The Victorian TAFE sector consists of 12 TAFE institutes and their 14 controlled entities. Collectively, the 12 TAFE institutes operate 69 campuses across Victoria.

TAFE institutes are established and governed under the Education and Training Reform Act 2006. TAFEs are also public bodies under the Financial Management Act 1994 (FMA). 

TAFEs deliver vocational education and training (VET) to equip students with practical and educational skills for a variety of careers and provide pathways to university courses.

Figure E1 shows the financial indicators used to assess the financial sustainability risks of universities. These indicators should be considered collectively and are more useful when assessed over time as part of a trend analysis.

Our analysis of financial sustainability risk in this report reflects on the position of each university.

FIGURE E1: Financial and non-financial sustainability indicators, formulas and descriptions

Figure D1 shows the risk ratings applied to issues raised in management letters. It also details what they represent and the expected timeline for the issue to be resolved.

FIGURE D1: Risk definitions applied to issues reported in audit management letters

Figure C1 lists the entities included in this report. It details the type of audit opinion for their 2020 financial reports, and the date it was issued to each entity.

FIGURE C1: Audit opinions issued for the university sector for the year ended 31 December 2020

We have consulted with DET and the eight public universities in Victoria, and we considered their views when reaching our audit conclusions. As required by the Audit Act 1994, we gave a draft copy of this report, or relevant extracts, to those agencies and asked for their submissions and comments. 

Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.

We also provided a copy of the report to DTF and DPC for their information.

Conclusion

The COVID-19 pandemic significantly affected the financial performance of the university sector during 2020. The loss of international students and consequential decline in revenue led to the implementation of cost-saving measures by the sector so it could remain financially sustainable in the short term.

The longer-term financial sustainability risk to the sector increases the longer the international borders stay closed. Universities need to actively manage costs and may need to rethink their business models to remain financially sustainable.

Conclusion

We provided clear audit opinions for financial reports across the sector. The financial reports of the universities and their controlled entities are reliable. Parliament and the community can use them with confidence.

At the date of this report, the financial audits of four controlled entities are still in progress.

The Victorian public university sector comprises eight universities and their 41 controlled entities. They principally provide higher education and conduct research.

Agencies were required to self‐attest to the accuracy and completeness of their survey response. The survey sought information on the status of performance audit recommendations:

• from all VAGO performance audits tabled in Parliament in 2018–19 to 2019–20 and two audits that tabled in early 2020–21
• that were reported to us in our 2020 survey as unresolved from audits tabled in 2015–16 to 2017–18.

In total, the survey included 1 063 recommendations from 76 audits involving 102 agencies.