Letter to the Tomorrow’s Schools Independent Taskforce

5 April 2019

Bali Haque
Chairman
Tomorrow's Schools Independent Taskforce

Email: tomorrows.schools@education.govt.nz

Dear Mr Haque

Report by the Tomorrow’s Schools Independent Taskforce

The report by the Independent Taskforce on the Review of Tomorrow’s Schools has recommended changes to the education system. In keeping with my mandate, I do not have a view on the proposed structural changes to the education system. My interest is in changes that will improve governance, ensure good accountability, and provide better support to schools. I also see this as an opportunity to improve performance reporting in the education sector.

I appreciate that more work will be done before a final decision is made. I have set out in this letter some matters for you to consider as you develop your proposals further.

Improving school governance

The Taskforce’s findings about governance were consistent with the observations arising from our audits. Many boards of trustees (boards) do not have the right skills, capability, and support to govern well. Good governance and management are essential for a school to perform well.

To improve school governance, the report recommends setting up Education Hubs, as Crown Agents, to govern a group of schools and assume most of the current legal responsibilities of boards. The governing body of an Education Hub could attract members with different backgrounds and skills, which could result in better governance at that level. However, boards will still have significant responsibilities, including responsibility for managing locally raised funds, delegated authority for spending operational funds, and providing advice to principals on matters such as the curriculum and student achievement. The report does not explain how this new structure will improve the capability of individual boards.

• How will the proposals address the problems that some schools have with attracting enough members to serve on boards?
• How will the introduction of Education Hubs improve the capability of individual boards?

Ensuring good accountability

Any changes to the current schooling model need to consider how schools remain accountable, because being accountable to the community that you serve is an important aspect of good governance. It is not clear where accountability will lie in the new structure. Will the Education Hubs or individual boards be accountable to Parliament and the public for their use of resources? Although the report discusses both boards and Education Hubs reporting on progress and educational achievement, it is silent on financial reporting.

Currently, the financial statements of all boards are audited every year. As well as giving an opinion on school financial statements, auditors also report on matters of public interest, such as financial difficulties, spending that suggests a lack of probity or financial prudence, and how well conflicts of interest are managed.

Because financial decision-making will be delegated to individual boards, the report refers to putting in place appropriate reporting and control processes between the schools and Education Hubs. This is essential. Without independent assurance at the board level, Education Hubs would need robust monitoring procedures to ensure that individual schools are managing their finances well and spending public money appropriately.

• How will Education Hubs and individual schools be accountable for the financial resources that they use?
• Will financial information be audited at the individual board level or Education Hub level?
• If Education Hubs are responsible for reporting financial information and having it audited, how will the Education Hubs monitor each board’s financial performance?

Better support for boards

The report recommends that Education Hubs would be able to carry out the procurement, property maintenance, and accounting functions for those schools that wanted them to. Through our audits, we know that many boards rely heavily on specialists, especially finance specialists. The quality of the specialists can vary, so I consider schools having access to good quality support to be a positive step.

• Will Education Hubs have the power to intervene to ensure that boards are operating effectively on matters such as finance, property maintenance, and procurement?

Improving reporting on school performance

Reforming the education system provides an opportunity to make school performance information (financial and non-financial) more understandable, valued, and accessible. Having the ability to report on the education system’s progress as a whole, against an agreed set of long-term goals and evaluation indicators, is an important step in this. However, it is important to understand the needs of all those who have an interest in a school’s performance. Although schools must be accountable to Parliament, the needs of other users, such as parents/caregivers and the wider community, also need to be considered.

The report refers to both the schools and the Education Hubs preparing annual plans, and reporting on educational achievement and progress in separate annual reports. The report also recommends that there be no individual reviews of schools, but that the Education Hubs monitor school performance in “real-time”. You might want to consider how reporting of school performance (now carried out by the Education Review Office), academic achievement, and financial information can be integrated, to better support parent/caregiver decision-making.

• What assurance will the school community have that they can rely on the performance information reported in the annual reports of the schools and Education Hubs?
• How will the Education Hub monitor schools’ performance in real-time, and will this performance information be available to the school community?
• Has the Taskforce considered the costs of setting up and maintaining systems for collecting financial and non-financial performance information, in such a way that it can reported at an Education Hub level?

Considering effects on other parts of the education system

It is important for all parts of the education system to work together if we are to have a system where all students can achieve to their full potential. However, the proposed changes to the central education agencies set out in the report relate only to schools. Although I appreciate this was the scope of your review, it is important not to lose sight of the early education and tertiary sectors.

There are many reviews happening simultaneously in the education sector, including consultation on major reforms in tertiary education. Changes to the schooling system cannot happen in isolation. The Taskforce needs to consider how its recommendations interact with other reviews, including those that may affect other parts of the education system. One example of this is that the report recommends disestablishing the Education Review Office. Which agency would become responsible for reviewing Early Education Centres?

Ensuring changes are implemented effectively

As with any significant reform, there are many risks that need to be planned for and managed well if the reform is to be implemented successfully. I support your recommendation of forming an Establishment Group, made up of persons with a range of expertise, to guide the transition. It is essential that implementation is not rushed and proposed changes are properly researched, including areas often seen as peripheral (such as the accountability arrangements for the new structure).

There have been some significant reforms in the public sector in recent years. I would be happy to share our observations with you about how other major restructures were managed.

If the proposed Establishment Group is set up, we could provide useful assurance support in a similar way to how we worked alongside the Auckland Transition Agency around the time that Auckland Council was being established. I look forward to talking to you more about this possibility as the proposals develop.

If you would like any more information on any of the matters raised in this letter, please contact my Sector Manager for schools, Jane Rogers. You can contact her at Jane.Rogers@oag.govt.nz or on 04 917 1594.

Yours sincerely

John Ryan
Controller and Auditor-General