He māhanga kai, he oranga mō te hapū.
A well-stocked food storehouse ensures the well-being of the community.
Module Objectives:
- Identify the key sources of funding for schools in New Zealand, including operational, salary, and property funding.
- Explain the principles of financial management in schools and their importance in supporting teaching, learning, and the achievement of strategic goals.
- Outline the key legislative requirements and National Administration Guidelines (NAGs) related to school financial management and accountability.
- Describe the cyclical nature of school budgeting and the key reporting checkpoints set by the Ministry of Education.
- Analyse the various sources of income available to schools beyond Ministry of Education bulk funding.
- Discuss the importance of aligning the annual budget with the school’s strategic plan and establishing a robust policy framework for financial management.
- Reflect on the challenges and complexities of managing school finances within the context of “free” education and diverse accountabilities.
Learning Material:
For all Kura in New Zealand, finance underpins and supports delivery of learning outcomes for students, with the resourcing available to be managed (budgeted for) by individual schools. Financial management of all the activities of a school, both day-to-day and in providing for sustainability into the future is an important and essential part of school leadership.
The context for school leadership in the area of finance can be challenging and is made more complex, because education in New Zealand is described as ‘free’ to participants. The funding supplied to schools by the Ministry of Education, which since 2004 has been in the form of a bulk grant, has three contributing strands:
- Operational funding
- Salary funding for teachers
- Property funding.
From the government’s Financial Information for Schools Handbook (F.I.S.H) on school finance:
“Financial management is crucial to the health of a school in order to provide adequate funding for day- to-day needs and in planning for the future. Any system of school administration must keep the needs of students in mind, support the learning and teaching at the school, and enable the board to realize its strategic goals and objectives.
A lapse in financial management − or deliberate fraud − diverts the attention of staff and trustees and may cause a reduction in the funds available for curriculum delivery.
Problems with a school’s financial governance and management almost always impact the education being provided to students”.
https://www.education.govt.nz/school/funding-and-financials/school-finances
Adding to the complexity of the context for managing school finance there is also a strong legislative compliance background:
Legislative Background
There is a raft of legislation covering the management of school finance, the most important being The Education and Training Act 2020 , Crown entities Act 2004 and the National Administration Guidelines:
Relevant Sections of the Education and Training Act 2020:
- 127 Objectives of boards in governing schools…in a way that is financially responsible;
- 135 Audit…board must submit its annual financial statements to the Auditor General……after the end of each financial year.
- 137 Annual financial statements of boards…must provide its audited annual financial statements to the Secretary no later than May 31 of the following year ……
Crown Entities Act 2004… Application of Education and Training Act 2020 Financial and property matters:
- 152 Board to be financially responsible…2020 – A board must perform……in a way that is financially responsible.
National Administration Guidelines:
NAG 4
According to legislation on financial and property matters, each board of trustees is also required in particular to:
- allocate funds to reflect the school’s priorities as stated in the charter;
- monitor and control school expenditure, and ensure that annual accounts are prepared and audited as required by the Public Finance Act 1989 and the Education Act 1989; and c. comply with the negotiated conditions of any current asset management agreement, and implement a maintenance programme to ensure that the school’s buildings and facilities provide a safe, healthy learning environment for students.
https://www.educationalleaders.govt.nz/Managing-your-school/Administration-links – Scroll down to NAG 4
Background Reading – Funding to Schools.
Every school receives annual funding that comes from three sources, Operational funding, the financial resources received by Boards of Trustees from the Government for running the day to day operations of schools. Salary funding, defined as gross salaries paid by the government to teachers employed in schools and Property funding, the funding spent on maintaining and expanding school property. All funding is formula driven based on the school roll at July 1.
https://www.educationcounts.govt.nz/statistics/funding-to-schools
Being formula driven requires compliance, via annual reporting and auditing of school accounts that restricts the ability of Principals and Boards to develop the flexibility that a bulk funding model implies.
Budgeting for school finances is cyclic, built around reporting check points set by the Ministry, and sets the financial cycle for the year. It is supported by monthly reporting to the Board of Trustees under the policy framework and delegations the Board has in place.
Other sources of income for the school may contribute to the overall budget that the Board has at its disposal. The three main sources are Ministry of Education additional funding for specific areas, locally raised funds from the community and other sources of government funding, from agencies and supporting local government entities.
For more information on budgeting in schools, click here – https://www.resourcecentre.org.nz/helpforprincipals?aId=ka0RF0000007gvNYAQ
Task:
Option A (Focus on Budget Alignment):
Review your Kura’s annual plan and budget. Choose one strategic goal and briefly explain (in max. 150 words) how the allocation of operational, staffing, or property funding directly supports its implementation. Does this spending reflect the school’s vision and values?
Option B (Focus on Policy):
Review one of your Kura’s finance policies against the model policies in Appendix B of the F.I.S.H. Briefly describe (in max. 150 words) one area where your school aligns with best practice OR one potential gap or recommendation for improvement.
