Fostering Trust and Efficiency in School Audits​

The Honourable Minister of Education Ministry of Education
PO Box 1666
Wellington 6140

And
The Education and Workforce Committee New Zealand Parliament
1 Museum Street
Wellington 6160 

Subject: Proposal for a Trust-Based and Efficient Financial Audit System for New Zealand Primary Schools 

Dear Members of the Education and Workforce Committee and Honourable Minister,

We, a collective of primary school principals, boards of trustees, teachers, and parents from across New Zealand, are writing to you today to propose some limited changes of the financial audit system for our primary schools.

The Current Challenge

At present, every school in New Zealand is required to have its annual accounts audited every year. While designed to ensure accountability, the current financial audit regime has become overly burdensome and inefficient. It places significant administrative demands on schools, diverting valuable time and resources away from core educational activities. The substantial financial cost associated with these extensive audits represents a considerable drain on school budgets—funds that could be more effectively utilised for direct educational provision, enhancing learning environments, and supporting student well-being.

A Proposal for Reform: Fostering Trust and Efficiency

We believe that a more trust-based and targeted approach to financial oversight would yield greater efficiency and ultimately strengthen the financial integrity of our schools without compromising accountability. We propose a revised audit framework incorporating the following key principles:

• Randomised Audits: We recommend implementing a system of random selection for routine financial audits. This approach would ensure periodic scrutiny across the sector while significantly reducing the administrative burden on individual schools. The selection process could be transparent and equitable, fostering a sense of shared responsibility and trust.

• Targeted Intervention for Financial Distress: Audits should be mandated specifically for schools experiencing demonstrable financial difficulties, indicated by persistently low working capital or other agreed-upon financial metrics. This targeted approach allows for timely intervention and support where it is most needed, facilitating proactive solutions rather than reactive compliance.  

Benefits of the Proposed System Implementing this revised audit framework would offer substantial benefits:

• Optimised Resource Allocation: By reducing unnecessary administrative overheads and audit-related expenditures, schools would be able to reallocate precious financial resources directly to teaching and learning, improving educational outcomes for all students. We’ve calculated that, considering both staff time and out-of-pocket expenses, the average savings could be NZD 7,500 to NZD 10,000 per school per year.

• Increased Operational Efficiency: School leadership and administrative staff could dedicate more time and energy to strategic planning, curriculum development, and student support, rather than extensive audit preparation and compliance.

• Enhanced Trust and Professionalism: A system that demonstrates trust in the financial stewardship of schools, while maintaining essential oversight, would foster a more collaborative and empowering environment for school leaders.  

Call to Action

We urge both the Education and Workforce Committee and the Ministry of Education to critically review the current financial audit requirements for primary schools and to engage with the education sector in developing and implementing a more efficient, cost-effective, and trust-based audit system. Such a reform would genuinely support schools in their primary mission of educating the next generation of New Zealanders.

Thank you for your time and consideration of this crucial matter. We look forward to the opportunity to discuss this proposal further.