ICAC Reports on Corruption Issues Relating to International Students at Universities in NSW

Thursday 30 April 2015 @ 11.05 a.m. | Crime | Trade & Commerce

In a recent report (released 16 April 2015) titled "Learning the Hard Way: Managing Corruption Risks Associated with International Students at Universities in NSW" the NSW Independent Commission Against Corruption (ICAC) has completed an investigation of universities in NSW and indicated that they should consider a range of key initiatives including the separation of academic compliance and incentive functions of their international student offices to reduce the risk of corruption.

Background - Development of International Student Industry

The ICAC report points out that between 1988 and 2014, the number of fee-paying international students at universities in NSW increased 13 times so that today, they represent nearly one in five of those studying at universities in NSW. Further, around 17% of university operating revenues come from international student fees, so that profits from the international student industry have become central to funding the broader range of activities in NSW universities, this from very modest beginnings in 1986 when Australian universities first entered foreign markets.

In Australia, the international student industry competes increasingly with universities around the world, but in particular with US, Canadian, German and the UK institutions, such that the growth in the supply of university places at a global level is out growing the growth in the number of international students with suitable academic capabilities and adequate English language skills.

The result of this competition is seen through the forcing down of the level of English language skills that some universities in NSW demand below what is normally considered necessary to complete some courses.

From this search for international students, the ICAC Report indicates, some universities in NSW are entering markets where document fraud and cheating on English language skill tests are "known to exist". Further, ICAC says they are using large numbers of local intermediaries/agents (as many as 200) to market to and recruit students, this ". . . resulting in due diligence and control challenges".

Background - Why ICAC Produced the Report?

ICAC's legal reasons for producing the report are noted in the report as responding to its role to ". . . secure the revision of work methods or procedures that may be conducive to corrupt conduct" (see the Independent Commission Against Corruption Act 1988 (NSW) section 13(1)(f) which states that a principal function of ICAC is “to advise public authorities or public officials of changes in practices or procedures compatible with the effective exercise of their functions which ICAC thinks necessary to reduce the likelihood of the occurrence of corrupt conduct”).

Some of the wider issues identified by ICAC as indicating potential problems:

Budgets - Pressure for some international students to pass courses that are beyond their academic capabilities, pressure on staff within NSW universities to find ways to pass students in order to preserve budgets.

Market - Pressure created by an increasingly competitive market that makes recruitment targets difficult to meet.

Poor Public Perception - Widespread public perception (fostered by the media) that academic standards are lowered to accommodate a cohort of students who struggle to pass.

Corruption Conducive Environment - Pressures within the universities are also conducive to corruption. The gap between student capabilities and academic demands increases the likelihood that students will offer inducements to academics in order to pass courses and, conversely, makes students vulnerable to improper demands from academics.

Initiatives Proposed by ICAC

In its Report ICAC identifies several corruption risks (as described above) created by the international student industry in NSW universities and it puts forward 12 key corruption initiatives to help the universities manage these risks. Some of the initiatives identified by ICAC that NSW universities are advised to adapt as appropriate to their organisations include:

  • Separating the compliance function from the business development function where feasible, which may include moving the admission functions out of international student offices that are responsible for marketing and recruitment and limiting the impact of international students numbers on faculty budgets;
  • Restricting the freedom of academics to enter into binding agreements with overseas agents and partners on behalf of the university without considering the full cost and risk of such agreements;
  • Considering the full costs associated with international students of different capabilities when making marketing decisions;
  • Limiting the number of overseas agents with which the universities work, where possible; and
  • Increasing due diligence on and monitoring of agents and partners, particularly focusing on the use of fine-grained data analysis of student issues that can be linked to markets, agents and partners.

Comment Relevant to The Report

The recent ABC Four Corners report "Degrees of Deception" points to why the ICAC report and its recommendations are needed, showing clearly at a national level how widespread the problems really are:

"With universities now hooked on the income derived from foreign students, very few university employees can openly acknowledge these problems. Those who do, say that they face the possibility they will lose their job".

The Conversation in an article by Tracey Bretag Senior Lecturer, School of Management at University of South Australia, points out that it has taken 30 years to realise the inadequacy of the current system's liability to corruption and points out the useful work done by ICAC with its report and recommendations:

"Thirty years after entering foreign markets, the Australian higher education sector is beginning to recognise that a short-sighted and ill-planned grab for revenue has had long-reaching and potentially disastrous effects on academic standards, integrity and reputation.

ICAC has provided a number of useful recommendations. These make clear the responsibility of universities, not students, for rectifying these issues."

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