The NSW Education Standards Authority (NESA) has been extremely busy in Term One and has recently released its second update to the Registered and Accredited Individual Non-government Schools (NSW) Manual and Registration Systems and Member Non-government Schools (NSW) Manual (the Manuals) in four months. In January 2017, School Governance published an article outlining the changes NESA made to the Manuals in December.
One of the changes was to introduce a new ''financial viability'' requirement.
At the time of publishing the January updates, the NESA stated that "Further information about the changes will be published early in 2017, particularly in relation to certification of financial viability.”
In an Official Notice published on 29 March 2017, the NESA announced changes to the Manuals to give schools more information about those requirements.
New financial viability information
Section 47(a1) of the Education Act 1990 (NSW), requires non-government schools to be financially viable. The new sections 3.9.4 and 5.9.4 of the Manuals (included in the January updates) introduced the financial viability requirement and provided some information on what schools must produce as evidence of compliance with the requirement.
The NESA's March changes have provided further detail of what evidence schools must produce. The required evidence of financial viability will now be prescribed by a NESA risk assessment and is to be in the form of a ''certification or warrant'' by a body or person "approved by NESA."
The Manuals list the following examples of what constitutes an acceptable form of certification or warrant:
- certification from the principal of the school as required in the online application form for renewal of registration; or
- Certification of Financial Viability from a NESA approved body or person assessed against the NESA Financial Viability Framework; or
- a Financial Viability Warrant from a NESA approved body or person providing assurance of financial viability.
The NESA Certification of Financial Viability, Financial Viability Framework, Financial Viability Warrant and an overview of the risk assessment approach of NESA are published on the Registration and Accreditation of Non-government Schools (RANGS)
website.
Who is a NESA approved body or person?
The following bodies and persons are approved by NESA to certify or warrant the financial viability of a registered non-government school or proposed non-government school:
- the Association of Independent Schools of NSW;
- the Catholic Education Commission NSW;
- the approved authority for a system of non-government schools of which the school or proposed school is a member; and
- Christian Schools Australia.
Overview of Risk Assessment Process
The
Overview of the Risk Assessment Process explains whether a school will need the Certification of Financial Viability, Financial Viability Warrant or both, depending on whether the school is applying for initial registration or renewing its registration.
Financial Viability Certification and Warrant
The Financial Viability Certification needs to be signed by the principal of the school to swear/affirm that school has met the requirements of the Manual. Obviously, the principal must not sign this certification lightly.
The Certification must also be signed by a NESA approved body or person assessed against the NESA Financial Viability Framework. The Framework document is new and includes information for the ''approved assessor'' and also a self-audit checklist in Appendix 1 for the school to complete. The checklist comprises 35 questions whereby schools evaluate themselves on key financial governance issues including the existence of strategic objectives, risk management, policies, procedures and other internal controls.
The Financial Viability Warrant is another declaration, to be signed by the NESA approved body or person.
Once these documents have been signed by the appropriate people and bodies, a copy of these documents must be retained by the school for a minimum period of seven (7) years before archiving or disposing.
What should schools be doing?
Schools should be reviewing the new financial viability materials listed on the RANGS website to understand which materials apply to them for the purposes of renewing their registration.
Generally, all non-government schools should be incorporating the checklist in the NESA Financial Viability Framework into their policies and procedures in relation to meeting the evidentiary requirements under sections 3.9.4 or 5.9.4 of the Manuals.
