International Students:risks and responsibilities of
universities
Audit summary
1.1 Introduction
International students are a significant source of revenue and
are major purchasers of Australian education services.
Policy changes in 1988 led to the introduction of the Higher
Education Contribution Scheme, and enabled universities to set fees
for international students at, or above, cost.
The number of international fee-paying students enrolled in
Australian universities in 1987 was 667. In 2007, there were 177
760, with 56 176 or 32 per cent of international students enrolled
in Victorian universities.
In Australia today, there are 37 public universities, two
private universities and around 150 private providers of
education.
Audit objective
The objective of the audit was to determine whether:
- universities were achieving the strategic
and operational goals set for their international student
programs
- business and financial risks associated
with international full fee‑paying students were being managed
efficiently and effectively
- services provided to international
students were in accordance with the relevant
legislation.
The audit examined the policy and procedural frameworks to
manage international students studying higher education, on campus,
at the University of Melbourne (Melbourne), Monash University
(Monash) and the University of Ballarat (Ballarat). These
universities were selected as they account for approximately 50 per
cent of international students enrolled in Victorian
universities.
Ballarat provides 90 per cent of its education services to
on-campus international students through private providers.
1.2 Overall conclusion
Universities have planned, and are achieving their goals for
international students. They are also aware of the importance of,
and risks associated with, international students.
The university wide planning and risk management frameworks
reflect this, however, management of operational risks is of
variable quality within and across universities, and one does not
do systematic risk management at the operational level.
Universities had a good understanding of, and generally complied
with, their service obligations. The areas of non‑compliance were
minor and have been raised with the individual universities during
the audit.
1.3 Findings
1.3.1 University goals for international students
The three universities have established goals that relate to
international students in strategic, business and
internationalisation plans.
The specific strategies for international students were
primarily related to increasing the number of student enrolments
and student satisfaction with their university experience. Once
international students are enrolled the universities manage them as
part of the broader student population.
The number and mix of students—undergraduate, postgraduate,
domestic and international—is determined once the business plan has
been agreed.
All universities survey students, including international
students, on completion of their degree courses. Monash separates
out international students within the survey results. Melbourne
also analyses the results for international students but not every
year. All universities reported a low survey completion rate from
international students.
All universities survey student’s satisfaction with the teaching
staff and unit content.
Melbourne and Monash survey international students for
satisfaction while they are still enrolled. In 2007 international
students were generally satisfied with the quality of their
education; however, results indicated dissatisfaction in comments
received for work submitted and acceptance by the university
community.
1.3.2 Risk management
The risks universities face with international students include
the number of students, the significance and reliance on fee
revenue, student expectations and compliance with the service
standards framework.
The universities identify strategic risks, those potentially
affecting the achievement of their organisational goals, as part of
their annual planning. Monash and Melbourne include the cause and
consequence of the risk materialising, which is considered better
practice.
Faculties at Monash and Melbourne included strategic and
operational risk management in their business planning processes.
Schools at Ballarat do not systematically identify and document
operational risk.
The universities have rating systems to analyse risks and use
statistical data, past experience/trends and judgement to assess
the impact and likelihood of risks materialising. Financial
analysis is done at all three universities, and includes the impact
of differences between actual and target revenue.
Risk analysis relies on good risk assessment. Risk assessment
was not always comprehensive, with universities sometimes
identifying ‘failure to achieve a target’ as a risk. The reason why
the target would not be reached had not been identified, and
analysis of the risk was not done.
Melbourne and Monash develop treatment plans to mitigate the
likelihood of risks materialising and their impact, at both the
faculty and university levels. Ballarat only identifies
organisation risks and therefore only develops treatment plans for
these types of risk. The universities primarily treat and monitor
risks that have been rated as high. Performance measures were not
always included within risk management treatment plans.
Ballarat has developed a core set of risks under each of its
strategic goal areas; however, the risk treatment plans did not
always address the specific risk identified. For example, it has
identified the risk of comparable educational outcomes not being
achieved by private providers contracted to deliver their courses.
The risk treatment includes providing compliance information to the
providers. While important, this does not address the achievement
of educational outcomes.
The universities had established risk committees that are
responsible for review and continuous improvement of the risk
management process. However, the inadequate identification of risk,
and lack of performance measures for risk treatment strategies have
made it difficult for audit to determine the extent to which
the:
- process to address and review risks leads
to continuous improvement
- universities test, review and use business
improvements to confirm their risk management strategies are
providing expected value and outcomes.
The universities have identified the need to link risk
management to planning frameworks, which should assist with the
development and monitoring of risk treatment plans, and reinforce
continuous improvement practices.
University committees meet regularly to discuss issues specific
to international students and student programs. These committees
are often advisory. Issues that affect the general student
population, including international students, are discussed by
audit and risk committees, student housing services and academic
boards.
1.3.3 Universities’ service provision obligations
The Commonwealth Government enacted the Education Services
for Overseas Students Act 2000, (ESOS Act) to:
- provide financial and tuition assurance to
overseas students for courses for which they have paid
- protect and enhance Australia’s reputation
for quality education and training services
- complement Australia’s migration laws by
ensuring service providers collect and report information relevant
to the administration of the law relating to student
visas.
It was reviewed after three years and supplemented with a
mandatory code—National Code of Practice for Registered
Authorities and Providers of Education and Training to Overseas
Students 2007 (the National Code)—which incorporates 15
standards that registered education and training providers must
meet.
The audited universities are required to conform to the National
Code standards. Ballarat contracts with private institutions to
deliver educational services to international students on their
behalf. ‘Private provider’ institutions are also required to comply
with the ESOS Act and the National Code.
The standards are grouped into the following categories:
- pre-enrolment engagement of students
(standards 1 to 4)
- care for and services to students
(standards 5 and 6)
- students as consumers (standards 7 and
8)
- the student visa programme (standards 9 to
13)
- staff capability, educational resources
and premises (standards 14 and 15).
The universities largely complied with the standards although
minor issues were identified with written agreements, the granting
of course credits and procedures for deferring, suspending or
cancelling student enrolment.
1.4 Recommendations
University goals for international students
- Universities should collect student satisfaction
data while students are undertaking courses, and in a manner that
enables data to be segmented by student cohort
(Recommendation 4.1).
Risk management
- Universities should require faculties and
schools to incorporate risk management into their annual business
planning process (Recommendation 5.1).
- Universities, as registered providers,
should regularly review their contractual relationships with
private providers to identify and mitigate the risks
(Recommendation 5.2).
Universities’ service provision obligations
The universities should:
- develop a written agreement with
individual students that clearly documents the education services
to be provided, fees and charges payable and refund information, as
required under the ESOS Act 2000 and National Code
2007
- document procedures to defer, suspend and
cancel students’ enrolment, including reference to visa
implications and appeals processes (Recommendation
6.1).