Bailing out a failing polytechnic
How much is the Government willing to pump into the troubled West Coast polytechnic while new management scrambles to turn its fortunes around? How did it receive $24.8 million by mistake and what effect did it have on students?
No one would argue Tai Poutini Polytechnic (TPP) is in trouble. It has been under a Government-appointed crown manager since 2016 after concerns about its financial and educational performance. In 2017, it got a Government bailout of $3.6 million and received the lowest possible rating from the NZ Qualifications Authority (NZQA). It was the first time a polytechnic received a category 4 rating.
Then in February, the Government announced TPP had been over funded by $24.8m and would be getting another $8.5m bailout.
Despite all this, NZQA says students’ qualifications are still valid after an independent assessment found students gained the skills and knowledge required despite not getting the learning hours TPP was funded for.
Trouble at TPP first came to light in 2015 when rival Search and Rescue training providers accused TPP of putting lives at risk by delivering a course in one week that previously took several months to complete.
The Tertiary Education Commission (TEC) launched an investigation when it found discrepancies with one of the scaffolding courses in 2015 and its findings were released on February 28.
It found TPP had been funded for significantly more learning hours than it actually delivered to students between 2010 and 2015 in 13 of the 14 programmes it examined.
In some of the scaffolding programmes, students were receiving as little as 10 percent of the teaching hours they were meant to. That means that in a course where students were expected to receive nearly 200 hours of training, they only did 20.
The programmes reviewed included scaffolding, search and rescue, quarrying, mining, crane operations, and occupational safety and health.
The investigation found the documents TPP’s registry submitted to TEC had far greater learning hours than what was in the polytechnic’s curriculum documents, and far greater learning hours than were actually delivered.
The report said TPP had blamed a clerical error when it claimed for funding to deliver one programme over 57 weeks in a one year. Some of the hours claimed was time students spent at their workplace with no oversight from TPP tutors.
TPP did alert TEC to its ‘‘compressed delivery’’ in the Search and Rescue courses but TEC found the funding claimed was still significantly higher than expected given the actual hours that were delivered to the students. Since the findings, TEC has tightened its monitoring processes to make sure this never happens again at TPP or any other tertiary education provider.
Dean Winter, TEC’s monitoring and crown ownership manager said TPP did not have the ‘‘checks and balances’’ in place.
‘‘It comes down to senior management and governance. There is no indication of any criminal activity. But if they didn’t know, they should have known,’’ he said.
Former TPP governance council chairman Graeme McNally refused to comment when asked if he knew TPP had being claiming too much funding during his tenure.
Allan Sargison was chief executive during that time and said the fundamental issue was that under TEC’s funding system, tertiary provision on the Coast is ‘‘totally uneconomic, however structured’’.
‘‘I did not believe TPP was overfunded. That said, the reports have been completed and decisions implemented without input from me as I was retired. I see no point therefore in trying to relitigate even if I had the data, which I do not. I will not, therefore, be commenting further,’’ he said by email.
A source close to the organisation, who did want to be identified, said Sargison was a ‘‘hands off’’ chief executive who spent most of his time in his office.
‘‘In my opinion, I would say incompetence, or naivety, came into it. Allan has been made the fall guy for it, but he’s not the only one to blame,’’ they said.
Current acting chief executive Alex Cabrera says he doesn’t know how the overfunding happened, or if the people in charge knew it was happening.
‘‘There is a report done by NZQA which pointed out lack of central oversight and lack of consistency,’’ he said.
He said the money had gone back in to ‘‘fund a structure that was not fit for purpose’’.
‘‘There was a lot of double ups. We had a structure fit for about 3000 EFTS, we never quite got there, and now the numbers are decreasing across the sector,’’ he said.
In 2017, TPP had 1840 Equivalent Full Time Students (EFTS) but only 311 of those were based on the West Coast. Cabrera said his first question when he arrived was what impact the ‘‘under delivery’’ had on students and found the answer was none.
‘‘NZQA contracted an independent audit on all of those students on those courses and concluded that they have achieved the standards required. There’s no question about the skill the students achieved, it’s a question of how much the organisation was being funded to provide that training,’’ he said.
He said the students gained the bulk of that knowledge while they were at work, not at the polytechnic. Students in the future would still get the same amount of hours as previous students but the courses, like scaffolding, would now be classed as apprenticeships or, like Search and Rescue, adult education.
NZQA’s evaluation said it was ‘‘not yet confident’’ in TPP’s educational performance or selfassessment but that students’ achievement was ‘‘adequate’’.
Cabrera hoped to have the NZQA category 4 rating upgraded by the end of 2018. It means all programmes and assessments have to be reviewed by Southern Institute of Technology (SIT).
Cabrera was hired in 2016 during a ‘‘rapidly deteriorating financial situation’’. He set about restructuring staff, disestablishing the roles of three general managers and ditching unaffordable programmes like the Music and Audio Institute of New Zealand, which was handed over to the SIT in January this year.
He said TPP had a completely new governance council who he was working with on an ‘‘improvement plan’’.
Cabrera was the chief executive of Aoraki Polytechnic until its merger with Christchurch Polytechnic Institute of Technology to create the Ara Institute.
He said a merger for TPP was ‘‘always a possibility’’.
Cabrera said a funding model based on volumes of students would never work for the Coast.
‘‘We want a model that is based on outcomes. The status quo is not sustainable. Anything we do has to be quality, financially sustainable and very closely aligned with the economic development of the West Coast,’’ he said.
He was in discussions with iwi, Development West Coast and the region’s employers like the Department of Conservation and District Health Board to ‘‘plan what the new look Tai Poutini will look like’’. ‘‘It’s very rare to get a deficit of $4.8m, a debt of $25m, the worst category in the country. It’s unprecedented. This is not for the faint-hearted, you have to have the stamina, and a mental toughness to deal with pressure. It’s a major task but we all need to change,’’ he said.
New council chairman Andrew Robb said the West Coast needed some form of tertiary education.
‘‘We need to provide opportunities for the people who are working here to upskill themselves while they are in employment. So it’s a matter coming up with a model that suits the community,’’ he said.
Don Campbell, who was chief executive from 2000 to 2006, said when he left the institution it was in a healthy state with a ‘‘robust quality management system in place’’.
He said TPP was set up in the late 1980s when the Government of the day wanted to take tertiary education to the regions.
‘‘Tertiary education is much more important to the regions than just people in those regions upskilling but that often gets overlooked. For example TPP has a library which is accessible to the public,’’ he said.
‘‘The problem in my view is we have had nine years of a National government who had a sinking lid on funding tertiary education. Regional institutions have the same structure and funding mechanisms as larger institutions. But larger institutions can fill lecture halls with people and TPP might only have 15,’’ he said.
‘‘What they should be looking at is outcomes for students. Are students receiving the skills and outcomes required to do the job regardless of how many hours they are at it?’’
‘‘There are a lot of staff there who have worked incredibly hard. People in the regions have as much right to learning as people in cities but how that can be delivered in a way that is cost effective is a question the Minister is currently grappling with.’’
TPP’s crown manager Murray Strong has presented two options to education minister Chris Hipkins for the future of TPP: a regional ownership model with joint ownership between the Crown and local stakeholders, and a merger.
Hipkins said he had deferred making a decision because substantial change was needed across the sector as student numbers had dropped ‘‘alarmingly’’ over the last eight years.
‘‘This situation has left us with a group of ITPs some of which, like TPP, are facing immediate and pressing challenges to their financial viability and sustainability, and are unable to modernise teaching and learning to better meet the needs of learners and employers,’’ he said.
He was working with TEC and sector representatives on new funding models and would report back to Cabinet in March. He would also present a plan for TPP to Cabinet in August 2018.
‘‘The challenges faced by TPP are not unique ... It is critical we address these challenges across the whole network, rather than just one organisation at a time. We need a lasting solution to this longstanding challenge.’’
‘‘Larger institutions can fill lecture halls with people and TPP might only have 15.’’
Don Campbell, the former CEO of Tai Poutini Polytechnic