By Lucy Carroll
The NSW government is set to tighten rules that govern how private schools can use taxpayer money in a bid to guarantee that the $1.5 billion they receive each year is spent appropriately.
NSW Education Minister Prue Car has appointed Tom Alegounarias, the former chair of the NSW Education Standards Authority and one-time president of the Board of Studies, to conduct a major review of the laws that regulate how public funding is used.
NSW Education Minister Prue Car has announced a review of NSW laws that regulate how public funds can be used by non-government schools.Credit: Bianca De Marchi
“This review will help provide greater clarity for both schools and the community when it comes to the use of taxpayer funds,” Car said.
“It will build public confidence that non-government school funds are being used appropriately for the education of students.”
The announcement follows revelations about multiple breaches of funding rules in recent years, including two Sydney schools being forced to repay more than $23 million in public money after they were found to be operating for profit.
NSW private schools that receive state government funding must operate on a not-for-profit basis, with section 83C of the Education Act stating that a school’s income and assets must only be used for the operation of the school.
Almost 30 schools have been found non-compliant in the past decade, including The King’s School, which this year was ordered to cease the planned construction of a plunge pool at its headmaster’s residence and repay the cost of business class flights for a trip to an elite British rowing regatta.
Construction of the pool would have been in breach of the school’s obligation not to operate for profit, a state government investigation found.
In the past ten years, 135 audits of the finances of non-government schools have been undertaken, and five non-government schools have been declared for profit.
“The review will provide non-government schools crystal clear advice and guidelines to give schools confidence and predictability around the use of funding,” Alegounarias said.
Tom Alegounarias, the former chair of the NSW Education Standards Authority and one-time president of the Board of Studies, will review laws that regulate how public funding is used.Credit: Steven Siewert
“For the vast majority of schools, this issue doesn’t arise. But it is important the rules are clear for when questions around funding come up. Currently, there isn’t as much clarity as there could be and schools should be left with no doubt about what the expectations are.”
The review will examine the effectiveness of section 83C and will assess the role of the not-for-profit advisory committee that was set up in 2014 under former education minister Adrian Piccoli.
The NSW Department of Education is also set to release guidelines to help schools better understand their obligations around government funding.
In April, the Herald revealed that south-west Sydney school, Al Amanah College, was ordered to return $19.4 million in public funding after an investigation found it had been running a hotel. The Lakes Christian College was also ordered to repay $3.8 million in funding it received over four years.
Association of Independent Schools NSW chief executive Margery Evans welcomed the review and said greater clarity was needed around the rules for independent schools.
“The review of laws governing non-government schools’ spending must restore the scope of the original legislation and move responsibility for compliance to an independent regulator,” she said.
“Non-government schools are already highly accountable to their parents and are subject to
financial regulation and scrutiny by multiple federal and state government agencies,” she said, noting the oversight of the NSW Education Standards Authority and the Australian Charities and Not-for-profits Commission.
“Despite this, many section 83C investigations have extended well over 12 months – at considerable cost to schools as well as taxpayers who fund the private sector auditors,” she said. “Breaches have also been largely inadvertent or technical, rather than deliberate or systemic.”
Evans said an independent regulator is needed that can understand the purpose and autonomy of non-government schools.
“Parents have a right to choose the school that meets their needs and expectations. They expect their non-government school to operate differently to government schools and provide a different educational offering.”
Catholic Schools NSW chief executive Dallas McInerney said section 83c is an integral part of the school regulation framework in NSW and delivers confidence to the public around the stewardship of taxpayer dollars for non-government schools.
“We welcome the appointment of Mr Alegounarias given his deep experience in education,” McInerney said.
The announcement comes as federal education minister Jason Clare has a root-and-branch review of school funding under way, led by Dr Lisa O’Brien, which will make recommendations later this year.
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