Lessons to be learned

Autonomous spending choice comes with risks

Peter Johnson

Spending has to be adequately documented

The devolution of operational decisions to principals and their school communities, the Victorian experience shows, can come with significant risk to schools.

Devolution programs for schools have been in focus for several decades. There are many Australian and overseas examples, including Independent Public Schools in Western Australia, colleges and free schools in the United Kingdom and charter schools in the United States.

The NSW path to devolution started with Schools Renewal in 1989 and picked up pace in recent years through Empowering Local Schools and Local Schools, Local Decisions, with much of the serious devolution of responsibility and accountability being carried out under the latter strategy.

Public schools in Victoria have endured a more prolonged transformation over the last two decades, with principals and their school councils accountable for most decisions affecting the delivery of education by their schools.

With this increased accountability comes inherent risk for school leaders and for the system.

Victorian schools are currently under significant scrutiny by the state’s Independent Broad-based Anti-corruption Commission (IBAC) concerning the role played by “banker” schools. These are schools that retained funds in their accounts on behalf of the Victorian Department of Education and Training and expended those funds on the approval of Departmental officers.

It has been alleged in IBAC that school principals and business managers in around 10 schools arranged for the payment of invoices on the advice of Departmental officers for work that was not undertaken, non-work related goods received by those officers and personal overseas trips for the officers and members of their families.

The final report on IBAC’s Operation Ord, as it is known, will be published in 2016 following the completion of a related inquiry.

There are lessons to be learned, not only for Victorian principals but for all staff in schools who are responsible for paying for goods and services using school or Departmental funds. This includes NSW principals, administration managers and executives in schools.

The Victorian allegations allude to a sense of blind obedience, with principals allegedly approving payments without acceptable evidence that goods were being purchased on behalf of the Department for Departmental purposes, that work had actually been carried out or that the overseas trips were official business and met the requirements for travel by Departmental officers.

Any school staff responsible for the expenditure of funds need to ensure that expenditure is a legitimate use of those school funds and that the expenditure complies with Departmental and public sector financial management requirements. The expenditure needs to be consistent with the school’s budget and planning processes and within the financial delegation of the staff member signing it off.

The school needs to keep appropriate documentation and needs to ensure that the appropriate endorsements are provided. The verbal say-so of a Departmental officer or a vague email is not sufficient. Evidence that the goods or services have been delivered is also essential.

This is not about bureaucratic red tape. This is about staff ensuring that they use public funds appropriately and can account for the use of those funds.

The consequences of not adhering to the proper accountability measures in this regard can be severe. As a result of the IBAC inquiry in Victoria, the employment of two senior Departmental officers has been terminated. A principal has been suspended. The final IBAC report may refer Departmental officers for police investigation to establish if crimes have been committed and whether charges should be laid.

If you have any doubts about decisions you are about to make in spending school funds, including the hiring of staff, refer to the relevant policy documents or seek advice from a credible source. Your career could hinge on it.

Peter Johnson is a former executive director of the NSW Department of Education.

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