Govt. Failure to Ensure Private School Systems Distribute Funding According to Need Will Continue Under Gonski 2.0

The following is a summary of a new Education Policy Brief published by Save Our Schools. The full Brief can be downloaded below.

A recent report by the Australian National Audit Office has slammed the Commonwealth Government for failing to ensure its funding of private school systems is distributed according to need and for not knowing how private school systems distribute their funding. The report is a scathing indictment of a massive failure of ministerial responsibility and government administration. Yet, this failure is likely to continue under Gonski 2.0, as it has for the past decade or more.

The ANAO report is highly critical of Commonwealth Government administration of funding for private school systems. In effect, the ANAO found that the Department of Education has failed to enforce its own legislation. It failed to ensure that:
• Private school systems’ funding arrangements are publicly available and transparent;
• Private school systems distribute taxpayer funding to affiliated schools on a needs-basis;
• Progress of agreed national reform directions is adequately monitored.

The report also notes that few private school systems report their administrative expenditures and that there are large variations between systems that do. Some appear to be diverting considerable funding to their own administration.

These are not new criticisms. Several have been highlighted by other reports over the past decade, including a previous ANAO report, the Gonski review, the Victorian Auditor-General and by Kathryn Greiner, a former member of the Gonski review. The Grattan Institute has also provided evidence that Catholic systems have allocated funding to schools in richer areas at the expense of those in poorer districts.

Despite all this evidence, there has been little change – private school organisations have continued to thumb their noses at legislative and regulatory requirements to be accountable for how they distribute their taxpayer funding. In particular, Catholic education authorities have long refused to divulge how they distribute funds to their schools. Successive Commonwealth governments and the Department of Education have been complicit in allowing them to ignore their obligations.

There is little prospect that this will change under Gonski 2.0. It maintains similar administrative and regulatory arrangements that have failed in the past.

First, the Government has made it clear that there will be no change to the autonomy of private school systems regarding the distribution of funding to their schools. Commonwealth funding will continue to be paid as a lump sum for them to distribute to schools through their own arrangements.

Second, the transparency arrangements for private school systems remain unchanged. Formally, they are required to ensure that their funding re-distribution arrangements are “publicly available and transparent”. This was required by the Regulations under the Australian Education Act 2013 and is included in the amendments to the Act passed by the Parliament last June. This requirement was not enforced in the past, as the ANAO report shows, and there are no additional enforcement procedures under Gonski 2.0.

Third, the amendments to the Act do not provide for any additional enforcement procedures to ensure private schools distribute funding according to need. There are no additional requirements for the Department to audit the distribution of funds to schools.

One substantive change is the establishment of the National School Resourcing Board to conduct reviews of the operation of the Act, particularly of arrangements and requirements relating to funding for schools. The Department’s response to the ANAO criticisms relies on reviews by the Board to improve transparency and public accountability of the use of taxpayer funds by private school systems. It failed to commit to using its powers and sanctions more effectively in the future.

In principle, the NRSB is a step forward, although it is very different from the joint Commonwealth/State/Territory statutory authority originally recommended by the Gonski report. There are strong reasons to doubt that it will do any better than the Department has over the last ten years or more. It is a review body, not a regulatory body. Given that the Department of Education, with its legislative and regulatory authority, has failed spectacularly to make private school organisations report on how they distribute funding to their schools, it is difficult to see how a review board without any significant regulatory powers will make any difference

Moreover, the ability of the NRSB to conduct genuinely independent reviews of private school funding arrangements is compromised by its composition. The Education Act requires that the Board consist of at least six members, including members nominated by the National Catholic Education Commission (NCEC) and the Independent Schools Council of Australia (ISCA) [s.128(4)], both of whom have now been appointed. The original Gonski review recommended against representation of sectoral interests on the Board and said that its members should be appointed on merit.

The basic tenet of public administration is that government departments implement and administer legislation passed by the Parliament. The ANAO report and several other reports show that the Department of Education has failed in its key responsibility to monitor and enforce legislative and regulatory requirements for private school systems to distribute taxpayer funding according to need.

The Department’s formal response to the ANAO report is to wash its hands of its core responsibility rather than take stronger action. It means to outsource its responsibility to the NSRB. It is a scandalous “Yes, Minister” avoidance of its administrative responsibility.

The Commonwealth Government and the Department of Education must ensure that private school systems publish their funding models on their websites. The Department must use its powers and sanctions to compel private school systems to provide evidence on how they distribute their taxpayer funding. It should also conduct much more robust annual audits on how private school systems distribute their funding to member schools and publicly report these audits.

Trevor Cobbold

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