28 July 2011
Are university employees subject to the same integrity obligations as State servants?
Police are investigating the misappropriation of about $500,000 from the Auckland University of Technology. A contemporaneous report is that a senior University manager has resigned. Circumstances like this bring into question the claim by university staff that they are different from other government employees, and should be exempt from integrity expectation held of others.
New Zealand has 29 state funded tertiary education institutions – eight universities, eighteen polytechnics and three wananga. TEIs have a hybrid form of governance. They are Crown entities but few parts of the Crown Entities Act apply to them. They are part of the Crown but, like State owned enterprises, are excluded from the State Sector Act definition of the State Services. They seek to distance themselves from the Crown but enjoy non rateable status on their inner city heritage properties because of the Crown relationship.
TEI staff are officials for the purposes of the Crimes Act – of particular relevance to bribery and corruption offences – but are excluded both from the State Services Commissioner’s standards of integrity and his general jurisdiction regarding advice and guidance on matters of integrity and conduct.
The rationale for this distinction is that universities are the conscience of the nation; their intellectual endeavour should not be circumscribed, their academic freedom is essential. Standards cannot be imposed on TEI employees, and members of governing boards are not subject to the integrity duties of Crown entity members. Ironically of course many in TEIs do no research or teaching and have no justifiable claim to academic freedom.
However, there is more than one way to skin a cat. All are subject to the ubiquitous application of the Cabinet Manual. TEIs are part of the State sector, and subject to the provision requiring that “all employees in the State sector must act with a spirit of service to the community and meet high standards of integrity and conduct in everything they do. In particular, employees must be fair, impartial, responsible, and trustworthy.”
These four principles of public service are informed by the State Services Commissioner’s code. Guidance on Understanding the Code explains what they mean. There would never be doubt about the apparent offending reported at AUT, but with the impending general election, TEI staff should consider whether in fact they have the political neutrality obligations of State servants.
www.3news.co.nz/AUT-CEO-resigns-amid-fraud-claims/tabid/423/articleID/220246/Default.aspx
www.ssc.govt.nz/sites/all/files/Guide-to-NZCGA-1July2011_0.pdf
Integrity Talking Points 
As a New Zealand pre-employment background screening company it is our experience that significant and inventive frauds have been committed in NZ tertiary institutions because employees there are not subject to the same level of oversight that the SSC imposes on the Public Service.
Three years ago a lecturer at Auckland Unitec fraudulently transferred $330,000 worth of Unitec-owned patents to a company he controlled, and even had Unitec pay the Patent Attorney’s $30,000 invoice for the work:
http://www.verify.co.nz/news-theftnz.php#theftnz20081118
A $609,000 fraud at Auckland University was only uncovered because the department the thief worked in had exceeded it budget:
http://www.verify.co.nz/news-theftnz.php#theftnz20081016
A former Director of External Relations who had worked at Waikato University for 27 years fraudulently deposited $22,500 into his own bank account. After being fired he went on to secure a position at the University of Bath in England:
http://www.verify.co.nz/news-theftnz.php#theftnz20080618
Four years ago a senior Librarian at Massey University was convicted of stealing rare books from the Library and selling them for $23,000, with a further $40,000 worth of books unaccounted for:
http://www.verify.co.nz/news-theftnz.php#Librarian
A science writer at Otago University resigned after it was discovered that for over two years she had falsely been claiming to have a PhD from Cambridge University:
http://www.verify.co.nz/news-cvfraudnz.php#cvfraudnz20090909
But the most brazen case we are aware of had its sequel just three weeks ago when a cashier at Adelaide’s Flinder’s University was sentenced to nine years imprisonment for stealing $27 million (NZ$37 million) from the university over a two year period:
http://www.verify.co.nz/news-theftos.php#20110708_christopher_fuss
I have great difficulty understanding how the university could not have missed this amount of money.
Craig Gubbins
Personal Verification Ltd
Auckland