Ministry of Education: Management of the school property portfolio.

School property is the second largest publicly owned property portfolio in the country, with a capital value of $7,000 million. Ensuring that this property is sufficient, suitable, and well-maintained is important for supporting effective teaching and learning.

The way school property is managed is unique, and unlike other public sector property portfolios. School Boards of Trustees, which are legal entities in their own right, are responsible for maintaining the school property they occupy and managing the school’s capital projects, even though they do not own the property. The Ministry of Education is responsible for the long-term planning of the school property portfolio, and for managing the risks related to the Crown’s ownership interest.

During the last 5 years, the Ministry has introduced new processes for planning and funding school property as part of the Government’s policy to give school boards greater control over the way their schools are managed.

The Ministry of Education has better controls in place through the guidance and the policy incentives it provides to school boards than when we last audited school property management in 2001. However, it has only partly addressed our recommendations for improving its overview of the overall condition of the school property portfolio and the maintenance that school boards undertake.

I am concerned that there is no strategic plan for managing the school property portfolio that demonstrates how school property supports the achievement of the Ministry’s wider education aims.

The planning and operations functions for the school property portfolio are carried out by different groups within the Ministry. This arrangement works well now, largely because of the good working relationships between the 2 sets of staff involved. However, the Ministry needs to introduce clearer business processes for operations staff. These will be matters for the Deputy Secretary – Schooling of the Ministry to consider once appointed to this newly established position.

We are aware that investigations are being carried out after serious allegations of fraud were made against a contractor. Depending on the outcome of these investigations, we may wish to undertake more work on the Ministry’s management of school property.

I thank the staff at the Ministry of Education, trustees and staff at schools that we visited, and the New Zealand Schools Trustees Association for their co-operation during this performance audit.


K B Brady
Controller and Auditor-General

22 June 2006

page top