Circular 2019/11 - Annual Reporting Circular

Date 15 November 2019 | End date 30 September 2020 | Circular 2019/11 | Category Governance

This circular is about Preparation of your 2019 Annual Report.

This circular replaces Circular 2018/04 issued September 2018.

The action needed is To ensure the schools or kura 2019 Annual Report incorporates all of the requirements.

It is intended for 

Chairpersons of Boards of Trustees and Principals of all state and state-integrated schools or kura.

All those preparing school or kura annual financial statements. Appointed Auditors of schools or kura.

For more information

Contact your School Finance Advisor

Introduction

This circular provides information, advice and guidance on how to prepare your 2019 Annual Report.

Annual Reports

The Annual Report is a key accountability document that Boards of Trustees (Boards) are required to prepare to inform and report to stakeholders including the Ministry of Education (the Ministry), Members of Parliament and, most importantly, parents and the wider community of school and kura.

The Annual Report contains the audited annual financial statements for the year.  It shows how the Board has applied the financial resources of the school or kura to achieve the goals set out in the charter.

The Annual Report also contains an analysis of any variance between the planned aims, objectives, directions, priorities, or targets (as set out in the school or kura strategic plan or charter) and what the school or kura has actually achieved during the year. The Analysis of Variance describe how the school or kura has addressed the Board's priorities for improving student achievement, and how successful the approach has been. The Analysis of Variance also provides the basis for plans for the coming year.

The components of the Annual Report are further explained in Appendix 2.

Important Dates

By 31 March 2020, your draft annual financial statements must be submitted to your Auditor, together with any and all supporting information required to carry out the audit. You should also provide the rest of the Annual Report to your Auditor as soon as possible. This is because your Auditor is required to check the consistency of information between the annual financial statements and the rest of the Annual Report.

If a Financial Service Provider completes your financial statements, it is still the Board’s responsibility to ensure that the Financial Service Provider meets this deadline.

By 31 May 2020, a single PDF file of your Annual Report, including your audited annual financial statements and Independent Auditors Report, must be submitted to the Ministry via the Ministry’s School Data Portal(external link). It is the responsibility of the Board to submit the report and not that of your Auditor or your Financial Service Provider.

For a complete list of important dates refer to Appendix 1.

Preparing your Financial Statements

Requirements and Guidance

Public Sector Public Benefit Entity (PBE) financial reporting standards are mandatory for all state and state-integrated schools or kura. To help ensure compliance with these standards, schools or kura are required to prepare annual financial statements using the format outlined in the Kiwi Park School model.¹

The annual financial statements (referred to as the Kiwi Park model financial statements), and related guidance, can be found on the Ministry’s Managing school finances webpage.

Financial Reporting Tiers

The Public Sector PBE financial reporting standards categorise entities into four tiers based on the entities level of public accountability and size. These tiers determine the format of reporting and required disclosures for that entity.

All schools or kura, with the exception of those that have expenditure greater than $30 million, are categorised as tier 2 and must meet the requirements of this tier.

The Kiwi Park model financial statements are designed to meet the requirements for a tier 2 entity.

Schools or kura with expenditure greater than $30 million are categorised as tier 1. Guidance on additional disclosure requirements for tier 1 entities can be found at: [Checklist for Tier 1 Schools]

The financial reporting standards allow for schools or kura moving between tiers. If your school or kura is expected to have total expenditure over $30 million for the 2019 year but does not currently report at tier 1, please contact the Ministry through your School Finance Advisor.

Group Financial Statements

Separate legal entities which are controlled by the Board are also public entities. Under the accounting standard PBE IPSAS 35: Consolidated Financial Statements, an entity is considered to be controlled by the Board when the Board has the capacity to influence the activities and the financial and operating policies of the entity.

Where a school or kura has a controlled entity, the school or kura will have to prepare consolidated annual financial statements, incorporating the transactions of the separate entity. 

Schools or kura that are required to prepare consolidated annual financial statements under Section 87 (3)(A) of the Education Act 1989, should use the Kiwi Park Group model for 2019.

Controlled entities are considered to be crown entities for the purpose of financial reporting. Under section 156 of the Crown Entities Act 2004 all crown entities are required to be audited.  The financial statements must be audited by the Auditor-General.

Accounting Changes

There have been no significant changes to the accounting standards for the 2019 financial year. In 2018 the Crown adopted PBE IFRS 9: Financial Instruments for the Financial Statements of Government. As crown entity’s schools or kura were also required to adopt the new standard. The Kiwi Park model has been updated to reflect the changes required by this standard.

It is possible that the controlled entities of schools or kura may hold investments. The current measurement and disclosure of these investments will need to be reviewed. There is potential for significant impacts upon adoption, depending on the activities of the controlled entity.

Further guidance on the impacts of the adoption of the PBE IFRS 9 accounting standard can be found on the Treasury website(external link).

What to expect from your audit

Quality of the Financial accounts

All schools or kura are required to prepare their annual financial statements in the format prescribed by the Secretary for Education. The Kiwi Park model has been designed to assist you in the preparation your annual financial statements. 

It is important that care is taken when preparing the annual financial statements. If not already in place, schools or kura will need establish a review process to ensure:

• The annual financial statements has been prepared in accordance with the appropriate accounting framework and the Kiwi Park model; and
• All relevant disclosures for the school and kura have been included.

The quality of the draft annual financial statements, and associated working papers submitted for audit, is a significant factor in the overall success of the annual audit.

High quality annual financial statements will likely reduce:

• the number of required audit changes; and
• the likelihood of the Auditor incurring additional audit costs (which they may seek to recover), as a result of the requirement to review several versions of the annual financial statements.

Auditors do not expect to review more than two draft sets, and one final version of the financial statements.

Key information you will need to provide

The audit process is designed to gather information to determine if the annual financial statements represent a true and fair view of how the Board has applied the financial resources of the school or kura to achieve the goals set out in the charter of the school or kura.

Gathering of this information can take multiple forms and is a combination of both physical supporting documentation and discussion. Schools or kura should work closely with their Auditor and provide an appropriate level of assistance, including timely responses to audit queries raised.

It is the Boards responsibility to ensure all key documentation and supporting evidence is provided to the Auditor by 31 March each year. This is not the responsibility of an outsourced Financial Service Provider.

Some key information the Auditor requires is:

• A copy of the draft annual financial statements approved by the Board.
• A copy of supporting working papers and documents used in the preparation of the draft annual financial statements. For example, reconciliations with supporting evidence for bank balances, accounts payable and payroll.
• Evidence that the school or kura has appropriate internal controls over payroll, payments and receipts. Evidence will also be needed to confirm that these controls have been in operation throughout the year.
• Signed board minutes. This includes Board and finance committee minutes and any in-committee minutes.
• A copy of the general ledger and trial balance.
• A copy of the approved annual budget.

Most Auditors will provide you with a list of audit requirements prior to starting the audit. If they have not done so you can contact your Appointed Auditor directly and request a list of all required documentation and evidence for the audit.

Signing of the Annual Report and Letter of Representation

The final step in the audit process is the approval of the annual financial statements by signing the Statement of Responsibility, and signing the Letter of Representation.

• The Statement of Responsibility is the authorisation of the annual financial statements, and is part of the Annual Report.
• The Letter of Representation will be provided to the school or kura by the Auditor once the audit has been completed.

Once the Statement of Responsibility and the Letter of Representation have been signed, they will need to be returned to the Auditor. The Auditor will then issue the Independent Auditors Report, which they will attach to the annual financial statements.

The annual financial statements and Independent Auditors Report will be returned to the school or kura for filing with the Ministry of Education and uploading to a Board controlled website.

The current Principal and Board Chairperson are required to sign the Statement of Responsibility and Letter of Representation on behalf of the school or kura. This cannot be completed by a previous Principal or Board Chairperson.

It is beneficial to plan ahead to ensure that both the Principal and Board chairperson are available to sign these documents. The Board may choose to approve the Annual Report subject to audit. This will allow for finalisation of the annual report without the need to re-convene the full Board.

A school or kura may also wish to consider establishing a timetable for the audit with the Auditor and Financial Service Provider The purpose of this is to reduce the likelihood of delay. Any such timeframes should be agreed in advance and actively managed by all parties. 

Audit Management letter

Following the completion of the audit, the Auditor will issue an audit Management Letter. This letter is different from the Independent Auditors Report (which forms part of the Annual Report). It is addressed to the Board or the Board Chairperson - not to the Principal, school or kura, and should be tabled at the first Board meeting following receipt.

The audit Management Letter will highlight issues, concerns and/or suggestions that have been identified during the audit process. It should outline any issues that need to be addressed by the Board.  The audit Management Letter may only state that the audit is completed and that there are no issues for the Board to address.

The audit Management Letter is the independent view of the Auditor, and may help a Board to identify any weaknesses in the internal accounting and control systems of the school or kura. This independent view may provide recommendations on how to improve the systems and controls.

Steps in the audit management letter process:

• Auditors will give the Board a draft audit Management Letter to review for factual accuracy before finalising.
• The audit Management Letter should be tabled at the first Board meeting following receipt. The letter is then given to the Principal to make comments on the recommendations made.  The audit Management Letter should then be re-tabled at the following Board meeting for final consideration.
• The Board should reply to the auditor, with responses to the recommendations, outlining the decisions it has made.
• The above process may involve working through the finance committee (or similar) if there is one.

The issues raised in the audit Management Letter will be reassessed during the next audit.

Filing your Annual Report

School Data Portal for Submission of Annual Reports

Please use the School Data Portal(external link) to submit your Annual Report to the Ministry.  This can be found under the drop down ‘Application Logon Links’. See Figure 1

Figure 1

Once you have logged in, In the next screen to open please select the drop-down option ‘Annual Report (31 May)’ in the School Data Portal(external link) (see Figure 2) to ensure your Annual Report is submitted correctly.

Figure 2

Your report should be a single PDF file, including audited annual financial statements and required signatures (Board Chairperson, Principal, and Independent Auditor’s Report).  Please ensure you scan originals rather than copies when creating the PDF to ensure they are legible.

Submission of financial statements in Excel format

Schools or kura can also upload an Excel spreadsheet version of their annual financial statements via the Ministry’s School Data Portal(external link). Please ensure that this is the final audited version of the annual financial statements. Uploading an excel version of this data will help ensure school or kura data can be collated in a timely manner. This is optional and in addition to the required PDF Version for the annual financial statements.

The process for uploading the Excel version of the annual Financial Statements is the same process as noted in Figures 1 and 2 above.

Publishing your Annual Report online

Your Board is required to publish the Annual Report on an internet site maintained by or on behalf of the Board. Generally this will be the school’s or kura website. Making Annual Reports available online ensures that parents, and the wider community, can access information about what your school or kura has achieved and how the Board has managed school and kura finances in the previous financial year.

It is expected that you will publish your Annual Report on this website at the same time as you submit your annual financial statements to the Ministry. If you do not currently have a website, the Ministry can host your Annual Report on our Education Counts website, www.educationcounts.govt.nz(external link). Please send your request for us to host your Annual Report to planning.reporting@education.govt.nz.

It is the Board’s responsibility to ensure your Annual Report does not contain any information that may breach an individual’s privacy before you make it publicly available. If you require assistance with this, please contact the New Zealand School Trustees Association(external link).

Important Reminders

Probity

Boards and management have a responsibility to ensure all funds received by the school or kura, no matter their origin, are safeguarded and spent in the best interests of their students.

All expenditure should be carefully considered before being approved. Expenditure is deemed as sensitive when it could appear to be spent inappropriately and not in the best interest of the school or kura. Common examples of areas of expenditure that can be considered highly sensitive include; travel and reimbursement of the Principal’s and Board members’ personal expenses. Please refer to section 2.4.1 of the Financial Information for Schools Handbook (FISH) for more detail.

Boards should consider the following before approving expenditure:

• Does the expenditure further the aims of the school or kura?
• Could the Board justify this expenditure to a taxpayer, parent or other interested party?
• Does the expenditure meet the financial expenditure policies of the school or kura?
• Would publicity over this spending adversely affect the school or kura?
• Could there be a perception of personal gain arising from this expenditure?
• Does the expenditure represent the best value for money?
• Is it in the budget?
• Does this expenditure occur frequently?

Payroll

The 2019 payroll information will be provided to you in early February 2020 for use in preparing your annual reporting. This information will be similar to that provided for the 2018 year. This will include:

• The Payroll Certification letter which will be available through the Managing School Finances and
• The School Annual Accrual Report (SAAR) which will be available through Novopay Online; and
• The Leave Liability Report which will be available through Novopay Online; and
• Additional schedules indicating known errors with the payroll data including funding code errors, stop pays and overpayments. These will be emailed to your Principal

We will send a reminder of how to access and when to access this end of year payroll information in early December 2019.

We encourage you to complete your draft annual financial statements once the SAAR report is available, as this will speed up the annual reporting process for you.

Borrowing

Boards can only borrow within the limits set by schedule 6 (clause 29) of the Education Act 1989 and the conditions specified in regulation 12 of the Crown Entities (Financial Powers) Regulations 2005.

Schedule 6 (clause 29) of the Education Act 1989(external link)

Regulation 12 of the Crown Entities (Financial Powers) Regulations 2005(external link)

A Board can: “in any calendar year, borrow any amount it thinks fit from any source it thinks fit provided that the total annual cost to the Board of Trustees in repaying all outstanding borrowings (including both principal and interest repayments) is equal to or less than one-tenth of the value of the grants determined by the Minister of Education to be paid to the Board for operational activities for that year”.

The Minister of Education has determined that operational activities include all items included in the Operational Funding notice. This should be used as the operational grant in the calculation.

What will create a breach of the borrowing limit?

Any new borrowing that causes the total annual principal and interest repayments to exceed 10% of its operational funding in that year will cause a breach of the borrowing limit. The new borrowing may be a finance lease, long-term property maintenance contracts, overdraft or other loan. If a Board exceeds the limit and does not obtain prior ministerial approval then that Board is deemed to be in breach of the Education Act 1989 and retrospective approval cannot be given.

How can a school or kura get approval to exceed the borrowing limit?

If a Board wants to borrow funds that will cause the school or kura to exceed the 10% repayment threshold they must obtain prior joint approval from the Ministers of Education and Finance. The Board must submit a written application to the Ministry, National Office. Please see the detailed application process in section 2.4.5 of the Financial Information for Schools Handbook (FISH).  

What if a school or kura has already breached the borrowing limit?

If a Board has already exceeded the 10% repayment threshold, they can still obtain joint ministerial approval from the Ministers of Education and Finance. This approval is not granted retrospectively but will ensure that while the school or kura will still exceed the borrowing limit, approval to do so has been granted for the ensuing period/(s). To apply for prospective approval the Board must submit a written application to the Ministry, National Office. Please refer to the detailed application process in section 2.4.5 of the Financial Information for Schools Handbook (FISH).

Lending

In no case shall a Board approve a loan to any party. This includes any staff, any trusts associated with the school or kura, or any other external parties.

Securities

A security is any interest or right to invest in any capital, assets, earnings, royalties or other property of any person. There are two main types of securities:

• Debt securities - this is a right to be paid money that has been lent to someone else. The most common form of a debt security is a term deposit. Debt securities can also include debentures, debenture stock, bonds, notes, certificates of deposit and convertible notes.
• Equity securities - this is full or part ownership of a private or public company.

Section 161(1)(a) of the Crown Entities Act(external link) and schedule 6 (clause 29) of the Education Act(external link), outline the restrictions relevant to securities.

Boards may not acquire securities other than:

• A debt security in a registered bank or other credit worthy institution (seek advice on credit worthiness rather than make your own decision); and
• Bonds and stock issued by public bodies.

Boards cannot own shares in private or public companies (meaning companies listed on a stock exchange) and cannot invest overseas or in any currency other than New Zealand dollars.

Approval for securities that do not meet the conditions listed above require the joint approval of the Minister of Finance and the Minister of Education. Approval will only be given if there is no risk to Crown funds, and there is a significant level of benefit (educational or otherwise) for one or more Boards or their students. Please see details on how to apply for approval to acquire securities in section 2.4.6 of the Financial Information for Schools Handbook (FISH).

Technical Accounting Guidance

Guidance on accounting for common transactions and arrangements can be found in the guidance notes attached to the Kiwi Park model.  The Financial Information for Schools Handbook (see Financial Information for Schools Handbook (FISH) is also a useful reference for technical advice.  Guidance on some specific matters has been included below and should be brought to the attention of the preparers of your financial statements.

Employee salary expenses

Privacy - Where a school or kura has only one person employed in either Property or Administration roles, a Board may combine both salaries under Administration. This means that the individual’s privacy will be protected, as it will no longer be possible for an individual’s salary to be identified.

Banking Staffing

Banking Staffing gives Boards flexibility in timing the use of their staffing entitlement. Boards are sent a fortnightly Banking Staffing report along with their Staff Usage and Expenditure (SUE) reports to help them monitor usage. A school or kura will need to logon to their Novopay account and download the Banking Staffing and SUE reports each fortnight.

The banking staffing modeling spreadsheet allows schools or kura to project staffing usage to the end of the year and model various scenarios. The Ministry monitors Boards’ usage and may contact schools or kura at risk of significant overuse during the year.

Please note that the Staffing year is different to the financial year. The financial year is 1 January through 31 December. The staffing year operates from pay period 23 to pay period 22, which approximates to 1 February through 31 January. Pay period 26 represents the end of the taxation year.

Accounting for over-used staffing

Boards that overuse their staffing entitlement must repay the Ministry for the amount overused. Banking Staffing overused at the end of the year must be recorded in the annual financial statements as an adjustment to the teacher salaries grant, with a corresponding accounts payable entry for the amount due to the Ministry. The amount recorded is GST exclusive.

The time period for final adjustments to balance the staffing usage is pay-periods 23 to 26 in respect of the Banking Staffing position as at year ended pay-period 22. The amount due to the Ministry at the end of pay-period 26 (following the final adjustment period) will be recovered from the July operations grant payment. The value associated is calculated at the banking staffing recovery rate of $72,500 (ex GST). The amount recovered is GST inclusive. The recovery rate may be recalculated each year.

For more information contact the Resourcing Contact Centre 04 463 8383, or visit the Ministry of Education’s website.

Cash reimbursements for unused staffing

Schools or kura can receive a cash reimbursement for roll-based staffing and additional staffing that they have not used by the end of the staffing year. If a school or kura has received special reasons staffing during the year, the Full-Time Teacher Equivalent (FTTE) allocated will be deducted from the under-used staffing entitlement before the reimbursement calculation is made.

The ‘reimbursement rate’ for unused staffing for the 2019 staffing year is $55,500 (ex GST). This will be limited to a maximum of 10% of the school or kura, total roll-based and additional staffing. The reimbursement rate may be recalculated each year.

For more information contact the Resourcing Contact Centre 04 463 8383, or visit the Ministry of Education’s website.

Recognition of annual leave

Schools or kura are required to report a liability in dollar terms for annual leave and long-service leave for their non-teaching staff.  A Leave Liability report will be available through Novopay online in February 2020. 

The liability should be reported in the Current Accounts Payable note to the annual financial statements (note 16 in the Kiwi Park model).

Schools or kura should be actively managing outstanding annual leave balances where the balance is high. This will assist in reducing the leave liability for which your school or kura is required to account.

Please do not record a liability for sick leave. You are not required to record this as in practice most teacher sick leave is funded by the Ministry.

Please see details in section 4.5.1 of the Financial Information for Schools Handbook (FISH)

Board contributions to capital works

It is the Board’s responsibility to ensure that capital works projects are completed within budget. Where projects are planned to be of greater value than the Ministry’s funding (i.e. when the Board wishes to contribute to the project from its own funds) the Board MUST obtain prior approval from the Ministry.

Contributions may be one of two types:

• Donation – a contribution towards an upgrade of a Crown-owned and maintained asset.  Where the contribution is a “Donation” the expenditure must be treated as a distribution to the Crown through the Statement of Changes in Net Assets/Equity.
• Investment – a contribution towards the creation of a new asset, or enhancement of an existing asset, which will be owned and maintained by the Board or owned and maintained jointly by the Ministry and the Board. The expenditure must be capitalised in the fixed asset register of the school or kura.

Please see details in section 2.4.9 of the Financial Information for Schools Handbook (FISH).

Parent Donations

Updated Information in regard to parental donations has been released in response to the passing of the Education (school Donation) Amendment Bill.  The amendments to the Act allows decile 1-7 schools or kura to opt-in to the donations scheme and receive a payment of $150 per student, in lieu of requesting donations from parents (with the exception of overnight school camps).

While this is not an impact on the 2019 annual reporting year, the information released further clarifies the earlier guidance provided.

Parent donations are entirely voluntary and cannot be compelled to be paid. Unpaid donations cannot be included in the accounts receivable figure and are therefore not an asset. Please take this into account when preparing your Annual Report.

Issued by

Natasha Barnett, Group Manager, Resourcing
Sector Enablement and Support

Ministry of Education, National Office, Matauranga House, 33 Bowen Street,
P O Box 1666, Wellington, New Zealand, Phone 04-463 8000, Fax 04-463 8001

Appendix 1: Annual Report Timeline 2019

Boards of Trustees are reminded that the Board’s analysis of variance is required to be provided at the same time as the updated school charter, before 1 March. 

Appendix 2: Components of the Annual Report

Board Chairperson/Principal’s Report [OPTIONAL]²

In this report, the Board Chairperson and/or Principal can inform the school or kura  community about the achievements and successes of the academic year. It also provides an opportunity to tell staff, parents and students about the goals for the coming year of the school or kura, and the risks and opportunities that may be encountered along the way.

It also provides the Principal with a chance to talk about the opportunities and challenges coming up in the year ahead.

There are no samples provided of this kind of report in the Kiwi Park model, as there are no mandatory requirements about content, and the school or kura will determine what the report(s) will cover.

Kiwisport [ESSENTIAL]

Schools or kura are asked to include a short statement in their Annual Reports on how they have used their Kiwisport funding to increase students’ participation in organised sport. Use of the Kiwisport funding will also be monitored as part of schools’ and kura regular Education Review Office reviews.

The Kiwisport report does not form part of the financial statements, therefore it is not to be included as part of the notes to the financial statements but should be shown in a separate statement within the Annual Report.

Other reports on special and contestable funding [MAY BE NECESSARY]

During the year the school or kura may have been the recipient of additional Government funding for specific purposes. The school or kura may need to report on how it has used these funds to support student development.

Analysis of Variance [ESSENTIAL]

This is a discussion of the outcomes achieved, compared to the outcomes planned, in areas of priority for the year. The Board will present an appraisal of the performance based on its aims, objectives, directions, priorities or targets as set out in the annual section of the school charter. It will provide pointers to the Board’s on-going strategy.  Some schools or kura will choose to combine the Board Chairperson’s report, the Principal’s report and the Analysis of Variance.

Statement of Resources [OPTIONAL]

This report describes the financial and non-financial resources used by the school or kura during the year.

Members of the Board of Trustees [ESSENTIAL]

This list details the people who govern the school or kura. It must include the name of each Trustee who served on the Board during the year, and the date on which that Trustee will finish their term on the Board.

The Members of the Board of Trustees list does not form part of the financial statements. However given its significance it has been included as part of the Kiwi Park model.

Annual financial statements

Statement of Responsibility [ESSENTIAL]

This statement is signed by the Principal and the Board Chairperson.  It acknowledges that the Board is responsible for the preparation and accuracy of the financial statements and states that the Board has established and maintained a system of internal control to safeguard the assets of the school and kura. 

Statement of Comprehensive Income [ESSENTIAL]

This financial statement summarises the income and expenditure of the school over the financial year, showing whether the school or kura has managed to operate within the funding they have received. The format of the Statement of Comprehensive Revenue and Expenditure is defined by Public Sector PBE financial reporting standards. A template is included in the Kiwi Park model financial statements.

Statement of Changes in Net Equity/Assets [ESSENTIAL]

This financial statement shows the value of the Government’s ‘investment’ in the school or kura (this is known as ‘equity’) and shows any increases or decreases in the value of that investment over the course of the financial year. The format of the Statement of Changes in Net Equity/Assets is defined by Public Sector PBE financial reporting standards. A template is included in the Kiwi Park model financial statements. 

Statement of Financial Position [ESSENTIAL]

This financial statement shows everything the school or kura owns (assets) and everything it owes (liabilities) at a specific date. The format of the Statement of Financial Position is defined by Public Sector PBE financial reporting standards. A template is included in the Kiwi Park model financial statements.  

Statement of Cash Flows [ESSENTIAL]

A Statement of Cash Flows shows all cash received and all cash paid by the school or  kura over the financial year. 

Notes to the Financial Statements [ESSENTIAL]

The Notes to the Financial Statements provide an extra level of detail that supplements the information shown in the financial statements. They include the Statement of Significant Accounting Policies, contingencies and commitments that were previously separate statements.

Independent Auditor’s Report [ESSENTIAL]

This report is prepared by the auditor of the school or kura, and must be included in the Annual Report. It provides an opinion to the readers of the Annual Report about whether the financial statements comply with generally accepted accounting practice, and whether they fairly represent the financial position, financial performance and cash flows of the school or kura.

Appendix 3: Annual Report Checklist

Make sure that you can check off each of the items below before you submit the single original PDF file of your Annual Report to the Ministry.

1. Analysis of Variance
2. Statement on Kiwisport funding
3. The Annual Financial Statements attached (all pages – please check)
4. Statement of Responsibility signed and dated
5. Independent Auditor Report signed and dated (not the management letter). 

Appendix 4: List of Guiding Legislation

Schools or kura are defined as Crown Entities in section 7 of the Crown Entities Act 2004(external link).  As Crown Entities, schools or kura are subject to the requirements of the Education Act 1989 and the Crown Entities Act 2004. These Acts define the form and content of the financial statements that schools or kura must present each year.

Education Act 1989

Section 87(external link): Outlines the requirements for preparing school and kura Annual Reports, their contents, and the deadlines for completion.

Section 87(AB)(external link): Specifies the Annual Report must be made available to the public on an Internet site maintained by or on behalf of the Board.

Section 87(3)(external link): Specifies that financial statements are to be prepared in accordance with generally accepted accounting practice.

Section 87(3AA)(external link): Specifies the Secretary for Education’s ability to request the specific format in which annual financial statements in the Annual Reports must be presented.

Section 87(4)(external link): Requires the annual financial statements to be accompanied by a statement of responsibility that complies with section 155 of the Crown Entities Act 2004(external link) but that is signed by the Chair of the Board and Principal.

Further information about the legal requirements governing school and kura financial operations is available in the Financial Information for Schools Handbook.

Appendix 5: Advice and Support

If you have questions about preparing Annual Reports, or the requirements of this circular, please contact your local Ministry of Education School Finance Advisor. 

Contact details are as follows:

Rebecca Cook, Tai Tokerau, Auckland
rebecca.cook@education.govt.nz or phone +64 9 632 9481

Carmel Riordan, Auckland
carmel.riordan@education.govt.nz or phone +64 9 632 9440  

Chad Britton, Waikato, Bay of Plenty
chad.britton@education.govt.nz or phone +64 7 837 3145

Alan Smith, Waikato, Bay of Plenty, Hawke’s Bay and Gisborne
alan.smith@education.govt.nz or phone +64 7 850 8984

David Hyland, Taranaki to Wellington
david.hyland@education.govt.nz or phone + 64 4 463 8699

Andrew Seagar – Nelson, Wellington
andrew.seagar@education.govt.nz or phone +64 4 463 4825

Alexander Dieudonne, South Island
alex.dieudonne@education.govt.nz or phone +64 3 378 7373

Your Board’s Accountant or Financial Service Provider may also be able to provide advice.

Footnotes

¹ Section 87 (3)(AA) of the Education Act 1989 states “The annual financial statement in the Annual Reports must be in the form (if any) determined by the Secretary after consultation with the Auditor General”. The Secretary for Education has determined that schools should report in the format set out in the Ministry’s Kiwi Park model.

² The Principal’s report and Board Chairperson’s report can be combined into one report.

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