Evidence of Batchelor Institute’s serious leadership and organisational failures presented by ICAC and the Auditor-General raises the question of why the education and training of young Aboriginal people is being so severely compromised, in full view of responsible commonwealth and Territory government agencies, Dr Don Fuller writes.

Batchelor Institute for Indigenous Tertiary Education is responsible for providing training and further education for Aboriginal and Torres Strait Islander peoples.

For joint higher education and vocational education and training (VET) providers, such as the Batchelor Institute, there are two main commonwealth regulators that have been established to ensure appropriate quality and standards of training and education in Australia.

For VET courses delivered by the Batchelor Institute, the regulator is called the Australian Skills Quality Authority (ASQA).

For higher education, involving post-graduate programs at the masters and doctoral level, the regulator is the Tertiary Education Quality and Standards Agency (TEQSA).

The effective regulation of Australia’s education and training sector has been found necessary to ensure that Australian industry, employers, students and the taxpayer have VET and higher education providers that can consistently deliver quality education and training outcomes at value for money.

Job seekers, employees, and trainees who undertake education and training should be able to depend on receiving such quality education and training.

Quality education and training is important for both Australia’s national and international reputation.

Recently, the commonwealth government has moved to strengthen the legislation resulting in an increase in ASQA’s regulatory powers to provide greater protection for students against dodgy operators and to further strengthen quality standards.

ASQA may decide to increase the degree of surveillance of a training provider or enforce penalties, including termination, against VET providers who are judged to fall short of the requirements of the act.

Such sanctions can be made public.

The VET quality framework against which VET providers are assessed, including Batchelor Institute, include two important requirements. These are outlined in the legislation as, fit and proper person requirements and, financial viability risk and assessment requirements.

The first is used to determine the suitability of owners, executives or senior managers involved in the management and operation of the registered training organization (RTO).

The second is used to determine the ability of an RTO, such as Batchelor Institute, to meet their financial obligations and remain financially viable.

Over the years, Australia has seen a number of high profile RTOs that have suffered from very poor governance and management and unacceptable levels of financial management that has led to the failure and demise of such organisations.

Such failures have damaged Australia’s international reputation in the fields of vocational education and training, and had a major negative effect on students enrolled at such Institutions

As with Batchelor Institute, some of these have been based primarily on revenue from government funding. A change in government can affect substantially, the financial viability of an RTO, particularly if it has not been well managed.

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For higher education or university requirements, the relevant act sets the minimum requirements for educational providers such as Batchelor Institute, for the right to deliver courses at the masters and doctoral levels. Batchelor Institute delivers courses at both of these levels.

One of the important requirements of this legislation is to establish minimum standards relating to the governance, management and financial management of the educational provider.

For example, TEQSA has established the need for governance and internal quality assurance to ensure the governing body of the institution has the ability to oversee compliance with regard to required educational quality standards.

The internal mechanisms of governance, such as an overall governing board and an academic board, need to be able to demonstrate a required level of accountability and quality assurance to ensure an ability to manage and monitor the financial and academic performance of the organisation.

With regard to corporate governance, there needs to be a formally constituted governing body, which includes independent members that can exercise competent governance and accountability oversight over all of the operations.

Competent academic governance is also required. These processes and structures are required amongst other things, to achieve effective academic oversight of the quality of teaching, learning, research and research training.

Advice needs to be provided from an academic board for example, to the corporate governing body and management on academic matters, including advice on academic outcomes, policies and practices.

With respect to corporate monitoring and accountability the provider needs to demonstrate that it is financially viable. The financial position, financial performance and cash flows need to be monitored regularly and in a professionally competent and legal manner.

Financial management needs to be materially accurate and meet Australian accounting standards. Effective financial controls and safeguards need to be in place and financial statements need to be audited independently, by a qualified auditor.

Such requirements and capabilities have been found to be demonstrably deficient at Batchelor Institute.

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For example, at the beginning of 2023, the NT Independent Commissioner Against Corruption, released a report into a review of Batchelor Institute, that found significant deficiencies in these areas, seen to be essential by educational regulators such as ASQA and TEQSA.

This included the lack of a framework that established clear direction, expectation and guidance for staff.

The commissioner identified a number of important deficiencies in the way policies were developed, approved and promulgated within the Institute. Those deficiencies included a lack of centralised control of the content and consistency of policies, the failure to conduct timely reviews, and a lack of sufficient processes to ensure easy access by staff.

The ICAC required Batchelor Institute to re-establish a legally mandated special board called the Institute Advisory board. The Batchelor Institute of Indigenous Tertiary Education Act 1999, requires that board be established, and that it should include a member of the Institute council who is Indigenous and with advisory experience in Indigenous matters.

The institute council is the name for the Batchelor Institute’s regular board.

It also requires five Indigenous members appointed by the minister who must live in the Territory and reside in different regions and represent both the Top End and Central Australia.

The chair of the Institute Council, Pat Anderson, who has occupied the position since February 2019, lives in Canberra.

The ICAC noted that during his review, the Institute Advisory board was not in existence and ‘had not been for some time’.

More recently it has been reported that the institute council itself only has four members, despite legislation requiring ten members.

A properly constituted board is necessary to approve the budget and business plan, approve significant commercial activities and importantly, undertake risk assessments.

It is not clear if an academic board exists, fundamental to regulatory requirements for the legal existence of an education and training provider.

With respect to financial management, and accountability and risk management, the ICAC found, the need to recommend a review of all financial controls and risk management at the Institute.

The review recommended amongst other things, a “wholesale review of internal policies and staff codes of conduct found to be deficient, inconsistent, and out-dated”.

The need to change corporate culture, enforce respect and accountability were found to be “critical”.

The commissioner found that a number of current and former Institute staff described corporate culture in negative terms.

The comments of the NT Auditor-General closely mirror those of the ICAC.

In a damming assessment of the financial management systems of the Institute, the Auditor-General refused to sign off on the Institute’s 2021 financial statements.

The Auditor-General refused to sign off on the financial report of the Batchelor Institute again, for the year ended December 31, 2022, indicating that financial management failures previously identified had not been corrected.

In a major potential breach of commonwealth and Territory regulations, this included an inability to substantiate student numbers studying at the Institute. Such numbers are used to claim federal and Territory funding.

For example, the Auditor-General found “significant deficiencies” in “governance policies and practices, risk assessment and management, monitoring processes, internal controls over financial reporting processes, general information technology controls, and an absence of controls over student records”.

The internal controls and process weaknesses were found to be pervasive and applying to wide areas of financial and corporate management.

There has been a particularly high turnover of chief executive officers at Batchelor Institute with eight different CEOs since August 2017.

This suggests major corporate management and communication difficulties at senior decision levels within the Institute, which would appear to be in urgent need of change.

Such findings suggest that the leadership of the Institute would not be able to meet the minimum requirements of the regulators with respect to corporate or academic governance, essential threshold requirements for an education and training provider in Australia.

The Auditor-General has found that it was the Institute council, headed by Ms Anderson, that was responsible for ensuring that the corporate and financial details were prepared and organised in a competent and acceptable manner, in accordance with relevant legislation.

The Auditor-General noted that there had been a number of reviews into Batchelor Institute conducted over the last six years.

While each of these reviews had resulted in reports identifying areas for improvement relating to corporate governance and financial management, many of the recommendations had not been addressed.

Rather such important recommendations appear to have been treated with a passive indifference and a lack of serious and competent concern and action.

Such serious management leadership failures of corporate governance and financial management and control would appear to be unacceptable and should be addressed as a matter of priority by responsible agencies.

Importantly, there has been an apparent inability of regulatory authorities and the NT and commonwealth government agencies, to protect students and stakeholders and to hold the Batchelor Institute to the required educational and training quality standards, required by legislation.

This is despite clear evidence emerging of serious leadership and organisational failures at the Batchelor Institute, by important government bodies such as the ICAC and the Auditor-General.

This raises the fundamental question as to why the education and training of such an important demographic group in the Territory, young Aboriginal people, is being so severely compromised, in full view of responsible commonwealth and Territory government agencies.

Dr Don Fuller was involved with the establishment of the first NT medical school under the leadership of Flinders University vice-chancellor Professor Ian Chubb, 27 years ago. He holds a first class Honours degree and a PhD in economics from the University of Adelaide. Don worked as Professor of Governance and head of the schools of law and business at Charles Darwin University. He grew up in Darwin and attended Darwin High School.