Auditor-general John Ryan last week released his report on audits of schools’ 2023 accounts, which highlighted seven schools considered "to be in serious financial difficulty".
Among them was Southland’s Wallacetown School. The report said one indicator of financial difficulty was when a school had a working capital deficit which meant that, at that point in time, the school needed to pay out more funds in the next 12 months than it had immediately available.
When referring to Wallacetown School, it stated "the school had negative net assets of $13,458 due to ongoing deficits and working capital surplus of $22,852".
Presiding member of Wallacetown School board of trustees, Carl Stewart, did not disclose details of what had happened to put the school into this situation, but when asked what the reason for it was, he said in a statement a range of previous financial decisions had been identified and addressed by the board.
"We were disappointed to read that the school had been named in the report as this implies we are not in a strong financial position. In fact, the school has very healthy reserves and strong financial controls in place."
He confirmed the school received a letter from the Ministry of Education but said this had no impact on any aspect of the school or on the pupils or staff.
The school had implemented the advice given by the auditor-general and significantly improved its financial position from 2023.
"Our strengthened financial position means we have been able to invest further in curriculum and infrastructure.
"Our accounts are audited annually, and the Ministry of Education staff have confirmed that they have confidence in the strength of our finances and of our ongoing viability."
Among the six recommendations given by the Auditor-General, where were that the Ministry of Education prioritise carrying out its project on the future of schools' financial reporting, improve school payroll processes and controls, ensure that schools have up-to-date cyclical maintenance plans, help schools to better control sensitive expenditure, support schools to prepare full budgets and review the accountability requirements for closed schools.
The auditor-general’s report on audits of schools’ 2023 also stated 54 schools across the country reported sensitive spending that provided a personal benefit to the principal which included gym memberships, pilates classes, sports events, nutritionist consultations, nutrient products, adventure tourism, guided walks and overseas family travel.
Auditors also reported 10 schools made gifts to staff that did not have board approval, were excessive, or were inconsistent with the school’s gift policy.
