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  2. Registered individual non-government schools
  3. Registration requirements
  4. Management and operation of the school
  5. Financial viability
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Financial viability

Under section 47(a1) of the Education Act, a registered non-government school must be financially viable.

Financial viability provides for the school to be administered and achieve the purpose of providing an education for school students whilst remaining financially solvent.

In considering the financial viability of a registered non-government school, NESA will have regard to:

  • whether the school’s proprietor is a body corporate that is being wound up

  • whether the affairs of the proprietor are under any form of external control, such as the control of a manager, under any law

  • whether, in the view of NESA, the liabilities of the proprietor are greater than its assets

  • whether, in the view of NESA, the proprietor is, and is likely to continue for a substantial period to be, unable to pay its debts when they fall due for payment

  • whether an audit conducted in accordance with any law is expressed to be qualified materially or expresses concern about the financial viability of the proprietor.

NESA will also have regard to whether a non-government school provides evidence from a body or person approved by NESA certifying the school’s current compliance with NESA requirements for demonstrating financial viability.

Other information which may be considered by NESA in order to assess the school’s compliance with the requirement to be financially viable includes, but is not limited to:

  • audited annual financial statements, an independent audit report and independent auditor’s management letter

  • compliance with any requirements imposed by state or Commonwealth agencies providing funding to the school

  • recent Commonwealth Financial Questionnaire completed by the school

  • current school year operating financials (management accounts)

  • schedule of loan agreements, if applicable

  • property lease or rental agreements, if applicable, including the length of the lease or rental agreement and the annual cost of accommodation services

  • information about any remuneration and/or reimbursements of expenses paid to members of the governing body and other related parties and the award or agreement under which staff salaries are being paid

  • current school business plan

  • current year’s budget and forecast budgets for three to five years

  • insurance policies covering risk areas for the school.

Evidence of compliance

The proprietor of a non-government school is required to maintain evidence to demonstrate the current financial viability of the school. At the time of making an application for initial registration or renewal of registration of the non-government school, this evidence is required to be submitted to NESA This evidence may be in the form of certification as prescribed by NESA by a body or person approved by NESA for that purpose.

The proprietor of a registered non-government school must have policies and procedures for:

  • assessing the school’s financial viability at regular intervals with specific reference to the records and documents to be used in making the assessment

  • retaining the school’s audited and certified financial statements on and from 1 September 2014 for a minimum period of seven (7) years before archiving or disposing

  • retaining a copy of the certification of financial viability in the form prescribed by NESA by the body or person approved by NESA for that purpose on and from 1 January 2017 for a minimum period of seven (7) years before archiving or disposing

  • notifying NESA if the contract or arrangement with the school’s external auditor is terminated by the school or external auditor prior to the expiry of the term of the contract or arrangement and providing the reason(s) for the termination

  • notifying NESA if the affairs of the proprietor are under any form of external control, such as the control of a manager, under any law.

In determining a school’s financial viability, an Inspector may require a school to provide relevant documentation such as:

  • audited annual financial statements, an independent audit report and independent auditor’s management letter

  • compliance with any requirements imposed by state or Commonwealth agencies providing funding to the school

  • recent Commonwealth Financial Questionnaire completed by the school

  • current school year operating financials (management accounts)

  • schedule of loan agreements, if applicable

  • property lease or rental agreements, if applicable, including the length of the lease or rental agreement and the annual cost of accommodation services

  • information about any remuneration paid to members of the governing body and the award or agreement under which staff salaries are being paid

  • current school business plan

  • current year’s budget and forecast budgets for three to five years

  • insurance policies covering risk areas for the school

  • any other relevant materials.
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