Qld Private Schools Rorting Govt Grants

A damning report by the Queensland Auditor-General has found that some private schools have been rigging their enrolments to claim more funding from the Queensland Government than they are entitled to. The report says that schools were over-funded by $1.5 million in 2014. It has also exposed totally inadequate audit processes for private schools.

The report found that:

Some non-state schools are getting more state recurrent grants than they are entitled to because they overstate their student numbers and, by doing this, obtain funding for non-eligible students. This means that those non-state schools that correctly apply the eligibility rules receive less than they are entitled to. [p.1]

Three schools visited by the Auditor-General’s investigation team were found to have over-stated their student enrolments by 14 per cent in 2014.

The report said that the over-funding was due to a weakness in the statutory audit procedures of the Non-State Schools Accreditation Board, which is responsible for collating the census data for private schools in Queensland. It said that the Board had failed to meet its obligation to properly audit school census data which is the basis for government grants to schools. As a result, it said:

…the Board cannot rely on the data collected in the non-state school survey as the basis for calculating the payments.
…there is no explicit risk assessment of the likelihood that students might be over-counted. This reduces the ability of the Board to target and reduce the risk of potential fraud. [p.3]

The Board engages a team of contractors to validate 10 per cent of school census returns. The Queensland Education Act refers to the verification of school censuses as an audit and the contractors employed by the Board as auditors.

However, the Auditor-General’s report found that the contractors “do not apply an audit discipline to their work” [p.3]. It said that they do not possess the qualifications, skills or experience required of a professional auditor. It also found that the work of the contractors, including their documentation standards, did not conform to the professional standards that apply to the audit profession. As a result, it said, the audits do not meet industry standards [p.11].

One contractor admitted to the Auditor-General’s investigation team that he allowed certain students to be counted in school censuses even though he knew the students were not eligible under the regulations. The regulations require that a student must have attended school for at least eleven days before the school census at the end of February.

The Auditor-General also found that the Department of Education, Training and Employment had failed to seek an assurance from the Board of the accuracy of the student numbers before paying grants to schools. The report says that the Department has no assurance mechanisms in place to confirm that it can rely on the census data provided by the Board. As a result, it is making payments without any assurance that the Board’s procedures are efficient and effective.

Incredibly, there is no grant agreement in place between the Department and the governing bodies of private schools. This prevents the Department from recovering grants if there are over-payments or breaches to the terms and conditions of grants.

The report recommended the Accreditation Board should implement a more robust audit framework to ensure the accuracy of the school census. It also recommended that the Board should provide greater guidance to schools to ensure that the student census is completed consistently and that proper records are maintained. The report further recommended that the Department of Education should establish an appropriate assurance mechanism with the Board about the operational effectiveness of the controls and processes the Board has in place to ensure the accuracy of student numbers in private schools.

The Queensland Minister for Education, Kate Jones, has announced that the recommendations of the report will be fully implemented. Unfortunately, the Auditor-General and the Department do not appear to have considered the introduction of unique student identification numbers for all public and private school students to follow them through their school careers. Such a system could help reduce enrolment fraud in both school systems.

The Auditor-General’s report raises broader questions about the regulation of private schools, not only in Queensland but elsewhere. The Queensland Accreditation Board is not an independent body. Representatives of private schools are involved in the formal process of accrediting private schools.

The executive directors of the Association of Independent Schools of Queensland (AISQ) and the Queensland Catholic Education Commission (QCEC) both sit on the Board. Three other members nominated by the Minister for Education can only be nominated after consultation with AISQ and QCEC. The chairperson is nominated by the Minister.

There is a perceived conflict of interest between inclusion of private school representatives on the Board and its function of assessing and approving accreditation of private schools. The representatives of private schools are in a position whereby they can exploit their official capacity on the Board to the benefit of their organisation and its members. Decisions about accrediting private schools may be unduly influenced by the self interest of private school organisations. It means that the accreditation of private schools in Queensland is largely a process of self-regulation rather than one based on the broader public interest.

A similar conflict of interest exists in relation to the Government Funding Committee which assesses the eligibility of private schools for Queensland Government funding. Two of the five members are representatives of AISQ and QCEC and a third member appointed by the Minister is a past principal of a private school.

Such conflicts of interest can only be resolved by a fully independent process. Private school organisations should be ineligible to be represented on official bodies assessing accreditation of private schools and eligibility for government grants. Private schools could have their views taken into account through a public submission process open to other interested parties as well.

Trevor Cobbold

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