Key Takeaways:
- 27 schools required Ministry of Education guarantees for their finances, a significant increase from the previous year
- Schools struggled with "sensitive expenditure" and planning for building maintenance
- Auditors highlighted issues in 64 audit reports, including personal travel and entertainment expenses
- Some schools broke the law by failing to charge international students fees, borrowing too much money, and breaching conflict of interest requirements
- 51 schools did not provide enough evidence about their plans for ongoing maintenance of their buildings
Introduction to the Auditor-General’s Report
The auditor-general’s annual report on schools’ 2024 accounts has raised concerns about the financial management of schools in New Zealand. The report highlights that more schools than the previous year are struggling financially or spending money inappropriately. The Ministry of Education has been criticized for not providing sufficient guidance on "sensitive expenditure" and planning for building maintenance. The report also notes that some schools have broken the law by failing to charge international students fees, borrowing too much money, and breaching conflict of interest requirements.
Financial Management Issues
The report states that 27 schools needed Ministry of Education guarantees for their finances, which is about four times as many as the previous year. This suggests that many schools are struggling to manage their finances effectively. The report also notes that some schools have spent money on items that are not directly related to education, such as boat cruises and food for local families. For example, Rotorua School’s principal spent $38,882 of school funds on meals and entertainment for 44 students and adults on a trip to the US in 2023, but did not provide receipts. Te Kura Kaupapa Māori o Mangere spent $35,025 on hospitality and entertainment for staff, including $22,833 on a boat cruise for 45 people.
Lack of Transparency and Accountability
The report highlights a lack of transparency and accountability in some schools’ financial management. For example, one school board, the combined board of Te Kura Kaupapa Māori o Manurewa and Te Wharekura Manurewa, did not retain accounting records and relevant supporting documents, making it impossible for auditors to give an opinion on their accounts. The report also notes that some schools did not keep adequate records of community-raised funds or sports fees. This lack of transparency and accountability can lead to mismanagement of funds and a lack of trust in the education system.
Breaches of the Law
The report notes that some schools have broken the law by failing to charge international students fees, borrowing too much money, and breaching conflict of interest requirements. For example, two schools met the costs of an international student through a scholarship, even though legislation requires schools to charge fees that at least cover the costs of tuition and capital facilities. Eight schools borrowed more money than they were allowed to, and 10 schools entered contracts with board members worth more than $25,000 without the Secretary of Education’s approval. These breaches of the law can have serious consequences and undermine the integrity of the education system.
Planning for Building Maintenance
The report highlights that 51 schools did not provide enough evidence about their plans for ongoing maintenance of their buildings. This is a concern, as schools have a responsibility to ensure that their buildings are safe and well-maintained for students and staff. The report notes that the Ministry of Education has developed new guidance and criteria for spending on professional coaching and well-being support, which will be published early next year. However, more needs to be done to ensure that schools are planning effectively for building maintenance and other long-term expenses.
Conclusion
In conclusion, the auditor-general’s report highlights significant concerns about the financial management of schools in New Zealand. The report notes that many schools are struggling financially, and some are spending money inappropriately. The lack of transparency and accountability in some schools’ financial management is also a concern. The report’s findings suggest that the Ministry of Education needs to provide more guidance and support to schools on financial management, particularly in areas such as "sensitive expenditure" and planning for building maintenance. By addressing these issues, the education system can ensure that schools are using their funds effectively and efficiently to support the education and well-being of students.