Financial struggles in Vic TAFE sector
A number of Victorian TAFEs are struggling financially, even after hiking fees to offset government funding cuts.
Auditor-General John Doyle says there have been substantial changes to the way the sector operates in recent years, and many TAFEs have not done enough to adapt, meaning the financial sustainability of the sector has declined.
The sector, comprising 14 TAFEs, recorded a net deficit of $16.2 million in 2013, a $74.8 million deterioration compared with a $58.6 million surplus in 2012.
That was mainly due to a $116.3 million cut - about 15 per cent - in government operating and capital grants.
"While a majority of TAFEs reduced their expenditure during the year, the cost reductions and increases in student fee revenue were not sufficient to offset the reductions in operating funds from government," Mr Doyle said.
His report, tabled in parliament on Wednesday, found five TAFEs face immediate or short-term financial challenges, while a further eight face a medium risk to their financial sustainability, continuing a five-year pattern of deterioration.
NMIT, or the Northern Melbourne Institute of TAFE, was singled out as needing close monitoring after it reported an operating deficit of $31.7 million in 2013 and projected major cash flow deficits for the next two years.
Four TAFEs reported improved financial performance in 2013 as a result of job cuts and fee hikes and other restructuring measures.
Higher Education Minster Nick Wakeling said the report showed the sector was still working through the reform process.
"Some are struggling to adjust to the contestable environment introduced by Labor in 2008," Mr Wakeling said.
He also said the funding available to TAFEs had not decreased and the government's changes to TAFE focused on driving an accountable system.
Opposition education spokesman Steve Herbert said the four TAFEs that recorded surpluses in 2013 achieved them through sacking staff, cutting courses, closing campuses and outsourcing training.
"That's produced a short-term surplus, but it will be a long-term headache," Mr Herbert said.
