5 FEBRUARY

NEW ZEALAND GAZETTE

proposes to release to the company on or after the 1st day of
March 2004, the amount deposited with Public Trust by the
company.
Any objections to the release of the amount deposited
should be lodged with the Public Trust at the Public Trust

Office, 117-125 Lambton Quay, Wellington 1, on or before
the 25th day of February 2004.
Dated at Wellington this 29th day of January 2004.
DONALD JAMES MATHER, Public Trust.
gn711

Departmental Notices

Education

Education Act 1989

Corrigendum—Risk Assessment Criteria for Tertiary Institutions

Pursuant to section 195A of the Education Act 1989 (incorporating all amendments), the Secretary for Education hereby
publishes criteria for assessing the level of risk to the operation and long-term viability of tertiary institutions.
Nothing in this notice limits or affects the duties of tertiary councils under section 46 of the Education Standards Act 2001 or
any other duties or obligations of institutions or councils under any enactment, regulation or order.

Introduction

Under sections 195B to 195D of the Education Act 1989, the nature of the action available to the Secretary or the Minister
depends upon an assessment of the level of risk to the institution or the operation or long-term viability of the institution. The
levels of risk and the nature of the actions available are:

1. If the Secretary has reasonable grounds to believe that an institution may be at risk, the Secretary may require the
   council of the institution to provide specified information or reports about the operation, management or financial
   position of the institution at a given time (section 195B).

2. If the Minister considers on reasonable grounds that the operation or long-term viability of an institution is at risk, the
   Minister may appoint a Crown Observer to the institution (section 195C).

3. If the Minister believes on reasonable grounds that there is a serious risk to the operation or long-term viability of an
   institution and other methods of reducing that risk have failed or appear likely to fail, the Minister may dissolve the
   council of the institution and appoint a Commissioner to act in its place (section 195D).

After consultation with institution councils, the Secretary has determined (pursuant to section 195A of the Education Act 1989)
criteria for assessing the level of risk to the operation and long-term viability of institutions. Those criteria are contained in the
table set out below.

The greater the number of criteria which an institution meets, the greater the level of risk to its operation and long-term
viability. The more adverse the position of an institution with respect to any of the criteria (for example, the greater the extent
to which its Liquid Funds Ratio is less than 12.0%), the greater the level of risk to its operation and long-term viability.

Defined Terms

Words and phrases defined in the Education Act 1989 (and not defined below) bear the same meanings in this notice.

In this notice:

“Approved Borrowing Agreement” means an agreement between an institution and a third party, under which the institution
may borrow money, issue debentures or otherwise raise money, which has been entered into by the institution with the
written consent of the Secretary pursuant to section 192 of the Education Act 1989 (including any such agreement as it
may be modified from time to time with the written consent of the Secretary).

“audited” means, in respect of an institution and any financial statements or financial statements component relating to any
financial year of that institution:

(a) the audited financial statements or audited financial statements component (as the case may be) for that financial year; or

(b) (except in relation to risk criteria 22 below) if no such audited financial statements or audited financial statements
component (as the case may be) for that financial year have or has been submitted to the Secretary within 120 days of
the end of the relevant financial year, until they are or it is so submitted the unaudited financial statements or relevant
financial statements component (as the case may be) in respect of that financial year most recently submitted to the
Secretary.

“Available Credit Lines” is the aggregate amount able to be borrowed by an institution under any committed borrowing
facility, less any amounts actually borrowed under those facilities, as at the balance date to which any audited actual or
budgeted (as the case may be) statement of financial position for an institution relates.

“Debt” is the total of amounts recorded as debt in the audited or budgeted (as the case may be) statement of financial
position of an institution, whether or not interest is payable on that debt.

“debt/equity ratio” means a ratio of debt to equity (however that ratio, that debt and that equity are calculated and
described).

“Default Event”, in respect of an institution which is party to an Approved Borrowing Agreement, means any event or
circumstance (however described) which (i) constitutes a default (however described) by that institution under that