FiRM recommended not be reviewed at present.
• The need to change the delivery of the service “Student Services Centre Caulfield”.
• Review of research support funding, which was recommended to occur when forecast external major changes eventuated.
• Simplify Faculty-Gippsland SLA costing process, to achieve uniformity and consistency.
• The need to tighten staff FTE budgeting.

Members canvassed a range of issues in discussion, including:

• The concern that space charges at Clayton appeared to be relatively expensive in comparison to local commercial rentals. In reply, Mr. Pitt referred to the 2008 analysis that showed Monash charges were in fact cheaper and emphasised that, for the purposes of accuracy, it was necessary to factor in the range of other items for which Monash had responsibility and which were reflected in consequent space charging.
• It was expected that, in reviewing the costs of research, the Federal Government would look to the sector for information on, inter alia, space charging. Consequently, it would be worthwhile to have available the latest information. Mr Pitt informed the Committee that Mr Dias had been co-opted onto the federal committee overseeing the review process, recognising that Monash was at the forefront of developments in this area.
• In framing ongoing budgets, certain assumptions e.g. correct staffing mix, were made. To ensure Monash’s continuing competitiveness, it would be preferable to develop a process, the accuracy of whose starting position was certain. Mr Pitt indicated that it may be necessary to sequentially review the budget process for e.g. the Research portfolio, however, expenditure of both time and resources would be necessary. Members were also advised that a Go8 benchmarking exercise had commenced.
• It was necessary to use activity based costing, focussing on the unit cost of transactions, which should decrease as a result of investments such as the ICT Shared Services project. Members were, however, advised that the Resources and Finance Committee was interested in expenditure by the university as a whole in central support areas – consequently, it was necessary to take a systems-wide approach.

Noting that a recent meeting of the Deans had expressed some concern over Monash’s budget model, Professor Redmond undertook to report back from that meeting to SRC.

The Committee:

• Received and noted the paper discussing changes proposed to the 2010 Budget.
• Endorsed the review of the Faculties-Gippsland SLA costing process.
• Noted that Professor Redmond would report back to the Committee from the Deans’ meeting.

For information: Mr D Pitt, Mr R Dias, Professor J Redmond

7.2   Financial Reports

Members noted that a summary of the February Report had been tabled at the last meeting. Introducing the complete report, Mr Pitt noted that Monash had maintained a steady financial position since January, and that, whilst the March report was expected to indicate significant improvement in the forecast operating result, careful management of the cash gap would continue.

The Committee received the Financial Reports and noted Mr Pitt’s advice.

For information: Mr D Pitt, Mr R Dias

8.    Policies

No policies were presented to this meeting.

9.    Standing Committees

No business was presented to this meeting.

10.    Matters raised by members

11.    Other Business

11.1   Equal Opportunity Committee

Members had before them a memorandum from Professor Colin Bourke MBE, inviting SRC to nominate a representative to participate in meetings of the Equal Opportunity Committee. Professor Shoemaker, already a member of the Equal Opportunity Committee, indicated that it would be appropriate for him to also serve as the SRC representative.

The Committee endorsed Professor Shoemaker as its representative on the Equal Opportunity Committee.

For information: Professor C Bourke MBE, Professor A Shoemaker

12. Next meeting – please note Wednesday meeting and revised venue

SRC Meeting 4/2009 is scheduled for Wednesday 6 May 2009, commencing at 4.00 pm in the Sir George Lush Room. Refreshments will be served after the meeting.