The recent Ideagen Education Risk Report - Looming Mental Health Crisis and Other Key Risks Affecting Schools in 2023 highlights a number of issues that schools are grappling with. 

In this final article in the series, we focus on the Report’s findings regarding ‘managing the compliance burden’.

Focus – Managing the Compliance Burden

• The burden of complying with regulations is having a major impact on most schools.
• Compliance costs and resource allocation are significant challenges for all schools, particularly smaller schools which have fewer resources to meet their obligations.
• Several survey respondents expressed concern over the potential impact on their ability to align their staff with their religious order, potential conflicts in the school community, and their freedom to teach religious foundations.

Compliance and regulations are a major concern for schools, according to our survey. Schools face the burden of managing unpredictable events, a lack of knowledge of compliance obligations, and the overall weight of compliance, including laws related to health, safety and child safeguarding.

A 2014 survey by Deloitte Access Economics found that compliance costs have become a crippling burden, costing the Australian economy (at that time) $21 billion a year to administer and generating $134 billion a year in compliance costs for public and private businesses, not-for-profits and government agencies. The report estimates that middle managers and senior executives were spending up to 8.9 hours a week complying with the rules that corporates set for themselves, while other staff spend 6.4 hours. Together with the costs of complying with public and private sector rules, compliance costs in Australia amount to a quarter of a trillion dollars a year.

While investment in compliance can be seen as critical to an organisation’s long-term success, schools must balance competing priorities, including delivering high quality education to students. Our survey results show that compliance costs and resource allocation are significant challenges for all schools, particularly smaller ones which have fewer resources to meet their obligations. This is not a lack of commitment to compliance but rather a lack of available resources in terms of people, time and money. School Governance's The Burden of Compliance for Smaller Schools article outlines these challenges and suggests steps that smaller schools can take to reduce risks.

Harvard Business Review’s article Why Compliance Programs Fail discusses the challenges of businesses understanding and meeting their legal and ethical obligations. The authors emphasise, as the survey results show, the importance of getting the best out of whatever resources have been allocated to compliance by focusing on identifying redundant or ineffective initiatives that can be replaced or eliminated—ultimately revealing opportunities to make compliance programs more effective.

In July 2016, the Independent Schools Council of Australia submitted their views to the Productivity Commission Inquiry into Introducing Competition and Informed User Choice into Human Services. They emphasised the significant financial and resource burden that independent schools in Australia faced, largely due to the range of accountabilities and legal obligations that affect the sector.

Independent schools are accountable to different groups, including their immediate communities, the relevant state or territory government, and regulatory bodies such as the Australian Securities and Investments Commission and the Australian Taxation Office. Additionally, because they receive public funding, they must comply with a variety of legislative requirements to be eligible for funding from the Australian Government. These requirements include participating in the implementation of the Australian Curriculum, taking part in national and international student assessments, providing financial data to the Australian Government Department of Education, and meeting accountability frameworks for vocational education and training, the Commonwealth Register of Institutions and Courses for Overseas Students, and early childhood education and care.

Schools also face new child safety and workplace relations issues, according to School Governance's article Key Child Safety and Workplace Relations Issues that Will Affect Non-Government Schools in 2023. All states and territories will require schools to implement the National Principles for Child Safe Organisations or their state or territory equivalent, if applicable. Some states will also require schools to implement a child safe risk register, such as Victoria. Tasmania will also strengthen its reportable conduct scheme.

Changes to workplace relations legislation have recently occurred or will also occur, including the introduction of paid family and domestic violence leave and new protected attributes to address discrimination against breastfeeding individuals, intersex individuals, and those with diverse gender identities. Other legislative changes affecting schools include a remuneration secrecy provision and an increased focus on managing psychosocial hazards as part of workplace health and safety legislation.

Religious schools will also be closely monitoring discussions surrounding religious discrimination in schools, currently before the Australian Law Reform Commission. Several survey respondents expressed concern over the potential impact on their ability to align their staff with their religious order, potential conflicts in the school community, and their freedom to teach religious foundations.

Summary

Respondents told us that they are struggling with the burden of compliance and regulatory requirements at their schools. In 2014, compliance costs were estimated to cost the Australian economy $21 billion annually. Almost 10 years later, with the introduction of child safe legislation, human resources changes etc, this figure is expected to be even higher.

These costs amount to a quarter of a trillion dollars a year, impacting schools of all sizes. Smaller schools, in particular, struggle with resource allocation and complying with obligations due to fewer available resources in terms of people, time and money. Overall, schools must balance compliance obligations with delivering high quality education to students, which remains their primary focus.