Schools registered in Victoria must be not for profit and not be party to prohibited arrangements in order to maintain registration – Education and Training Reform Regulations 2017 (Vic)
Consistent with its new Guidelines to the Minimum Standards, the VRQA is prioritising audit of matters relating to:
- Not for profit school – the requirement that all funds are applied solely towards conduct of the school (r7); and
- Prohibited Arrangements – the requirement that schools are not party to these (which involve diversions of funds or excessive payments to other entities, including loans made for purposes not connected to the School).
Schools which are up for review might consider that they are on notice from the VRQA that many arrangements with ELCs and school systems are considered to be in contravention of the above requirements.
Other schools should consider their arrangements, consistent with the requirements of the new Guidelines to the Minimum Standards which take effect from 1 July.
ELCs
ELCs are not considered to be schools under the legislation (Education and Training Reform Act 2006 (Vic)), so payments to them are treated as payments to third parties. (“Schools” provide education to children aged 5 to 17, which are the compulsory school attendance ages in Victoria).
Evidence that ELC arrangements are not in contravention will need to include:
- Proper accounting;
- Agreement which meets the requirements of the Regulations, between the school and ELC regarding service and payments in both directions.
School Systems
Payments to school systems can also contravene the Regulations, if payments made are used for other schools in the School system and are not otherwise able to be justified as consistent with the system’s permitted activities under the Regulations.
Evidence that system arrangements are not in contravention will need to include:
- Proper accounting;
- The policy of the system regarding use of school funds; and
- Agreement which meets the requirements of the Regulations, between the schools and system regarding service and payments in both directions.
How we can help
If you would like further information about the required agreements, policies and accounts matters, please do not hesitate to contact us.