Accounting for donations, fundraising and other income

Your school may receive income from a variety of sources, as well as government funding, such as:

Expenses will be incurred against each of these income types. Some require a separate expense account related to the category while others are expensed in other sections of the financial statements. You must use separate account codes for revenue and payments. Income and expenditure accounts must not be combined.

Audit checks

When your school’s annual report and financial statements are submitted for audit, auditors will be comparing the current and previous years’ income and expenditure for each category of local funds.

You need to provide notes to explain any differences greater than 10% on the previous year. For this reason it is good practice to make sure local funds are accounted for in a similar way between years.


Schools can request donations from parents and caregivers. These are voluntary payments and are recorded in full, without deducting GST. There is no directly related expense as these funds generally contribute to classroom and curriculum costs.

Schools sometimes receive gifts or bequests, which are tagged in some way by the donor. They may be designated for the purchase of particular equipment, such as library books. Or they may have to be invested and only the interest received used, perhaps for a scholarship or similar purpose.

The correct accounting treatment for restricted donations and bequests is to recognise it as income as soon as the school has control over the assets. This would normally be on receipt.

The donated assets should then be transferred to a reserve and disclosed in the financial statements as a restriction on equity. A donation should be recognised as a liability only if there is an obligation to return it to the donor if it is not used for the purpose specified.


Your school may fundraise to increase the funds available for supporting students. You might fundraise for a particular purpose, such as:

  • a new asset like an adventure playground (often the PTA is a source of this type of fundraising)
  • computers or other IT equipment
  • sports gear or uniforms
  • school camps
  • field trips, sports trips, music trips.

You need to include all funds raised in income under local fundraising – under either donations or fundraising.

The expenditure that the fundraising covers is unlikely to be recorded directly against local funds expenditure. Expenditure on capital assets, such as playgrounds or equipment like computers, will be expensed into the asset register. Sporting and music costs will be expensed against extracurricular expenditure. The costs of field trips and camps may be expensed directly against these categories.

If your school receives donated assets (such as computers) you need to record the estimated value of the donated assets in local funds (under fundraising) and expense the asset into the asset register in the usual manner.


There are several types of activity revenues. In primary schools, it may be the income requested from parents and caregivers to meet the costs of a camp or field trip. For intermediate and secondary schools, there are the additional expenses for sports and music activities and for curriculum expenses when the goods or services provided are for the individual students' use and are generally taken away by the student. These include materials used in subjects such as photography and food technology.


Your school might buy goods for subsequent sale on a semi-commercial basis. Examples include the supply of school uniforms, stationery and lunches. It is usual for schools to only recover the costs rather than to make a profit. However, it is acceptable for a school to generate a profit from a trading operation. If parents or caregivers have no alternative providers (such as if uniforms are only available from the school) there needs to be clear agreement with the community that any profit made will be used to benefit the students.

There is usually a time difference between when the stock is purchased and when it is sold. It is common for stock to be on hand at balance date (year-end). You need to count the stock and value it at cost or realisable value if the original cost is no longer known.

We recommend that you do not include trading income and expenditure in monthly management reports as the time differences may provide a false indication of the school’s financial position. Record the trading income and expenditure in separate accounts and report it only at year-end.

It is important for the board to know whether the school’s trading operations are performing satisfactorily throughout the year. This can be covered in a separate management report alongside the board’s regular financial reporting. 

International students

If your school has foreign fee-paying students (international students) you must comply with the Regulations to better support international students (external link) . Record all income from international students in an income in advance account and release it to revenue only when the student has taken up their place in the classroom, usually at the beginning of each term.

Expenditure that relates directly to international students (such as employing teaching staff to assist with the students’ learning of English, or any special pastoral care staff) should be expensed under learning resources.


If your schools operates a hostel, you account for fees under its own heading within other non-government income. Similarly, hostel expenditure should have its own heading under expenditure. 

Use of land and buildings

State schools record their use of land and buildings grant under government grants. State-integrated schools report the grant from their proprietor under other income.

All schools record the use of land and buildings expenditure under property expenses.

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