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Private schools not accountable for how they spend government funds

The following is an excerpt from a report by Save Our Schools titled “Govt. Failure to Ensure Private School Systems Distribute Funding According to Need Will Continue Under Gonski 2.0”. It was sent to me by the principal of a state high school in the western suburbs of Sydney who has made amazing progress with a challenging cohort but who despairs at the lack of accountability in the private sector.

A recent report by the Australian National Audit Office (ANAO) has slammed the Commonwealth Government for failing to ensure its funding of private school systems is distributed according to need and for not knowing how private school systems distribute their funding.

In effect, the ANAO found that the Department of Education has failed to enforce its own legislation. It failed to ensure that:

  • Private school systems’ funding arrangements are publicly available and transparent;
  • Private school systems distribute taxpayer funding to affiliated schools on a needs-basis;
  • Progress of agreed national reform directions is adequately monitored.

The report also notes that few private school systems report their administrative expenditures and that there are large variations between systems that do. Some appear to be diverting considerable funding to their own administration.

These are not new criticisms. Several have been highlighted by other reports over the past decade, including a previous ANAO report, the Gonski review, the Victorian Auditor-General and by Kathryn Greiner, a former member of the Gonski review. The Grattan Institute has also provided evidence that Catholic systems have allocated funding to schools in richer areas at the expense of those in poorer districts.

For example, about $550 million was allocated to the low SES loading by the Department of Education in 2015, but only $300 million was distributed to schools by system authorities under the loading. Just over $500 million was allocated to the disability loading, but system authorities only distributed $300 million to schools for this loading. [The remainder was either given to schools who didn’t qualify for the loading or siphoned off for ‘administration’.]

Despite all this evidence, there has been little change – private school organisations have continued to thumb their noses at legislative and regulatory requirements to be accountable for how they distribute their taxpayer funding. In particular, Catholic education authorities have long refused to divulge how they distribute funds to their schools. Successive Commonwealth governments and the Department of Education have been complicit in allowing them to ignore their obligations.

There is little prospect that this will change under Gonski 2.0. It maintains similar administrative and regulatory arrangements that have failed in the past.

First, the Government has made it clear that there will be no change to the autonomy of private school systems regarding the distribution of funding to their schools. Commonwealth funding will continue to be paid as a lump sum for them to distribute to schools through their own arrangements.

Second, the transparency arrangements for private school systems remain unchanged. Formally, they are required to ensure that their funding re-distribution arrangements are “publicly available and transparent”. This was required by the Regulations under the Australian Education Act 2013 and is included in the amendments to the Act passed by the Parliament last June. This requirement was not enforced in the past, as the ANAO report shows, and there are no additional enforcement procedures under Gonski 2.0.

Third, the amendments to the Act do not provide for any additional enforcement procedures to ensure private schools distribute funding according to need. There are no additional requirements for the Department to audit the distribution of funds to schools.

One substantive change is the establishment of the National School Resourcing Board (NSRB) to conduct reviews of the operation of the Act, particularly of arrangements and requirements relating to funding for schools. The Department’s response to the ANAO criticisms relies on reviews by the Board to improve transparency and public accountability of the use of taxpayer funds by private school systems. It failed to commit to using its powers and sanctions more effectively in the future.

In principle, the NRSB is a step forward, although it is very different from the joint Commonwealth/State/Territory statutory authority originally recommended by the Gonski report. There are strong reasons to doubt that it will do any better than the Department has over the last ten years or more. It is a review body, not a regulatory body. Given that the Department of Education, with its legislative and regulatory authority, has failed spectacularly to make private school organisations report on how they distribute funding to their schools, it is difficult to see how a review board without any significant regulatory powers will make any difference

Moreover, the ability of the NRSB to conduct genuinely independent reviews of private school funding arrangements is compromised by its composition. The Education Act requires that the Board consist of at least six members, including members nominated by the National Catholic Education Commission (NCEC) and the Independent Schools Council of Australia (ISCA) [s.128(4)], both of whom have now been appointed. The original Gonski review recommended against representation of sectoral interests on the Board and said that its members should be appointed on merit.

I think this is something Labor should pursue. Schools in low SES areas and those who have students with special needs are entitled to receive the funding allocated and provided by the government rather than it being siphoned off to high fee-charging show pieces and to “administration”.

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  1. townsvilleblog

    What a crook joke this is, when they were supposedly accountable for the public purse payments they were building an extra swimming pool or gymnasium. In my humble opinion, if people want to send their children to private schools then they should pay for it out of their own pockets. The government provide a good standard of education through government schools, but of course there are no “business connections” to be had unlike private schools, why should the taxpayer pay for education for the rich?

    Either this option or force the multinational multibillion dollar corporations who currently don’t pay “any” tax to pay a “fair share” of their billion dollar incomes, so that public students get a fair go as well.

  2. babyjewels10

    Disgraceful. No less than theft from the taxpayers, who expect their contributions to society to be spent wisely.

  3. bobkav

    This is wrong on so many levels. As TB says I have no problem with people having the choice of a private education but that is what it should be PRIVATE and, as such, should be paid for in full by those making the choice. Taxpayers should not be subsidising private education. Our tax dollars should be providing the best possible educationfor all Australians and if you still want to buy “privilege” through a private school you pay for it (without any tax breaks!). (As well as making your contribution to the public system through paying your fair share of tax.)

  4. diannaart


    Yeah but, no but… only the “true” Abrahamic faith may profit from religion, in a Judeo-Christian nation.

  5. corvus boreus

    I have no real problem with any of the different brands of religion feathering the nest by fleecing their followers via the traditional practice of shaking the can for donations (exploiting guilt to obtain gilding).
    However, I strongly object to subsidising the indoctrination of young minds into superstitious dogma under the guise of ‘educational funding’, or even worse, the money being cynically siphoned straight into the grubby mitts of temple clerics, particularly those of the more fundamentalist varieties.
    Educational funding provided to private institutions (particularly ‘faith-based’ ones) should, at the very least, come with strict conditions that the monies be accountably allocated to material resources for secular education.

  6. diannaart

    I have no disagreement with your view on the brain washing of young minds by any doctrine, dogma or religion – that was not the point I was making.

  7. totaram

    CB: “.. be accountably allocated to material resources for secular education…”

    Ha,ha! You wish! All religions have always been used for siphoning public funds into the accounts of the “clergy”. If you think they will not do this unless they are prevented on pain of punishment, you are dreaming. Those strict conditions you want will never be there until we get rid of these “good bothering” types from govt. or at least let them know that they are free to go and bother whatever gods they like, but that is not what they were elected to do. It is a very hard ask. The struggle will be long and painful.

  8. corvus boreus

    Dunno if you’ve noticed this, but the basic principles I hold dear and the outcomes I greatly desire don’t always exactly tally with the current state of observed reality.
    And no, I do not think that the cults of dictated worship will voluntarily relinquish their grip on the teats of the public milch cow.

  9. Kaye Lee

    I think parents of children in the poorer Catholic and Independent schools would be very much on board if Labor decided to allocate the funding directly to the schools rather than giving it to the system in a lump sum with no accountability of how they then distribute it.

    The Grattan Institute has also provided evidence that Catholic schools in Melbourne are not funding schools according to need. A comparison of eight schools in affluent areas of Melbourne with eleven Catholic schools in Melbourne’s less privileged Broadmeadows area showed that if Catholic schools were funded directly according to the Gonski needs-based distribution formula then the affluent schools would lose 42% of their funding while the Broadmeadows schools would gain 78%.

  10. Matters Not

    Funding children according to educational ‘need’ is the way to go but that simple statement masks any number of problems – including significant political mountains to climb. Labor had a unique chance with Gonski Mark One and stuffed up with Shorten attempting to do deals. An approach that characterised educational (mis)administration for decades.

    Now they know not what they want to do. Apart from mouthing slogans. And so it goes.

  11. Kaye Lee

    Educators make submissions and do extensive study telling them what they need but it gets ignored in favour of some “here is one I prepared earlier” crap dished up by hand selected consultants like Donnelly and Wiltshire and that woman who has a phonics program to sell.

    The principal who sent me the report has told me of the frustration expressed at principals’ meetings. They have such an important and difficult job to do but are at the mercy of politicians, bureaucrats and a heavily supported unaccountable private system

  12. Matters Not

    KL, the article to cite was written by Trevor Cobbold and has been in circulation for some time. He makes insightful comments and his views are respected.


    the frustration expressed at principals’ meetings … at the mercy of politicians, bureaucrats …

    Indeed! Principals express frustration at their meetings. And Teachers do the same at theirs. As for ‘teachers in training’ they express frustration re their supervising teachers, their lecturers … and so on. To add to the mix of frustrations – politicians blame unions, bureaucrats who in turn blame .. whoever.

    Lots of people at the mercy of the other apparently. Generally speaking, Principals are ignorant of the law and perhaps I should add – so are the politicians. We’ll all be ruined.

  13. Kaye Lee

    My article is an excerpt from a report written by Trevor Cobbold dated December 2017 so not sure about “in circulation for some time”? He is specifically responding to the recently released report by the ANAO but also refers to a 2009 ANAO report, the Gonski report, the Victorian Auditor-General’s report, the Greiner report on NSW Catholic system, the Grattan Institute report, and Gonski 2.0. It is worth reading in its entirety.

  14. Kaye Lee

    As for principal’s being ignorant of the law, f*ck, how much do you want them to be responsible for. They have been instructed they have to identify and counsel kids at risk of obesity. WTF? Where does it end?

    You will note the article is about the government and the department of education not enforcing the law. What exactly would you have principal’s do other than try and inform us? As you are no doubt aware, they cannot publicly express political views.

  15. Matters Not

    KL, if you click on my link you will find I read Cobbold’s post on 12 December. It’s now part of the historical record, I believe – references and all that.


    As for principal’s being ignorant of the law, f*ck, how much do you want them to be responsible for

    Perhaps knowing their legal obligations might be a starting point?

  16. Miriam English

    If the decision makers in Labor were smart (yeah, right!) they could use this as a way to stick it to the LNP. Even wealthy people sending their kids to private schools would have reason to be annoyed that there’s no accountability and that funds were likely being siphoned off instead of going to teach their kids. Middle class and working class parents would have even more reason to be annoyed. Their kids are being directly disadvantaged by wealthy schools that they are being forced to subsidise!

    This is a perfect way for them to trip up the LNP.

    So, watch Labor move with all the speed and grace of a snail to take advantage of it… just as they did with the LNP repeatedly attempting to kill off extremely popular renewables in favor of coal… and just like they did with theft of water in the Murray-Darling system, which if they’d handled it right could have got that halfwit Barnaby Joyce booted. Even their support of marriage equality was slow, timid, and lukewarm despite knowing the majority of Australia was in favor of it.

    God! It looks suspiciously like Labor is either scared to bite the hands that are paying it off, or is half asleep. If the former then they are competing with the LNP for first place in the most-evil stakes; if the latter then somebody needs to wake them up… seriously!

  17. Kaye Lee

    I did click on your link. Did you click on mine showing reports on December 7,11, 13, and 20? References and all that.

    As for public school principal’s knowing their legal obligations, they fulfil them every year when they fill in the endless paperwork accounting for every cent they are given and every cent they spend. The whole point of this article, in case you missed it, is that private schools, though under the SAME legal obligation, do NOT comply. To reiterate….

    “the transparency arrangements for private school systems remain unchanged. Formally,they are required to ensure that their funding re-distribution arrangements are “publicly available and transparent”. This was required by the Regulations under the Australian Education Act 2013 and is included in the amendments to the Act passed by the Parliament last June. This requirement was not enforced in the past, as the ANAO report shows, and there are no additional enforcement procedures under Gonski 2.0.”

    And Miriam, I agree. Labor should go hard on this.

  18. Matters Not

    KL Can I draw your attention to your post at 11:02 pm

    The report was posted on December 20. Perhaps it is you who needs to update.

    Enough said. No distractions allowed. LOL.

    Re Labor going hard – you want them to touch the tar baby? Funding for private schools, including Catholic schools, is an absolute minefield.

  19. Kaye Lee

    Absolutely. How controversial could it be to insist that funding go to those for whom it was intended? Why should poorer Catholic schools miss out on funding specifically allocated for them because of the students they are dealing with? I would think they would be very grateful if the Labor party promised to make sure this funding went to their kids’ school or their disabled children for whom it was intended ibstead of being given to schools who don’t need it or disappeared under non-disclosed ‘administration’ costs.

  20. Matters Not

    How controversial could it be to insist that funding go to those for whom it was intended

    Very controversial! Just ask Birmingham, Shorten, Latham et al.

    The political reality is: – it’s not about the kids and their needs but about the parents and their expectations. Kids don’t get to vote! The funding debate isn’t about kids’ rights but about the parents’ perceptions

  21. Kaye Lee

    We are not talking about cutting funding to private schools (though we should be). This is about everyone getting what they are entitled to under the law. There aren’t that many kids attending very wealthy schools. Let those few get shitty whilst engaging the bulk of the private sector who are being ripped off by their own administration.

  22. Zathras

    Just like Churches care more about themselves as business organisations than they do about the concerns and welfare of their members (beyond the usual lip-service) there’s no reason Private Schools should act any differently.

    No surprises here.

    If the government wanted to be truly fair they would introduce a Voucher System for all students where the voucher would cover the cost of Public Schooling and anybody wanting to send their childen to Private Schools are free to make up the difference as they wish.

  23. Matters Not

    If the government wanted to be truly fair they would introduce a Voucher System for all students where the voucher would cover the cost of Public Schooling and anybody wanting to send

    So we should treat unequals – equally?

  24. Kaye Lee

    The voucher system has problems and I have great reservations about it but it doesn’t necessarily mean everyone gets a voucher worth the same amount.

  25. Jaquix

    Thanks for an interesting report Kaye Lee, pointing to the fact that this govt is basically lazy (not bothering to monitor funding allocation) and keen as always to make sure it’s voting base is looked after. And yes, as per the comments, Labor should pick this up and run with it. But they need to make the message as clear as KL has made it. Not click it up with too much detail. The fact that schools collect a lump sum and can basically do what they like with it, is contrary to the spirit of Gonski, after all. “(on the basis of need”). People will be furious that the Liberals have not stuck to this – another lie they’ve told us.

  26. Sue

    Vote 1 for Zathrus idea of voucher system.
    Labor should be all over this idea, send the LNP back to their caves.

  27. Terry2

    Remember how Labor were mercilessly kicked by Abbott and Pyne over the so called school halls initiative which not only acted as a measure to stimulate economic activity during the GFC but gave so many schools additional much needed facilities, yet they were ridiculed. And still we see the massive amounts of public money going to private schools with little or no accountability..

    Labor really needs to learn how to get down and dirty occasionally.

  28. Jan

    I agree Terry Labor needs to stop playing victim.

  29. Miriam English

    As Kaye mentioned, voucher systems sound good on the surface, but they’ve been causing big problems in USA, messing with the public school system over there. Shonky religious schools in USA benefit greatly from vouchers.

  30. diannaart

    Kevin Donnelly has been spruiking school vouchers for years, if not decades. I am of a mind anything Donnelly pushes needs intense scrutiny and then some revision.

    School Vouchers sound reasonable… but… I am not in possession of sufficient cerebral activity (today) to do a complete analysis, suffice to say Donnelly supports privatisation of education across the board (if I remember correctly).

    We can do better than the Gonski reforms

  31. Kaye Lee

    That is the problem with vouchers. They tend to gut the public system and lead to more unaccountable boutique/religious schools who don’t have to show HOW they spend the voucher.

  32. diannaart


  33. Zathras

    From what I can see the perceived inequity with a voucher system comes from supplementary payments from governments and this varies considerably between countries. Most criticism about voucher schemes seems to come from other countries who have entirely different funding arrangements and particularly from private education institutions.

    Unlike many other countries, Australian States provide about 75% of public school funding while most Federal government funding (three out of every five Federal dollars) goes to private schools.

    This is a hangover from the bail-out of the collapsing Catholic Education system back in the 1970’s and should have been readdressed long ago but has been so deeply embedded into politics that sensible debate is no longer possible.
    As long as a group like The Exclusive Brethren can funnel some of their increased taxpayer private school funding dollars back into certain political party coffers (as revealed in ICAC), it’s a problem for us all, but one conveniently ignored.

    Vested interests can cherry-pick their statistics and inequality examples all they like but the bottom line is that the taxpayer continues to pay more dollars for each private student than for each public student, or to put it another way – private students are being subsidised at the expense of the public system.

    Funding should be transparent and come from a single source but accountability should also be maintained.

  34. Matters Not

    Lots of problems with vouchers – including very practical ones. Here’s the actual finances of two State schools in Queensland. First, there’s Winton State School outside of Longreach. Average recurrentexpenditure is north of $25 000 per student in 2015

    Then there’s Sandgate State School on the Bayside in Brisbane Average recurrent expenditure is slightly less than $11 000. per annum in 2015.

    So how much should the voucher be worth? Use the highest amount, the lowest amount or an average?

    What about the students who go to Aspley Special School where the average cost is slightly less than $53 000 per annum? Should their voucher be redeemable for $50 000?

    There’s even more contrasting examples if one wants to look.

    Then there’s the complication that children move between schools during the year – from city to country – private to state and also interstate. An administrative nightmare.

  35. Matters Not

    Birdsville State school at an average of $72,405 per annum. Tagai State College, Thursday Island, with an average expenditure of $24 000 per student per annum.

    Generally speaking, schools are funded based on enrollments. Increased numbers (usually) means increased funds. Sometimes it’s in the form of more administrative staff, teacher aides, cleaners, specialist teachers and the like.

    And let’s not take the no accountability argument too far. Almost all schools prepare their students for external assessments – and significant variations in outcomes are noted. Private schools tend to have Boards and the like. They also have professional staff who cannot be silenced – at least in the longer term. While unionism may be in decline, that’s not the case when it comes to Teacher Unions in both the State and Private sectors. That’s agood thing.

  36. Matters Not

    KL re your point:

    As you are no doubt aware, they (principals) cannot publicly express political views.

    While that may be true (or at least risky) for individual Principals, it’s not the case when it comes to Presidents, Secretaries etc who speak publically on behalf of their ‘association’ or what ever. Governments fear united voices and while they might mouth concerns they are loathe to act. If people stick together, they invariably escape any retribution.

  37. David

    It would seem more that Christian schools are not accountable but Muslim schools are. So although I am not a supporter of government funding for any private schools – most especially for any damned superstitiious religions – Muslim schools seem to have been targetted by both federal and state governments regarding funding. The most open abuse seems to come from not just administraion costs but from ownership of property and rental paid. The most recent spate with muslim schools related to the relationships between the religious governing body (in the case Australian Federation of Islamic Councils (AFIC) now called Muslims Australia and the schools boards. The cases before the Federal and State courts in 2016/17 exposed just how easy it can be to divert monies for other purposes. It was basically the sloppy bookeeping that left the Muslim schools open to funding cuts, but I feel quite certain that the longer running Catholic and Christian schools have a much more perfected system of defrauding taxpayers and diverting school funds to their own purposes.I think it would actually warrant a Royal Commission as it can be certain that nice little arrangement will exist between the government funding bodies and Religious governing bodies.

  38. Kaye Lee

    The real killer is the part of the act that says “an approved system authority is to receive funding for all of its member schools, which it can redistribute according to its own needs-based funding model.”

    But the government’s own national auditor said….

    “The department is yet to establish sufficiently robust arrangements to ensure that system authorities have in place, and make publicly available, compliant needs-based funding arrangements. There are also weaknesses in the arrangements established by the department to collect and validate the information provided by approved authorities to account for funding. These weaknesses have reduced the level of assurance the department has that funding is allocated in accordance with the needs-based principles established under the legislative framework.”

  39. stephengb2014

    Heres a simplistic view.
    Private schools are by definition private – a business designed specifically to educate for a fee.
    State schools are by definition not a business – they are a government service in compliance with their obligations under the Universal Declaration of Human Rights.
    Religious schools are also private schools – they have a primary aim to proselytize their peculiar brand of fairy tale, and use the guise of educting children in order to achieve their aim of spreading their creed.
    The whole point of the UDHR is to ensure governments are obligated to fund government schools, so that those who are the least able will get an education.
    There is no such UDHR obligation for governnments to fund private schools, nor relogipus schools.

    Clearly private scnools and religions have a right to offer education to whom ever they choose, and that does not mean that they are entitled to funding from the public purse.

    Equally clear is the unpalability of removing funding from private schools, however there must be accountability for any public funds granted to private schools to ensure that every cent is used for the direct benefit of educating children. The best way that achieve that level of accountability is to not to fund private schools but fund the parents of those children via tax relief fpr each child up to a maximum of the average cost of funding public schools per child per year.


    Yes I know it will never happen.

  40. Zathras

    Matters Not,

    Thanks for the information – point taken and accepted.
    It seems like a complex issue that will never be resolved under the current arrangements and that some form of inequality is here to stay.

  41. Matters Not

    stephengb2014 re:

    for any public funds granted to private schools to ensure that every cent is used for the direct benefit of educating children

    Sounds great! But how shall we determine the direct benefit of educating children. Does expenditure on air-conditioning qualify as a direct benefit? At Broadbeach (on the Gold Coast) maybe not, but at Normanton (in the Gulf) it does get very hot with stifling humidity. So a maybe for air-con? What about a swimming pool? Perhaps expenditure on one pool might be acceptable but what about the second? The warm up pool? What about the specialist coach(s) – gym, swimming, cricket and equestrian? Then there’s the stables. Some parents are of the view that such activities are a direct benefit in the education of their children. Then there’s the educational trip to exotic places like Canberra or even Paris and beyond.

    Then there’s the definition of education itself. Does it include religious education? And so on .. Much to debate.

    Zathras re Vouchers. It was Friedman who pushed hard for vouchers in the US, arguing that the provision of education should be subject to the forces of the free market. Betsy DeVos , the current US Secretary for Education, is the modern day champion. The ideology is strong but the practicalities are weak. Besides, as any teacher will tell you, children are treated differentially in every classroom, at different times of the day. Some need more help than others in different subjects as well as in swimming classes, physical education and so on.

    It’s not good educational philosophy to treat unequals – equally. A school is not a Procrustean bed.

    What went wrong with Gonski 01 – the architect behind Gonski explains.

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