VC on financial position

Summary:
Our annual reports mis-represent the financial position: we are not in
a state of continual deficits, but have sizeable surpluses each year.
Specifically, page 66 of the 2012 report
http://sydney.edu.au/about/publications/annual_report/2012/annual_report_2012_volume_1.pdf#68
should read:
                              2012
                                $M
  Operating revenue         1736.5
  Operating expenses        1600.4
  Operating result           136.1
  Adjusted for:                      carried from 2011
  Philanthropic funds        (78.0)        -
  Investment funds           (29.1)      10.9
  Capital grants             (53.9)      54.5
  Specific purpose grants    (21.4)      32.4
  Net operating margin        51.5 surplus
Such intentional mis-representation is unethical; but maybe is not
illegal, not fraud in criminal law.

Updates at bottom, please scroll down. Please see "open letter" to VC,
letters to Senator and Minister, etc, at end. Long saga...

-----

Ann Brewer (Deputy Vice-Chancellor) wrote on Fri 28 Jun to all-staff:
http://sydney.edu.au/news/staff/2576.html?newscategoryid=222&newsstoryid=11850
  ... the Vice-Chancellor has this week written to the NTEU and CPSU to
  confirm the University’s position ...
  You can read the letters on the enterprise bargaining website
http://s1.sydney.edu.au/staff/enterprise_agreement/enterprise_bargaining_2012/updates/indexupdate.shtml

In the Vice-Chancellor’s calculations
http://s1.sydney.edu.au/staff/enterprise_agreement/enterprise_bargaining_2012/updates/proposed/Thomson-20130626.pdf
of the financial position of the University, he subtracted various
adjustments from the operating result surplus. In effect, he subtracted
various items from the revenue; but then, should not the corresponding
spending be subtracted from the expenses?
For example, if philanthropic funds and capital grants are not included
in the revenue, then should not the spending from those funds similarly
not be included in the expenses?

Could someone please explain this to me...

---

I wonder about "unspent funds" generally. I think those could safely be
counted: though not entirely discretionary, will be used to pay for
expenses, so other revenues could instead be used in discretionary ways.

I wonder about amounts related to government capital grants.

But mainly: the VC is deducting $78M of philanthropy from the surplus,
and that is the totality of donations for the year, not the unspent
amount:

http://inspired.sydney.edu.au/our-donors/
  2012 proved to be ... raising more than $80 million ...

http://sydney.edu.au/news/staff/2576.html?newsstoryid=11492
  We embarked on our campaign internally in 2008 ... have already raised
  more than $300 million ...

http://sydney.edu.au/about/annual_report/index.shtml
http://sydney.edu.au/about/publications/annual_report/2012/annual_report_2012_financial_review.pdf
  ... During the year, $80 million ... in pledged and receipted funds
  were committed through the University’s various programs.  Of this
  total, $50.8 million ... was receipted in the year ended 31 December.
  ...

---

I received a reply to my query:

> From: "Ann Brewer (DVC)" <[email protected]>
> To: Paul Szabo <[email protected]>
> Date: Tue, 2 Jul 2013 16:29:53 +1000
>
> The answer is that these adjustments are net of the costs.  They are
> like the Operating Margin for each of these activities incorporating
> revenue less costs.

But surely, more than 2million has been spent of the 80million received!
Or maybe it is 78 unspent from 50 receipted?

---

Looking at the audited financial statements within the annual report
http://sydney.edu.au/about/annual_report/index.shtml
http://sydney.edu.au/about/publications/annual_report/2012/annual_report_2012_financial_statements.pdf
it makes explicit mention of "restricted funds":
  Operating result after income tax and impairment...* $136,144k
  * Includes net operating result of 2012 $73,997k ... received from
    sources with specific restrictions in use, such as bequests, trusts
    etc. (Refer to Note 35 ’Restricted funds’).

I do not understand how the financial review within the annual report
http://sydney.edu.au/about/publications/annual_report/2012/annual_report_2012_financial_review.pdf
makes adjustments totalling $182.4M, not matching the audited figures.

As I interpret the audited statements, after adjusting for restricted
funds, the Uni made a "clear" surplus of over $62Million.

---

Another reply received:

> From: "Ann Brewer (DVC)" <[email protected]>
> To: Paul Szabo <[email protected]>
> Date: Fri, 5 Jul 2013 07:07:52 +0000
> 
> The more detailed analysis is as follows:
> 
> Total Investment income received or accrued             76.6 M
> Donations and Bequests received                         54.9 M
> 
> Less funds provided for teaching and research           (53.5)M
> (primarily salaries and scholarships)
> 
> Net movement in the Endowment Fund                      78.0 M
> (that must be preserved)

Still, I do not seem to be able to correlate these figures to others
mentioned in the annual report:
 - the audited financial statement (page 127, note 35, restricted funds)
   figures seem wildly different
 - the financial review (page 69) mentions either $80M or $50.8M
   philanthropic income

---

Also asked the Finance people (Julie’s boss Thomas Sapina) on 5 Jul:
  Recently I was reading the Uni Annual Report ...
  and noticed that the adjustments in the "financial review" (page 66)
  do not seem to match the figures in the audited "financial statements"
  (I guess that might be page 127, note 35, restricted funds).
Had meeting with Tom Sapina. He explained that the adjustments may
relate to future obligations, and that the meaning and grouping of
the items may be different from those in the audit report. He does
not have access to the sources of these data, and suggested I ask
the CFO (Mark Easson) directly. I did so now.

---

Also asked the Audit Office of NSW, and received a reply:

> The ’adjusted for’ amounts on page 66, are not directly drawn from the
> amounts in Note 35 Restricted Funds, or other disclosures within the
> financial statements. The University has complied these ’adjusted for’
> amounts from its own sources including the financial statements.
> Management are able to use management accounting information to disclose
> transactions or factors that affect the University’s position at 31
> December 2012 in their commentary. ...

---

Reply received from the CFO Mark Easson:

> From: Mark Easson <[email protected]>
> To: Paul Szabo <[email protected]>
> CC: Julie Small <[email protected]>,
>     Thomas Sapina <[email protected]>
> Subject: RE: Query about Annual Report
> Date: Thu, 18 Jul 2013 11:45:45 +1000
> 
> Dear Paul,
> 
> I am happy to explain.
> 
> The Restricted Funds that are quoted in the financial statements on page
> 127 is $73,998M.  These are our bequests, trusts, prize, and scholarship
> accounts.  They are essentially the accounts that are covered by legal
> trust obligations and follow the definition for "restricted funds"
> provided by the Federal Department - DIISRT.  Our adjustment for
> "Philanthropic funds" also includes the donation accounts and Foundation
> funds.  Both of these are restricted by agreement, either formal or
> informal, with the donor.  Though the legal aspects are not as formal
> they are effectively restricted and managed in the same way.  This
> causes the difference between our figure of $78.0M and the $73.998M
> quoted in the financial statements.
> 
> In addition to the above restricted funds there are also grant funds
> provided by the Government that are restricted by contractual means. 
> These include capital grants (for example large amounts were received in
> 2012 towards the Charles Perkins Centre and the Australian Institute of
> Nano-science) and the normal research grants (for example, ARC and
> NHMRC).  These are also restricted and must be set aside from normal
> operating income.  They are not included in the department’s definition
> of "restricted funds", but are required to be disclosed in the financial
> statements in separate sections, and the department understands the
> implications and our obligations to spend the funds for the purpose for
> which they were granted.  The Government policy on accounting that
> includes this income in the Operating result has been challenged by the
> sector.  Some University’s, like the University of Melbourne, feel so
> strongly about this issue that they modify their accounts to remove this
> income and have their accounts qualified by their auditors as materially
> misstated.  Our policy is to follow all legal requirements, but disclose
> the inaccuracy in a separate document.
> 
> Finally, we also have to deduct some movements in our long term
> reserves, as these are not treated as underlying margin that is
> available for discretionary use.  The long term reserves must be
> retained as a condition of NSW Treasury to support our debt.  In
> addition the retaining of a reserve is done to guarantee staff
> entitlements and benefits, guarantee that we always have sufficient cash
> to honour carry forward balances on research and consulting accounts,
> while also providing a contingency for unforseen events.  A University
> cannot raise capital and must be self sufficient in all conceivable
> adverse scenarios.  It must thus maintain a reserve.  This adjustment
> (gain) was larger than normal in 2012 because of a change in accounting
> policy last year where we now record unrealised gains on equities,
> whereas before these were not recorded.  It is also subject to normal
> equity market fluctuations and last year was a better than average year
> for investment returns.
> 
> I hope this responds sufficiently to your question.
> 
> Regards
> 
> MARK EASSON | Chief Financial Officer
> Financial Services | Office of the Chief Financial Officer

(I wonder why some similar explanation is not mentioned in the annual report.)

But then, a related question (that I should have thought of earlier!).
As I understand now, these adjustments are funds that must be preserved
for specific uses, carried forward into future years. But then should
not the similar funds from the previous year, be mentioned as carried
into the current year?

---

Another reply:

> From: Mark Easson <[email protected]>
> To: Paul Szabo <[email protected]>
> CC: Julie Small <[email protected]>,
>     Thomas Sapina <[email protected]>
> Subject: RE: Query about Annual Report
> Date: Fri, 19 Jul 2013 11:09:44 +1000
> 
> The annual result essentially does report the previous year funds
> made available, less the carry forward that remains available for
> the following year.  In other words the operating result reflects
> the net movement in the carry forward funds for each of the
> restricted accounts over the course of the year.
> 
> Hope that explains it.
> 
> Regards
> 
> MARK EASSON | Chief Financial Officer
> Financial Services | Office of the Chief Financial Officer 				

I still do not understand this. Is it meant that the reported figures
are strictly just the change in the restricted funds; that looking at
this year’s annual report, page 66, in between this year and last, we
have $150.2M =78+72.2 preserved from philanthropy, and so on for the
other lines? That would mean that we have a "nest egg" of $352.3M saved
up just between 2011 and 2012 (and should add all previous years).

---

Another reply:

> From: Mark Easson <[email protected]>
> To: Paul Szabo <[email protected]>
> CC: Julie Small <[email protected]>,
>         Thomas Sapina
> 	<[email protected]>
> Subject: RE: Query about Annual Report
> Date: Mon, 22 Jul 2013 21:32:17 +1000
> 
> Dear Paul,
> 
> The actual philanthropy account that we maintain has the following
> summary of transactions for the year:
> 
> Total Investment income received or accrued                     76.6 M
> Donations and Bequests received in 2012                         54.9 M
>   (these funds must be preserved and invested - we only use the income)
> Less funds provided for teaching and research in 2012          (53.5)M
>   (primarily for academic salaries and scholarships)
> Net increase in Endowment Fund for the year                     78.0 M
>   (shown as an adjustment to the Operating Result as restricted)
> 
> The $78.0M we deduct is a sub-set of the total Operating Result for the
> year of $136M.  The 72.2M of "restricted funds" disclosed in the
> financial statements is a sub-set of the $78.0M and complies with the
> definitions provided by the Education department for use in the Annual
> Financial Statements.  Last year was a good year for both new
> philanthropy income and investment income, plus we changed the
> investment income policy to include unrealised gains on investment funds
> (namely change in market value).
> 
> I hope that makes it clearer.
> 
> Regards
> 
> MARK EASSON | Chief Financial Officer
> Finance| Office of the Chief Financial Officer

Now that seems all wrong: or does it say that the annual report is a lie?

The donations and bequests received "must be invested": is that so?
I guess some donations are to establish a fund to provide an ongoing
scholarship, but I guess some donations are for some one-off purpose
e.g. to purchase some equipment.

Seems that from the investment income of 76.6M, 53.5M was spent. What
happened to the remaining 23.1M?

The annual report, page 69, mentions $50.8M philanthropic income, not
54.9M. I guess this is caused by the different interpretation of what is
"restricted", leading to the difference between 73,997k mentioned on
pages 80 and 127 in the audit report, to 78M on page 66. Thus pages 66-69
seem somewhat inconsistent.

What is the relationship between 72.2M in 2011 and 78M in 2012? In what
sense is the 72.2M a subset of 78M, or are they cumulative? What about
the other lines on page 66: are those amounts cumulative?

---

Another reply:

> From: Mark Easson <[email protected]>
> To: Paul Szabo <[email protected]>
> CC: Julie Small <[email protected]>,
>     Thomas Sapina <[email protected]>
> Subject: RE: Query about Annual Report
> 
> Dear Paul,
> 
> I realise I may have misunderstood your earlier email. When I referred
> to the "72.2M" as a sub-set of the $78.0M I was in fact talking about
> the "restricted funds" comment in the annual report of $73.997.  The
> 73.997 is a sub-set of the 78.0M.
> 
> In relation to your follow up questions I would make a couple of general
> comments that may help explain.
> 
> When we work out the adjustment to the underlying margin we are using
> our management reporting accounts.  There inevitably is an explanation
> for all the variances that you have noted but we do not typically
> reconcile them all.  The Annual Financial statements follow strict rules
> which we follow closely and are audited.  The management accounts
> organise or group some of the figures slightly differently and this
> causes some of the differences that you observe when you try to cross
> reference them.  We do not explicitly reconcile the two approaches, so
> don’t have a specific answer for all your questions, but they are
> materially similar.
> 
> In relation to what assets represent each of the surpluses you refer to
> below.  This can get more complex.  In some cases the funds are in the
> bank.  But in others they are just an increased value of the investment
> in shares.  In some cases like the capital grants we have spent them as
> capital expenditure on the building project for which we were given the
> funds.  The capital expenditure does not show as an expense in the
> income statement. In terms of research grants some is spent on large
> research equipment and again does not show as an expense in the income
> statement.
> 
> 
> Regards
> 
> MARK EASSON | Chief Financial Officer
> Finance| Office of the Chief Financial Officer
> 
> THE UNIVERSITY OF SYDNEY
> T +61 2 9351 3133 | F +61 2 9351 8645
> 
> 
> -----Original Message-----
> From: [email protected] [mailto:[email protected]]
> Sent: Monday, 22 July 2013 10:18 PM
> To: Mark Easson
> Cc: Julie Small; Thomas Sapina
> Subject: RE: Query about Annual Report
> 
> Dear Mark,
> 
> > ...
> > The $78.0M we deduct is a sub-set of the total Operating Result for
> > the year of $136M.  The 72.2M of "restricted funds" disclosed in the
> > financial statements is a sub-set of the $78.0M and complies with the
> > definitions provided by the Education department for use in the Annual
> > Financial Statements.  Last year was a good year for both new
> > philanthropy income and investment income, plus we changed the
> > investment income policy to include unrealised gains on investment
> > funds (namely change in market value).
> >
> > I hope that makes it clearer.
> 
> Thanks again for your reply. However sorry, still not quite clear to me.
> 
> You say that the 72.2M from 2011, and the 78M from 2012, have both been
> invested? Or did you mean that the difference was invested?
> 
> Looking at the next line:
>   Investment funds $29.1M in 2012, $10.9M in 2011.
> I understood these were reserves we needed to hold to fulfil some legal
> obligations; so I assume they are a bank deposit. Is that so? Do we now
> have just 29.1M in the bank, or is it $50M = 29.1+10.9?
> 
> Looking at the next line:
>   Capital grants $53.9M in 2012, $54.5M in 2011.
> I understand these were government grants for some specific building
> purposes, as yet unspent. Do we now have $108.4M = 53.9+54.5 in the
> bank, unspent?
> 
> Looking at the next line:
>   Research grants $21.4M in 2012, $32.4M in 2011.
> As I understand these were research grants, not fully spent in the year
> they were given but carried over. Do we now have $53.8M in the bank,
> available for those specific research purposes?
> 
> Could you please explain.
> 
> Thanks, Paul
> 
> Paul Szabo   [email protected]   http://www.maths.usyd.edu.au/u/psz/
> School of Mathematics and Statistics   University of Sydney    Australia

Quoting selectively from the above reply, and the way I interpret them:

  The management accounts ... We do not explicitly reconcile ...

There are secret accounts, to make fraud easier.

  ... don’t have a specific answer for all your questions ...

We do not know how much we have stolen.

  ... the capital grants we have spent them as ... does not show
  as an expense ...

We do not itemise our theft.

  ... research grants some is spent on large research equipment and
  again does not show as an expense in the income statement.

Some we gave to researchers so fraud is less obvious, only some of the
research funds were stolen.


ANYONE reading this: is there another explanation? PLEASE reply to me...


-----


Personal notes (bits that did not make it into the open letter):

Building grants viewed another way. Supposing the builders were
quicker, and the project completed in 2012: how would that have
affected the surplus shown in the audited accounts? - My guess is
"not at all": audit would show spending increased, and assets
increased by about the same amount, the surplus unchanged. Then why
deduct anything now? - Or, assuming that spending would be counted
but the increase in assets shown elsewhere and the surplus reduced.
Then the surplus will be reduced next year when the work completes:
deducting now would mean doubling up.

The amounts claimed as adjustments in the annual report are in doubt:
 - it is not clear whether those amounts are cumulative, or whether
   each deduction should be offset by the corresponding one of the
   previous year
 - up until 2010, adjustments were on an entirely different basis

I am mystified by the purpose of those adjustments. Is it simply to
"cry poor" to the government, hoping for further handouts? Or is it
to "hide" funds from public view, with a view to commit fraud?
I have no clear indication...

With some creativity, the annual report could have made a deduction
of some $900M for staff salaries: a legal commitment as per EBA.
To do so would be ridiculous, comparable to other adjustments made
in the annual report.

The University has survived many years with a claimed deficit,
maybe it can similarly survive well into the future:
1998    (14.8M)
1999    (59.1M)         shown as  (29.3M) in 2000 report
2000    (30.5M)         shown as  (31.0M) in 2001 report
2001    (13.8M)
2002     15.6M surplus
2003      5.4M surplus
2004      2.2M surplus  shown as  (22.4M) in 2005 report
2005     20.6M surplus  shown as   (9.5M) in 2006 report
2006      2.9M surplus
2007    (11.4M)
2008   (414.2M)         shown as (410.3M) in 2009 report
2009    (68.2M)         shown as  (77.5M) in 2010 report
2010    (27.4M)         shown as  (15.7M) in 2011 report
2011    (77.4M)
2012    (46.3M)
Confusingly, when annual reports refer to last year’s performance,
often they show a result different from that of the previous year.

Executive performance (pay+bonus)
                        2010            2011            2012
Spence                  754024 + 169655 744143 + 167432 744143 + 155000
Garton    Provost       519999 + 80000  540799 + 82000  540799 + 83200
Armstrong Education     444047 + 53828  456300 + 50000  456300 + 39000
Hearn     International 492987 + 52947  523106 + 50000  523106 + 44051
Trewhella Research      459339 + 61880  456300 + 64000  456300 + 70200
Brewer    Strategic     416131 + 60464  443728 + 61000  443728 + 60681
Houston   Indigenous                    400000 + 41250  400000 + 50000
Pay pool expanded 15.48%, some reduced but others increased 4.85% so
average pay rise 2.52% in 2011 (none in 2012). Average 14.65% bonus.


-----


Open Letter
To:
	[email protected]
CC: Unions:
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
    Senate staff reps:
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
    Secretary to senate:
	[email protected]
    For the Uni:
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
	[email protected]
    OGC:
	[email protected]
	[email protected]

View on Uni financial position

Dear Vice-Chancellor,

You wrote to the Unions:
http://s1.sydney.edu.au/staff/enterprise_agreement/enterprise_bargaining_2012/updates/indexupdate.shtml
http://s1.sydney.edu.au/staff/enterprise_agreement/enterprise_bargaining_2012/updates/proposed/Thomson-20130626.pdf
> ... the University does not have the funds available ...
> ... we cannot agree to the unions’ pay claim ...

I have spent some time looking into the financial position of our
University. I had some helpful communication with CFO Mark Easson,
until DVC Ann Brewer stepped in and ordered all interaction to stop.

My view is that the "adjustments" in your letter, from page 66 of
the annual report
http://sydney.edu.au/about/annual_report/index.shtml
http://sydney.edu.au/about/publications/annual_report/2012/annual_report_2012_volume_1.pdf
are mostly un-justified.

Deductions might be reasonable for items that are forced upon us.
However, for building grants in particular: if the Uni has plans
to develop the Charles Perkins center, and lobbies the government
for contributions, and the government agrees to provide partial
funding, is it then "right" to "complain" that those funds are
restricted to pay for that particular project?

The same reasoning applies to unspent research funds.

Funds that must be held in reserve to provide for some liabilities:
were not those liabilities accounted for already, and anyway will
not the funds be free to spend in due course?

The one item that might be reasonable to adjust is philanthropic
income: because some is to invest and establish a fund and not for
immediate spending, and because some might be for projects not
closely aligned to Uni strategies. However no analysis is available
on the proportion of funds that must be invested, or on the
closeness of purpose between the fund and Uni activities.

---

The amounts claimed as adjustments are in doubt:
 - there is no cross-reference to them anywhere in the annual report
 - the difficulty (so far inability) of Finance in providing a
   justification, casts doubts on the veracity of those figures
 - management accounts from where those figures were produced, are
   not normally reconciled with the audited financial statements.
Though I emphasize that those adjustments should not have been made
at all.

As an exception, the adjustment related to philanthropic income may
be somewhat justified.

---

The University is in a healthy financial position, also evidenced by
the 15% pay bonuses given each year to upper management. The 4% wage
claim of the Unions is clearly affordable; and upper management has
no moral authority to question that.

Cheers, Paul

Paul Szabo   [email protected]   http://www.maths.usyd.edu.au/u/psz/
School of Mathematics and Statistics   University of Sydney    Australia


-----


Message received:

> From: Vice Chancellor <[email protected]>
> To: Paul Szabo <[email protected]>
> Subject: RE: View on Uni financial position
> Date: Tue, 30 Jul 2013 18:07:04 +1000
> 
> Dear Paul - it is clear that we have failed to explain the realities of
> the budget sufficiently. Let me respond briefly to some of your points.
> 
> 1.       You are quite right - it is a matter of choice whether the
> University applies for capital grants or not. But the fact remains the
> University did so decide - it was decision endorsed by the senior
> executive, including all the Deans. They did so because they were
> persuaded that we had critical infrastructure shortages that required
> urgent address and seeking assistance from the government so we didn’t
> fund them entirely by ourselves was deemed prudent. When we did manage
> to win these grants in open competition with other universities the
> projects they supported and the additional funds required to complete
> them were approved by Senate. Those decisions were in many instances
> made as long ago as five years and contracts have been signed for
> Charles Perkins, Nanoscience and Abercrombie. WE cannot renege now and
> thus, regardless of the merits of these projects, (although we believe
> they are essential) we cannot back out of them now and thus these
> capital funds are indeed committed. Some of these funds have supported
> other smaller projects such as the learning and teaching hubs in Carslaw
> as they benefit directly our students. So in principle your point is
> correct but in reality we have already accepted those funds and cannot
> return them now. So these are not funds available to pay salary
> increases.
> 
> 2.       Unspent research funds are actually funds won by staff in
> competitive research grant schemes, not funds allocated by the
> University. You seem unclear on this point. These funds represent all
> those (largely ARC and NH&MRC) funds awarded in a year that the grantees
> don’t fully expend in the year allocated. Unspent funds from such grants
> then have to be carried over to a later year. These are not university
> funds, they are government funds, and again as you can hopefully see
> now, are not ones we can allocate to other purposes.
> 
> 3.       Liability funds - this is a prudent "rainy day" provision and
> Senate has endorsed the strategy of having some reserve funds in case of
> emergency. To not have such funds would put us at very considerable risk
> if there was a major crisis in higher education or the University. This
> is a judgement call and all the audit and risk management protocols
> governing the reporting of our accounts suggest we should have them and
> without them would be the cause of considerable alarm in any such audit
> report.
> 
> 4.       As for philanthropic funds the critical point is that we can
> only spend them on things donors have specified and they cannot be
> diverted to other purposes. Many donations specify perpetuity and thus
> we are required to invest the entire sum (no matter how small or large)
> and then spend 5% per annum on the specified purpose (allowing us to
> reinvest some of the earnings back into the capital to keep pace with
> inflation). If not specified in perpetuity we still treat all donations
> over $250K as if they are in perpetuity (using the same mechanism as
> above) unless a Faculty or School makes a case to spend down the entire
> sum for the specific purpose of the donation. Sums below $250K we
> usually leave to the decision of faculties or schools to spend or invest
> as they see fit. But again these funds cannot be diverted to pay salary
> increases.
> 
> I hope this gives you more detail and insight into why these are
> committed funds that cannot be diverted to the purposes you would like.
> 
> Yours sincerely
> 
> Michael Spence
> 
> DR MICHAEL SPENCE | Vice-Chancellor and Principal
> 
> UNIVERSITY OF SYDNEY
> Quadrangle A14 | The University of Sydney | NSW | 2006


-----


Personal notes (bits that did not make it into reply):

Are these just careless wording by the VC?

> 1. ... capital grants ... Some of these funds have supported other
> smaller projects ...

Seems to suggest that major grants were mis-used for other purposes.

Those smaller projects, already completed: they are not unspent, so
not included in the deduction we discuss.

> 3. Liability funds ... the audit ... protocols governing the
> reporting of our accounts suggest we should have them ...

Are they itemised in the audited financial statements already?

> 4. As for philanthropic funds ... If not specified in perpetuity we
> still treat all donations over $250K as if they are in perpetuity
> (using the same mechanism as above) unless a Faculty or School makes
> a case to spend down the entire sum for the specific purpose of the
> donation.

Suggests a disregard for the donor’s wishes.


-----


Reply to VC:

To: [email protected]
Subject: Re: View on Uni financial position
Cc: [email protected] [email protected]
    [email protected]
    [email protected] [email protected]
    [email protected] [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected] [email protected]
    [email protected] [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]

Dear Michael,

Thanks for your message. However you miss the point entirely. The
issue is whether it is reasonable to deduct funds from the surplus,
whether the calculations and amounts mentioned in the annual report
are correct.

The building and research funds deducted, apparently were those
unspent during the year. How would the audited accounts and the
surplus be affected if those funds had been spent during the year?
My guess is "not at all": audit would show spending increased, and
assets increased by about the same amount, the surplus unchanged:
then why deduct anything now? - Or, assuming that spending would be
counted but the increase in assets shown elsewhere and the surplus
reduced. Then the surplus will be reduced next year when the funds
are spent: deducting now means doubling up.

Assuming that deduction was justified. Are the amounts mentioned
cumulative, or should previous year’s deduction be offset against
the current year? Cumulative would mean that at end of 2012, the Uni
held over $108.4M (=53.9+54.5+...) unspent building funds, over
$53.8M (=21.4+32.4+...) unspent research funds, and over $40M
(=29.1+10.9+...) in legislated reserves. Otherwise, the amounts from
2011 should have been used to offset those calculations.

The amounts deducted are un-explained. They should have been related
to the audited accounts, or have the management accounts audited and
presented.

---

The issue of staff salary increases is related only inasmuch as that
is affected by the financial position of the University: apparently
the only reason to not agree to Union claims is the ability to pay.
You did not address the issue of staff salaries versus bonuses for
upper management.

Cheers, Paul

Paul Szabo   [email protected]   http://www.maths.usyd.edu.au/u/psz/
School of Mathematics and Statistics   University of Sydney    Australia


-----


Message received:

> From: Vice Chancellor <[email protected]>
> To: Paul Szabo <[email protected]>
> Subject: RE: View on Uni financial position
> Date: Mon, 5 Aug 2013 17:35:11 +1000
> 
> Dear Paul
> 
> Thank you for your latest enquiry.  I don’t think that I can say any
> more about our finances since we clearly disagree in our
> understandings.  You are, however, correct that my insistence that we
> limit the over-all salary increase offer to 2.9% is based on
> affordability and not on some ideological commitment to the number.
> 
> Lastly, there is the matter of your reference to staff bonuses.  You
> should note that the senior executive and other staff who are outside
> the EBA have not had a salary increase since before the last EBA
> increase in January of last year.
> 
> Such staff, however, may have a contractual entitlement to a
> performance-related bonus as part of their conditions of employment. 
> Where such bonuses are payable they have consequently been paid.
> 
> Yours sincerely
> 
> Michael Spence
> 
> DR MICHAEL SPENCE | Vice-Chancellor and Principal
> 
> UNIVERSITY OF SYDNEY
> Quadrangle A14 | The University of Sydney | NSW | 2006
> T +61 2 9351 6980  | F +61 2 9351 4596
> E [email protected] <[email protected]>


-----


Reply to VC:

To: [email protected]
Subject: Re: View on Uni financial position
Cc: [email protected] [email protected]
    [email protected]
    [email protected] [email protected]
    [email protected] [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]
    [email protected] [email protected]

Dear Michael,

Thank you for your further message.

The difficulty and reticence to justify the figures and arithmetic
in the annual report, a document that should be self-contained and
accessible even to people like myself, suggests those are a chimera.

Looking back through the last dozen years, most annual reports show
a deficit:
  2000  (30.5M)         shown as  (31.0M) in 2001 report
  2001  (13.8M)
  2002   15.6M surplus
  2003    5.4M surplus
  2004    2.2M surplus  shown as  (22.4M) in 2005 report
  2005   20.6M surplus  shown as   (9.5M) in 2006 report
  2006    2.9M surplus
  2007  (11.4M)
  2008 (414.2M)         shown as (410.3M) in 2009 report
  2009  (68.2M)         shown as  (77.5M) in 2010 report
  2010  (27.4M)         shown as  (15.7M) in 2011 report
  2011  (77.4M)
  2012  (46.3M)
How is that possible, that we are not insolvent yet? When a report
refers to the previous year’s figures, why do not they always match?

Thanks for pointing out the generosity of senior staff entitlements
and contracts, compared to conditions in the EBA.

The criteria for bonuses for senior staff, surely included one for
performance of the University as a whole as per PM&D policy. That
goal being reached, does not it indicate a solid financial position?

Cheers, Paul

Paul Szabo   [email protected]   http://www.maths.usyd.edu.au/u/psz/
School of Mathematics and Statistics   University of Sydney    Australia


-----


Personal note:

Chatting to (arguing with) Julie... maybe the following explains better
what I see wrong with those "deductions" in our annual report.

Supposing that the funds being deducted, were given away or spent on
some good cause (say given away to charity, as approved by senate).
Then I would understand the annual report as it stands now: money given
away last year, gone; and some more given this year, gone also. However
we did not give anything away; and I feel that the report should reflect
that, that there should be a difference between giving away and keeping;
that the report should explicitly say how the funds deducted last year
were used. As it stands, the report suggests that funds were given away;
or worse, fraudulently mis-appropriated.

There also remains the detail that the amounts of those deductions are
not explained or justified, not related to any other data, but pulled
out of thin air.


-----


I contacted "Audit and Risk Management":

Dear Audit and Risk Management,

I have an issue with the University’s annual report:
http://sydney.edu.au/about/annual_report/index.shtml
http://sydney.edu.au/about/publications/annual_report/2012/annual_report_2012_volume_1.pdf
On page 66, some adjustments are made to the surplus, and I feel that
those are mostly un-justified. As I interpret the annual report, it
suggests that those funds deducted were "lost" to the University: there
is no mention of what happened to funds deducted the previous year.

I would understand the annual report as it stands now, if the funds
being deducted were given away or spent on some good cause: money given
away last year, gone; and some more given this year, gone also. However
we did not give anything away; and I feel that the report should reflect
that, that there should be a difference between giving away and keeping;
that the report should explicitly say how the funds deducted last year
were used. - Because the report suggests to me that those funds were
"lost", I fear that some might be fraudulently mis-appropriated.

I would be very grateful if you could explain to me why my misgivings
are baseless.

Thanks, Paul


-----


Reading the Sydney Morning Herald, I noticed how Senator Lee Rhiannon
takes an interest in the issues at the Uni. So I wrote to her:

To: [email protected]
Subject: Uni of Sydney: financial position

Dear Senator,

I notice your interest in the turmoil at Uni of Sydney. I have
been working at the Uni since 1986, and am dismayed at the lack
of progress in the current Enterprise Bargaining negotiations.

Management claims to be unable to afford a "fair" wage rise for
staff. This prompted me to look into the financial position of
the Uni, to read the annual report:
http://sydney.edu.au/about/annual_report/index.shtml
http://sydney.edu.au/about/publications/annual_report/2012/annual_report_2012_volume_1.pdf
I have some misgivings about the figures and arithmetic in the
annual report. I spent considerable effort in seeking answers to
these questions, but only received evasive replies.

On page 66 of the annual report, some adjustments are made to
the surplus, and I feel that those are mostly un-justified:
 - the amounts are in doubt, as there is no cross-reference to
   them anywhere in the report
 - it is not clear whether those amounts are cumulative, or
   whether each deduction should be offset by the corresponding
   one of the previous year
 - there is no mention of how funds deducted the previous year
   were used
 - management accounts from where those figures were produced,
   are not normally reconciled with the audited statements.

Looking back through the last dozen years, most annual reports
show a deficit:
  2000  (30.5M)         shown as  (31.0M) in 2001 report
  2001  (13.8M)
  2002   15.6M surplus
  2003    5.4M surplus
  2004    2.2M surplus  shown as  (22.4M) in 2005 report
  2005   20.6M surplus  shown as   (9.5M) in 2006 report
  2006    2.9M surplus
  2007  (11.4M)
  2008 (414.2M)         shown as (410.3M) in 2009 report
  2009  (68.2M)         shown as  (77.5M) in 2010 report
  2010  (27.4M)         shown as  (15.7M) in 2011 report
  2011  (77.4M)
  2012  (46.3M)
How is that possible, that the Uni is not insolvent yet? When a
report refers to the previous year’s figures, why do not they
always match?

A somewhat separate issue is what is a fair wage rise for staff.
Senior managers received performance bonuses of about 15% in
each of the last three years. The criteria for those bonuses
surely included one for performance of the Uni as a whole, as
per internal "Performance Management and Development" policy.
That goal being reached, would indicate a solid financial
position: maybe the Uni can in fact afford 4% for staff.

Thank you for your consideration of these matters.

Paul Szabo   [email protected]   http://www.maths.usyd.edu.au/u/psz/
School of Mathematics and Statistics   University of Sydney    Australia


-----


I wonder whether to contact the Minister for Education:
http://www.directory.nsw.gov.au/ministers.asp
The Hon. Adrian Piccoli BEc, LLB MP
[email protected]
as to whom the Annual Report is addressed.


-----


Message received from Audit:

> From: Charles Corban <[email protected]>
> To: Paul Szabo <[email protected]>
> Subject: RE: Issue with deductions in annual report
> Date: Tue, 13 Aug 2013 10:20:46 +1000
> 
> Dear Mr Szabo,
> 
> Thanks for your email below.  For your information, the University’s
> accounts are based on the NSW Auditor General’s interpretation of
> accounting standards.  The University is of the view that the current
> interpretation of the standards results in a set of accounts that
> overstate the amount of monies available to spend on normal University
> activities.
> 
> The purpose of page 66 is to provide a different interpretation of the
> information in the audited accounts. The figures that you are
> interpreting as losses are adjustments to the audited figures to take
> out money that isn’t available for the University to use in the normal
> course of business. The adjustments do not reflect any "loss" of funds.
> As an example the negative $78m figure for philanthropic funds
> represents $78m million which contributed to the $136.1m recorded profit
> but which must be maintained in perpetuity and are not available to be
> spent. The University still has the $78m invested but it is not profit
> in the normal sense.
> 
> I hope that this addresses your concerns.
> 
> Regards
> 
> Charles
> 
> Charles Corban | A/Manager Investigations
> Audit & Risk Management

No mention of the 78M vs 73M discrepancy. But mainly, what about the
other lines on page 66: are those also invested in perpetuity?

Is the Uni view that accounting standards are plain wrong, or that they
are so badly worded as to be open to interpretation to the tune of 100M,
or that the Auditor General is hopeless at interpreting?

If page 66 re-interprets the same info, then why do not at least some of
the figures match?


-----


Message received, to the questions:

>> Is the Uni view that accounting standards are plain wrong, or that they
>> are so badly worded as to be open to interpretation to the tune of 100M,
>> or that the Auditor General is hopeless at interpreting?
>> If page 66 re-interprets the same info, then why do not at least some of
>> the figures match?

> From: Charles Corban <[email protected]>
> To: Paul Szabo <[email protected]>
> Subject: RE: Issue with deductions in annual report
> Date: Wed, 14 Aug 2013 09:35:23 +1000
> 
> Dear Paul,
> 
> It is not an issue of right or wrong.  The accounting standards cover
> all types of businesses from major corporates to small businesses.  In
> this case it is the view of the University that applying those standards
> to the University accounts, while correct in an accounting sense, does
> not necessarily result in an accurate picture of the financial
> situation.  The treating of all capital preserved trust and investment
> interest, tied research grants and tied capital funds as sources of
> profit is clearly not the reality. A significant part of the former two
> must be retained in accordance with the relevant agreements and/or is
> unrealized (see bottom of page 66) and the latter two must be spent on
> the specific purpose for which they were provided or returned to the
> granting body.
> 
> In relation to the specific numbers we did not audit the accounts and
> thus do not have access to information on how the figures on page 66
> were calculated.  Generally however the figures on page 66 are subsets
> of the figures in the accounts and not cannot be directly matched
> without access to the detailed reconciliation that would have been used
> by the Auditor-General to reach his opinion on the accounts.
> 
> Regards
> 
> Charles
> 
> Charles Corban | A/Manager Investigations
> Audit & Risk Management

The accounting standards are not wrong, just out of touch with reality.
The amounts on page 66 are of unknown provenance and un-verified, and we
accept them as true. This is all so cool...


-----


Message received, to the question:

>> ... I think I understand that 78M philanthropic funds are invested. ...
>> The above explanation does not seem to be right for the other lines:
>> those funds may not be invested, and certainly not in perpetuity.
>> Could you please provide an explanation for those also.

> From: Charles Corban <[email protected]>
> To: Paul Szabo <[email protected]>
> Subject: RE: Issue with deductions in annual report
> Date: Wed, 14 Aug 2013 10:49:44 +1000
> 
> Dear Paul,
> 
> I disagree with your interpretation of my response.  In my view I have
> provided you with the appropriate answers to your questions.  My role
> here is to investigate serious corruption matters.  There are no grounds
> to warrant my pursuing this matter any further. 
> 
> Regards
> 
> Charles
> 
> Charles Corban | A/Manager Investigations
> Audit & Risk Management

We have $100M destined for restricted uses, never used or seen again.
A minor matter, not serious at all.


-----


A children’s story.

Little Paul had set up a lemonade stand. At the end of the day he
sold $10 worth of lemonade, having spent $5 on lemons and sugar. He
was happy with the $5 profit, and wanted to go and spend on lollies.

Big Daddy told him to reconsider. If he had a lemon squeezer, he
could produce more lemonade and sell more; and advised him to invest
the $5 in a nice plastic squeezer. Being a good boy, he went to bed
with no lollies but dreaming about a brighter tomorrow.

The second day, he purchased the squeezer for $5, sold $30 worth of
lemonade, spending $15 on lemons and sugar. According to Mum the
auditor, this was a profit of $10. Little Paul was happy to see the
wisdom of the advice of Big Daddy, and eager to spend on lollies.

Big Daddy again asks him to reconsider. If he had an electric
juicer, on special at Aldi for a mere $10, he could produce even
more and further increase his profits. So no lollies, he says.

Little Paul ponders for a while and says: At the beginning of the
day I had $5 in my pocket, collected $30, and spent $5 and $15; so
now must have $15 with me! Empties his pockets, and effectively
those piles of coins add up to $15. Being a good boy, he sets $10
aside for the juicer, puts $5 back in his pocket, and walks off into
the sunset, towards the magical sweets aisle of the shop.

The next day Mum the auditor sends old Big Daddy to a Nursing Home,
and all live happily ever after.

Morals:
 - Restricted funds that are "unspent" in the period, must be offset
   or added back for the next.
 - Tell your children the full story.
 - Never argue with Mum the auditor.


-----


A story for adults.

Once upon a time BU "Balanced University" was doing well. Each year
it received revenue (government funding, student fees etc) of $1.6B;
had expenses (mostly staff salaries) also of $1.6B; no surplus or
deficit, balanced and boring. Each year the audited financial
statements showed:
  Year Revenue Expense  Result
   any   1600M   1600M       0

In 2005, BU received funding of $100M to build the Charles Darwin
Center for the study of evolutionary corporatism. This was a large
project, half completed in 2005 with $50M spent, $50M unspent and
carried into the next year; the project was fully completed in 2006.
The audited financial statetements for those years showed:
  Year Revenue Expense  Result
  2004   1600M   1600M       0
  2005   1700M   1650M     50M  surplus
  2006   1600M   1650M    (50M) deficit

The 2005 annual report of BU noted the extraordinary nature of the
carry-over funding, it being restricted funds; the unspent $50M was
deducted from the operating result, leaving a net operating margin
of zero: perfectly reasonable and sensible.
In 2006 there were no unspent funds, no deduction was made.
The annual reports of BU showed:
  Year Revenue Expense  Result            Adjust  Margin
  2004   1600M   1600M       0                 0       0
  2005   1700M   1650M     50M  surplus     (50M)      0
  2006   1600M   1650M    (50M) deficit        0    (50M) deficit
Though on average BU had been balanced, still it showed an overall
deficit? That could not be right!

Someone pointed out that the $50M deducted in 2005, was carried into
2006 and should have been adjusted back in. The annual reports
should have showed:
  Year Revenue Expense  Result            Adjust  Margin
  2004   1600M   1600M       0                 0       0
  2005   1700M   1650M     50M  surplus     (50M)      0
  2006   1600M   1650M    (50M) deficit      50M       0
Perfectly balanced.

--

In the same way, our own "page 66" in
http://sydney.edu.au/about/publications/annual_report/2012/annual_report_2012_volume_1.pdf#68
should maybe read:
                            2012
                              $M
Operating revenue         1736.5
Operating expenses        1600.4
Operating result           136.1
Adjusted for:                      carried from 2011
Philanthropic funds        (78.0)        -
Investment funds           (29.1)      10.9
Capital grants             (53.9)      54.5
Specific purpose grants    (21.4)      32.4

Net operating margin           51.5 surplus

Notes:
 - Philanthropy is wholly invested, funds themselves are not carried
   into next year.
 - Exact amounts are in doubt, e.g. auditor said not 78 but $73M. Other
   amounts not mentioned (or explained or justified) anywhere else.

Further notes:
 - Whether philanthropy is $73M or $78M and whether it is wholly
   invested, seems a minor matter, maybe not worth arguing about.
 - The amounts of the other deductions are to be offset or added or
   adjusted back the following year (according to me: that is the
   essence of my argument). Thus long-term the exact amount is
   unimportant (as it cancels out), not worth arguing about.
The only issue, the only thing worth talking through, is whether the
deductions for "unspent funds" and "reserves" should be added back in
for the next year.


-----


(A less complete version of this was posted earlier, above.)

Annual reports 1999 and onwards are available in
http://sydney.edu.au/about/publications/annual_report/
Some older print reports are available in the library
http://opac.library.usyd.edu.au:80/record=b1359895~S4
  Fisher Rare Books, level 1
  RB 378.944S C 25

The Annual Reports contain the "audited financial statements"
by the Auditor-General of NSW. Since 1995, they also contain a
"Financial Review" with adjustments to the audited results.
Audited and adjusted results, surplus or (deficit), below.
Some annual reports restate previous results; restated value
shown in [brackets] when it differs.

Year     Audited                 Adjusted
1980     4774k
1981     7609k
1982     9335k
1983    12568k
1984    17942k  [15128k]
1985    15568k
1986    23946k  [23918k]
1987    27494k  [27475k]
1988    28870k
1989    33032k
1990    16251k
1991    30784k
1992     1887k
1993    27356k
1994    60661k
1995    80541k                    (9.5M)
1996    (2307k)                  (58.4M)
1997     2946k                   (45.6M)
1998    14692k                   (14.8M)
1999    23903k                   (59.1M) [(29.3M)]
2000    26247k                   (30.5M) [(31.0M)]
2001    96211k                   (13.8M)
2002    66622k                    15.6M
2003    94664k                     5.4M
2004    77878k                     2.2M  [(22.4M)]
2005   115966k  [109976k]         20.6M  [(9.5M)]
2006   190598k                     2.9M
2007   187199k                   (11.4M)
2008  (159996k) [(167393k)]     (414.2M) [(410.3M)]
2009    69149k  [59895k]         (68.2M) [(77.5M)]
2010   112167k                   (27.4M) [(15.7M)]
2011    88516k                   (77.4M)
2012   137008k                   (46.3M)

Why do restated values differ so often: changed accounting
standards, or just more creative ways of claiming adjustments?

The adjusted results all show large deficits (except for maybe
small surpluses between 2002-2006). That is clearly impossible,
seems these adjusted results should not be taken seriously.

The last EA 2009-2012, right after the GFC and at a time of larger
deficits, provided 5%pa wage increases (previous agreements provided
4% and 5% increases). Why cannot we afford the same now?


-----


I wrote to the Minister for Education:

From psz Tue Aug 20 19:58:25 2013
To: [email protected]
Subject: Uni of Sydney: financial position

To:
The Hon. Adrian Piccoli BEc, LLB MP
NSW Minister for Education

Dear Minister,

During the current Enterprise Bargaining negotiations at the Uni
of Sydney, management claims to be unable to afford a "fair"
wage rise for staff. This prompted me to read the annual report:
http://sydney.edu.au/about/annual_report/index.shtml
http://sydney.edu.au/about/publications/annual_report/2012/annual_report_2012_volume_1.pdf
I have some misgivings about the figures and arithmetic in the
annual report. I spent considerable effort in seeking answers to
these questions, but only received evasive replies.

On page 66 of the annual report, some adjustments are made to
the surplus, and I feel that those are mostly un-justified:
 - each deduction (except maybe philanthropy) should be offset
   by the corresponding one of the previous year;
 - the amounts are in doubt, as there is no cross-reference to
   them anywhere in the report.

Looking through past annual reports, they show large deficits
each year for the last 20, and I wonder how that is possible.

Thank you for your consideration of these matters.

Paul Szabo   [email protected]   http://www.maths.usyd.edu.au/u/psz/
School of Mathematics and Statistics   University of Sydney    Australia


-----


Record (written down from memory: please correct any mistakes!) of
presentation by Provost Stephen Garton to Faculty of Science staff
on 28 Aug 2013.

--

Garton: ... we have been in deficit for the last 10 years ...
Heckler: We have been in deficit for 20 years. How is that possible,
  what changed now?
Garton: Those are rolling deficits, not cumulative. We had 300million
  reserves, they have been used up now.
Heckler: We had 300million reserves 10 years ago. The deficits in the
  last 10 years add up to more than 300, and we have been in deficit
  for longer. Did we have more, say a billion reserves 20 year ago?
Garton: [mumbles yes] But those are rolling deficits.
Heckler: The deficit is just a tool to play hardball at bargaining?
Garton: [mumbles yes]

Rolling deficits mean that deductions one year, should have been
credited back the following year, offsetting the deduction there:
the figures in the "financial review" of the annual report are false.
Does this constitute dishonesty, or fraud in criminal law?

I did not notice 300million reserves in 10-year-old annual reports.
Must be recorded in the audited statements, should scrutinize again.

The "rolling" (not cumulative) deficits pretty much offset one another
(except maybe for GFC losses) and do not total 300M in 10 years. Where
did our reserves go?

--

Garton: ... Need to invest in infrastructure that was neglected for 30
  years. ... We borrowed about 500million for building investment

Previous annual reports show significant investments in infrastructure
(buildings and IT).

I do not see this level of borrowing in the 2012 annual report. Should
be in the 2013 report, maybe?

--

Heckler: Are the performance criteria that determine your bonus at all
  connected to the outcome of the Enterprise Bargaining process?
Garton: No. Prof Ann Brewer would have this but not me.

Who determines this bonus structure: is it the VC, the head of HR, or
the Senate (HR subcommittee) itself? If the Senate is putting such a
condition into Brewer’s contract then it is actively trying to affect
the outcome of the EB process.

--

Discussion about retrospective criteria of "3 papers in 3 years" to be
classed as research-active.

Garton: Those criteria were established 20 years ago, they just were not
  being applied. We failed as a community to help our staff reach that
  objective.
Heckler: So the right action was to sack some staff?
Garton: We were facing a budget crisis.

Whether the criteria used to determine "research active" were widely
known or not, is beside the point. Seeking to make redundant the roles
of people who had not been research active in the *previous* 3 years is
still a retrospective action. The non-retrospective version would be to
indicate that anyone not research active in the *subsequent* 3 years
would have their role considered for redundancy.

--

Garton: You are the best-paid staff.

Comparing USyd rates with UNSW, contradict this claim:
http://sydney.edu.au/staff/enterprise_agreement/ea_2009-12_schedules/index.shtml
http://www.hr.unsw.edu.au/services/salaries/salrates.html


-----


Does not quite belong here, but... email sent to VC on 2 Sep:

To: [email protected]
Subject: Re: Enterprise bargaining update
Cc: [email protected], [email protected],
    [email protected],
    [email protected], [email protected],
    [email protected], [email protected], [email protected],
    [email protected], [email protected],
    [email protected], [email protected],
    [email protected], [email protected],
    [email protected], [email protected],
    [email protected], [email protected],
    [email protected], [email protected],
    [email protected], [email protected],
    [email protected], [email protected],
    [email protected], [email protected],
    [email protected], [email protected],
    [email protected], [email protected],
    [email protected], [email protected]

Dear Michael,

You wrote to all-staff:

> ... the University is no longer able to guarantee the backdating of
> salary increases to 1 July 2013. Given that we do not know how long
> the negotiations will continue ...

Others have already pointed out that this argument is spurious: whether
you backdate now and pay increased salaries, or pay current salaries and
backdate later, the total spending or commitment is exactly identical.

> The University’s offer [of 2.9%] allows us to continue to be the
> Australian university with pay ... that lead the higher education
> sector ...

Comparing our salary rates with UNSW shows that we have fallen behind
already; since UNSW offers 4%pa increases, our position as second-rate
will be cemented:
http://sydney.edu.au/staff/enterprise_agreement/ea_2009-12_schedules/index.shtml
http://www.hr.unsw.edu.au/services/salaries/salrates.html
http://www.hr.unsw.edu.au/services/indrel/UNSW_Academic_Staff_Enterprise_Agreement_2011.pdf

Cheers, Paul

Paul Szabo   [email protected]   http://www.maths.usyd.edu.au/u/psz/
School of Mathematics and Statistics   University of Sydney    Australia


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Apparently, "creative accounting" is common, and then maybe not even illegal:
http://www.smh.com.au/business/qantas-takes-a-financial-flight-of-fancy-on-accounting-winds-20130901-2syto.html
Maybe it is not worthwhile reporting our financials to ICAC...


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