Chapter 4 Publications
Publication Details
This report of the Minister of Education on the compulsory schools sector in New Zealand pertains to 2008 (also known as the Schools Sector Report). Other editions are available on the New Zealand Schools publication home page.
Author(s): Ministry of Education
Date Published: September 2009
This report is available as a download (please refer to the 'Downloads' inset box). For links to related publications/ information that may be of interest please refer to the 'Where to Find Out More' inset box.
Chapter 4: Governance and Resourcing
The quality of schooling is an important contributor to outcomes for students. Sound governance, effective leadership, adequate resourcing and the effective management of resources are all critical to the operation of a quality school.
School Governance
Boards of trustees are accountable and responsible to both their school community and the government. Boards require informed and committed people with a variety of skills and experience to govern successfully. School governance is a complex role for a trustee.Trustees are faced with finance, law, sales and marketing, human resources, student discipline and of course the school curriculum and education issues in general.80
A recent report81 by ERO confirms that school boards competently manage the majority of schools. The findings highlight some common features of well-governed schools:
- Governance is centred on students, with trustees committed to improving student learning and achievement.
- The principal and teachers give trustees analysed student achievement information that is used to set realistic targets and underpin decision-making, especially in supporting professional development of staff.
- Strategic planning and annual planning have a strong focus on improving student achievement.
- The principal plays a key role in working with trustees and providing strong professional leadership for the board, staff and students.
2008 Mid-term Elections
Two hundred and eighty schools participated in the most recent mid-term elections held on 12 September 2008. Of this total, 117 schools held a voting election, posting out over 60,000 voting forms (an average of 542 forms per school). Of the forms posted out, 26 percent were returned.
Candidates Offering Themselves for 2008 Mid-term Elections
Of the 117 schools that held voting elections in 2008, there were 619 positions available and 772 candidates.
Fifty-four percent of candidates had no previous experience of having been on a board of trustees, an increase from 2005 (49 percent). The percentage of male and female candidates remained stable from 2005 to 2008, with 54 percent being male.
In 2008, 78.6 percent of the candidates were European/Päkehä. There was a small decline in the proportion of Mäori candidates from 12.2 percent in 2005 to 11.4 percent in 2008. There was also a small decline in the proportion of Pasifika candidates, from 2.9 percent in 2005 to 1.8 percent in 2008. There was an increase in the number of Asian candidates from 1.4 percent in 2005 to 1.8 percent in 2008.
Election Irregularities
Election irregularities were minimal, with only one school having its election invalidated and being required to hold a new election on 14 November 2008.
Strategic Focus
One of a board’s core activities is establishing a strategic focus. Since 2003, all schools have been required to document their strategic plans in their annually updated school charters. A board of trustees’ self-review, including analysis of student achievement data, informs the setting of future priorities and targets for student outcomes.
In 2008, 95 percent of schools sent copies of their charters to the Ministry of Education. Of these schools, 70 percent had specified learning area targets for student outcomes. A reduced number of schools (57 percent) cited a language area target compared with 2007 (81 percent). Mathematics, at 32 percent, was the next most common learning area target. Health-related targets were set by 7 percent of schools, and information and communication technology (ICT) targets were set by 5 percent.
Statutory Interventions in Schools
Since the implementation of legislation on statutory interventions in October 2001, 392 interventions have been initiated in schools. Ninety-eight of these statutory interventions were current at the end of 2008.
The most common form of statutory intervention is a limited statutory manager. This is a person appointed by the Secretary for Education at the direction of the Minister of Education to take over specified powers of a board while leaving the board intact with continued responsibility for all other functions.
During 2008, 54 statutory interventions were initiated, compared with 53 in 2007 and 51 in 2006. Fifty-one were revoked during the year, 10 in order to be reinstated under a different section of the Education Act (1989) (seven were reduced to a lower level; three were escalated from limited statutory manager to commissioner). At the end of 2008, about 4 percent of all state and state integrated schools were subject to statutory interventions.
Fifty-five percent of statutory interventions in 2008 were initiated in response to requests from boards.
Twenty-three of the statutory interventions commencing in 2008 involved the appointment of a limited statutory manager. Most commonly, the identified area of risk that justified these appointments related to employment matters.
School Leadership
Kiwi Leadership for Principals (KLP)82 describes the qualities, knowledge and skills required for leading learning in 21st-century New Zealand schools. It reflects the key messages from the Best Evidence Synthesis report on leadership. Research has found that school leaders can make a significant difference to student achievement.
The Ministry responded to feedback from principals on the draft KLP document in early 2008. This feedback confirmed that most principals were committed to being leaders of learning with a focus on student achievement. Principals also advocated a broader educational leadership focus to better reflect the principal as leader of the learning organisation. The KLP was modified to achieve this in consultation with stakeholder groups and was ready for publishing in early 2009.
The First-time Principals Programme is an induction programme for new principals and has a strong commitment to their development as school leaders. Since 2002, around 1,000 new principals have taken part in the programme. This is run over 18 months by the University of Auckland. The programme includes three ‘residentials’ during term breaks, involvement with professional learning groups, online learning and working with mentors. The programme uses the KLP document as a framework for professional learning for school leaders and a roadmap for principals to use to chart their progress.
The National Aspiring Principals Pilot was announced in the 2007 Budget, to be run in 2008 with 180 participants nationwide. The purpose of the pilot is to provide a programme of professional learning to prepare aspirants for principalship. The pilot programme was delivered in six regions by the Leadership and Management Advisors attached to the universities. There were over 400 applications for the 180 places. The evaluation of the pilot will be completed in the latter half of 2009.
Network of Schools
For all students to access high-quality learning experiences, there needs to be a strong network of schools. Both nationally and locally, the network must be able to cope with the diversity of student needs, fluctuations in student numbers and the changing composition of the school-age population.
Significant changes in school rolls nationally are not expected over the next four years. There are, however, specific areas of growth and decline in different parts of the country.
During 2008, a number of school reorganisations took place:
- Three schools closed.
- Four schools merged to form two schools.
- One state school changed its classification to become a designated character school.
- Two contributing schools were approved to retain students to Years 7 and 8.
- Three schools changed their class from full primary schools (Years 1–8) to composite schools (Years 1–10).
- Five new state schools were established.
- One private school was approved to become a state integrated school.
International Students
The International Education Agenda (2007)83 sets out four goals to support international education in New Zealand schools and by tertiary providers. Goal two focuses on enriching the experience of international students and relates to school management responsibilities:
International students are welcomed, receive effective orientation guidance, and exemplary pastoral care and learning support.
During 2008, there were 15,660 international students enrolled in New Zealand schools.84 It is important that international students are well informed, safe and properly cared for while they are studying in New Zealand. The Code of Practice for the Pastoral Care of International Students provides a framework for service delivery by education providers and is mandatory for all providers who enrol international students. The Code sets out the minimum standards of advice and care expected of education providers. It applies to pastoral care and provision of information only and not to academic standards. More than 800 schools are Code signatories.
After two periods of consultation a draft revised Code was notified to all Code signatories in September2008. Some of the proposed amendments to the draft were new or went further than those anticipated in the initial discussion document, so it was accompanied by a supplementary consultation document. The consultation on both documents ended on 22 October 2008.
Traditionally, a large proportion of the international students studying at New Zealand schools have been from Asia. More than 80 percent were citizens of Asian countries in 2004 (see Table 4.1). The past five years have seen a decline in this trend as New Zealand becomes a well-noted destination at which to learn and practise English. A greater proportion of enrolments are now coming from European and South American countries.
South Korea remains the most prominent country of origin for international students in New Zealand schools, but now contributes only 42 percent of all international enrolments, since a high of nearly 50 percent in 2006. Enrolments from Chinese students have shown an even greater decline, decreasing by over 50 percent since 2004, and now contributing just 13 percent to all international school enrolments.
Germany is the dominant European country of origin, contributing 10 percent of international school enrolments, up from 2 percent in 2004. Student numbers from Italy, Brazil and Russia have also increased since 2004.
Resourcing Schools
New Zealand schools are funded primarily by the government. The three main components of government funding are: staffing (on which the government spent $3,162 million in 2008); operational funding, including property maintenance ($963 million in 2008); and property capital works85 ($489 million in 2008).
On top of this, the government gives schools various forms of ‘in-kind’ resourcing, including software licensing, laptops for principals, other ICT support and professional development.
Some schools receive resourcing to meet particular needs (for example, transport), and other resources are available from discretionary funding. In 2008, over 30 discretionary funding pools were available to schools. These allocated $96 million for programmes as diverse as English for Speakers of Other Languages, support for refugees and migrants, study support centres, initiatives to reduce suspensions and truancy, parent mentoring and programmes to support collaboration across schools.
In both nominal and real terms, there has been an increase in total government funding of schools (including teachers’ salaries, operational funding, property funding and other resources) in the past decade. Total government per-student funding increased 12.8 percent between 2004 and 2008 (see Figure 4.1), over and above an inflation rate of 13.3 percent. Over the past year, government funding has increased by 6.2 percent, over and above an inflation rate of 4 percent. In 2008, the government committed to a 5 percent increase in operational funding for schools from 2009, including provision for extended ICT expenditure.
Figure 4.1: Estimates of Inflation-adjusted Per-student Funding, 1999-200886
Region of Origin | 2004 | 2005 | 2006 | 2007 | 2008 |
---|---|---|---|---|---|
% | % | % | % | % | |
Asia | 84 | 78 | 80 | 69 | 67 |
Europe | 3 | 6 | 7 | 15 | 15 |
South East Asia | 10 | 12 | 9 | 10 | 11 |
Central/South America | 1 | 1 | 1 | 3 | 3 |
Middle East | <1 | <1 | <1 | 1 | 2 |
Oceania | 1 | 1 | 2 | 2 | 1 |
North America | <1 | 1 | <1 | 1 | 1 |
Africa | <1 | <1 | <1 | <1 | <1 |
Total International Students | 18,311 | 14,447 | 13,934 | 15,574 | 15,660 |
Changes to Schools’ Operational Funding
In Budget 2008, schools’ operational funding increased by 5 percent, including $65.3 million over four years to help meet the cost of ICT.
Secondary schools received a boost to their operational funding to support students’ access to tertiary-type courses through an increase to the Secondary Tertiary Alignment Resource (STAR) funding rates in 2008. The government announced changes to STAR in September 2008 to enable more students to participate in STAR-funded courses. From the beginning of 2009, the STAR funding rate for the first 40 units increased from $655.81 to $668.53, and the per-unit rate increased from $88.66 to $117.49.
The range of courses for which STAR can be used was also increased, through changes to the STAR Excluded List (SEL). Courses within the Core Generic and Communications Skill subfields of the National Qualifications Framework (NQF) were removed from the SEL from the beginning of 2009.
NZCER National Survey Thematic Report
The New Zealand Council for Educational Research (NZCER) released a report87 in May 2009 detailing results from a 2006–07 National Survey on School Resources, Culture and Connections. The survey was designed to assess the impact of recent education reforms.
The survey found that, for all stakeholder groups (principals, teachers, school trustees and parents) in both primary and secondary schools, funding was identified as the major issue affecting schools. Real government funding per student has been increasing since the 1990s. However, expectations have also grown, as have the use of ICT and high associated depreciation costs.
Principals identified a range of areas where unexpected extra costs, or rapid increases in costs, had contributed to financial difficulties. These included areas such as property and ICT maintenance, teacher aides, administration staff and health and safety. To balance these increased pressures, possible cuts were considered in areas such as school initiatives, ICT depreciation and property, and relievers to cover professional development.
Schools were trying to raise additional income to help ease budget pressures. A quarter of secondary schools and one in six primary schools had increased the amount of parent donations requested over the past two years, although principals reported that a substantial number of parents did not pay. Income from IFP students was another source of income, which mainly benefited high decile secondary schools.
Management of School Property
Government property expenditure in schools in 2008 was $489 million, compared with $358 million in 2007. In 2008, $258 million ($216 million in 2007) was spent on the modernisation of buildings and other property improvements, $206 million ($110 million in 2007) on increasing capacity in the network through new classrooms and schools, $16 million ($19 million in 2007) on furniture and equipment, and $9 million ($14 million in 2007) on unplanned capital works made necessary for health and safety reasons.
Schools plan for maintenance and capital projects using a 10-Year Property Plan. As part of a school’s charter, the property plan is linked to, and is consistent with, the school’s vision and educational objectives for its students. In forming their plans, most schools consult with specialists such as architects and acoustics consultants. Schools also consider the opinions of their students, staff and community, who, as users, often have valuable ideas on making improvements.
Schools’ Financial Accounts
The following is a summary of the estimated financial performance and position of New Zealand state and state integrated schools in 2008, based on the aggregation of these schools’ annual accounts. At the time of publication, the Ministry has received 94 percent of schools’ audited accounts. Audited accounts from earlier years are used to estimate financial accounts for the remaining 6 percent of schools that have yet to supply data for 2008.
Since 2007, New Zealand schools have been required to prepare their annual financial accounts in accordance with the New Zealand equivalents to International Financial Reporting Standards (NZ IFRS).88
More details on schools’ finances are included in Appendix Two, Tables A26–A43.
Schools’ Income
New Zealand state and state integrated schools had an estimated total income of $5,060 million in 2008, an increase of 7.5 percent from $4,798 million in 2007 (see Table A26).
As in previous years, the main source of school resourcing was government funding, which accounted for 86.6 percent of schools’ total resources in 2008. The remaining came from locally raised funds (11.8 percent), investments (1.4 percent) and other revenue (1.3 percent).
Schools’ revenue figures per student (see Table A29)89 show that government grants increased between 2004 and 2008 by 23.4 percent in primary schools and 27.8 percent in secondary schools. This is a real increase in funding for both sectors when compared with the inflation rate of 13.3 percent over the same period. Estimated per-student government funding for 2008 is $5,283 for primary students and $6,797 for secondary students.
Locally raised funds include voluntary donations, non-compulsory amounts paid by parents, income from fundraising activities, fees charged to international students and revenue generated from such sources as school canteens and stationery shops. When interpreting the significance of locally raised funds, the costs incurred to raise such funds should also be considered. Net locally raised funds have remained reasonably consistent over time, having increased by 8.1 percent between 2004 and 2008 compared with a 25.5 percent increase in government grants over the same period.
Schools’ Expenditure
Estimated expenditure in state and state integrated schools in 2008 was $5,029 million, an increase of 7.7 percent compared with $4,668 million in 2007.
Overall there has been little change since 2004 in the way schools allocate expenditure across different areas. Around three-quarters of expenditure is on learning resources, such as teachers’ salaries, classroom resources, consumables and salaries for teacher aides (see Tables A27 and A28).
Schools’ Assets and Depreciation
As of 31 December 2008, the schools sector had invested $2,426 million in fixed assets measured at historical cost or acquisition value (see Table A33). Measured at net depreciated value (NDV), schools’ investments in fixed assets have been increasing steadily. In 2008, the combined NDV of schools’ fixed assets stood at $1,167 million, an increase of 1.5 percent over the previous year.
Indicators of Good Financial Management
Schools are resourced to provide quality education to students. It is important that school boards ensure the future financial health of their schools while doing so.
Principals and boards develop and work to five-year strategic goals for curriculum development, and these form the basis of their annual plans. After setting aside funds for their essential operating costs, schools use their strategic plans to determine how they can best use the remaining funds to meet their strategic goals.
There is a range of indicators of good financial management, including whether schools have an operating surplus, have sufficient working capital to operate effectively, have increasing public equity and manage their staffing resources effectively.
Operating Surplus
An operating surplus represents the difference between revenue and normal operating expenditure (including depreciation). In general, it is desirable to have a small surplus each year in order to have sufficient reserves available to provide for unexpected expenditure.
Schools achieved an estimated combined operating surplus of 0.6 percent in 2008, compared with 0.9 percent in 2007 and 0.8 percent in 2006 (see Table A26). Primary schools recorded a total operating surplus of $26 million (1.0 percent of their revenue) in 2008, compared with $22 million (0.9 percent) in 2007 (see Table A27). Secondary schools recorded a total operating surplus of $2 million (0.1 percent of revenue) in 2008, compared with $16 million (0.7 percent) in 2007 (see Table A28).
In 2008, 57 percent of schools had an operating surplus (see Table A35), a increase from 55 percent in 2007. It is not unusual for schools to incur an operating deficit in any one given year. A deficit may arise, for example, if a board of trustees decides to focus on improving student literacy levels and implements a major programme of teacher professional development in a particular year. However, if a school consistently incurs substantial operating deficits over consecutive years, its asset base will reduce, and this could adversely affect that school’s ability to provide effective education to its students. For the three years ending December 2008, approximately 14 percent of schools had consecutive years of operating deficits (see Table A38).
Working Capital
The level of working capital is an indicator of a school’s ability to operate financially and meet its debts in the short term. Working capital measures the difference between current assets and current liabilities. It is normally described in two ways – as a dollar figure or as a ratio between current assets and current liabilities.
Schools have had a steady increase in their working capital, with a total increase of $156 million since 2004 (see Table A30). Estimated at 1.89:1, the average working capital ratio for all state and state integrated schools in 2008 suggests that, on average, for every $1 of current liabilities schools owe, they have $1.89 worth of current assets to meet their short-term financial obligations. This is considered healthy and the ratio has increased for five consecutive years to 2007. However, it decreased slightly in 2008.
Having a working capital ratio of at least 1:1 means that a school is able to pay its short-term debts and operate with some flexibility. Schools that do not have an adequate working capital ratio are, therefore, operating on a thinner margin than other schools because they do not have sufficient short-term reserves to cover their immediate debts.
Approximately 93 percent of schools had a positive working capital ratio in 2008 (see Table A35). Primary schools were more likely to have positive working capital (94 percent) than secondary schools (84 percent). The proportion of both primary and secondary schools with positive working capital has declined slightly since 2006.
Public Equity
Public equity represents the net worth of schools and is the difference between total assets and total liabilities. Schools in a healthy financial position generally show increasing levels of public equity over time (see Tables A30–A32).
Across all schools, public equity has increased each year over the past five years – a 26.6 percent increase since 2004. Among individual primary schools, 73 percent had increasing public equity between 2004 and 2008. Public equity increased by a third or more for 39 percent of primary schools. High and medium decile primary schools are slightly more likely to have increasing public equity than low decile schools.
Similarly, in the secondary sector, 65 percent of schools had experienced public equity growth between 2004 and 2008. In 38 percent of secondary schools, their public equity increased by a third or more. High decile secondary schools are more likely to have increasing public equity than low and medium decile schools, with low decile schools being least likely in 2008 to have increasing public equity.
Overall, between 2007 and 2008, public equity increased for around 36 percent of schools (approximately 43 percent of primary schools and 37 percent of secondary schools).
Effective Use of Banking Staffing
Schools receive approximately two-thirds of their funding through staffing entitlements. Consequently, it is important for schools to manage this resource well. Overusing their staffing entitlement results in schools having to repay money in the following year, and underusing the entitlement means that schools forego valuable resources.
At the end of the 2008 school year, 856 schools (35 percent) had overused their staffing entitlement, 11 had exactly used it and 1,596 (65 percent) had underused it.
Schools were given eight weeks in the new school year to manage their overused entitlement down to a balanced position or to use their underused staffing entitlement from the previous year. After this eight-week period, about 33 percent of all schools had managed their entitlement to a balanced position, 22 percent had still overused it and 45 percent had underused it.
The recovery rate for 2008 is $57,500 for each full-time teaching equivalent (FTTE).
A total of $6.8 million is being recovered from the 509 schools that overused their staffing entitlement in 2008. Of these, 476 schools (94 percent) were within 5 percent of their entitlement. The total overuse for these schools was 101 FTTE, with an average per school of 0.21 FTTE.
Of the 1,113 schools that had underused their entitlements, 1,031 schools (93 percent) were within 5 percent of their entitlement. The average amount of underuse was 0.16 FTTE. The total staffing underuse was 163 FTTE in 2008, estimated at $13.1 million. This represents about 0.5 percent of schools’ 2008 staffing entitlements.
Overall Financial Management
The Ministry’s financial advisers closely monitor schools that show indicators of financial risks. Schools that are considered to be at a low or moderate level of financial risk receive advice and support, as appropriate. Schools with more serious levels of risk undergo an in-depth financial analysis and are offered school support options, including ongoing financial advisory services.
Conclusion
New Zealand schools are generally being capably governed, and most are in a financially healthy position, although they face increased budgetary pressure. Government funding has continued to increase above the rate of inflation.
Footnotes
- Lorraine Kerr, associate president New Zealand School Trustees Association. Speech on trustee recognition, NZSTA Conference, July 2007.
- Education Review Office. (2007). School Governance: An Overview. Wellington: Education Review Office.
- Ministry of Education. (2008). Kiwi Leadership for Principals. Wellington: Ministry of Education.
- Ministry of Education. (2007). International Education Agenda: A Strategy for 2007–2012. Wellington: Ministry of Education.
- All government funding components are exclusive of GST. The figure for property capital works is an estimate from cash payments made during 2008 and includes both capital and operating expenditure.
- GST exclusive. Rolls exclude estimated new entrants.
- New Zealand Council for Educational Research. (2009). School Resources, Culture and Connections. NZCER National Survey Thematic Report. Wellington: Ministry of Education.
- Data reported here are not fully comparable with schools’ financial accounts prepared under NZ IFRS. Accounts are adapted to make them comparable with schools’ financial accounts in earlier years.
- The number of students used in per-student revenue calculations in Table A29 excludes IFP students. However, when reference is made to government expenditure, per-student figures are based on the funding roll.
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