Quality monitoring processes in Australia's public universities have improved markedly over the past 12 months, according to the government's quality audit committee.

In its second report since 1993, the committee focussed on teaching and learning. It said it was impressed by the change in attitude and procedures across higher education.

There was a marked improvement in quality assurance policies and practices. "In the committee's judgement there is now less differentiation between institutions in the area of teaching and learning than was found in the first round," it said.

The 36 public universities have again been grouped in bands according to progress and the financial rewards they will receive. The Labor government has adopted a "carrot rather than a stick" approach and those which have done well win substantial grants.

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This year they will share almost Aus$72 million (Pounds 36 million), a cut of 10 per cent on 1994. The amount they receive depends on which band they are in and their student numbers. The money comes with no strings attached, other than that the universities should use it to further improve teaching and student results.

But academics have criticised the scheme, claiming that universities which already have high-quality programmes receive more money than those which could use the funds to improve their own standards.

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The universities are divided into three bands instead of the six that in 1994 created a storm of controversy. The committee changed the divide because of the narrowing gap in performance between those in the top and bottom bands.

The classification, however, also appears to be linked to size. Overall, the nine largest universities were placed in the top group and, among the 16 biggest, only Edith Cowan University in Perth was relegated to the bottom. The remaining seven in the bottom band all have fewer than 10,000 full-time equivalent students.

Of the 36 institutions, 16 were placed in group one, 12 in group two and eight in group three. The biggest and oldest, the University of Sydney, which was in the second band last year and is now in the top, will receive the largest sum: $5.22 million.

The second biggest, Monash, which was also ranked in the second band previously and has been similarly elevated this time, will get $4.85 million. The nation's smallest university, Northern Territory, is again in the bottom band and will be paid a mere $5,000.

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Federal education minister Simon Crean accepted the committee's findings and confirmed that a third round would proceed. The response from universities to the quality programme had been positive and constructive.

"This report shows that Australians can have confidence in the quality of our university system. It is clear that the spectacular growth in university enrolments over the past decade has not been at the expense of quality," he said.

The Vice Chancellors Committee also endorsed the report's findings. Its president, Don McNicol, said the report showed that universities were operating at a good level in international terms. Universities were fully committed to the quality assurance process because it focused on the importance of establishing and maintaining quality assurance mechanisms, Professor McNicol said.

Brian Wilson, quality commitee chairman and vice chancellor of Queensland University, said the survey had revealed that enormous change had taken place. "Reformers who had found it very difficult to cope with institutional inertia have been given support to do things that were too hard to do before," he said.

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Although money was a key factor - having a few million dollars extra or even just a few thousand could generate an operational flexibility not otherwise possible - Professor Wilson said status had also become significant.

After the first round, when there was a great deal of controversy over who missed out on being in the top band, a university's placing suddenly counted for a great deal. "When we started out, money was the big incentive," Professor Wilson said. "But after the first report, there were institutions that would have been quite happy to give the money up if they could have got into group one!"

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