Appendix: Update on progress with our previous recommendations

Results of the 2021 school audits.

We provide an update on the Ministry’s progress with the recommendations in our report Results of the 2020 school audits. We also refer to some recommendations from earlier reports that we followed up during our 2021 audits.

2020 recommendations

Recommendation	The Ministry of Education’s current progress against recommendations	Our comment
School payroll processes We recommend that the Ministry of Education make sure that changes to school payroll processes do not adversely affect the schools’ control environment by working collaboratively with Education Payroll Limited. This includes making sure that controls within schools help prevent fraud and error, and ensure that all transactions are approved within delegations.	Education Payroll Limited released updated guidance to the sector on school-level internal controls in March 2022, including how reporting from EdPay supported these controls. This guidance was jointly developed by the Ministry of Education and Education Payroll Limited. Schools have been able to re-establish the controls around the “payroll transaction report” that was lost during the transition from Novopay to EdPay. The Ministry will continue to meet with Education Payroll Limited to understand the impact of any planned developments to EdPay to ensure that any issues are addressed before implementation.	We have not repeated this recommendation, however we will continue to monitor progress.
Cyclical maintenance plans We recommend that the Ministry of Education make sure that schools are complying with their property planning requirements by having up-to-date cyclical maintenance plans. This includes reviewing those plans to assess whether they are reasonable and consistent with schools’ condition assessments and planned capital works.	During 2022, the Ministry of Education released new guidance on its website to assist schools in the development and review of their cyclical maintenance provision calculations, including having appropriate supporting evidence. During the 2021 audits, the Ministry was actively working with schools where audit challenges about cyclical maintenance have arisen. In our Results of the 2020 school audits report, the Ministry noted three key areas that were being worked on: Working with BRANZ on the development of a Maintenance Guide for Schools. This work is in progress. A longer-term strategy piece to address assets failing due to inadequate maintenance, and the burden of maintenance responsibilities. This work is in progress. Online modules to provide school boards, principals, and staff guidance on their obligations to manage school property. These modules have been available since June 2022 and have been well received.	We have repeated this recommendation.
Kiwi Park model financial statements We recommend that the Ministry of Education simplify the level of financial reporting required in the Kiwi Park model financial statements. This includes reconsidering information the Ministry of Education specifically requires, in addition to what is required by financial reporting standards, and whether it can obtain that information from other sources.	During 2022, the Ministry of Education engaged PwC to carry out a full technical review of the Kiwi Park model financial statements. This review identified opportunities to make minor changes that had significant effects on the reporting and auditing annual process. Two changes included: reporting of all grants from the Ministry in one disclosure line rather than two; and a shift to functional reporting on the Statement of Comprehensive Revenue and Expenditure. These changes allow for simplified financial reporting and auditing. Improvements will continue to be made annually as opportunities are identified. We worked with the Ministry to produce a terms of reference document that sets out a programme of work on the future of school financial reporting. This work will be led by the Ministry with our support, as appropriate. It will include identifying improvements and efficiencies to school financial reporting to ensure that it is both timely and cost-effective.	We have repeated this recommendation.

2019 recommendations that are still relevant

Recommendation	The Ministry of Education’s current progress against recommendations	Our comment
Accounting for “other activities” We recommend that the Ministry of Education provide guidance to schools on accounting for “other activities” (including Resource Teacher: Learning and Behaviour clusters) that they receive funding for.	During 2022, the Ministry of Education engaged PwC to carry out a technical review of the current accounting treatment of Resource Teacher: Learning and Behaviour funding for lead schools. This review was shared with us and resulted in updated guidance in the 2022 Kiwi Park model financial statements. The Ministry will continue to work with the lead Resource Teacher: Learning and Behaviour schools to assist with the correct accounting treatment for this source of funding. The Ministry will continue to improve its guidance to the sector on accounting for “other activities” as required.	We have not repeated this recommendation, however we will continue to monitor progress.