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April 2, 2012 | by  | in News |
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University Accused of Fraud

Investigator investigates, investigations reveal no fraud. Yet.

Serious allegations of “accounting fraud” for the purposes of distorting league- table results and government research grant appropriations recently drove the University to employ an external investigator.

Following a complaint made by Associate Professor Martin Lally, from Victoria’s School of Economics and Finance, to the University Council, an investigation was launched. Bruce Corkill QC was contracted by Chancellor Ian McKinnon to independently examine Lally’s allegations.

Such included claims that the University was artificially hiding staff in order to improve their research rating in the PBRF result, which he considered to be a form of “accounting fraud.”

“The effect of these types of games is to push the university up the league table,” Lally told The Dominion Post.

“I’m alleging that people are being induced to regard the university as a higher quality institution than it is.”

However Corkill’s four-and-a-half month long investigation found there was no evidence to support the allegations.

In the executive summary of the investigation he concluded that “the underlying thrust of the allegations of bad faith or cover up on the part of senior members of the University was unfounded” and that “there was no evidence of accounting fraud, fraud or bribery.”

It also said the criteria for PBRF eligibility was being appropriately implemented and “the arrangements did not infringe the letter or spirit of the PBRF Guidelines.”

Due to containing individuals’ contract details, the full report has not been made public. Lally has since laid a complaint with the Ombudsman about this decision.

In emails obtained by Salient he indicated he was not satisfied with the findings, claiming that not all his allegations were investigated.

Tertiary Education Union national president, Sandra Grey, says allegations of this nature fit with similar stories the TEU has heard from staff working at universities around the country.

They claimed to know of instances of staff being persuaded to resign on the understanding of being rehired, or being placed on fixed term contracts in order to limit staff numbers during a calendar period.

“There cases represent an outrageous breach of people’s employment rights, but also make a farce of the PBRF as a funding mechanism,” Grey said.

Labour Tertiary Education Spokesperson Grant Robertson recommended the upcoming review of the PBRF needed to have a wide scope to ensure it was “meeting its goals of promoting and rewarding high quality research.”

“While Victoria University has said it could not find particular evidence of wrong doing here, allegations regarding the potential gaming of the PBRF system at other universities are rife. That’s a concern and one that should raise alarm bells.”

McKinnon didn’t think such calls for a review were out of order.

“I think there’s probably a lot of merit in having a review. But I wouldn’t like to see a diminishment on the importance of research-based teaching, because that’s the distinguishing feature of a university,” McKinnon said.

Documents and communications surrounding the investigation were given to prominent New Zealand blogger, David Farrar who proceeded to publishing them online.

Performance-based research fund:

Introduced by the last Labour Government, as a response to the previous ‘bums on seats’ approach to tertiary education funding, it’s intended to incentivise universities to focus on research. Based on certain indicators, universities are ranked and given a corresponding level

of tax-payer backed grants. Since its introduction, there have been two ’rounds’ of funding. The first in 2006 saw Victoria ranked 3rd, but 2009 saw them drop to 4th. This year will not only see the next ’round’ of funding, but also a review of the current PBRF system. Universities have been known to ‘work the system’, as they respond to incentives within the rules. But allegations such as these have raised questions as to whether the incentives are in the right place.

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