Dept. of Education > Administrative Services > Finance, Facilities and Business Strategy Branch > School and College Bank Accounts

School and College Bank Accounts

• Overview

• Coverage

• Policy

  • Statutory and Departmental Requirements

  • Financial Management Within Schools and Colleges

  • School and College Bank Accounts

  • School and College Funding and Bank Account Balances

  • Financial Management Strategies

    • Why Prepare a Budget

    • Establishing Budgets For Future Year Provisions

    • Potential Future Year Provision Items

• Recommended Bank Account Balances

  • Balance of Bank Account Summary Form

Overview

These guidelines have been prepared to assist schools and colleges in the operation and management of funds contained in their bank account and should be read in conjunction with the Department’s Bank Account policy. 

Coverage

These guidelines apply to all schools and colleges.

Policy

Statutory and Departmental requirements

The department is required to manage its finances in accordance with the Financial Management and Audit Act 1990 (FMAA). The Act provides for the management of public finances in an efficient and effective manner consistent with contemporary accounting standards and financial practices as well as the audit of public finances.

The Secretary of the Department of Education is responsible for efficient and effective financial management in all schools and colleges and the department generally. In order to ensure that the Secretary is able to fulfil this responsibility it is essential that schools and colleges conduct their financial activities and operate their financial management systems in accordance with prescribed requirements.

All monies must be controlled as government money.

In accordance with the requirements outlined above, all monies controlled through school and college accounting systems become public monies regardless of their source. This includes money raised by the school or college or contributions received from community organisations. The money recorded within the school or college’s accounting system must be treated in the same way as all monies which make their way into a Government fund and all Government financial management policies and requirements apply to all monies which pass through school and college bank accounts.

Financial Management within schools and colleges

Each school or college is required to manage its finances in an efficient and effective manner in accordance with all Government financial management policies and requirements. This is achieved by sound financial management in the form of appropriately recording and reporting financial information together with the appropriate budget development and management, and by ensuring appropriate management and operation of the funds held within the school bank account. The responsibility for this rests with the Principal of the school or college.

School and College Bank Accounts

The following are guidelines that must be followed by schools and colleges in operating bank accounts:

a. General

• Schools and colleges are only permitted to operate one bank account, subject to one minor exception (see b, below) for the provision of banking services, and only with State Government contracted bankers. There are two exceptions to this rule, being Rosebery District High School and Beaconsfield Primary School.

• Bank accounts may not be overdrawn or operated in overdraft.

• All school and college bank accounts with either Commonwealth or Westpac are within the TASCORP (the State Government’s Investment arm) pooling arrangements, where funds are invested and interest is paid to the respective schools on a pro-rata basis.

• Central Office will not receive transaction details from the banks. However, it will receive balances on a monthly basis, from TASCORP, as part of the information gathered to ensure accuracy of provider operations.

• School Associations and other bodies associated with schools and colleges are to have bank accounts separate from those for schools, unless under exceptional circumstances where it may be authorised by the Manager, Finance and Procurement Services. Schools and colleges do not have approval to make payments to these bodies for school expenses or investment.

b. Bank accounts for bequests

• Schools and colleges should not use multiple bank accounts to manage different components of the school or college’s financial resources. However, occasionally a bequest is made to schools and colleges for the purpose of funding an annual scholarship or prize, where the annual funding is based on the interest earned on the bequest. If such a bequest is made to a school or college on the condition that the principal sum is to be retained and only the interest earned is to be applied to a nominated activity, then it is recommended that a second bank account is created to keep the bequest separate from the school or college’s general funds. Although a separate account is established, the initial bequest should be recorded within the school or college’s accounting system, as should all subsequent transactions.

c. Private Moneys

No employee shall:

• deposit public or other moneys to the credit of a private bank account;

• hold private moneys with other moneys under his or her control;

• deposit private moneys to the credit of a bank account of a school; or

• keep or permit any private moneys to be kept in a safe or strong room of a school.

School and College Funding and Bank Account Balances

Schools and Colleges receive funding from a number of sources including:

• School Resource Package grant;

• Educational program funding, provided outside the School Resource Package;

•  Levy payments; and

• Other miscellaneous income.

Balances held in school and college bank accounts are generally held for the following purposes:

• Amounts held for future year provisions, such as maintenance and minor works, furniture and equipment purchases;

• Unexpended education program funding;

• Professional development funding; and

• Specific purpose grant funding, including IT grants.

Financial Management Strategies

The financial management strategies detailed in this section focus mainly on budgeting. The School Budget Workbook, developed by the Business Support Service (BSS) is a valuable tool to assist schools and colleges in developing their budget.

To further assist schools and colleges in developing an appropriate budget a benchmark bank account balance, for each school type is provided together with a maximum and minimum balance, expressed as a balance per student FTE, that a particular school type should work within. The major objectives of these strategies are:

• to enable the school or college to actively pursue a set of educational and administrative objectives which the school has developed;

•  to empower the school or college to participate with all other schools in the pursuit of the Department’s educational and operational objectives;

• to ensure control of the school’s or college’s financial resources with the objective of maximising the usefulness of resources available to the school within a given year;

• to develop efficient and uniform systems of operation in schools and colleges; and

• to enable the school or college and the department to meet their financial accountability requirements efficiently.

Why Prepare a Budget

Budgets are projections or forecasts which provide the framework for planning by specifying measurable periodic objectives which should be achieved. The budget will guide the school’s or college’s operations and will serve as one benchmark for comparing planned performance with actual results.

One of the foundations of budgeting in a school or college is to ensure that the activities planned to be undertaken are adequately resourced. The process of preparing a budget requires the school or college to acknowledge this fact and to tackle the challenging task of deciding those activities which should be resourced and those which should not. Based on the important assumption that the budgeting process is closely linked to the school or college’s planning process, the following list summarises the grounds for preparing a budget.

A budget:

• ensures that all resources available to the school or college are allocated efficiently and effectively;

• ensures that the day to day operations of the school or college are geared towards achieving specific objectives;

• provides management with a plan, thereby reducing impact of staff changes;

• provide one benchmark against which the collection of transactions or events of the budget period can be compared and monitored to ensure that the school or college remains financially robust and that its resources are used to optimum advantage;

• encourages communication within the organization;

• enables consolidation of individual objectives into the overall objectives of the school or college;

• enables the school or college to control the financial activities of the school effectively;

• section 27f of the Education Act 1994 requires that the school or college budget is to be approved by the School Association.

An essential part of the budgeting process, that not only focuses on the transactions, receipts and payments identified for the current year (generally identified in the Cash-Flow budget), it is also essential to establish a budget for future year provisions.

Establishing Budgets for Future Year Provisions

General

Schools and colleges are funded on a year to year basis and, ideally, money received within the current year should be directed towards the needs of current students. However, in some circumstances it may be necessary to spread the impact of the purchase of major capital items or costly maintenance activities across more than one year. For instance, the upgrade of a computer facility, if it is to be funded from one particular year’s allocation, may force significant limits on payments in other program budgets for that year.

Money accumulated for such a purpose over a number of years is known as a “Future Year Provisions”.

When compiling a Future Year Provisions budget, it is critical to remember:

• the funds should be accumulated for specific, identifiable needs;

• the Future Year Provisions budget should be reassessed each year – this year’s Future Year Provision may be next year’s payments item or may continue to be a Future Year Provision into later years;

• Payments are never classified to the Future Year Provisions category. If a spending expectation is brought forward due to a change in circumstances, then budget adjustments should be made. The Future Year Provisions budget should be diminished and those funds then added to the budget in those accounts which would normally be expected to make such payments.

Potential future year provision items

The range of items and activities warranting consideration in the school or college’s Future Year Provision budget is extensive. It may include:

• replacement of valuable assets – computers, televisions, sound equipment;

• replacement of basic equipment;

• upgrading computer facilities;

• replacing sets of equipment – band instruments, classroom furniture, text books;

• maintenance and minor works activities – repainting, re-roofing, playground upgrades.

An equipment replacement schedule should be maintained which provides clear support for the level of funds being held for equipment replacement purposes and identifies the year that specific equipment will be replaced to assist effective budgeting practice.

Recommended Bank Account Balances

The previous sections in this guideline  have highlighted that schools and colleges are responsible for the financial management of the school and college in an effective and efficient manner and that the responsibility for this rests with the Principal of the school or college.

The by product of sound financial and budget management is the effect it has on the bank account balance. At any given point in time, and especially at the end of the school year, 31 December, the school or college should be able to reconcile what makes up the balance of its bank account. 

Balance of Bank Account Summary form is a pro-forma that can assist schools or colleges when they undertake this reconciliation. This form will be reviewed during the school audit process.

This reconciliation should show what the bank account balance is made up of, which would generally be for:

• Current Commitments for unpaid creditors;

• Unexpended education and training program funding;

• Professional development funding;

• Specific purpose grant funding, including IT grants; and

• Provisions for future years.

All funds held within a school or college bank account should be able to be identifiable as to its purpose.

The following table identifies what the benchmark, minimum and maximum bank balances that a particular school type should manage to. Schools which are not maintaining their bank account balances within these ranges will be subject to a review process each year.

Recommended Bank Balances, per student FTE (as reported in the August student census)