Education (Tertiary Reform) Amendment Act 2002

New Part 13A inserted in principal Act

9 New Part 13A inserted
  • The principal Act is amended by inserting, after Part XIII, the following Part:

    Part 13A
    Tertiary Education Commission

    Preliminary provisions

    159A Purpose of Part
    • The purpose of this Part is to establish a Tertiary Education Commission and the means by which the Government will exercise leadership of the tertiary education sector to ensure the strategic use of resources.

    159B Definition of organisation
    • (1) In this Part, unless the context otherwise requires, organisation means—

      • (a) a tertiary education provider:

      • (b) an industry training organisation:

      • (c) a person or body that provides tertiary education-related services and is identified in accordance with subsection (2) as an organisation for the purposes of this Part.

      (2) The Minister may, by notice in the Gazette, identify organisations for the purpose of this Part, and may do so by describing a type of person or body that is an organisation, or by naming individual persons or bodies as organisations.

    Establishment of Commission

    159C Establishment of Commission
    • (1) The Commission is established as a body corporate owned by the Crown.

      (2) The Commission is a Crown entity for the purposes of the Public Finance Act 1989, and is named in the Fourth, Fifth, Sixth, and Seventh Schedules of that Act.

      (3) Schedule 13A applies to the Commission and its members.

    159D Composition of Commission
    • (1) The Commission comprises at least 6, but not more than 9, members appointed by the Minister after consultation with the Minister of Maori Affairs.

      (2) At least 2 months before appointing a member (other than a replacement member appointed under clause 11(1) of Schedule 13A), the Minister must advertise his or her intention to appoint a member and must seek responses from interested persons.

      (3) Subsection (2) does not apply if the Minister appoints as a member a person who, immediately before the appointment, was a member of the Transition Tertiary Education Commission.

    159E Powers of Commission
    • (1) The Commission has—

      • (a) all the rights, powers, and privileges of a natural person of full age and capacity; and

      • (b) the power to do anything it is authorised to do by or under this Act, any other enactment, or any rule of law.

      (2) The Commission may exercise its powers only for the purpose of carrying out its functions.

      (3) The Commission may provide goods and services that are consistent with its functions and may, with the approval of the Minister, charge a commercial rate for any goods and services provided.

    Functions of Commission

    159F Functions of Commission
    • (1) The functions of the Commission are—

      • (a) to give effect to the statement of tertiary education priorities through—

        • (i) negotiating charters with organisations; and

        • (ii) negotiating and approving profiles, or parts of profiles, for the purpose of funding; and

        • (iii) allocating funds to organisations; and

        • (iv) building the capability of organisations; and

      • (b) to provide advice to the Minister on—

        • (i) the tertiary education strategy and the statement of tertiary education priorities; and

        • (ii) the activities and performance of the sector generally; and

        • (iii) any policy implications arising from any research, monitoring, or evaluation conducted under paragraph (c); and

      • (c) to conduct applied policy and programme research, monitoring, and evaluation; and

      • (d) to monitor the performance of organisations against their profiles for the purpose of assessing overall achievement in relation to the tertiary education strategy and the statement of tertiary education priorities; and

      • (e) to undertake any functions delegated to the Commission, including (without limitation) functions relating to the funding of organisations other than under section 159ZC; and

      • (f) to undertake any other function given by this Act, the Industry Training Act 1992, the Modern Apprenticeship Training Act 2000, or any other enactment; and

      • (g) to undertake any other function that is necessary or desirable for the purpose of fulfilling its other functions under this subsection.

      (2) In addition, the Commission may provide information and other tertiary-related services to the Crown, provided that these functions are consistent with the Commission's statement of intent and are consistent with, and do not displace, any of its functions under subsection (1).

    159G Principles guiding how Commission operates
    • In performing its functions, the Commission must, in addition to complying with section 159AB,—

      • (a) comply with any written direction of the Minister given under section 159J; and

      • (b) work closely with the stakeholders of tertiary education providers and industry training organisations; and

      • (c) work closely with tertiary education providers and industry training organisations.

    159H Minister may review performance of Commission
    • (1) The Minister may, by written notice to the Commission, review the performance, or any aspect of the performance, of the Commission.

      (2) Before the Minister undertakes a review under this section, he or she must—

      • (a) consult with the Commission on the purpose and nature of the review; and

      • (b) consider any submissions made by the Commission on the proposed review.

      (3) The Minister may appoint any agency to conduct a review under thissection on behalf of the Minister, and in that case clause 16 of Schedule 13A applies to the agency as if it were the Minister.

    159I Delegation of functions or powers of Minister
    • (1) The Minister may, either generally or specifically, delegate to the Commission all or any of the Minister's functions and powers under this Act or any other Act, including—

      • (a) functions or powers delegated to the Minister under this Act or any other Act; and

      • (b) the Minister's powers relating to charters.

      (2) A delegation under this section must be in writing.

      (3) No delegation under this section may include the power to delegate under this section.

      (4) The power of the Minister to delegate under this section—

      • (a) is subject to any prohibitions, restrictions, or conditions contained in any other Act in relation to the delegation of the Minister's functions or powers; but

      • (b) does not limit any power of delegation conferred on the Minister by any other Act.

      (5) Subject to any general or special directions given, or conditions imposed, by the Minister, the Commission may exercise any functions or powers delegated to the Commission under this section in the same manner and with the same effect as if they had been conferred on the Commission directly by this section and not by delegation.

      (6) If the Commission purports to act under any delegation under this section, the Commission is, in the absence of proof to the contrary, presumed to be acting in accordance with the terms of the delegation.

      (7) A delegation does not affect or prevent the exercise of any function or power by the Minister, or affect the responsibility of the Minister for the actions of any person acting under the delegation.

    159J Minister may direct Commission
    • (1) The Minister may, from time to time, give a formal direction under this section to the Commission specifying the policy that the Government wants the Commission to pursue in fulfilling its functions, and the Minister may revoke or amend any existing direction in the same way.

      (2) The Minister may not give a direction unless he or she has first notified the Commission of his or her intention to do so and invited comment from the Commission on the proposal.

      (3) Every direction under this section must be consistent with the tertiary education strategy and the functions of the Commission.

      (4) The Minister may not, under this section, direct the Commission to provide or deny funding under section 159ZC to any specified organisation.

      (5) As soon as practicable after giving, amending, or revoking a direction under subsection (1), the Minister must—

      • (a) give public notice of the direction, amendment, or revocation; and

      • (b) present a copy of it to the House of Representatives.

      (6) If the Minister gives a direction under this section, the Commission must include in its annual report for every year to which the direction relates—

      • (a) a copy of the direction; and

      • (b) a report on how the Commission has responded to it.

    159K Application of Commerce Act 1986
    • Despite section 6 of the Commerce Act 1986, nothing in that Act applies to the Commission except to the extent that the Commission engages in supplying goods and services for which it charges.

    Charters

    159L What is a charter?
    • An organisation's charter is a document that—

      • (a) sets out the organisation's mission and role in the tertiary education system; and

      • (b) is intended to cover a medium- to long-term timeframe; and

      • (c) provides the basis for development of the organisation's profile; and

      • (d) is prepared by the organisation in accordance with the requirements for the contents of charters prescribed by the Minister under section 159M; and

      • (e) is approved by the Minister in accordance with the criteria for assessment of charters identified by the Minister under section 159M.

    159M Content of charters, and assessment criteria
    • (1) The Minister must, in consultation with the Commission, prescribe and give public notice of—

      • (a) the content of charters, being the matters that charters must address; and

      • (b) the criteria that the Minister will use to assess proposed charters.

      (2) When prescribing, under subsection (1), the content of charters and assessment criteria for charters, the Minister may prescribe standard contents and criteria, as well as prescribing different contents and different criteria applying to different organisations, groups of organisations, or types of organisation.

      (3) The criteria for assessment may (without limitation) include criteria that relate to the process used to develop a charter as well as to the content of the charter.

      (4) If the Minister requires an organisation, by notice in writing, to consult over its charter with any specified person or group of persons, that requirement is for all purposes to be treated as assessment criteria that have been prescribed under this section.

    159N Organisations that must or may have a charter
    • (1) After 1 January 2004, the following must have a charter prepared and approved under this Part:

      • (a) all institutions:

      • (b) all other organisations that seek or receive funding from the Commission, unless exempt under subsection (4).

      (2) At any time before 1 January 2004, the Commission may require, by notice in writing to the organisation, any organisation referred to in subsection (1) to prepare a charter under this Part within a specified reasonable period, and an organisation that receives such a notice must prepare a charter as required.

      (3) Before 1 January 2004, any organisation that is not required under subsection (2) to have a charter, but that wishes to have one may, with the agreement of the Minister, prepare and seek approval for a charter.

      (4) The Minister may, on the advice of the Commission,—

      • (a) by notice in writing to an organisation, exempt the organisation from the requirement to have a charter or from any requirement about the content of charters; and

      • (b) by notice in the Gazette, exempt any group of organisations or type of organisation from the requirement to have a charter or from any requirement about the content of charters.

      (5) Subsection 4 does not apply to institutions.

    159O Preparing charters
    • (1) An organisation that wishes, or is obliged, to have a charter must—

      • (a) identify its stakeholders and publish a list of them in at least 1 daily newspaper circulating in each area served by the organisation; and

      • (b) prepare a proposed charter; and

      • (c) consult with its stakeholders over the proposed charter; and

      • (d) consult with any other person or group of persons with whom the Minister requires the organisation to consult.

      (2) After completing the consultation required under subsection (1)(c) and (d), the organisation must submit the proposed charter to the Commission for comment and consultation.

      (3) Following consultation with the Commission over, and (if necessary) modification of, the proposed charter, the organisation must submit the proposed charter to the Commission for approval by the Minister.

    159P Minister's approval of charters
    • (1) The Minister must assess a proposed charter against the criteria prescribed under section 159M(1).

      (2) The Minister must approve a proposed charter unless satisfied on reasonable grounds that he or she should not do so.

      (3) A charter comes into effect on the date specified by the Minister.

      (4) If the Minister rejects a proposed charter, he or she must give reasons for the rejection.

      (5) An organisation may submit a revised proposed charter to the Minister as many times as is necessary, but only if, before resubmitting it, the organisation has consulted further with the Commission and, if the revisions are significant, with the people or groups with whom it is required to consult under section 159O(1)(c) and (d).

    159Q Minister's special powers in relation to charters of institutions
    • (1) If the Minister and an institution cannot agree over the content of the institution's charter, the Minister must, after consulting as he or she thinks appropriate, determine the matter.

      (2) The Minister may, at any time, on his or her own initiative, propose amendments to an institution's charter or proposed charter.

      (3) If the Minister proposes an amendment to a charter or proposed charter, he or she must notify the institution of the proposal and give the institution a reasonable period in which to make submissions in response to it.

      (4) After considering any submissions made by an institution on the proposal, the Minister may approve the proposed amendment, with or without further amendment, or abandon the proposal.

      (5) Nothing in this section limits the right or ability of an institution to propose any amendment to its own charter or proposed charter.

    159R Minister may approve interim charters for institutions
    • (1) In any of the following circumstances, the Minister may, on his or her own initiative, approve an interim charter for an institution:

      • (a) when an institution is newly established:

      • (b) when an institution has changed its status:

      • (c) when an institution has merged with another institution or had another institution incorporated into it:

      • (d) when an institution's charter has expired or been revoked:

      (2) An interim charter approved under subsection (1) remains in force until a new charter is approved under section 159P.

    159S Amendments to, and review of, charters
    • (1) Sections 159O and 159P apply to an amendment or proposed amendment to a charter (other than an amendment proposed by the Minister under section 159Q) as if the amendment or proposed amendment were a charter or proposed charter.

      (2) If the Minister approves an amendment to a charter, the amendment forms part of the charter from the date set by the Minister.

      (3) The Minister may, at any time, require an organisation to review its charter with a view to amending or replacing it.

    159T Expiry of charters
    • (1) Every charter must specify the date on which it expires, which must be—

      • (a) an expiry date as agreed with the Minister, which must be a date no later than 10 years after the date on which the charter comes into effect; or

      • (b) in the case of an industry training organisation, the date on which its recognition under section 5 or section 8(1) of the Industry Training Act 1992 expires.

      (2) Every charter, unless revoked earlier, expires on its expiry date.

    159U Charter may lapse if organisation does not receive funding
    • The charter of an organisation (other than an institution) lapses if the provider does not receive funding from the Commission for 2 consecutive years.

    159V Charters must be available
    • An organisation that has a charter must ensure that the charter is available for inspection by the public, and that copies may be obtained at no more than a reasonable cost.

    Profiles

    159W What is a profile?
    • An organisation's profile is a document that—

      • (a) is prepared annually; and

      • (b) sets out the organisation's operating plans, key policies, and proposed activities for the next 3 years; and

      • (c) sets out the organisation's objectives, and the performance measures and targets that the organisation will use to measure its performance; and

      • (d) sets out the short- to medium-term strategic direction of the organisation; and

      • (e) identifies the activities of the organisation for which it seeks or receives funding from the Commission; and

      • (f) sets out the basis on which funding will be sought or received from the Commission; and

      • (g) demonstrates how the organisation will give effect to its charter (unless it is exempt under section 159N(4) from the requirement to have one); and

      • (h) identifies the information that the organisation will supply on an annual basis to the Commission; and

      • (i) includes the content prescribed under section 159X(1)(a), and is in the form prescribed under that section.

    159X Content of profiles and criteria for approval
    • (1) The Commission must, at least once every 3 years, prescribe and give public notice of—

      • (a) the content and form of profiles; and

      • (b) the criteria on which the Commission will approve profiles, or parts of profiles, for funding purposes; and

      • (c) the kinds of background or supplementary information that the Commission may require an organisation to provide when it submits its profile to the Commission; and

      • (d) the timetable and process for the submission of profiles to the Commission.

      (2) Notices given under subsection (1)—

      • (a) may prescribe different content and form, criteria, information, timetables, and processes for different organisations, groups of organisations, or types of organisation; and

      • (b) may be given at different times; and

      • (c) may be amended by the Commission, in which case the Commission must give public notice of the amendment.

      (3) The Commission may permit organisations to prepare combined profiles for more than 1 organisation.

      (4) The Commission may waive any requirement (other than a requirement imposed by this Act) as to the content or form of profiles, or the timing or process to be used in submitting them.

    159Y Organisations that must have a profile
    • (1) After 1 January 2004, the following organisations must have a profile:

      • (a) all institutions:

      • (b) all other organisations that seek or receive funding from the Commission, unless exempt under subsection (3).

      (2) At any time before 1 January 2004, the Commission may, by notice in writing to an organisation, require the organisation to prepare a profile within a specified reasonable period; and an organisation that receives such a notice must prepare a profile.

      (3) Despite subsection (1), the Commission may,—

      • (a) by written notice to an organisation, exempt the organisation for a specified period from the requirement to have a profile; and

      • (b) by notice in the Gazette, exempt any group of organisations, or type of organisation, from the requirement to have a profile.

      (4) Subsection (3) does not apply to institutions.

    159Z Profiles must be publicly available
    • An organisation that has a profile must ensure that the profile is available for inspection by the public, and that copies may be obtained at no more than a reasonable cost.

    Funding by Commission

    159ZA Minister must determine design of funding mechanisms
    • (1) The Minister must, from time to time, determine the design of the mechanisms that the Commission must use to fund organisations.

      (2) Without limiting the generality of subsection (1), when determining the design of funding mechanisms the Minister—

      • (a) must identify the general form and essential components of each mechanism; and

      • (b) must indicate which mechanisms relate to funding provided under section 159ZC, and which (if any) relate to other funding; and

      • (c) may specify the amount of money, or the proportion of an amount of money, available under any particular mechanism; and

      • (d) may provide for different versions or modifications of a mechanism to apply to different groups of organisations; and

      • (e) may specify conditions that the Commission must attach to funding provided under any funding mechanism, including conditions setting limits on the fees that an organisation may charge domestic students; and

      • (f) may make provision for funding that targets particular student groups.

      (3) However, the Minister may not identify a specified organisation or organisations to which funding is to be provided or denied under any mechanism.

      (4) Every mechanism must be consistent with the principle that receipt by an organisation of public funds is dependent on the organisation meeting quality assurance requirements under this Act.

      (5) The Commission must develop the details of how to implement the Minister's determinations under this section.

      (6) The Minister may not, under subsection (2)(e), specify conditions setting limits on the fees that organisations may charge domestic students until 2 months after the date on which the Minister has published a notice in the Gazette that—

      • (a) states that the Minister proposes to specify such conditions; and

      • (b) sets out the proposed conditions; and

      • (c) invites submissions on the proposed conditions; and

      • (d) specifies the date by which submissions must be received, which must be a date no more than 21 days after the date of the Gazette notice.

    159ZB Approval of profiles for funding purposes
    • (1) An organisation that has a profile may submit it to the Commission for approval for funding purposes.

      (2) The Commission may, after discussion and, if necessary, negotiation with the organisation, approve all or any part of the organisation's profile for funding purposes.

      (3) If the Commission does not approve a profile or part of a profile for funding purposes, it must notify the organisation and give reasons for the non-approval.

      (4) If the Commission approves an organisation's profile, or part of its profile, for funding purposes, the organisation is eligible for funding from the Commission.

    159ZC Payment of funding
    • (1) The Commission must determine the amount of funding payable to an organisation that is eligible for funding by applying the appropriate funding mechanism or mechanisms to the part or parts of the organisation's profile that are approved for funding purposes.

      (2) The Commission must arrange for payment to the organisation of the amount of funding determined under subsection (1).

      (3) If a funding mechanism provides that funding may be provided under it to an organisation that does not have a profile, the Commission may, in accordance with the funding mechanism, fund an organisation under this section even if it does not have a profile.

      (4) Nothing in this section limits the Commission's powers, under a delegated authority or any other enactment, to fund organisations other than under this section.

    159ZD Conditions on funding
    • (1) It is a condition of payment of funding under section 159ZC that the recipient will supply to the Commission or Ministry, at intervals and in a form specified by the Commission or Ministry, any financial, statistical, or other information that the Commission or Ministry requires the organisation to supply.

      (2) The Commission may impose conditions on the use of any funding provided under section 159ZC, but only if the Minister has provided that, under the mechanism under which that funding is provided,—

      • (a) any or specified conditions may be imposed; or

      • (b) specified conditions must be imposed.

      (3) The Commission may at any time (including during a funding period) amend any condition imposed under subsection (2), but no such amendment takes effect until the organisation has had reasonable notice of it.

    159ZE Accountability for funding received under section 159ZC
    • (1) An organisation, other than an institution, that receives funding under section 159ZC must ensure that—

      • (a) records are kept, in a form not inconsistent with that required by the Commission, for the period to which the funding relates, that fully and fairly show—

        • (i) the transactions, assets, liabilities, and funds of the organisation that are or were affected by the funding; and

        • (ii) whether any conditions on which the grant was made have been complied with; and

      • (b) the records are available for inspection by the Commission at all reasonable times.

      (2) As soon as practicable after the end of any year in which an organisation, other than an institution, receives funding under section 159ZC, the organisation must provide the Commission with—

      • (a) a financial report of the organisation for that year, including a statement of financial performance, a statement of financial position, a statement of movements in equity, a statement of cash flows, and a statement of service performance that compares the performance of the organisation with the objectives and targets specified in the organisation's profile for that year; and

      • (b) any financial reports, or statistical or other information, required by the Commission; and

      • (c) any information necessary to demonstrate compliance with any condition attached to any funding.

      (3) The reports required under subsection (2)(a) must be prepared in accordance with generally accepted accounting practice and must be audited by an independent chartered accountant.

      (4) Section 203 sets out the accountability requirements for institutions.

    159ZF Commission may suspend funding
    • The Commission may suspend or terminate payment, or any or all further payments, of any funding to an organisation if the Commission is satisfied on reasonable grounds that the organisation—

      • (a) has not complied, or is not complying, with a condition on which the funding was provided; or

      • (b) in the case of funding provided under section 159ZC, is not providing, or has not provided, adequate and timely information when required to do so by the Commission or Ministry.