Part 1: Introduction

Schools: Results of the 2012 audits.

New Zealand has about 2500 state schools. This number includes state primary and secondary schools, state-integrated schools, and kura kaupapa Māori (kura, or Māori language immersion schools). Total public expenditure on schools is about $6.6 billion a year.

Schools vary significantly in size. The smallest spend less than $200,000 a year, while the largest are more than 100 times larger and spend more than $20 million a year. Schools are Crown entities, which are governed by boards of trustees (boards). There are about 18,500 trustees throughout the country.

There are about 330 state-integrated schools. These schools used to be private schools, but are now part of the state education system. They provide education within the framework of a particular or general religious or philosophical belief.

Boards govern and principals manage state-integrated schools in the same way that other state schools are governed. The boards are responsible for the governance and operation of their schools, which, like all other state schools, are publicly accountable. The Auditor-General is the auditor of all state-integrated schools.

There are about 70 kura, which are also state schools set up under the Education Act 1989. The principal language of instruction in kura is te reo Māori (the Māori language). Kura tend to be small and are often located in rural parts of the country.

Kura are also governed by boards and managed by principals. Each kura has its own governance and board constitution. These are intended to ensure that communities are fully involved in governing and operating the kura. Kura are subject to the same accountability requirements that govern all other state schools, and the Auditor-General is the auditor of all kura.

Structure of this report

In Part 2, we report on the results of our 2012 school audits and other school audits completed before the end of February 2014, including the nature of our audit reports, the timeliness of the audits, and other matters arising from the audits.

The introduction in August 2012 of a new centralised payroll system, Novopay, significantly affected the 2012 school audits. With a few exceptions, Novopay is used to pay staff in all state schools. In Part 3, we summarise the effect that Novopay had on our 2012 school audits.

In Part 4, we outline the financial health of schools as a whole. We have used information published by the Ministry of Education (the Ministry) and other information held on the Ministry database as a result of schools providing the Ministry with their audited financial statements.

In Parts 5, 6, and 7, we provide updates on the matters that we reported on in recent years about state-integrated schools, kura, and payments to principals above their normal salary.

In Part 8, we comment on the upcoming changes to schools' financial reporting, which come into effect in 2015.

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