The NSW Department of Education has today released an updated version of its Not for Profit Guidelines for Non-Government Schools (June 2019 edition).
These replace the December 2018 version.
Given similarities between Victorian and NSW laws, and the operation of many school systems in both states, Victorian schools and systems should seriously consider the guidelines as best practice.
The new Guidelines impose new requirements in key areas, which, if not followed, will make the school non-compliant. These include:
- Onsite ELCs, childcare and out of hours care;
- Facilities (including Performing Arts Centres) which are hired out; and
- Related Entity Transactions; and
- Reimbursements to board and staff.
Other areas have been tightened. An example is the new requirement that, in relation to any compensation, settlements or one-off payments, a school must “ensure it has received legal advice that such payment is reasonable and not excessive”. Previously, a school needed only follow any legal advice (if obtained).
Another is fundraising. Any donations must be demonstrated as related to education of students at the school.
Another is finance. All school finance must meet the reasonable market value test.
Onsite ELCs, childcare and out of hours care
These are not considered part of the school by law. Under the new guidelines, schools can only fund these if all surplus returns to the school, and the school must not incur a liability from the operation.
This raises the issue of schools not only needing separate accounts, but potentially a separate entity and undoubtedly an agreement between the school and ELC.
Facilities (including Performing Arts Centres) which are hired out
A far-reaching prioritisation of the school’s use of facilities is now required, and a school may not incur a liability due to external use, nor contribute school funds to another’s use of the facilities.
Related Entity Transactions
The regulator will now expect that the school can demonstrate reasonable market value in accordance with the guidelines. New policies are also listed, including conflict of interest, fraud, staff delegations etc.
Reimbursements to board and staff
Reasons for all reimbursement must now be recorded. All travel, for which reimbursement is claimed, must relate to the position of the person and be proven to be not personal.
How we can help
Moores extensively advises on regulatory compliance in education, including NSW and Victorian compliance (inc. s 83) reviews and agreements. Education expert and Practice Leader Cecelia Irvine-So is not only a parent of children at an independent school but also a school board member. Cecelia can be contacted on 03 9843 2100 or alternatively please fill out the enquiry form below for more information.