University Secretary's Department Statutes and Regulation

Regulation 6.1.R7 - Guidelines for the Formation and Management of University Centre and Institutes for Research and Research Training Involving The University of Melbourne

 

  1. INTRODUCTION

    The University has established and participates in a large number of Centres which are central to the strategy of raising the teaching and research profile of the University.

    Centres are a mechanism for meeting the emerging needs of multi-disciplinary requirements in new teaching and research areas.  It is important therefore that establishment and reporting requirements capture and demonstrate the value that new Centres add to the University.

    There are two broad categories of Centres for Research and Research Training in the University:

    1. Institutional Centres which do not involve an external node and for which the University has sole responsibility. Institutional Centres will not be incorporated normally. In a very small number of cases, centres of this type have been referred to as Institutes.

      Since 2008, a refocus on research priorities has led to the establishment of a number of major multi-disciplinary research entities involving several Faculties and which are referred to as Institutes. Typically, these entities operate to make connections where none exist, to enhance fledgling connections, to support already valuable connections and to provide leadership and coordination when responding to challenges that transcend individual disciplines. Examples of three such institutes are the Melbourne Energy Institute, the Melbourne Institute of Materials, and the Melbourne Sustainable Societies Institute.

      As a result, from 2009, when associated with institutional entities whose major purpose is related to research or research training, the term institute will be used only on the recommendation of the Deputy Vice-Chancellor (Research) to the Vice-Chancellor and subsequent approval by the Vice-Chancellor. These institutional entities (referred to as institutes) will be multi-disciplinary and multi-faculty in nature representing a University-level research theme. Thus, Section 2 does not apply to the formation of institutional entities of this kind.
    2. Collaborative Centres/Institutes which involve external organisations and where one or more nodes of the Centres/Institutes are located outside the University. These entities have a separate Board of Management and are subject to formal external review. For these Collaborative Centres/Institutes, whose major purpose is related to research, the terms centre and institute have the same intent and meaning. However, from 2009, the preference of the University is the term centre. The term institute can be used only with the recommendation of the Deputy Vice-Chancellor (Research) to the Vice-Chancellor and subsequent approval by the Vice-Chancellor. For unincorporated Centres/Institutes the responsibility for their operation is shared between the University and the other organisations. They are created normally through formal contractual agreements.

      Incorporated Centres/Institutes for Research and Research Training will have a different governance model, but are still subject to these Guidelines. Additional guidelines for University participation or support for Incorporated Centres/Institutes are available as Appendices A and B of this section (Section 22) of Regulation 6.1.R7.

    It is noted that other Centres or Institutes involving the University (i) whose major purpose is not related to research or research training or (ii) which have their own Regulation are not covered by these Guidelines.

    Subject to the foregoing paragraph, the following revised Guidelines are provided so that the various types of Centres and Institutes for Research and Research Training are established and operated in a manner which is consistent with University policy.

    A listing of the University of Melbourne Centres and Institutes for Research and Research Training forms Attachment A of Regulation 6.1.R7.

  2. FORMATION

    2.1 Institutional Centres for Research and Research Training

    All proposals for new Institutional Centres must be submitted to the Vice-Chancellor for approval with a recommendation from the Deputy Vice-Chancellor (Research) and the relevant Deans of Faculties.  Centres will be established by the Vice-Chancellor.

    In the consideration of any proposal for the formation of an Institutional Centre, the Vice-Chancellor must be satisfied that:

    • The Centre has the potential to be of demonstrable benefit to the University;
    • The academic purposes and objectives for which the Centre is proposed cannot be reasonably achieved within an existing University organisational structure;
    • The Centre can demonstrate financial viability for the initial operational term of the Centre, which would be at least 3 years normally.

    A Centre must show evidence of support from the relevant Faculties and have confirmation of wide consultation across discipline areas.  For reporting purposes, each Centre should be clearly aligned with one Faculty.  This arrangement is particularly important for multi-disciplinary Centres.

    Additional funds for the purposes of the establishment or operation of the Centre will be obtained in general from external sources.

    (This Section does not apply to the formation of multi-disciplinary multi-faculty institutes - see Section 1A.)

    2.1.1 Plans for Institutional Centres

    Each Centre or node of a Centre must develop a plan as part of the application or renewal process. 
    The Centre Plan should outline:

    • Summary of the Plan - including, mission statement, objectives against Faculty and University Strategic Plans, teaching and /or research outcomes;
    • Justification of the establishment of the Centre - addressing how the formation of a Centre is necessary to achieve the objectives and why these cannot be achieved through an existing organizational structure;
    • Organisation and management structure - including staffing arrangements, proposed Director and term of appointment, any Centre advisory committee composition and definition of arrangements for administrative support;
    • Research and Research Training Strategies - including course development, research areas and scope of any consulting activities;
    • Funding - proposed seed funding, projected budgets identifying sources of external funds to support Centre activities, plans for becoming financially self-sufficient and growth of the funding base over time;
    • Reporting and review cycle - including auditing cash and in-kind contributions annually, reporting against performance and financial objectives and mechanisms to capture and report any IP developed; and
    • Sunset or renewal arrangements at the end of the secured funding cycle.

    3. Note that academic units otherwise coming within these Guidelines and which arise from successful applications to major funding Schemes, regardless of whether they are titled as a “Centre” or as an “Institute”, are subject to the process of Section 2.2(i).

    2.2   Collaborative Centres/Institutes

    In general, there are two types of Collaborative Centres and Institutes for Research and Research Training which involve the University of Melbourne and external organisations:

    1. Centres and Institutes which result from successful applications to major funding schemes (such as the Australian Research Council Centres of Excellence Scheme, the National Health and Medical Research Council Clinical Centres of Research Excellence Scheme and the Cooperative Research Centres Program).

      In this case, the approval from the Deputy Vice-Chancellor (Research) is obtained by virtue of the submission process for the application which must be prepared with support from the Deans of the relevant Faculties and in consultation with the Melbourne Research Office and (as appropriate) with Legal Services.  A successful submission to the funding Scheme results in the opportunity to form the Centre or Institute.  Deans of Faculties are required to notify the Vice-Chancellor of a successful bid for such a centre or institute.
    2. A number of external organisations and the University agreeto establish an entity for research purposes.

      In this case, Centres and Institutes for Research and Research Training are subject to the process of Section 2.

    For all types of Collaborative Centres and Institutes for Research and Research Training, and for academic units which have arisen through a successful application to a major funding scheme, the University will provide support as required by the conditions of the collaboration or funding Scheme.  A written agreement must be signed by authorised persons of the collaborating organisations and the University.  The Melbourne Research Office must be consulted with regard to the collaborative agreement.

    2.3   Budgets

    It is expected that budgets for all Centres/Institutes will be prepared in consultation with the Vice-Principal (Research) and will include cost recovery for the provision of research infrastructure and services and the calculation of in-kind contributions associated with research activities.  Advice on the valuation of Intellectual Property (IP) should be sought from Melbourne Ventures Pty Ltd.

  3. REPORTING

    Approved procedures must be established to enable adequate reporting on the activities of the various types of Centres and Institutes for Research and Research Training.

    The Heads of the Departments and Deans of the Faculties involved are to be kept informed on a regular basis about Centre/Institute activities by receiving the relevant management documentation including minutes of meetings, financial statements and annual reports.

    Unless the Centre/Institute is subject to formal and regular external reviews, Centres/Institutes will be reviewed every five years (also refer to Section 7).  This ensures that Centres/Institutes are within the University’s continuous improvement and quality assurance cycles.

    On an annual basis, each Centre/Institute must (in conjunction with the Heads of Departments) assess its performance against Centre/Institute objectives and budgets, including the reporting of any IP developed by the Centre/Institute within the previous twelve months.  The outcomes of this assessment should be discussed with, and presented to, the relevant Heads of Departments and Deans of Faculties.  Performance of Centres/Institutes will form part of the Faculty Strategy and Performance Review.

  4. RESPONSIBILITIES

    41. Institutional Centres

    Where a Centre involves only one Department, that Department must be designated as the unit responsible for the Centre and the staff therein.  Where a Centre involves more than one Department, normally only one Department would be designated as the unit responsible for the reporting of Centre outcomes.  However, in exceptional circumstances, the Vice-Chancellor may approve an alternative arrangement (including reporting procedures) following consultations with the relevant Deans of Faculties.  The Director will be responsible for complying with the reporting requirements.

    Each Centre must have an Advisory Committee comprising both University members and external members as deemed appropriate for the Centre’s Mission.  The Advisory Committee must meet at least twice a year.

    4.2 Collaborative Centres

    When the Centre/Institute is unincorporated, only one Department will be designated usually as the unit responsible for the Centre/Institute.  However, in exceptional circumstances, the Vice-Chancellor may approve an alternative arrangement for accountability and reporting purposes, following consultations with the relevant Heads of Departments and Deans of Faculties.

    Where the Director of the Centre/Institute is not a member of the University, a University staff member will be designated Head of the University node and will undertake the reporting responsibility.  This person will provide the first point of contact for any matters pertaining to the activities of the University node of the Centre/Institute.

    For Incorporated Centres/Institutes reporting will be in accordance with the obligations described in contractual arrangements.

  1. STAFFING ISSUES

    2. All University staff engaged to work in any Centre/Institute will be employed normally as members of the Departments with which the Centre/Institute is involved.  All such staff will assume the responsibilities consistent with membership of these Departments.

    Special conditions will apply to staff seconded to Incorporated Centres/Institutes.  Such conditions will be determined when the University enters into contractual arrangements with the incorporated body.

    A Director of an Institutional Centre will be appointed for a period of up to five years in the first instance and renewable for further periods of up to five years.  Where appropriate, the terms and conditions of the Director's appointment should be confirmed at the time the Centre is proposed.

  2. AUDIT REQUIREMENTS

    3. Funds available to Centres/Institutes are the overall responsibility of the Departments involved.  The accounts of the Centres/Institutes are audited as part of the continuous auditing procedures which the University must undertake to fulfil statutory obligations.

    In some cases, there is a requirement for the University's in-kind contributions, resulting from the commitment of both human and other resources, to be ratified in the audit of the activities of the Centre/Institute.  Each Centre/Institute must establish and maintain a record of all its resources and IP created.  The latter must be reported in accordance with the University invention disclosure policy.

    For some Centres/Institutes, there may also be a requirement for the accounts associated with the Centre/Institute to be audited independently of the University's auditing operations.  In the first instance, audit arrangements should be made with the Internal Audit Office of the University.

  3. REVIEW

    7.1 Externally Reviewed Centres

    For Collaborative Centres/Institutes and some types of Institutional Centres which are obliged to undergo an external review under a major funding scheme, the Faculties responsible for the Centre/Institute will not conduct usually another review of the University contribution to the Centre/Institute.  This decision is subject to both the satisfactory operation of the Centre and acceptable outcomes from the external review.

    Copies of the reports of external reviews including the responses by the Faculties must be forwarded by the Deans of the Faculties responsible for the Centre/Institute, for subsequent reporting to the Vice-Chancellor and through the Strategy and Performance Review process.

    7.2 Institutional Centres

    Each Institutional Centre must develop a Centre Plan along the lines outlined in
    Section 2.1.1.  Each Centre should report annually on the outcomes achieved against the Plan objectives, at the same time as the Strategy and Performance Reviews held in Faculties.  Where the Centre is not subject to a formal external review as a condition of establishment, each Institutional Centre will be required to undergo five-yearly reviews.  For these reviews, it is expected that some members of the Review Panel will be external to the University, with exceptions being approved by the Deputy Vice-Chancellor (Research).

    If a Centre is deemed not to be performing against its Centre Plan, a recommendation must be made by the Deans of the relevant Faculties to the Vice-Chancellor for consideration, according to Section 8.

  4. DISESTABLISHMENT

    8.1 Criteria for the Continuation of a Centre

    In determining whether the continuation of a Centre/Institute for Research and Research Training within the University should be approved, the Vice-Chancellor will take into account the advice of the Deputy Vice-Chancellor (Research) and relevant Heads of Departments and Deans of Faculties as to whether:

      • The purposes and objectives of the Centre/Institute have been met;
      • The Centre/Institute is continuing to provide a unique and productive role in the University;
      • The Centre/Institute continues to fit within the basic organisation structure of the University; and
      • The Centre/Institute has a firm financial base.

8.2 Disestablishment Procedures

    Centres will be disestablished by Council on the recommendation of the vice-chancellor after receiving advice from faculties.

  1. CHANGES OF NAMES AND CATEGORIES

    Requests for approval for changes to the names of Centres/Institutes and the categories (institutional or collaborative) of Centres/Institutes must be submitted to the Vice-Chancellor by the Deans of the Faculties.

  2. OTHER

Other changes such as the change of status of a Centre/Institute or the change of composition of a Centre/Institute (the latter not leading to a change to the category of the Centre/Institute) must be provided by the Deans of the Faculties to the Vice-Chancellor for information.

A change of status of a Centre/Institute may occur, for example, when a Centre/Institute formed originally with support from a major funding scheme has come to the end of the funding period but still exists either (i) with the same name usually with the approval of the funding scheme or (ii) with the same name minus the component which identifies the funding scheme.  However, should the end of a funding period for a Centre/Institute result in a completely different name or category type, the Centre/Institute is subject to Section 9.

  1. RECORDED DATES

The date of any event (establishment, disestablishment or name, category or status change) of a Centre/Institute or the official University receipt of a review of a Centre/Institute which does not involve an overriding legal document will be taken to be the date of the Council Meeting at which the Vice-Chancellor reports the event or receipt of review in the Vice-Chancellor’s Report to Council.


Appendix A

The University of Melbourne Involvement in
Incorporated Collaborative Centres and Institutes
For Research and Research Training

Explanatory Notes and Guidelines

Background

These Explanatory Notes and Guidelines should be read in conjunction with both Guidelines for the Formation and Management of Centres and Institutes for Research and Research Training Involving the University of Melbourne and The University of Melbourne Involvement in Incorporated Collaborative Centres and Institutes for Research and Research Training – Summary (Appendix B of Section 22 of Regulation 6.1.R7).  These Explanatory Notes and Guidelines form Appendix A of Section 22 of Regulation 6.1.R7.

Funding agencies at all levels are imposing stringent requirements on the provision of funding for research or educational purposes.  There is an increasing trend to incorporate centres.  Funding agencies are insisting that the Management and Board of Centres/Institutes should be able to act independently and to be responsible for the direction of the Centre/Institute and its programs.  It is not considered appropriate for Centres/Institutes to have Boards which represent the specific interests of participants which establish them.

The establishment and continuing growth of Incorporated Collaborative Centres/Institutes raise significant issues for Universities in particular.  Some of these issues can be managed, although the costs of doing so are substantial and entail an ongoing commitment of University resources.  The benefits derived from involvement in an Incorporated Collaborative Centre/Institute are more difficult to quantify and are perhaps more intangible in nature.

Determining when it is appropriate and beneficial to create or participate in an Incorporated Collaborative Centre/Institute is a fundamental threshold question for the University.   It is necessary for some minimum criteria to be identified which need to be satisfied before the University agrees to commit cash and in-kind resources to a proposal to establish an Incorporated Collaborative Centre/Institute.

As a typical example, the former Commonwealth Department of Education, Science and Training (responsible at the time for the Cooperative Research Centres Program) issued guidelines for the 2005 Round of Cooperative Research Centres Program which included the following requirements:

In considering whether or not to participate in the establishment of an Incorporated Collaborative Centre/Institute, a number of issues including the following must be resolved:

Financial

In earlier years, Centres/Institutes were mainly unincorporated joint ventures of a number of parties coming together and agreeing to pursue as program of activities, mainly research and educational.  This meant that funding from the Commonwealth or State Government could flow directly back into the University for research projects to be undertaken here.  There was also reasonable certainty that the amount of allocated funds which was agreed at the beginning of the life of the Centre/Institute would flow to the University.  This is no longer the case.  It will be up to the Board and Management of the Incorporated Collaborative Centre/Institute to determine which activities or research projects should proceed and which should not proceed.

Therefore, unless the University ties its cash contribution to research activities to be carried out within the University’s premises, it runs the risk of becoming a research funder rather than a research provider. 

Tax

Subject to possible review in the light of the decision of the High Court in the Word Investments case, the Australian Taxation Office has previously made it clear that Incorporated Collaborative Centres/Institutes will not be easily able to obtain tax-exempt status.  In the main, Incorporated Collaborative Centres/Institutes will be liable to pay income tax as well as all other taxes normally paid by enterprises carrying on commercial activities.  This means that a substantial amount of the funds contributed by the funding body and the participants could have to be remitted in taxes to the Australian Taxation Office if the financial management of the centre is not robust, or certain structural provisions designed to address the likely tax treatment are not present in the constitution of the Incorporated Collaborative Centres/Institutes.
Taxes such as the Goods and Services Tax also carry significant hidden administrative costs. Systems have to be established and personnel have to be employed to deal with these issues.

Legal

Participation in the formation or establishment of a company is subject to University Council approval via the Finance Committee and to certain reporting and other requirements, including under the Melbourne University Act. 

An Incorporated Collaborative Centre/Institute is a separate legal entity to the University.  This has significant legal implications.  The Board of Directors of an Incorporated Collaborative Centre/Institute is required by law to give primary consideration to the interests of the company itself.  The directors will not be in a position to represent the interests of a particular shareholder or member.  The Board will be entitled and obliged to consider the activities of the company, and to determine from time to time whether certain activities should be discontinued or others included, whether costs should be cut back, whether additional funding should be sought.  A Board may decide that it is necessary to raise funds or that the company should be positioned to be publicly listed.  These types of activities carry risk and need to be considered in appropriate detail by properly qualified personnel.

Although the University may be a member or shareholder in an Incorporated Collaborative Centre/Institute and may have contributed considerable cash and in-kind resources to the Centre/Institute, it will not be able to control the direction or activities of the company.  At best, it can devote resources to try and ensure that the centre is managed as effectively as possible.  Alternatively, and subject to the terms of any relevant agreement or constitution, it can, with notice, withdraw from the Centre/Institute, having sunk considerable costs into its establishment.

Therefore for reputational/legal/liability reasons, it may be more appropriate for the University not to be the member or shareholder in an Incorporated Collaborative Centre/Institute, but instead to have Melbourne Ventures Pty Ltd or some other similar subsidiary as the shareholder or member.  However, even this separation will not necessarily achieve the desired objective in all instances, and may not always render the provisions in the Melbourne University Act inapplicable.

The legal costs associated with establishing Incorporated Collaborative Centres/Institutes are high as structures are increasingly complex and involve substantial legal documentation such as Constitutions, shareholders agreements, project agreements, spin-out companies etc. 

Therefore the University will need to devote resources to ensure its involvement in an Incorporated Collaborative Centre/Institute is compliant with University legislation and policies, protects the interests of the University and limits the University’s potential liability.  Even if funds from the funding body are used to prepare legal documentation, the University will need to allocate resources to negotiate its position, to prepare and review legal documents and to perform due diligences on Intellectual Property to be made available by the University, as well as verifying property acquired or commitments made or to be made by the Incorporated Collaborative Centre/Institute.

An Incorporated Collaborative Centre/Institute also has ongoing reporting requirements to the Australian Securities and Investments Commission and as a shareholder or member, even through a subsidiary, it is in the interests of the University to ensure that all appropriate governance requirements are met. Even if the University can and does rely on the ‘corporate veil’ argument, (such that Melbourne Ventures Pty Ltd or some other subsidiary is a separate legal entity with limited liability), in regard to any potential legal liability, such protection may be limited as mentioned previously.  Courts are increasingly likely to look behind the ‘corporate veil’.   In any case, reliance on the ‘corporate veil’ defence, even if appropriate, is unlikely to enhance the University’s reputation should an Incorporated Collaborative Centre/Institute with which it is involved encounter financial or legal difficulties.

Governance

An Incorporated Collaborative Centre/Institute will also have ongoing reporting requirements to the Australian Securities and Investments Commission and as a significant shareholder or member, it is in the interests of the University to ensure that all appropriate governance requirements are met.  While these reporting requirements may not apparently amount to many thousands of dollars, they also involve hidden administrative costs and risks of non-compliance.

It is important that the people who become involved in the management of Incorporated Collaborative Centres/Institutes are properly skilled and trained.   If University employees take up positions of management, then they should, in order to avoid conflicts of interest, stand down from their University employment or at least change their employment terms to reflect this new commitment. Similarly, as it is potentially conceivable that the interests of the University and the interests of the company may not be always aligned, non-executive directors should preferably not be University employees. 


Appendix B

University of Melbourne involvement in
Incorporated Collaborative Centres and Institutes
For Research and Research Training

Explanatory Note and Guidelines

This Summary should be read in conjunction with both Guidelines for the Formation and Management of Centres and Institutes for Research and Research Training Involving the University of Melbourne and The University of Melbourne Involvement in Incorporated Collaborative Centres and Institutes for Research and Research Training – Explanatory Notes and Guidelines (Appendix A of Section 22 of Regulation 6.1.R7). This Summary forms Appendix B of Section 22 of Regulation 6.1.R7.

A proposal for an Incorporated Collaborative Centre/Institute for Research and Research Training should meet the following minimum criteria:

 

CENTRES FOR RESEARCH AND RESEARCH TRAINING

The School of Rural Health

 

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