Increased government funding ensured schools were better off financially last year despite a big drop in locally-raised income.
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The Office of the Auditor General's report on audits of school accounts said more schools made operating surpluses and fewer were in financial trouble in 2020 than in previous years.
The report said 80 percent of schools recorded a surplus, compared to only 59 percent for 2019.
"Overall, schools reported a surplus of about $198 million for 2020. This compares with an overall surplus of about $70m in earlier years," it said.
The report said 43 schools had working capital deficits, about half as many as in previous years.
The good results were achieved despite a significant loss of income.
As previously reported schools lost about $170m from the combined effect of the government's donation scheme and the pandemic preventing fund-raising events and reducing foreign student income.
"Total locally raised funds for 2020 was $390m, compared to $520m in 2019. Schools also received about $117m of revenue from international students in 2020. This is a decrease of 26 percent on 2019 ($157m)," it said.
The donation scheme gave participating schools in deciles 1 to 7 a total of $64.8m last year in return for agreeing not to ask parents for donations.
The report showed only decile 1 schools received more from the donation scheme and locally-raised funds last year than they had in 2019 from locally-raised funds alone.
All other deciles received less than they had in 2019, though the difference was slight for decile 2 and 3 schools and schools that were not in the scheme, deciles 8- to 10, had the biggest decreases in locally-raised fund income.
The report said government funding to schools increased 7 percent last year including the donation scheme, $57m in Covid-19 support payments, and $79m in top-up funding for a pay equity claim for teacher aides and support staff.
It said schools had weathered the first year of the pandemic better than expected, but it worried that this year's figures might not be so good.
"Although our auditors identified only 17 schools that we consider to be in financial difficulty and another 44 schools that had the potential to get into financial difficulty, our analysis showed that many schools continue to spend large amounts of their funding on staff. Without the same level of Covid-19 support funding as in 2020, there is a risk that more schools get into financial difficulty in 2021," the report said.
Meanwhile, the report said auditors had warned 10 schools about hospitality and entertainment expenses that seemed excessive, and three schools and travel-related expenditure.
It also singled out some schools' spending.
"The board of Papatoetoe North School gifted several hardware items costing $4310 to the principal of the school as a leaving gift and paid for a farewell event costing $8695. The board also gave farewell gifts of $1000 each to two staff members and spent $2200 on a function for a former teacher," the report said.
"We drew attention to the board of Manurewa West School not obtaining approval from the Ministry for various well-being payments, and revitalisation and refreshment grants, that it paid to the principal in 2017 and 2018," it said.
"We also drew attention to the school paying for the principal and his spouse to travel to Singapore to attend the World Education Leadership Conference. Subsequently, the principal repaid his spouse's travel costs and his daily incidental travel allowances to the school."
It also said an audit of Te Kura Kaupapa Māori o Kokiri could not verify that $33,064 spent on fuel was incurred for the benefit of the kura.