The New South Wales auditor general has raised concerns about a lack of control over how non-government schools distribute their share of the $1.2bn in state government grants that the sector receives each year.
On Thursday, a report released by the NSW audit office found that there were “gaps in oversight” in the way funding from the state education department was distributed within the non-government school sector.
It also found the education department did not directly verify information it received from schools and did not monitor progress towards meeting objectives in a way that gave it clear oversight of the use of funds.
• Sign up to receive the top stories in Australia every day at noon
About 418,000 schoolchildren in NSW attend non-government schools, representing 35% of students in the state. About 56% of that group attend Catholic or Seventh Day Adventist schools, also known as systemic schools, which receive funding as a “system”, rather than through individual allocations.
The NSW auditor general, Margaret Crawford, said there was a lack of oversight in how the systemic schools “reallocate grant funding between their member schools”.
Her report did not examine the way the funding was reallocated – she said the auditor’s office did “not have the mandate to assess how government funds are spent by non-government entities”.
“The department does not require systems to report on how much funding each school receives, or how much funding is retained by the system for administration,” she said in the report.
“Systems submit a single certified declaration that the per capita funding was used in line with the department’s categories. This means the department does not receive enough information to verify grants are used by each school as intended.
“Strengthening oversight of the use of funds and how systems reallocate funding would increase accountability for public funding.”
This is not the first time the way state education departments fund non-government systemic schools has come under scrutiny.
In 2016, the Victorian auditor general criticised the oversight of the distribution of funding, saying there was “limited assurance that grants to non-government schools are used for their intended purpose or are achieving intended outcomes”.
“This is primarily due to weaknesses in funding agreements and DET’s [Department of Education and Training] ineffective grants management, including limited oversight of grant recipients and their use of grants, as well as inadequate monitoring and reporting,” the auditor found at the time.
In December, the Australian National Audit Office released its own review of the system, saying it did not provide “a sufficient level of assurance that funding has been used in accordance with the legislative framework, in particular the requirement for funding to be distributed on the basis of need”.
“As such, the department is not well placed to determine whether the current policy settings are effective in supporting the achievement of educational outcomes,” the report said.
An NSW department of education spokesman said it supported the auditor general’s recommendations and was “committed to continue strengthening accountability for non-government schools”.
He said the department would “develop principles and an approach to reporting requirements for the distribution of state funding for system authorities” to align with commonwealth requirements.
