Circular 2020/07 - Annual Reporting Circular
Date 1 November 2020 | End date 31 October 2021 | Circular 2020/07 | Category Governance
This circular is about Preparation of your 2020 annual report.
This circular replaces Circular 2019/11 issued November 2019.
The action needed is To ensure the schools/kura 2020 annual report incorporates all requirements.
It is intended for
Chairpersons of boards of trustees and principals of all state and state-integrated schools/kura.
All those preparing school/kura annual financial statements.
Appointed auditors of schools/kura.
For more information
Please contact the Ministry through your school finance advisor
This circular provides information, advice and guidance on how to prepare your 2020 annual report.
By 31 March 2021, your draft annual financial statements must be submitted to your auditor, together with 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 2021, a single PDF file of your annual report, including your audited annual financial statements and independent auditor’s report, must be submitted to the Ministry of Education (the Ministry) via the Ministry’s Secure 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.
The annual report is a key accountability document that boards are required to prepare to inform and report to stakeholders including the Ministry, Members of Parliament and, most importantly, parents and the wider community of schools/kura.
The annual report contains the audited annual financial statements for the year. It shows how boards applied the financial resources of schools/kura to achieve the goals set out in their charter.
The annual report also contains an analysis of any variance between the planned aims, objectives, directions, priorities, or targets (as set out in schools/kura strategic plan or charter) and what schools/kura achieved during the year. The analysis of variance describes how schools/kura have addressed boards’ 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.
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/kura. To help ensure compliance with these standards, schools/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 Schools' annual report (annual financial statement) webpage.
A series of short videos which provide additional guidance on how to use the Kiwi Park Model can be found on the Ministry’s Schools' annual report (annual financial statement) webpage.
Further guidance on accounting for specific transactions can be found in Technical Accounting Guidance.
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.
The Kiwi Park model financial statements are designed to meet the requirements for a tier 2 entity and the Ministry requires all schools/kura, except for those that have expenses greater than $30 million, to meet the requirements of this tier.
Schools/kura with expenses greater than $30 million are categorised as tier 1. A disclosure checklist, outlining the additional disclosures required for tier 1 schools/kura, can be found on the Ministry’s Schools' annual report (annual financial statement) webpage.
The financial reporting standards allow for schools/kura moving between tiers. If your school/kura is expected to have total expenses over $30 million for the 2020 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 have been assessed as controlled by the board for financial reporting purposes are also public entities. Under the accounting standard PBE IPSAS 35: Consolidated Financial Statements, an entity is controlled by the board for financial reporting purposes if the board has:
- power over the other entity;
- exposure, or rights, to variable benefits from its involvement with the other entity; and
- the ability to use its power over the other entity to affect the nature or amount of the benefits from its involvement with the other entity.
Where schools/kura have an entity that has been assessed as controlled for financial reporting purposes, the schools/kura must prepare consolidated annual financial statements, incorporating the transactions of the separate entity.
Schools/kura that are required to prepare consolidated annual financial statements under Education Act 1989 section 87 (3)(A), should use the Kiwi Park Group model for 2020.
There have been no significant changes to the accounting standards for the 2020 financial year.
What to expect from your audit
Quality of the Financial accounts
All schools/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 of your annual financial statements.
It is important that care is taken when preparing the annual financial statements. If not already in place, schools/kura will need establish a review process to ensure:
- the annual financial statements have been prepared in accordance with PBE accounting framework and the Kiwi Park model; and
- all relevant disclosures for the schools/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/kura to achieve the goals set out in the charter of the school/kura.
Gathering of this information can take multiple forms and is a combination of both supporting documentation and discussion. Schools/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 a financial service provider.
Some key information the auditor requires are:
- 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/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 its subcommittees minutes, including 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 schools/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 auditor’s report, which they will attach to the annual financial statements.
The annual financial statements and independent auditor’s report will be returned to schools/kura for filing with the Ministry 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 schools/kura. This cannot be completed by a previous principal or board chairperson.
It is beneficial to plan 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 the finalising of the annual report without the need to re-convene the full board.
Schools/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 auditor’s report (which forms part of the annual report). It is addressed to the board or the board chairperson, not to the principal, 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 schools/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
Secure Data Portal for submission of annual reports
Please use the Secure 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
Once you have logged in, In the next screen to open please select the drop-down option ‘Annual Report (31 May)’ in the Secure Data Portal(external link) (see Figure 2) to ensure your Annual Report is submitted correctly.
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/kura can also upload an Excel spreadsheet version of their annual financial statements via the Ministry’s Secure 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 schools/kura data can be collated in a timely manner. This is optional and is 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 schools/kura website. Making annual reports available online ensures that parents, and the wider community, can access information about what your schools/kura has achieved and how the board has managed schools/kura finances in the previous financial year. 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 email@example.com.
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.
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).
Find further guidance and a set of frequently asked questions on our website.
All money received by boards, whatever the source, automatically becomes public funds and boards are accountable for all expenditure. Boards and management have a responsibility to ensure all funds received by the schools/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, for example where it could be considered to have provided a personal benefit to an individual or is not related to the objectives of the school/kura. Common examples of areas of expenditure that can be considered sensitive include; travel, hospitality and reimbursement of the principal’s and board members’ personal expenses. Please refer to the Financial Information for Schools Handbook (FISH) section 2.4.1 for more detail.
Boards should consider the following before approving expenditure:
- Does the expenditure further the aims of the school/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/kura?
- Would publicity over this spending adversely affect the school/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?
The 2020 payroll information will be provided to you in early February 2021 for use in preparing your financial statements. This information will be similar to that provided for the 2019 year. This will include:
- The School Annual Accrual Report Certification form which will be available through managing school finances;
- The School Annual Accrual Report (SAAR) which will be available through EdPay/Novopay Online;
- The Leave Liability Report which will be available through EdPay/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 2020.
We encourage you to complete your draft annual financial statements once the SAAR is available, as this will speed up the annual reporting process for you.
Boards can only borrow within the limits set by Education and Training Act 2020 and the conditions specified in regulation 12 of the Crown Entities (Financial Powers) Regulations 2005.
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 in the form of 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 and Training Act 2020 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/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 the Financial Information for Schools Handbook (FISH) section 2.4.5.
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 Minister of Education and Minister of Finance. This approval is not granted retrospectively but will ensure that while the school/kura will still exceed the borrowing limit, approval to do so has been granted for the following 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 the Financial Information for Schools Handbook (FISH) section 2.4.5.
In no case shall a board approve a loan to any party. This includes any staff, any trusts associated with the school/kura, or any other external parties.
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 (or shares) - this is full or part ownership of a private or public company.
Crown Entities Act 2004 section 161(1)(a) and Education and Training Act 2020 section 154 outline the restrictions relevant to securities.
Boards may only make investments in:
- A debt security in a registered bank or other credit worthy institution, such as a term deposit; 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 the Financial Information for Schools Handbook (FISH) section 2.4.6.
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 (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.
The Education and Training Act 2020
The Education and Training Act 2020 came into effect on 1 August 2020. It incorporates and replaces the Education Acts 1964 and 1989 and implements changes from the Education Work Programme.
Where appropriate references to legalisation have been update in the Kiwi Park model financial statements and other supporting guidance, except for section 87 of the Education Act 1989 which remains in force until January 2023.
The new legislation does not change the financial reporting obligations of schools/kura.
Recognition of COVID-19 funding
Where schools/kura have received additional funding from the Ministry to offset the financial impact of the COVID-19 pandemic, these revenue streams should be reported as ‘Other MOE Grants’.
The ‘Revenue Types’ tab of the Kiwi Park model financial statements provides a list of the funding provided to schools/kura, including COVID-19 specific funding types, and how they should be reported in the financial statements.
If the COVID-19 funding is material for your school/kura, additional disclosure may be required to help the readers understanding of the financial statements. An example of this disclosure has been included in note 2 to the Kiwi Park model financial statements, refer Schools' annual report (annual financial statement).
Letters of support
As part of the audit process, your auditor will assess the appropriateness of preparing you financial statements on a going concern basis.
If the auditor has concerns about the ability of your school/kura to meet its financial obligations as they fall due, they may request a letter of support from the Ministry. A letter of support confirms that staffing and funding will continue to be provided for the subsequent 12-month period.
If you require a letter of support, please contact the Ministry School Finance Advisor for your Region.
Updated information on parental donations has been released in response to the passing of the Education (School Donations) Amendment Act 2019. The amendments to the Act allow decile 1-7 schools/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 schools/kura camps).
Donations scheme funding should be recorded as government grants - operational grants. In the Kiwi Park model (Note 2) schools/kura are required to disclose if they opted into the donations scheme and the funding provided.
Parental donations are entirely voluntary, and payment cannot be compelled. Unpaid donations should not be included in the accounts receivable balance at year end. Please take this into account when preparing your annual report.
Cyclical maintenance provisions
To support better planning for cyclical maintenance costs, such as the internal and external painting of the school, and to comply with generally accepted accounting practice (GAAP), schools are required to include a provision for cyclical maintenance as a liability in their balance sheets. Schools should set sufficient funds aside to match that liability.
The provision should be based on a reasonable estimate of cyclical maintenance costs, such as an up to date 10-year property plan or other reliable evidence such as a recent quote.
A cyclical maintenance workpaper accompanies the Kiwi Park model financial statements to assist schools/kura with calculating their provision and preparing the required disclosures.
Statement of Cash Flows
The statement of cash flows summaries the amount of cash entering and leaving a school/kura. The cash flow workpapers in the Kiwi Park model financial statements have been updated to make it easier to capture adjustments for common non-cash items such as finance leases and disposal of assets. A short video on how to use the Kiwi Park Model - Statement of Cash Flows can be found here Schools' annual report (annual financial statement).
Employee salary expenses
Where schools/kura have 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 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. Schools/kura will need to logon to their EdPay/Novopay account and download the banking staffing and SUE reports each fortnight.
The banking staffing modeling spreadsheet allows schools/kura to project staffing usage to the end of the year and model various scenarios. The Ministry monitors boards’ usage and may contact schools/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 (31 March).
Accounting for over-used staffing
Boards that overuse their staffing entitlement must repay the Ministry for the amount overused.
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 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 of the overuse is calculated at the banking staffing recovery rate of $74,500 (ex GST). The amount recovered will be grossed up for GST. The recovery rate may be recalculated each year.
Schools should recognise an accrual for banking staffing overused at the end of the year in their annual financial statements. The amount accrued should be equal to the balance at the end of December (pay period 20). This is recorded as an adjustment to the teacher salaries grant, with a corresponding accounts payable entry for the amount due to the Ministry. The accrual should then be adjusted to reflect the March balance (pay period 26) if the difference is material. The amount recorded is GST exclusive.
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/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 schools/kura received special reasons staffing during the year, the full-time teacher equivalent (FTTE) allocated will be deducted from the underused staffing entitlement before the reimbursement calculation is made.
The ‘reimbursement rate’ for unused staffing for the 2020 staffing year is $60,500 (ex GST). This will be limited to a maximum of 10% of the schools/kura total roll-based and additional staffing. The reimbursement rate may be recalculated each year.
If the amount receivable is material, schools school recognise this in their financial statements. This is recorded as an adjustment to teacher salaries grant, with a corresponding accounts receivable entry (banking staffing underuse).
For more information contact the Resourcing Contact Centre 04 463 8383, or visit the Ministry of Education’s website.
Recognition of annual leave
Schools/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 EdPay/Novopay online in February 2021.
The liability should be reported in the current accounts payable note to the annual financial statements (note 16 in the Kiwi Park model).
Schools/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 schools/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 the Financial Information for Schools Handbook (FISH) section 4.5.1.
Holidays Act Compliance – school payroll
The Ministry's review of the school sector payroll, to ensure compliance with the Holidays Act 2003, is ongoing. Further information on the review, including frequently asked questions, is available on the Ministry of Education’s Website.
Schools/kura are required to include a standard disclosure note in their financial statements. The wording of this disclosure is provided in note 29 of the Kiwi Park model financial statements.
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 for the total value of the project and the amount to be contributed by the board to capital works.
Contributions may be one of two types, as agreed with the Ministry at the outset of the project:
- 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/kura.
Please see details in the Financial Information for Schools Handbook (FISH) section 2.4.9.
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
|February||Payroll end of year reports and error schedules will be made available to schools or kura.|
|February/March||The Board should approve the draft annual report and send it to the auditor.|
This is the statutory deadline for draft annual reports to be presented to the auditor (Education and Training Act 2020 Section 135). To avoid the time of peak workload for the auditor, and to help speed up the audit process, you should attempt to submit draft accounts and comprehensive working papers well before this date.
The Ministry recommends that you agree to a timetable with your auditor to ensure that audited accounts are with the Ministry by 31 May 2021. This timetable should allow for sufficient time to submit draft accounts and the analysis of variance report and work through any issues identified through the audit.
|April/May||When all audit adjustments have been made, the board should adopt the annual report and sign the statement of responsibility. The auditor signs the independent auditor's report after the board signs the statement of responsibility.|
This is the statutory deadline for the annual report, including audited financial statements, to be submitted to the Ministry using the Secure Data Portal(external link).
Boards must ensure its annual report is available to the public on an Internet site maintained by or on behalf of the board (Education and Training Act 2020 section 136), as soon as possible after your audit is complete.
Boards are reminded that the board’s analysis of variance for 2020 is required to be provided at the same time as the updated schools/kura charter for 2021, before 1 March.
Boards should also include a copy of the analysis of variance for 2020 in the annual report.
Board Chairperson/Principal’s Report [OPTIONAL]2
In this report, the board chairperson and/or principal can inform the schools/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 schools/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, schools/kura will determine what the report(s) will cover.
Schools/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/kura regular Education Review Office reviews.
The Kiwisport report does not form part of the financial statements, and therefore it is not to be included as part of the notes to the financial statements. It 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 schools/kura may have been the recipient of additional government funding for specific purposes. Schools/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/kura will choose to combine the board chairperson’s report, the principal’s report and the analysis of variance.
Members of the Board of Trustees [ESSENTIAL]
This list details the people who govern the schools/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/kura.
Statement of Comprehensive Revenue and Expense [ESSENTIAL]
This financial statement summarises the income and expenditure of the school/kura over the financial year, showing whether the school/kura has managed to operate within the funding they have received. The format of the statement of comprehensive revenue and expense is defined by Public Sector PBE financial reporting standards. A template is included in the Kiwi Park model found here Schools/kura annual report.
Statement of Changes in Net Equity/Assets [ESSENTIAL]
This financial statement shows the value of the government’s ‘investment’ in the school/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 assets/equity is defined by Public Sector PBE financial reporting standards. A template is included in the Kiwi Park model found here Schools/kura annual report.
Statement of Financial Position [ESSENTIAL]
This financial statement shows everything the school/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 found here Schools/kura annual report.
Statement of Cash Flows [ESSENTIAL]
A statement of cash flows shows all cash received and all cash paid by the school/kura over the financial year. The format of the statement of cash flow is defined by Public Sector PBE financial reporting standards. A template is included in the Kiwi Park model found here Schools/kura annual report.
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 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/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/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.
- Analysis of Variance
- Statement on Kiwisport funding
- The Annual Financial Statements attached (all pages – please check)
- Statement of Responsibility signed and dated
- 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 Crown Entities Act 2004, section 7(external link). As Crown entities, schools/kura are subject to the requirements of the Education Act 1989, Education and Training Act 2020 and the Crown Entities Act 2004. These Acts define the form and content of the financial statements that schools/kura must present each year.
Education Act 1989
Section 87(external link): Outlines the requirements for preparing schools/kura annual reports, their contents, and the deadlines for completion.
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 Crown Entities Act 2004, Section 155(external link) but that is signed by the Chair of the Board and Principal.
Education and Training Act 2020
Section 136(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.
Further information about the legal requirements governing school/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 the Ministry through your school finance advisor.
Your board’s accountant or financial service provider may also be able to provide advice.
1 Education Act 1989 section 87 (3AA) of the 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.
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