Letter to the Secretary for Education

Results of the 2023 school audits.

11 February 2025

Ellen MacGregor-Reid
Acting Secretary for Education
Ministry of Education

Tēnā koe Ellen

REPORT ON THE RESULTS OF THE 2023 SCHOOL AUDITS

Please find enclosed our report on the results of the 2023 school audits. The report sets out the results of the school audits completed since our last report, up until 31 October 2024.

Most schools received a standard audit report. This means that, in our opinion, the financial statements for those schools fairly reflect their transactions for the year and their financial position at the end of the year.

Where we have needed to raise matters in audit reports or with school boards, the reasons are familiar and have appeared in previous reports on the school audit results. There is a need to:

  • improve school payroll processes and controls;
  • ensure that schools have up-to-date cyclical maintenance plans;
  • better control sensitive expenditure;
  • support schools to prepare full budgets; and
  • review the accountability requirements for closed schools.

These matters are covered by the recommendations in our report.

Audit completion

In previous letters, I have noted that school audits have become more complex because of increased financial reporting requirements and increasing professional requirements of auditors. At the same time, the number of audit firms in New Zealand has been reducing. As a result, it was another challenging year for school audits, with 58% of the 2023 school audits completed by the deadline of 31 May 2024.

We have made good progress and more than 91% of 2023 school audits are now complete.

To improve timeliness for the audits for 2024 to 2026, we have allocated the school audit portfolio to auditors who we understand have capacity to carry out the work at the appropriate time.

The Ministry has also considered how it can influence audit timeliness. Your approach to provide additional audit fee funding to each school after the audit has been completed provides an incentive for both my auditor and school to complete these audits.

Future of schools’ accountability project

As you will be aware, we have been concerned for some time about ensuring appropriate accountability of schools and how it can add most value. Reviewing the school financial reporting and assurance requirements has the potential to reduce the complexity and cost of schools’ financial reporting and improve timeliness. The attached report includes a recommendation that the Ministry prioritise completing its proposed work programme on the future of school financial reporting. We are ready to assist where appropriate in this work programme.

Concluding comments

There continues to be strong collaboration between your staff and my staff to improve the overall accountability of schools. Thank you for this and your ongoing support for the work of the Office.

I am happy to meet with you to discuss this letter and the attached report. As we do each year, we
will publish this letter and the report on our website. We will also send a copy of the report to the
Education and Workforce Committee.

Nāku noa, nā

John Ryan
Controller and Auditor-General