Part I: Summary
1.1 Audit findings and opinion
1.1.1 Staff housing allocation regime of the University of Macau
1.1.1.1 Formulation of regulations and policies of staff housing allocation regime
The University of Macau (UM) staff housing allocation regime, is regulated by the chapter 7 (Benefits) and the chapter 12 (Staff in Residential Colleges) of the “Regulations of the Personnel Affairs of the University of Macau”, which is the supplementary internal regulations of the “Personnel Statute of the University of Macau”.
In accordance with the doctrines of the administrative law in Macau, the relevant regulations should be regarded as external regulations when it standardizes the fundamental rights, legal relationship of work or relationship of rights and obligations among the administrative authorities and staff. Therefore, “Regulations of the Personnel Affairs of the University of Macau” should be regarded as external regulations since it standardizes the rights and obligations in aspect of housing between UM and its staff.
Since the “The University of Macau’s Staff Management Regulations” which also sets up the housing allocation regime, is only applicable to the university’s staff, UM regards it as a regulation without external effects and did not publish it in the “Official Gazette of Macau Special Administrative Region”. However, since it contains matter of labour relations, it effectively produces external effects, therefore, it violates the “Charter of the University of Macau” and at the “The University of Macau’s Staff Statute”.
1.1.1.2 Principle of the staff housing allocation
The housing allocation regime, in addition to provide free accommodation to residential college staff due to the specific needs of their work; UM also, as a form of benefits, allows other teaching and not teaching staff to apply for renting staff quarters, without fulfilling any additional duties or obligations. Data shows that, up to 31st May 2014, 217 staff with Macau identity card have been allocated staff housing, among them a total of 32, as at 31st December 2013, were already house owners in Macau, with 5 of them owning even 2 residential properties.
As a public institution, UM is entitled to have the autonomy of administrative, financial and patrimonial, and is able to formulate its own general rules and regulations of staff, including regime of staff benefits and accommodation, in accordance with “Judicial Regime of the University of Macau”. However, since the construction costs of the new campus of UM were fully borne by public funds and the SAR Government’s budgetary allocations are the main source to cover UM’s daily operating expenses, as a result, UM should comply with the principle of effective application of public resources as stipulated in Decree Law Nr. 41/83/M, and articulate its decisions with the policies of the SAR Government.
The consistent principle of public housing provision policy of the SAR Government, which is supported by public funds, is only to provide assistance to citizens and civil servants that do not have any property. However, UM uses public resources to provide additional accommodation to teachers and staffs who are property owners. Thus, UM is obviously in disarticulation not only with the principle of public housing policy of the SAR Government, but also against the principle of effective use of public resources.
1.1.2 Research Institute of the University of Macau in Zhuhai
1.1.2.1 Foundation of setting up the Research Institute
Since UM was looking forward to establishing a scientific research base in mainland China, in order to be able to apply for grants awarded by the National Natural Science Foundation of China, in competition with mainland institutions, and raising, by this way, the academic status of its teaching staff and the visibility of UM. For this purpose, the University Council made the following deliberation: “UM is authorized to set up a scientific research base in Zhuhai as a company limited, funded exclusively by UM itself”, on 24th August, 2011. However, UM proceeded in such a way that the research institute was eventually established as a “private non-enterprise unit (collective person)”. In this respect, UM explained, the deliberation of the University Council should only be considered as a broad orientation authorizing the establishment of a research institute in the mainland; it did not define an institutional model UM must adopt. UM only reported on the institute’s situation to the University Council at its 26th November , 2014 meeting, following the receipt of CA’s observation report.
However, in accordance with “The University Council shall be the highest collegiate organ of UM”, in Nr. 17, paragraph 1 on the “Charter of the University of Macau”, therefore, the resolutions which formulated by the Council, not only authorized UM to set up a research institute in China as a company limited, funded exclusively by UM itself, the administrative decision itself also was legally effective. However, due to UM proceeded in such a way that the research institute was eventually established as a “private non-enterprise unit (collective person)”, which was totally different with the content of the resolutions of the Council essentially, in a result, relevant behavior would be short of legal basis resolutions granted by permission entity. Although the Council has noted the final institutional model of the research institute afterward, even UM regarded the relevant institutional behaviour was subsequently endorse by the Council , but it does not alter the fact that the establishment of the research institute, was short of legal basis resolutions granted by permission entity in the implementation indeed.
1.1.2.2 Analysis and Selection of the Research Institution Establishment Program
During the process of setting the Establishment Program for the research institute, UM has never evaluated the advantages, disadvantages and feasibility of different kinds of establishment model. UM directly adopted the proposal of the mainland government when they pointed out that the Research Institute should be established individually as a “private non-enterprise unit (individual)”. UM stated that as they were not familiar with the law of mainland China, as such they did not consider any other feasible establishment model. In addition, although it was determined that the main propose of establishing the research institute in mainland was to apply for subsidiary funding from the National Natural Science Foundation of China, UM still overlooked the juridical status that is required for the unit to apply for the subsidiary funding. As a result, the research institute spent one more year to re-register as a “private non-enterprise unit (collective person)” in order to comply with the relevant applicant qualifications, after the establishment of “private non-enterprise units (individual)” in 2012.
Therefore, UM expressed that the internal organs should be composed by the staff of UM, since the establishment of the Research Institute was invested and set up by UM. As a result, UM still regards the Research Institute as their affiliates even it was only under the staff individual name currently. Furthermore, UM has formulated the internal regulationsfor the Research Institute, including “The internal norms of the operation for the Research Institute” and established the Supervise Commission. Subsequently, after the observation report was issued by the Commission of Audit, UM signed an agreement with the Research Institute, to stipulate its interests and supervision rights.
Although all the internal authorities current members of research institute are the incumbent staff of UM, and UM had formulated the supervision measures. But it must be noted, due to the UM proceeded in such a way that the research institute was established as a “private non-enterprise unit”, UM is not organizer of the research institute, and also does not possess any effective supervision and control rights conferred by law. Because of that, UM can only through the employment relationship giving instructions to the relevant members of the research institute for implementation.
As such, during the process of drafting the establishment plan for the research institute, in addition to satisfying the purpose of establishing the institute, UM should also continuously and effectively monitor the established institute through the way with legal basis. As in the short of legal empowerment, any comprehensive control measures or mechanisms will only result in a good subjective views ultimately, and it is difficult to ensure the long-term implementation of the mechanism. Thus, if UM maintains to operate the research institute in Zhuhai in the way of “private non-enterprise unit”, the following associated risks will be bound to exist:
UM as a public collective person, do not appropriate to assign its staff to hold position or provide assistance for the private collective person which have no legal relationship ;
The practical implementation of the supervision on the research institute, relies on the employment relationship between UM and its staff. However, in the long run, if there is a significant conflict of interest arise in the future, UM is difficult to ensure that the members of the authority would follow the instructions due to the short of effective legal means, and finally, UM can only be forced to accept the result.
In the future, if the use of, or any other matters related to, the operation and research funds appears ineffective or irregular, the long-term interest and reputation of UM would be negatively affected.
Although UM stipulated the supervision rights to the research institute through agreement, but in view of research institute was establishing by individual as an independent collective person and operating autonomous. If the research institute subsequently deny the corresponding rights which was given to UM in accordance with agreement, even UM may seek a judgment from the judiciary, but the Court was also difficult to enforce the research institute to carry out the terms of the agreement, UM is tend to recover the involved economic losses for compensation only.
Therefore, UM’s management of the research institute is under threat, even may arise the long-term impact of UM's reputation, because it does not possess any effective supervision and control rights conferred by law.
1.1.3 The University of Macau Development Foundation (UMDF)
1.1.3.1 The feasibility of the establishment model and actual operation of UMDF
The University of Macau Development Foundation (UMDF), conceived to better collect and manage donations, UM was from the start to the end of the process focused on establishing it by individuals in their private capacity under the Civil Code. UM never considered adopting other institutional models nor evaluated the pros and cons of those models. This fixation led to the establishment of a foundation which is fully independent from UM.
Despite allowing UMDF to use its name and being the beneficiary of UMDF, UM has no affiliated or other legal relationship with UMDF. In this respect, UM may face a series of potential problems in the long run, such as the difference in the philosophy between UM and UMDF which is unfavourable to long-term cooperation; UM is difficult to intervene the investment policies and the expenditure of daily operations of UMDF; even UM intends to establish another foundation, third parties may also be confused, and it would be difficult for UM to clarify the relationships to the public.
It shows that UM did not take effective measures guardedly to protect its interests in the long run through the way of legal during the process of establishing UM Foundation, and also failed to handle the management of risks properly. Finally, UM is currently unable to monitor or to control it, nor does it have the right to intervene its operations. As it now stands, UM cannot help but watching the donations collected on its behalf and dedicated to its development being channelled to a private foundation, with which has no legal relationship. The current model poses serious risks to the good management and application of the funds donated to UM.
1.2 Audit suggestions
1.2.1 Staff housing allocation regime of the University of Macau
Must be in accordance with Nr. 44, paragraph 3 of the “Charter of the University of Macau” and Nr. 4, paragraph 5 of the “The University of Macau’s Staff Statute”, all internal regulations with external effects should be published as a notice in the “Official Gazette of Macau Special Administrative Region”, including the internal regulation which involves the benefits and rights between UM and its staff.
The principle of the regimes of public departments must correspond to the important policy of the government, and should comply with the principle of effective application of public resources as stipulated in Article 16 of Decree Law Nr. 41/83/M (Law of Budgetary Framework).
1.2.2 Research Institute of the University of Macau in Zhuhai
The implementation must be in accordance with the administrative decision made by the highest collegiate authority of UM. In case revision is required in response to the actual situation during the implementation process, UM should timely report to the University Council, and let the University Council to reconsider the feasibility in accordance with the changes and influence before carry on the implement, in order to ensure all the relevant activities are carried out with corresponded legal basis.
Before the establishment program was fixed, UM should fully gather all the conditions which are needed to achieve the purpose of the establishment. Then analyse the characteristics, advantages and disadvantages of each program, so as to choose an appropriate establishment program which would preserve the interests and reputation of UM in the long run effectively. If UM’s interests cannot be guaranteed by the existing programs on the basic level, UM have to seek other feasible solutions, instead of establishing the research institute hastily without fundamental protections.
1.2.3 The University of Macau Development Foundation (UMDF)
While UM preparing to establish the foundation and collecting external donations, UM should consider and analyse every institutional models in detail, select an appropriate and operational model in accordance with UM’s own requirement, in order to conduct supervision on the foundation and to ensure UM’s interest in the long run.
