Our assessment of the readiness of individual universities for the new accounting standards is detailed in Figures C1 and C2.
Figure C1
Readiness of universities for accounting standards AASB 15 and 1058 as at March 2019
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Part of Group of Eight |
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Criteria – AASB 15 and AASB 1058 | ||||||||
Figure B1 lists the entities included in this report. It details the nature of the audit opinion for their 2018 financial reports, and the date it was issued to each entity.
Figure B1
Audit opinions issued for universities and their controlled entities for the year ended 31 December 2018
We have consulted with DET and the eight public universities in Victoria, and we considered their views when reaching our conclusions. As required by section 16(3) of 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. We also provided a copy of the report to the Department of Premier and Cabinet.
Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.
Responses were received as follows:
In this part of the report, we discuss the significant upcoming changes in accounting standards that will impact the university sector's financial reporting.
Six of the eight universities are well progressed in their preparations for the significant changes to the accounting standards that will apply in 2019.
In this part of the report, we summarise the financial outcomes of the university sector for the year ended 31 December 2018 and comment on the sustainability of the sector in the context of information we obtained and observed during our audits.
The sector continues to be financially sound.
In this part of the report, we summarise the results of our financial audits and observations for the university sector for the year ended 31 December 2018.
The financial reports of the universities and their controlled entities present fairly, except for those of the University of Melbourne and Deakin University with respect to their recognition of research grant revenue, which does not accord with current accounting standards.
Eight universities and their 47 controlled entities make up the Victorian public university sector. Their principal activities are providing higher education and conducting research. Figure 1A illustrates all main income sources, activities and key stakeholders for the sector.
Figure 1A
University sector 2018 income sources, activities and key stakeholders
Source: VAGO.
| AASB | Australian Accounting Standards Board |
| DET | Department of Education and Training |
| EFTSL | effective full-time student load |
| FMA | Financial Management Act 1994 |
| FTE | full-time equivalent |
| Go8 | Group of 8 |
| HESA | Act Higher Education Support Act 2003 |
| TEQSA |
In Victoria, there are eight public universities, which control a further 47 entities that we are required to audit.
Each year, we conduct the financial audits of these 55 entities. This report outlines the results of these financial audits and our observations for the year ended 31 December 2018.
We also comment on the financial performance and sustainability of the sector and discuss the significant upcoming changes in accounting standards that will impact the universities’ financial reporting.