The great PBRF scam

I’ve had forwarded to me a number of documents and reports from within Victoria University over its attempts to what can only be called a rort of the PBRF, or Performance Based Research Fund. The TEC says that:

The primary purpose of the PBRF is to ensure that excellent research in the tertiary education sector is encouraged and rewarded. This entails assessing the research performance of TEOs and then funding them on the basis of their performance.

As I will detail below though, in fact it seems the universities gain funding on the basis of their ability to manipulate employment contracts.

The annual value of funding from the PBRF is around $500 million, so universities are highly incentivised to maximise their share of it. Sadly it seems that rather than encouraging academics to do more and better research, VUW (and probably others) have unleashed the HR Department to try and manipulate their results. The ironic thing is that if all universities do what VUW does, then no university actually gains a comparative advantage.

A complaint was made to the VUW University Council by an Associate Professor in the Accounting Economics & Finance Department, who said what VUW was doing was effectively accounting fraud.  He gave eight examples:

1. Individual A, who is not active in research and who has a fixed-term contract maturing after June 2012, was asked to terminate this contract in favour of another one terminating in early 2012 coupled with a further contract starting in late 2012.  The effect of this would be to exclude A from the calculation of the University’s PBRF score in June 2012.  Individual A rejected this proposal on ethical grounds.      

2. Individual B, who is not active in research and had a series of fixed-term contracts with the last maturing in 2011, was offered at that time a replacement contract with a significantly shorter duration than before and that would mature in early 2012, with the effect that they would not be included in the calculation of the University’s PBRF score in June 2012.  B accepted this contract.    

3. Individual C, who is not active in research and has a conventional academic contract, was asked to temporarily depart from University employment in 2012.  The effect of this would be to exclude C from the calculation of the University’s PBRF score in June 2012.  C accepted this offer.  Within a week of Mr Corkill’s inquiry being set up, these arrangements with C were cancelled.

4. Individual D, who is not active in research and had a conventional academic contract, was asked to retire early and was offered a fixed-term contract for teaching work in 2012 with the contract period excluding June 2012.  The effect of this would be to exclude D from the calculation of the University’s PBRF score in June 2012.  D accepted this contract.

5. Individual E, who is not active in research and had a conventional academic contract, was asked to retire early and was offered fixed-term teaching contracts for early 2012 and a further period in late 2012, with the effect of excluding them from the calculation of the University’s PBRF score in June 2012.  E accepted this contract. 

6. Individual F, who is not active in research and had a conventional academic contract, was asked to retire early and was offered a fixed-term teaching contract for late 2012, with the effect of excluding F from the calculation of the University’s PBRF score in June 2012.  F accepted this contract.

7. Individual G was offered teaching contracts in 2012 with the terms of the contracts such that G would be excluded from the calculation of the University’s PBRF score in June 2012.  In addition, G was advised by a University manager that this PBRF consideration was the rationale for the terms offered and that the terms were chosen sufficiently well away from the June 2012 date to avoid suspicion.

8. A Head of School circulated an email to staff in their School advising them that academic staff members of a particular type counted for PBRF and instructed staff to therefore ensure that none of this type were employed on the June 2012 census date. 

There is also other stuff happening to massage the numbers, such as putting some staff onto teaching only contracts, so they get excluded. That is arguably more legitimate, but I struggle to see how having employment contracts that exclude the month of June, purely to avoid the PBRF census can be a correct or ethical thing to do. It also undermines the whole point of the PBRF.

The VUW Chancellor appointed a QC to investigate. His full report they refuse to release, but a summary was released. It is worth noting that his “advisor” was the Chair of the University’s Audit & Risk Committee. I regard that as a conflict. Members of the University Council naturally wish to maximise the funding for VUW. They would be concerned about behaviour that costs VUW money, but be motivated to take a tolerant view of unethical behaviour which gains VUW money.

The report summary is here – Corkill Executive Summary. A response to it from the Accounting Associate Professor Martin Lally is here – PBRF Allegations and Investigations-to dist list. Note that Martin Lally is not the person who supplied these to me. I have had no interactions with him at all. A response from the Chancellor is here, which basically tells him to go away and even declares he will not entertain further correspondence on the issue – Chancellor Letter 28 Feb.

If you bother to read the response from Lally, he points out that the summary is so lacking in details, that he can  not know whether or not his allegations are correct. VUW refuses to allow him the full report.

Further to the original allegations, there is then the e-mail below:

Now to be fair, this is not just happening at VUW. I understand there are complaints about this gaming happening at other universities also. Apart from the low ethical standard the universities are providing to students (Lally’s  concern is the university is doing something that he lectures students on, as being accounting fraud), it would be simpler if all the universities just agreed they won’t game their numbers, if the others won’t.  The amount of time and energy put into this gaming is significant. Every Department in every Faculty has to take part.

There are a lot of unhappy academic staff about this. Since I gained the original materials, I have spoken to several acquaintances who are academics and they all confirm that this is wide-spread.

I understand TEC are aware of all this. I can’t understand why they haven’t said “No you can’t sack a staff member in May and rehire them in July, just to make your PBRF ranking look better”.

This poses an issue for the Minister also. $500 million of taxpayer funds go towards universities and others through the PBRF every year. The PBRF was set up by (I think) the last Labour Government. The intention of it is good – that universities which are producing more research and better research gain more funding. I spent a couple of terms on the Otago University Council and recall that even at Otago, there were some academics who produced minimal original research. PBRF should be encouraging more original research.

But the gaming of the system must seriously bring into question whether the $500 million is going to the right institutions in the right proportions. In theory getting rid of staff for a month who are not doing much research doesn’t actually gain an institution more money directly (as I understand it), but it increases their relative ranking, which benefits them for decisions on other issues such as where new schools might be located, or attracting staff.

At a minimum, in my opinion,  the PBRF rules need to be reviewed to discourage such gaming of the system. Ideally there would be a proper external inquiry into all the universities, to discover how widespread this gaming is, and whether it it ethical and legal.