Principals under fire over cash reserves


Public schools in Western Australia will soon be forced to spend most of their money in the year they receive it instead of stashing big amounts in bank accounts.

Under the Western Australian Education Department’s new funding agreement, which takes effect next year, principals must spend at least 96% of their annual budget the same year they receive it.

Figures released by the Department showed that the state’s public school balances had spiked 90% in five years, from $236m in September 2010 to $449.3m in September this year.

On average, schools are holding $1,547 per student this year, compared with 2010, when the average was just $928.

Several weeks ago, about 20 principals of schools with large cash reserves were summoned to a meeting with Education Department director-general, Sharyn O’Neill.
 
O’Neill said parents expect schools to use their funding in a timely way to benefit students while they are actually at school “rather than putting aside large sums of money for some time in the future”.
 
However, some principals have defended their decisions to use their cash reserves as they see fit, saying it is necessary to help manage certain expenses.
 
John Curtain College of the Arts (JCCA) principal, Mitchell Mackay, told the Freemantle Gazette that this business decision aligned with his school’s “current practice as a large, successful independent public school”.
 
“As an independent public school we have full flexibility to manage our finances in a strategic manner and the changes fall in line with good financial management,” he said.
 
“We have more than 1,500 students and a very large campus, so it is good financial management practice to have a small reserve for contingencies for variances in student numbers and staffing.”
 
Similarly, Melville Senior High School principal, Evan Floyd, told the Melville Times the reserve accounts were a vital element of the school’s financial management.
 
“At Melville SHS, this includes funds for infrastructure projects, the replacement of equipment and the replacement of resources,” Floyd said, also emphasising that a percentage of the school’s bank balance came from sources other than government funding.
 
“School accounts reflect money from a variety of sources, including school funds, parent money (held for excursions, trips and tours) and school-generated funds such as investments and alternative income,” he said.
 
O’Neill said that while many principals had taken “a cautious approach” to financial management in recent years, the reforms needed to be consolidated to better target quality teaching and learning.
 
“The majority of funding that a school receives should be used during that school year on lessons, programs and resources which benefit students and boost high quality teaching and learning.”