Auditing schools

All schools in New Zealand are audited. The auditor writes to the school’s Board of Trustees, setting out what the audit will involve and what it will cost.

The Board's general responsibilities

The Board is responsible for managing the school's finance and preparing the accounts (the financial statements) for the audit. We expect members of the Board to be familiar with those responsibilities and, where necessary, have obtained advice about them.

The Board's responsibilities cover all the resources, activities, and subsidiaries (like trusts the school might set up) under its control. We expect the Board to make sure that:

  • it operates effectively and efficiently;
  • it complies with laws, regulations, and contractual requirements;
  • waste is minimised; and
  • it conducts its business with probity (behaving properly).

The Board should have policies and procedures in writing to support its general responsibilities. It should also regularly monitor how it's performing against what it is trying to achieve. 

Schools need to clearly inform audit staff about health and safety matters, particularly safety equipment, emergency evacuations, and reporting accidents and hazards.

The auditor's general responsibilities

It is essential that appointed auditors remain both economically and attitudinally independent of the Board. 

To protect the independence of appointed auditors, specific limitations are placed on them in accepting engagements with the Board other than the annual audit. They may accept certain types of other engagements, subject to the requirements of the Auditing Standards. Any such other engagements must be the subject of a separate written arrangement between the Board and the appointed auditor.

As with any audit on our behalf, appointed auditors for schools are required to be alert for issues of:

  • performance, in particular whether the school carried out its activities in an efficient and effective manner;
  • authority, in particular whether the school carried out its activities, used its resources, and fulfilled its accountability requirements in keeping with the authority granted by Parliament and all other relevant directions;
  • waste, in particular whether the school obtained and applied its resources in an economical manner and whether any public money is being wasted; and
  • probity, in particular whether the school met Parliament's and the public's expectations of appropriate standards of behaviour in the public sector.

Deadlines for statutory reporting

To meet the statutory reporting deadlines, appointed auditors depend on receiving the Board's financial statements that comply with legislation - and are ready for audit - within 90 days of the balance date (that is, by 31 March) at the latest. "Ready for audit" means that the financial statements comply with generally accepted accounting practice and are supported by proper accounting records and complete evidential documentation.

Appointed auditors will ensure that the annual audit is completed by 31 May following the balance date or, if that is not practicable because of the non-receipt or condition of the financial statements, or for some other reason beyond their control, as soon as possible after that.

Page last updated: 1 April 2021