ITEM 5.4 Chair Finance Committee Report #13454 Council OPEN Meeting 6 December 2013

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1 ITEM 5.4 Chair Finance Committee Report #13454 Council OPEN Meeting 6 December 2013 Purpose To provide Council with an overview of activities conducted by the Finance Committee at the 27 September 2013 and 13 November 2013 meetings. Recommendation Mr Robert Finch, Chair Finance Committee Council is asked to NOTE the Chair Finance Committee Report to Council # Executive Summary The Finance Committee considered the following matters. 27 September 2013 Financial Management Rule Report # August 2013 YTD Dashboard # November 2013 Draft 2014 Work Plan #13399 Self Review of Committee Performance and Terms of Reference Review # September 2013 YTD Dashboard #13397 Written Report on Controlled Entities SportUNE and Services UNE #13407 Attachments Minutes of the 27 September and 13 November 2013 meetings. Page of 314

2 Finance Committee Open Minutes (8:2013) CONFIRMED Open Minutes of the Finance Committee meeting held at 10:00am on Friday 27 th September 2013 in the Council Room, Booloominbah. 1. MEETING OPENING AND WELCOME COMMENTS The Chair welcomed those present to the meeting. PRESENT Mr R Finch (Chair) Prof J Barber (Vice-Chancellor) Dr Geoff Fox (Deputy Chancellor) Professor Nick Reid (Chair, Academic Board) Mr James Harris IN ATTENDANCE Ms Michelle Clarke (Chief Financial Officer) Mr David Cushway (Chief Operating Officer) Mr G Seach (Director of Finance) Mrs L Kettlestring (University Secretariat Officer, Minute Recorder) 1.1 APOLOGIES Dr Brian Denman Mr Brendan Peet (Chief Legal & Governance Officer) 1.2 COUNCIL MEMBER CONFLICT OF INTEREST DISCLOSURES There were no declarations of conflict. 1.3 ORDER OF BUSINESS (including adoption of non-starred items) The Finance Committee ACCEPTED the Order of Business and adopted all unstarred items. 2 PREVIOUS MINUTES 2.1 Confirmation of Minutes from meeting held 11 September 2013 Minutes of the meeting held on 11 September 2013 are currently out For Approval and are unavailable at this time. 2.2 Matters arising from these Minutes There were no matters arising from the draft minutes of 11 September of 314

3 3 MATTERS FOR DECISION 3.1. * Financial Management Rule Report #13312 The Chief Financial Officer reviewed the reported changes to the Financial Management Policy. The Committee discussed the liquidity and funding arrangements currently in place. The Vice-Chancellor queried whether the Rule should be refreshed on a regular basis and the Chief Financial Officer confirmed it would be appropriate to do this annually or when triggered by an applicable event. ACTION: Secretariat to add Refresh of Financial Management Rule to 2014 Work Plan document. 10:35am - Mr Kevin Pugh, (Senior Manager, Corporate Finance - NSW Treasury Corporation) joined the meeting. He reiterated the points made by the Chief Financial Officer with regard to the required changes and updates of the Rule. With amendments as agreed by the Committee, the Finance Committee APPROVED the proposed Financial Management Policy # NB: A full list of amendments is attached as a marked up document for easy reference. 4 MATTERS FOR NOTING August 2013 YTD Dashboard #13 There was discussion on the movement of the full Dashboard report to the confidential meeting. The Chief Financial Officer advised that the document contains confidential proprietary information. In line with other Australian universities, a summary document will be submitted to the open meeting. There was a query with regard to the publication of the Budget papers to the Open meeting. ACTION: Chief Financial Officer to research what practice other universities undertake with regard to the publication of budget documents. Finance Committee NOTED the Financial Management YTD Dashboard August 2013 # Confirmed Open Finance Committee Minutes 27 September 2013 ii 265 of 314

4 5 GENERAL BUSINESS There were no items of general business. 6 MEETING FINALISATION 6.1 Work Plan The Committee NOTED the Work Plan. The Chair closed the Open session of the meeting and proceeded to the Confidential session. Confirmed Open Finance Committee Minutes 27 September of 314 iii

5 Financial Management Rule Approved by Finance Committee 27 September 2013 Financial Management PolicyRule (approved by Finance Committee) NB: changes made to the July Finance Committee earlier version are highlighted FYI. Overview This policyrule outlines UNE s obligations to ensure appropriate and consistent financial and financial risk management for UNE and its controlled entities. Scope This policyrule applies to the University, staff, contractors, office-holders, council members and controlled entities (staff and board directors). It applies to the following areas of financial management and financial risk: liquidity and funding interest rates foreign exchange investments counterparty credit exposures, and financial operations. This rule is made pursuant to Section 29 of the UNE Act and Section 25 of the UNE By-Law Policy Financial risk appetite UNE s finances and financial risks are managed in a manner which: is clear, prudent, cost-effective and comprehensive aligns with the university s strategic risk management reflects the needs of stakeholders, and assists the achievement of the University s strategic objectives. UNE s appetite for financial risk falls between risk-averse and moderate, primarily because it is a not-for-profit government-owned enterprise and requires predictable financial performance and position. Financial risk and return must be considered in the context of UNE s short, medium and longer-term goals. Investments must be selected that will protect the nominal value capital over the term of the investment. Page of 314

6 Financial Management Rule Approved by Finance Committee 27 September 2013 Table of Contents 1 Liquidity and funding management Objectives Managing liquidity risk Managing funding risk Liquidity reserve Interest rate management Objectives Managing interest rate risk Foreign exchange transactions Objectives Managing foreign exchange risk Authorised foreign exchange products Counterparty credit management Objective Managing counterparty credit risk Investments Objective Managing investments Short term investment portfolio (maturity <1 year) Long term investment portfolio (maturity >1 year) Fund managers Investment advisers Authorised investment products Investment limits Investment allocation Financial transaction operations Objective Managing financial transaction operational risk Breaches of Policy Reporting Procedures Roles and responsibilities University Council Finance Committee Revenue & Investment Section Liquidity and funding management Objectives of 314 Page 2

7 Financial Management Rule Approved by Finance Committee 27 September Managing liquidity risk Managing funding risk Liquidity reserve Interest rate management Objectives Managing interest rate risk Foreign exchange transactions Objectives Managing foreign exchange risk Authorised foreign exchange products Counterparty credit management Objective Managing counterparty credit risk Investments Objective Managing investments Authorised investment products Investment limits Investment allocation Financial transaction operations Objective Managing financial transaction operational risk Breaches of Policy Reporting Procedures Roles and responsibilities University Council Finance Committee Controlled entities Revenue & Investment Section Page of 314

8 Financial Management Rule Approved by Finance Committee 27 September Liquidity and funding management 1.1 Objectives Ensure access to sufficient cash and facilities to meet financial obligations as they fall due with a target current ratio 1 between 1.05 and 3.0. Ensure sufficient excess liquidity to meet financial obligations in the event of unexpected business disruption. Seek to diversify revenue between government and non-government revenue sources. The university should have three or four income sources, none of which is below 5%: preferably all should be above 15%. Reliance on government operating grant revenue should reduce, preferably not much more than 50% (excluding abnormal or one-off special payments) 2. Ensure compliance with borrowing facility undertakings. Ensure effective, efficient and orderly use of credit facilities with reliable liquidity management planning and procedures. Ensure that the debt maturity profile is appropriately structured, taking into account the infrastructure and working capital funding requirements, asset/liability matching and refinancing risks. Seek an appropriate mix of capital in order to access diverse funding sources with debt no more than 10% 15% of capital. Target ratio of <5% of annual principal and interest repayments to annual total revenue. Ensure an interest coverage ratio (EBIT (and after capital grants)/principal and interest pa) of at least 1.5 while ensuring the current ratio for untied assets/untied liabilities remains within 1.05 and Managing liquidity risk The Chief Financial Officer will develop and maintain plans for managing unforeseen events which may curtail cash flows and cause pressure on liquidity, including but not limited to: unplanned reduction in revenue unplanned operating expenditure business disruption unplanned capital expenditure sustained reduction in operating margin collapse of capital markets, and collapse of the banking sector. 1.3 Managing funding risk The University funding requirements and funding strategy will be reviewed annually and set out in the annual budget approved by Council. The annual budget will include a target capital structure that minimises the weighted average cost of capital without adversely impacting liquidity risk and that corresponds to the University s risk preference. Debt maturities will be spread out to limit risk on debt rollover. Any new facilities negotiated will be contracted with an adequate spread of maturities, taking into account the duration in debt funding requirements, balanced with the cost of capital over short or long tenors. Where practical and cost-effective, the University will access diverse sources of funding, in order to reduce refinancing risk. Funding sources may include banks, mutuals and capital markets. 1 Within DEEWR Benchmarking: a manual for Australian universities, page 54 2 Benchmarking: a manual for Australian universities, page of 314 Page 4

9 Financial Management Rule Approved by Finance Committee 27 September Liquidity reserve Liquidity and funding risk will be managed through the liquidity reserve 3. The minimum liquidity reserve will be the sum of amounts required to cover: a) the likely shortfall (if any) in actual net cash flow to forecast b) event risk c) committed and uncommitted borrowings maturing with the next 12 months, and d) strategic funding purposes. LESS e) any target operational cash float, liquidity buffer or excess liquidity maintained from time to time. To manage short-term operating liquidity, a target operational cash float will be maintained, based on the minimum cash required to cover regular costs. Access to the short term operational cash float must be immediate. The expected return on the short term operational cash float is the cash rate. 2 Interest rate management 2.1 Objectives Minimise large variations in earnings, capital or cash flow, while ensuring an appropriate flexibility to accommodate potential changes in funding requirements. Ensure fixed and floating interest rate exposures on assets and liabilities are managed in accordance with this policyrule. Use a proactive risk management approach with an emphasis on risk reduction, rather than profit maximisation, and achieve a mix of fixed and floating interest rate exposure on interest bearing debt. 2.2 Managing interest rate risk For debt, the Finance Committee of Council will approve interest rate risk management strategies. The University will manage debt interest rate risk by determining the appropriate level of fixed and floating rate exposure in each maturity band. The benchmark, and authorised ranges, will be based on a percentage of fixed interest rate exposure per year. Authorised ranges for fixed interest rate exposure on borrowings are set out in the following table. Maturity Minimum fixed rate exposure Maximum fixed rate exposure < 5 years 50% 100% > 5 years 40% 60% 3 Benchmarking: a manual for Australian universities, page 56 Page of 314

10 Financial Management Rule Approved by Finance Committee 27 September Foreign exchange transactions 3.1 Objectives Minimise large variations in earnings, capital or cash flow arising from the impact of exchange rate movements. Ensure prompt and proper identification of foreign currency exposures. 3.2 Managing foreign exchange risk The University will, where possible and appropriate, hedge the variability in cash flows associated with changes in exchange rates in order to fix amounts of foreign income and expenditure in Australian dollar terms. Committed (timing and amount) foreign currency exposures identified in excess of A$100150,000 will be hedged between 50 and 100%, with foreign exchange contracts, to the expected date(s) of settlement. It is the responsibility of the relevant directorate, faculty or organisational unit to identify possible foreign currency transactions early and to formally request hedging cover immediately. to the finance directorate. The finance directorate is responsible for transacting and managing foreign exchange risk. 3.3 Authorised foreign exchange products Fixed forward exchange contracts USD bank account with a maximum balance of $2million, and/or Spot FX transactions. 4 Counterparty credit management 4.1 Objective To ensure counterparties to UNE s financial transactions are creditworthy and that the transactions are within approved delegations. 4.2 Managing counterparty credit risk All counterparty exposures must be identified and reported for regular review against counterparty limits. Counterparty limits will be based upon the counterparty credit rating. The university will only deal with counterparties with an investment grade long term credit rating. Actual limits, for each counterparty, will be set out in procedures associated with this policyrule. The following table sets limits for the short term cash float and the short term investment portfolio. Organisation Credit rating Maximum exposure (% of short term cash float and STIP) Maximum term to maturity Licensed bank AAA to AA- 100% 12 months Licensed bank A+ to BBB 5040% 12 months APRA approved credit unions and building societies Rated or unrated 5025% 6 months Commonwealth or State Government AA- or above 5025% 12 months 272 of 314 Page 6

11 Financial Management Rule Approved by Finance Committee 27 September Investments 5.1 Objective To maximise return to the university while limiting interest rate risk and credit risk exposure to an acceptable level. Select investments/investment portfolios that will protect the nominal value capital over the term of the investment. Investment will be made ensuring University cash flow requirements are met as and when they fall due. Invest in accordance with schedule 2 of the University of New England Act 1993, and the University of New England (Investment Powers) Order To invest the assets prudently ensuring the portfolio/s have an appropriate risk profile, adequate liquidity and diversification. For university commercial activities, the return on investment target will be equal to or higher than current cash management rates 4. To invest solely in the best interests of the university. To invest with care, skill, prudence and due diligence. To observe conditions attached to bequests/donations when investing. 5.2 Managing investments Investment of funds (including in any asset category) will be diversified to manage credit risk (refer above). Interest rate security investments will be managed with a held to maturity philosophy. Investments are limited to a short-term investment portfolio, and a long-term investment portfolio. investment returns may experience volatility and fluctuations in market value. The university will tolerate volatility as measured against the volatility of a comparable market index in each asset class and a composite index based on the strategic allocation to each asset. The indices (eg, ASX All Ordinaries index) used as a measure of an investment manager s performance will also be used to benchmark what is allowable volatility (risk). Authority to approve the transfer of funds, including to an approved funds manager, is governed by the University s Financial Delegations Short term investment portfolio (maturity <1 year) This portfolio provides liquidity to meet short term operational and capital commitments by investing in financial instruments that are liquid, at interest rates higher than the transaction bank account and that have negligibleminimal chance of loss of capital. A fund manager/s may be engaged to manage part of or this entire fund (see section 5.2.3). Investments are limited to cash and fixed interest products and do not involve property or equity investments. Return required: outperform the weighted average return of the RBA 90day Cash: UBS Bank Bill index (short term) & Fixed interest: UBS Composite Bond Index. Risk appetite: market yields are expected to cause occasional reduced performance. 4 Benchmarking: a manual for Australian universities, page 58 Page of 314

12 Financial Management Rule Approved by Finance Committee 27 September Long term investment portfolio (maturity >1 year) This portfolio augments the long term strategic objectives of the university by investing in growth asset categories aimed at returns marginally greater than fixed term interest with negligible chance of loss of capital. Money related to commitments which are more than one year away can be invested in this portfolio. For this portfolio, the university will engage a fund manager (see section 5.2.3). Return required: To match or outperform the average return of CPI plus 3% pa over rolling three year periods after deduction of investment fees paid (if any) for investment management. Risk appetite: Annual returns are expected to be quite variable with a likelihood that on average 1 year in 5 may produce a negative return UNE Foundation investments Myer Family Company managed Fund advisers and managers The university may employ one or more fund advisers/managers to achieve its investment objectives. Where funds are held by a controlled entity, the controlled entity may also engage one or more funds managers. Where the services of fund managers are used, the managers will have full responsibility for the investment of the assets, within agreed mandates. Fund advisers and managers must, at all times during which investments are made, hold a current Australian Financial Services Licence and comply with their obligations under all laws including applicable ASIC policies and the conditions of any ASIC Class Order or individual relief granted by ASIC. Adding a new fund adviser/manager must be approved by the Finance Committee, Council and, where required by law, the NSW Treasurer. Authority to approve the transfer of funds to an approved funds adviser/manager is governed by the University s Financial Delegations Investment advisers The university (and its controlled entities) may engage and seek advice from an investment adviser for services including but not limited to assessing the risk of investment in each investment category, the combined risk and return characteristics of the investment funds relating to each category, and in general product advice. 5.3 Authorised investment products At-call cash accounts 11AM cash Fixed interest term deposits Bonds Debentures Treasury Notes Negotiable Certificates of Deposit 274 of 314 Page 8

13 Financial Management Rule Approved by Finance Committee 27 September 2013 Bank Bills Transferable Certificates of Deposit Promissory Notes, and Professional fund managers: o Perennial Investment Partners Limited o Merlon Capital Partners o Perpetual Investment Management Limited o Airlie Funds Management, and o Myer Family Company Ltd. 5.4 Investment limits Financial limits for investment transactions are in the UNE schedule of financial delegations. The following table sets limits for maturity, liquidity and investment targets. Investment portfolio UNE Short Term Investment Portfolio UNE Long Term Investment Portfolio UNE Foundation MFCo Immediate Benefit Pool UNE Foundation MFCo Perpetual Benefit Pool Time horizon <1 year or less >1 year <612 months Long term (in perpetuity) Accessibility/ liquidity Within 5 business days Within 30 business days Within 5 business days Within 30 business days Target return RBA 90 day bank bill rate + 1% Cash: UBS Bank Bill index (short term) CPI + 43% To protect the nominal capital value of the portfolio and meet cash flow requirements CPI + 3% over rolling five year periods Fixed interest: UBS Composite Bond Index Cash: UBS Bank Bill Index (short term) Fixed interest: UBS Composite Bond Index Target term 12 months 36 months or as funds required eg donations held in perpetuity <612 months Long term (in perpetuity) 5.5 Investment allocation The investment allocation benchmarks for the short term investment portfolio (STIP), the long term investment portfolio (LTIP), and the UNE Foundation investment portfolios are in the tables below. Short term investment portfolio asset class Strategic benchmark Tolerable range Cash 5% 3-8% Fixed interest term deposits, promissory notes, treasury notes, government bonds 95% 92-97% TOTAL 100% Long term investment portfolio asset class Strategic benchmark Tolerable range Fixed interest and cash 55% 50-70% Page of 314

14 Financial Management Rule Approved by Finance Committee 27 September 2013 Australian shares 35% 20-40% Overseas shares 7.5% 5-10% Unlisted property funds 0% 0-5% Australian listed property 2.5% 0-5% Overseas listed property 0% 0-5% Hedge funds 0% 0-5% TOTAL 100% UNE Foundation Immediate Benefit Pool Strategic benchmark Tolerable range Cash (at call, 11AM, professional funds accounts) 100% 100% UNE Foundation Perpetual Benefit Pool Strategic benchmark Tolerable range Cash 0-5% 0-5% Fixed interest 30-70% 30-70% Equities 30-70% 30-70% TOTAL 100% 6 Financial transaction operations 6.1 Objective Apply appropriate controls to minimise the potential for financial loss through human error, fraud or the inappropriate use of financial instruments. 6.2 Managing financial transaction operational risk Clearly define the roles, responsibilities and authorities of staff involved with financial transactions. Ensure key treasury/finance process tasks and corresponding controls are adequate and operate effectively. Ensure compliance with audit, contractual and statutory requirements. 276 of 314 Page 10

15 Financial Management Rule Approved by Finance Committee 27 September Breaches of Policy Any breaches of this policyrule will be reported immediately to the Chief Financial Officer, who will determine whether corrective action is to be taken. The breach will be reported to the Council Finance Committee at its next meeting, including the reasons for the breach occurring, and the corrective action taken, if any. Page of 314

16 Financial Management Rule Approved by Finance Committee 27 September Reporting The Chief Financial Officer will provide reports to the Vice-Chancellor monthly; and to the Finance Committee of Council for each of its scheduled meetings which: address the university s: a) liquidity profile b) interest rate profile c) foreign exchange transaction risk profile d) counterparty credit risk profile, and e) operational risk profile. show actual outcomes compared to risk limits and benchmarks, and highlight breaches of limits/delegations. 9 Procedures The Chief Financial Officer will establish procedures for the implementation of this policyrule. 10 Roles and responsibilities 10.1 University Council Under Section 16 of The University of New England Act 1993, the functions of Council include investing any funds belonging to or vested in the University, overseeing risk management and assessment and approving systems of control and accountability Finance Committee The Finance Committee is a committee responsible to the University Council for the governance of the University s investmentfinancial management activities. The responsibility of this Committee is to oversee and review financial and investment activityactivities, approve asset allocation strategies, review and approve any policy, guideline or procedural changes and benchmarks and approve the appointment of any investment Fund Managers and/or consultants. within the confines of the University s financial delegations. The Finance Committee is responsible for monitoring the development, review and implementation of financial strategies, policies and delegations Controlled entities Controlled entities are expected to work closely with the University CFO in applying this policy Revenue & Investment Section The Revenue & Investment Section within the Financial Services Directorate attends to the day to day investment activities under delegation and within these guidelines. This Section is responsible for managing the day to day cash flow operational needs of the University, short term cash requirements and managing the portfolio of investment funds not allocated to external fund managers for long term investment. Based on this policyrule, and under the direction of the Chief Financial Officer and the Director, Financial Services, the Section will determine broad targets for the level of available investment funds that are to be held in cash or cash equivalent forms. 278 of 314 Page 12

17 Financial Management Rule Approved by Finance Committee 27 September 2013 Page of 314

18 Financial Management Rule Approved by Finance Committee 27 September 2013 Definitions Counterparty credit risk means the risk of sustaining a loss as a result of a default by a counterparty to a transaction into which the University has entered. Counterparties may include banks that may have entered into a hedging transaction with the University related to the management of financial risks. Foreign exchange transaction risk means the risk of sustaining a loss due to movements in exchange rates. Such risks may occur through an increase in the Australian dollar value of foreign currency payables or a decrease in the Australian dollar value of foreign currency receivables. Hedging means making an investment or entering into a transaction with the aim of offsetting the risk of adverse price movements in an asset. Interest rate risk means the risk of a reduction in earnings, capital or cash flows as a consequence of movements in interest rates. Liquidity risk means the risk of sustaining loss due to having insufficient liquidity to meet future commitments. Financial transaction operational risk means the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. Financial risk management means the financial management of the university s collections, disbursements, liquidity and funding so as to mitigate financial, operational and reputational risk. Administration Document Type: Policy Administrator: TRIM reference: Date approved: Due for review: Responsible party for review: Council PolicyRule Finance Committee of Council October 2014 or when triggered by environment changes Finance Committee of Council Approved by: Related policies or other documents Schedule of Financial Delegations The University of New England Act 1993 (NSW) University of New England (Investment Powers) Order 2003 Public Finance and Audit Act 1983 (NSW) Public Authorities (Financial Arrangements) Act 1987 Schedule 4 (Investment Powers or Authorities) Code of Conduct Finance Committee Terms of Reference 280 of 314 Page 14

19 Finance Committee Open Minutes (9:2013) Open Minutes of the Finance Committee meeting held at 9:00am on Wednesday 13 th November 2013 in the Council Room, Booloominbah. PRESENT Mr R Finch (Chair) Prof J Barber (Vice Chancellor) Dr Geoff Fox (Deputy Chancellor) Professor Nick Reid (Chair, Academic Board) Dr Brian Denman Mr James Harris IN ATTENDANCE Ms Michelle Clarke (Chief Financial Officer) Mr David Cushway (Chief Operating Officer) Mrs Gabrielle Price (Deputy University Secretary) Mrs L Kettlestring (University Secretariat Officer, Minute Recorder) 1. MEETING OPENING AND WELCOME COMMENTS The Chair welcomed those present to the meeting. 1.1 APOLOGIES Mr Brendan Peet (Chief Legal & Governance Officer) 1.2 COUNCIL MEMBER CONFLICT OF INTEREST DISCLOSURES There were no declarations of conflict. 1.3 ORDER OF BUSINESS (including adoption of non starred items) The Finance Committee ACCEPTED the Order of Business and adopted all unstarred items. 2 PREVIOUS MINUTES 2.1 Confirmation of Minutes from meeting held 27 September 2013 Draft minutes of the meeting held on 27 th September 2013 had been circulated. Committee agreed to adopt these minutes as confirmed today. The 2.2 Matters arising from these Minutes There were no matters arising from the draft minutes of 27 th September of 314

20 3 MATTERS FOR DECISION 3.1. * Draft 2014 Work Plan #13399 The Chair spoke to this item. He raised the issue of the last meeting for the year being in October which would only allow for September figures to be reported. The Committee agreed to an additional meeting (late November/early December 2014) which would see more thorough reporting for later in the year. ACTION: Chair to liaise with Chief Legal and Governance Officer regarding a date for an additional meeting in November/December A member noted the lack of reporting on capital expenditure. Given the large amount identified for 2014 it was requested that this be reported separately at the same time as each YTD Dashboard, commencing in February ACTION: Secretariat to add a separate report on capital expenditure to be reviewed alongside the Dashboard report for each Finance Meeting commencing February Name of report to be clarified by Chief Financial Officer. The Committee discussed the timing of reports in general. There was suggestion that the April date for Audit may be brought forward to March and the Chief Financial Officer would confirm this as the information becomes available. ACTION: Secretariat to consult Chief Financial Officer for further advice on more precise Audit reporting timeframes. A slightly revised Work Plan document will be included in the February 2014 meeting. ACTION: Secretariat to include colour code guide for reading status of Work Plan items. With amendments to the responsible Senior Executive for some reports as well as revised dates for some audit reports, the Finance Committee APPROVED the 2014 Work Plan # * Self Review of Committee Performance and Terms of Reference Review #13400 The Chair advised the Committee that the Chief Legal Governance Officer is currently negotiating with an external consultant to manage this process. Further advice is being sought from the Chancellor with regard to the functionality of the process. The Chief Legal and Governance Officer will provide a more detailed report to the Committee after these negotiations have occurred. The Committee agreed the resolution as recommended in the Agenda be put aside until further information is provided. The Committee noted the verbal update provided by the Chair. 282 of 314 Open Finance Committee Minutes 13 th November 2013 ii

21 4 MATTERS FOR NOTING 4.1. * 30 September 2013 YTD Dashboard #13 The Chair acknowledged the summary document however he requested the Chief Financial Officer provide more detail regarding the balance sheet and cash position. The Committee discussed removing the item from the Open paper altogether with the full document put to Confidential. The issue of transparency was discussed however the Chief Financial Officer provided a list of sensitive matters which she believes should remain confidential (in line with other universities). ACTION: The Committee requested the Chief Financial Officer investigate open and confidential reporting methods used by other Australian universities. Finance Committee NOTED the Financial Management YTD Dashboard September 2013 # Written Report on Controlled Entities SportUNE and Services UNE # The Chief Operating Officer advised the incident of theft by an employee of Services UNE had been referred to the Police and that ICAC had been informed should they wish to investigate further. ACTION: The Chief Financial Officer was asked to check if loss from employee theft is covered by our Insurance Policy. The Chief Financial Officer advised she will be liaising with the Vice Chancellor and Chief Operating Officer regarding a cash amount currently sitting with Services UNE which could be put to better use in A member noted the recent introduction of an identified issues section at the front of other reports has been a helpful tool in identifying important areas of concern. It was noted this report doesn t contain such a summary and was requested for next time. ACTION: The Chief Operating Officer was asked to include a summary of identified issues and possible solutions at the beginning of reports where appropriate. The Finance Committee NOTED the Written Report on Controlled Entities SportUNE and Services UNE # GENERAL BUSINESS There were no items of general business. Open Finance Committee Minutes 13 th November 2013 iii 283 of 314

22 6 MEETING FINALISATION 6.1 Work Plan Several items were identified as now being complete. ACTION: Secretariat to ensure an updated Work Plan showing items now complete is recorded for corporate record. ACTION: Secretariat to call all Controlled Entity reports to a meeting in early 2014 to allow timely review of audited accounts. The Committee NOTED the 2013 Work Plan. The Chair closed the Open session of the meeting and proceeded to the Confidential session. Robert Finch Chair Date 284 of 314 Open Finance Committee Minutes 13 th November 2013 iv

23 ITEM 5.5 Chair Audit and Risk Committee Report #13455 Council OPEN Meeting 6 December 2013 Purpose To provide Council with an overview of activities conducted by the Audit and Risk Committee at the 13 November 2013 meeting. Recommendation Mr James Harris, Chair Audit and Risk Committee Council is asked to NOTE the Chair Audit and Risk Committee Report to Council # Executive Summary The Audit and Risk Committee considered the following matters. Draft 2014 Open Work Plan #13309 Self Review of Committee Performance and Terms of Reference (Verbal) Audit and Risk Director s Report #13410 Attachments Minutes of the 13 November meeting. Page of 314

24 Audit & Risk Committee Open Minutes 13 November 2013 (6:2013) Open Minutes of the Audit & Risk Committee meeting held at 11:00am, Wednesday 13 th November 2013 in the Council Room, Booloominbah. PRESENT Mr J Harris (Chair) Dr G Fox (Deputy Chancellor) Prof J Barber (Vice Chancellor) Dr J Hobbs Mr R Finch Ms J McClelland Ms G Raby IN ATTENDANCE Ms M Clarke (Chief Financial Officer) Mr B Peet (Chief Legal and Governance Officer) Mr D Tanner (Director Audit & Risk) Ms S Hills (Associate Director Audit & Risk) Mrs G Price (Deputy University Secretary) Mrs L Kettlestring (University Secretariat Officer & Minute Recorder) Ms Karen Taylor, (Director Financial Audit Services, NSW Audit Office) via telephone Mr Harminder Singh (Audit Leader, NSW Audit Office) via telephone OPENING COMMENTS The Chair welcomed those present, especially Ms Karen Taylor, who joined the meeting for the first time since her appointment as Director Financial Audit Services for the NSW Audit Office. 1.1 APOLOGIES There were no apologies. 1.2 COUNCIL MEMBER CONFLICT OF INTEREST DISCLOSURES There were no declarations of conflict of interest. 1.3 ORDER OF BUSINESS (including adoption of non starred items) The Committee ACCEPTED the Order of Business and adopted all non starred items. 2 PREVIOUS MINUTES 2.1 Confirmation of Minutes from meeting held 17 th July 2013 The Minutes of the meeting held on 11 September 2013 were confirmed via on 30 September Matters Arising There were no matters arising from the 11 September Minutes. 286 of 314

25 3. MATTERS FOR DECISION 3.1 * Draft 2014 Open Work Plan #13309 ACTION: Secretariat to update several typographical errors. ACTION: Reporting dates of some reports are to be updated via consultation between Chief Financial Officer and Secretariat. With small amendments to the calling dates of several financial reports, the Audit & Risk Committee APPROVED the 2014 Open Work Plan # * Self Review of Committee Performance ad Terms of Reference (VERBAL) The Chief Legal and Governance Officer advised the Committee that he is currently negotiating with an external consultant to manage this process. Further advice is being sought from the Chancellor with regard to the functionality of the process. The Chief Legal and Governance Officer will provide a more detailed report to the Committee after these negotiations have occurred. The Committee agreed the resolution as recommended in the Agenda be put aside until further information is provided. The Committee noted the verbal update provided by the Chair. The Audit & Risk Committee NOTED the verbal update on Self Review of Committee Performance and Terms of Reference. 4. ITEMS FOR NOTING 4.1 Audit and Risk Director s Report The Audit & Risk Committee NOTED the Audit & Risk Director s Report # GENERAL BUSINESS There were no items of General Business. 6. MEETING FINALISATION 6.1 Work Plan The Committee NOTED the 2013 Work Plan. The Chair closed the Open session and proceeded to the Confidential session. James Harris Chair Date Audit & Risk Committee Meeting Open Minutes 13 November 2013 ii 287 of 314

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27 ITEM 5.6 Chair Infrastructure Committee Report #13456 Council OPEN Meeting 6 December 2013 Purpose To provide Council with an overview of activities conducted by the Infrastructure Committee at the 13 November 2013 meeting. Recommendation Ms Gae Raby, Chair Infrastructure Committee Council is asked to NOTE the Chair Infrastructure Committee Report to Council # Executive Summary The Infrastructure Committee considered the following matters. Draft 2014 Infrastructure Open Work Plan #13408 Stage 2 Fire Upgrade Report #13385 Works Project Report #13380 Energy Management Report with Trimesterisation Statistics #13381 Environmental Report #13382 Rural Properties Report #13383 Information Technology Report #13384 Annual Presentation of TEFMA Benchmarks #13386 Update Rural Properties OH&S Report #13387 Campus Gas Supply Report #13421 Attachments Minutes of the 13 November meeting. Page of 314

28 Infrastructure Committee Open Minutes 13 November 2013 (5:2013) Minutes of the fifth Open Infrastructure Committee meeting held on Wednesday, 13 November 2013 at 2:00pm in the Council Room, Booloominbah. PRESENT Ms G Raby (Chair) Dr G Fox (Deputy Chancellor, ex officio) Professor J Barber (Vice Chancellor, ex officio) Professor N Reid (Chair of Academic Board) Professor M Sims Mr A Campbell IN ATTENDANCE Ms M Clarke (Chief Financial Officer) Mr D Cushway (Chief Operating Officer) Mr B Peet (Chief Legal and Governance Officer) Mrs G Price (Deputy University Secretary) Mrs D Fergusson (Secretariat Officer, Minute Recorder) 1. OPENING COMMENTS The Chair opened the meeting and welcomed all Committee members to the open session * Apologies There were no apologies Welcome to Country The Committee acknowledged the traditional inhabitants of this land we call New England and showed respect to Elders past and present * Council Member Conflict of Interest Disclosures The Deputy University Secretary, Gabrielle Price, declared that she resides opposite the property, Laureldale Station, which is owned by UNE. This declaration was noted * Order of Business (including adoption of non starred items) The Infrastructure Committee ACCEPTED the Order of Business, noting a member requested that Item 4.6 be starred. The Infrastructure Committee ACCEPTED that non starred items be adopted. 290 of 314

29 2. MINUTES OF PREVIOUS MEETING 2.1. Confirmation of Minutes from meeting held 11 September Minutes of the meeting held on 11 September 2013 were approved as a true and correct record via on 27 September These minutes are available in the Infrastructure Committee Reading Room Matters Arising There were no matters arising from the minutes of 11 September MATTERS FOR DECISION 3.1 * Draft 2014 Infrastructure Open Work Plan #13408 The Chief Legal and Governance Officer, Brendan Peet, spoke to this item advising the meeting that this document was a work in progress and that members were welcome to add items. The Committee discussed the following: The time between last meeting of the year and first of the following year; The ability to call additional meetings or use technology for link ups; Parliament changing the UNE Act and taking the election process out; and The need to reserve a date for a meeting in December ACTION: The Chief Legal and Governance Officer to provide a date in December 2014 for an extra meeting and advise the Committee via The Infrastructure Committee APPROVED the Draft 2014 Infrastructure Open Work Plan # BROUGHT FORWARD FROM GENERAL ITEMS 4.6. * Stage 2 Fire Upgrade Report #13385 A member indicated that the section of the report written by the Fire Engineering Consultants appeared to be the same as is contained in the confidential paper. The Chief Operating Officer, David Cushway, indicated that the particular section referred to was not confidential and felt that it added value to both the open and confidential reports. The meeting agreed that even though the section was contained in both papers that section is, in fact, an open part of the report. The Infrastructure Committee NOTED the Stage 2 Fire Upgrade Report # Open Minutes Infrastructure Committee 13th November Page 2 of of 314

30 4. MATTERS FOR NOTING 4.1. Works Project Report #13380 The Infrastructure Committee NOTED the Works Project Report # Energy Management Report with Trimesterisation Statistics #13381 The Infrastructure Committee NOTED the Energy Management Report with Trimesterisation Statistics # Environmental Report #13382 The Infrastructure Committee NOTED the Environmental Report # Rural Properties Report #13383 The Infrastructure Committee NOTED the Rural Properties Report # Information Technology Report #13384 The Infrastructure Committee NOTED the Information Technology Report # Annual Presentation of TEFMA Benchmarks #13386 The Infrastructure Committee NOTED the Annual Presentation of TEFMA Benchmarks # Update Rural Properties OH&S Report #13387 The Infrastructure Committee NOTED the Update Rural Properties OH&S Report # Campus Gas Supply Report #13421 The Infrastructure Committee NOTED the review strategy for gas supply. 5. GENERAL BUSINESS A member referred to the Energy Report, noted that the units of electricity used had gone down and suggested that we recognise the Director FMS, Brian Munro, in relation to these cost saving efforts showing fruition. ACTION: The Chief Operating Officer is asked to acknowledge the efforts of relevant staff members for their cost saving measures having had a noticeable effect. 6. MEETING FINALISATION 6.1. Work Plan The Committee is asked to NOTED the 2013 Work Plan Next meeting The next meeting of the Infrastructure Committee is scheduled for Friday, 21 February 2014 at 2:00pm and will be held in the Council Room at Booloominbah. Open Minutes Infrastructure Committee 13th November Page 3 of of 314

31 6.3. Meeting Close The open session of the meeting closed at 2.20pm Open Minutes Infrastructure Committee 13th November Page 4 of of 314

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33 ITEM 5.7 Draft 2014 Council Open Work Plan #13439 Council Open 6 December 2013 Purpose To provide the Open session of the Council with the draft 2014 Council Open Work Plan for review/approval. Origin of report: Scheduled item on 2013 Work Plan Recommendation Brendan Peet, Chief Legal & Governance Officer The Council is asked to APPROVE the Draft 2014 Council Open Work Plan # Executive Summary Not applicable Key Information Not applicable Evaluation of Options Not applicable Strategic Alignment Not applicable Budget/Financial Implications Not applicable Risk Management and Implications Not applicable Accountability Not applicable Attachments 1. Draft 2014 Council Open Work Plan Page of 314

34 296 of Work Plan Council Open DRAFT Version4/12/2013 DRAFT Source/Meeting Meeting Date & Report # Item Owner Status Due 20 Mar 14 Work Plan Report and Presentation from Academic Schools Sec Work Plan Vice Chancellor's Report on outcomes of the 2013 Business Plan VC Work Plan College's Redevelopment Update COO Work Plan Chairs Reports (Council Committees) Chairs Work Plan Media Update VC 23 May 14 Work Plan Approval of Annual Financial Report (Year Ended 31 December 2012) VC/CFO Work Plan Presentations by Controlled Entities Sport UNE & Services UNE only [UNE Sec Partnerships & UNE Open in June and PPM Co & Abri in August ] Work Plan Report and Presentation from Academic Schools PVCD Prof Work Plan Chairs Reports (Council Committees) Chairs Work Plan Media Update VC 25 July 204 Work Plan #13214 & Presentations by Controlled Entities UNE Partnerships & UNE Open Sec Work Plan Chairs Reports (Council Committees) Chairs Work Plan Media Update VC 19 Sep 14 Work Plan Annual Governance Review LC EDG Work Plan Update Management response to the Management Letter Year Ended 31 CFO December 2013 Work Plan Vice Chancellor s Report on Progress against the 2014 Business Plan VC Work Plan Draft 2015 Meeting Dates (Council and Committees) Sec Work Plan 2015 Budget Parameters CFO Work Plan Report on Council compliance with statutory requirements and risk management Sec Work Plan Presentations by Controlled Entity Abri M Scholz Work Plan Chairs Reports (Council Committees) Chairs Work Plan Media Update VC 21 Nov 14 Work Plan Receive 2015 Budget CFO Work Plan Presentations by Controlled Entity UNE Foundation COO Work Plan Presentations by Controlled Entity PPM Co CFO Work Plan Vice Chancellor s Report on Progress against the 2014 Business Plan VC Work Plan Approve Draft 2015 Work Plan Sec Work Plan Chairs Reports (Council Committees) Chairs

35 2014 Work Plan Council Open DRAFT Version4/12/2013 DRAFT Source/Meeting Meeting Date & Report # Item Owner Status Due Work Plan Media Update VC 297 of 314

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37 ITEM 5.8 University Secretary Rule #13470 Council OPEN Meeting 6 December 2013 Purpose To: report to the Council on the proposal, endorsed by the Governance Working Party on 17 October 2013, to define the role of the University Secretary in a policy instrument; and provide the proposed policy instrument to Council for consideration/approval. Origin of report: Action from Governance Working Party meeting on 17 th October 2013, ITEM 3.5 Role of the University Secretary. Recommendation Mr Brendan Peet, Chief Legal Governance Officer Council is asked to: (1) NOTE the report on the University Secretary Rule #13470; and (2) APPROVE the University Secretary Rule as set out in Report # Executive Summary Presently there is no policy instrument at the University defining the role, responsibilities and authority of the University Secretary. The Association of Australian University Secretaries (AAUS) has published a role description for a University Secretary. The ASX Corporate Governance Principles and Recommendations set out certain governance principles relating to the role of secretary to the board. The Governance Working Party considered these documents and recommended that the University approve a policy instrument that: Adopted the AAUS role description, subject to any changes needed to reflect the role performed by the University Secretary at UNE; and Clarifies the reporting line of the University Secretary, based on best practice as set out in Recommendation 2.5 of the ASX Corporate Governance Principles and Recommendations. The attached University Secretary Rule has been prepared on this basis and is submitted to Council for consideration/approval. The University Secretary Rule reflects the role, responsibilities and authority of the University Secretary as they currently stand at UNE. Page of 314

38 ITEM 5.8 University Secretary Rule #13470 Council OPEN Meeting 6 December 2013 Attachments Attachment 1: Notes and Resolution from the Governance Working Party (meeting 17th October 2013). 3.5 * Documenting the Role of the University Secretary #13419 The Chief Legal and Governance Officer advised there is no official documentation defining this particular role within UNE. The Australian Association of University Secretaries had prepared a role description and it was considered. The Chair requested clarification of the reporting lines for the University Secretary and the Governance Working Party discussed the definition and considered the guidance set out in the ASIC Corporate Governance Principles and Recommendations document (page 20 of the document submitted to the meeting). The Governance Working Party recommended that Council adopt a policy to recognise the role of the University Secretary. This policy should be based on the AAUS document, tailored, as required, to include attributes specific to UNE. The policy should also adopt the guidance set out in the ASIC document provided. Attachment 2: University Secretary Rule See attached. Page of 314

39 University Secretary Rule (approved by Council) Overview This Rule identifies the role and responsibilities of the University Secretary. Scope This Rule applies to the Council and staff of the University and reflects the University s commitment to good corporate governance. Policy The Chief Legal and Governance Officer 1 is the University Secretary. Roles, responsibility and authority The roles, responsibilities and authority of the University Secretary are as follows 2 : 1 Promoting good governance a. Works with the Chancellor, Council (and its committees/working parties) and the Vice Chancellor to establish and implement good governance practices. b. Provides advice and secretariat support to the Council, other decision making bodies and management in the good governance of the University. 2 Assistance/support to the Chancellor a. Provides high level advice and strategic support to the Chancellor; b. Assists in the assessment and strategy development for addressing the required balance of skills knowledge and experience of Council (and its committees/boards); 3 Assistance/Support to the Vice Chancellor Provides high level governance advice to the Vice Chancellor. 4 Assistance/Support to the Chair of Academic Board Provides high level governance advice to the Chair of Academic Board. 5 Advice to Council and Council Committees and Boards Ensures that members of Council (and its committees/boards) are provided with the information necessary for them to fulfil their responsibilities. 6 Management of meetings, agendas and minutes 1 The Chief Legal and Governance Officer is also the University s General Counsel. This Rule does not cover the roles, responsibilities and authority of the General Counsel. 2 These are taken from the role statement published by the Association of Australian University Secretaries. Page of 314

40 a. Ensures timely distribution of notices and agendas of meetings of the Council; b. Ensures that the agenda papers are prepared and forwarded to members of Council (and its committees/boards) in accordance with the Council s procedures; and c. Ensures timely preparation, confirmation, and distribution to members and filing of Minutes of meetings of the Council (and its committees/working parties). 7 Council Induction and Professional Development a. Coordinates the Induction Program for new members of Council (and its committees/boards), and conducts those segments of the Program relating to the operations of the Council; and b. Coordinates in consultation with the Chancellor and Vice Chancellor the conduct of Workshops and professional development activities for members of Council (and its committees/boards). 8 Conflicts of Interests a. Maintains a register of conflicts of interests of members of Council (and its committees) and advises the Chancellor in respect of any real or potential conflict of interests arising for members of Council (and its committees) or for the Chancellor; and b. Maintains a disclosure of material interests register. 9 Relationship Management Works closely with the Chancellor and Vice Chancellor to maintain strong and productive relationships between Council and the senior management of the University. 10 Advice and liaison point for Council members a. Is the main point of contact together with the Chancellor and Vice Chancellor for members of Council (and its committees/boards), including for members wishing to obtain information direct from officers of the University; and b. Provides guidance to the Chancellor and members of Council (and its committees/boards) on their responsibilities under the law (including obtaining legal advice as required), the Rules of the University to which they are subject and how these should be discharged. 11 Communication with external stakeholders Is responsible for communication with the State Minister for Education, the relevant State Education Departments, Tertiary Education Quality & Standards Agency, and officers of the relevant Commonwealth Departments, in respect of governance compliance issues and Council resolutions which require notification to, or action by the Minister or the Department(s). 12 Council Committees/Boards a. Ensures the smooth operation of Council committees/boards; and b. Provides secretariat support to committees/boards of the Council (including the Academic Board). 13 University Seal a. Maintains custody of and controls over the use of the University Seal; and b. Maintains a record of the use of the University Seal and provides reports to Council. 14 Council and Committee/Board Membership Maintenance Page of 314

41 a. Acts as Returning Officer for Council and other elections; b. Conducts statutory election and appointment processes for Council and its committees/boards as prescribed (often under Statute); c. Oversees members attendance registers for Annual Reports; d. Undertakes all necessary actions in relation to appointments to Council and its committees/boards; and e. Maintains members registers for Council and its committees/boards. 15 Council budget Makes budget submissions to the Vice Chancellor to secure adequate resources for the performance of the Council s (and its committees/boards) and the Secretariat s responsibilities. 16 Delegations/policies/legislative framework (Statutes etc) Maintenance a. Is responsible for maintaining Council delegations; b. Is the policy custodian and maintains the policy library; and c. Is responsible for publishing, maintaining and managing amendments to the University of New England Act, By Laws and Rules. 17 Information Privacy and Access Has responsibility for discharging the University s responsibilities under relevant privacy and Information access legislation. 18 Other Responsible for: a. Oversight of the preparation and lodgement of the Annual Report; and b. Records and Archives management; Relationship between the Council and University Secretary The University adopts the following principles 3 : The University Secretary is to support the effectiveness of the Council by monitoring that Council policy and procedures are followed. All Council members may have access to the University Secretary. The appointment and removal of the University secretary is a matter for decision by Council as a whole. The University Secretary is accountable to the Council, through the Chancellor, on all governance matters. Definitions Council means the Council of the University of New England, being the governing body of the University. Secretariat means the Office of the Secretariat assigned to support to the University Secretary in the discharge of the University Secretary s functions under this rule. 3 Taken from Recommendation 2.5 ASX Corporate Governance Principles and Recommendations with 2010 Amendments 2 nd Edition published by the ASX Corporate Governance Council. Page of 314

42 Administration Document type: Council Rule Policy Administrator: Chief Legal and Governance Officer TRIM reference: Date approved: Due for review: 3 years from approval Responsible party for review: Chief Legal and Governance Officer Approved by: [Signature] [Name] Related policies or other documents: Role and Function of Council Rule Role and Function of Vice Chancellor Rule Page of 314

43 ITEM 5.9 Chair Standing Committee of Convocation Report to Council #13452 Council Open Meeting 6 December 2013 Purpose To provide Council with an overview of activities conducted by the Standing Committee of Convocation at the 9 October 2013 meeting. Recommendation Dr Jack Hobbs, Chair Standing Committee of Convocation Council is asked to NOTE the Chair Standing Committee of Convocation Report # Executive Summary The Standing Committee of Convocation considered the following matters: Welcome to new members Ms Liz Ryan and Mr Anthony Phillips Visual Identity Guidelines and UNE Social Media Setup Guidelines Update on Scholarship requirements / details 75 th Anniversary Celebrations Distinguished Alumni Awards Attachments Minutes of 9 October 2013 meeting. Page of 314

44 Standing Committee of Convocation Minutes (4:2013) Minutes of the fourth meeting of the Standing Committee of Convocation of the University of New England held at 4:00pm on Wednesday, 9 October 2013 in the Council Room, Booloominbah and via teleconference. PRESENT Dr J Hobbs (Chair) Mr A Campbell Ms J Miller Ms L Ryan Dr P Ward Mr A Phillips (via teleconference) Ms L Tait (via teleconference) Ms M Young (via teleconference) IN ATTENDANCE Mrs D Fergusson (University Secretariat Officer, Minute Taker) 1 OPENING COMMENTS The Chair opened the meeting and welcomed members to the fourth Standing Committee of Convocation meeting for * Apologies Mr G Horsley Dr P McClenagah Ms P Yeoh 1.2 * Conflict of Interest Disclosures There were no conflicts of interest noted. 1.3 * Order of Business (including adoption of non starred items) The Committee ACCEPTED the Order of Business and that non starred items be adopted. 1.4 * Confirmation of Minutes from meeting held on 31 July 2013 The minutes of the Meeting held on 31 July 2013 were approved as a true and correct record via on 13 August There were no matters arising from the minutes of 31 July PRIORITY MATTERS 2.1 * Welcome to new members Ms Liz Ryan and Mr Anthony Phillips The Chair advised that Kate Matthew had tendered her resignation as a member of the Committee. He indicated that Kate had been a very valued member, expressed gratitude for her contribution and advised that she would be very welcome to return as a member should she so wish. He had passed to her the Committee s best wishes. 306 of 314