Thursday, 17 October 2019

Questions (11)

Bobby Aylward


11. Deputy Bobby Aylward asked the Minister for Education and Skills if he is satisfied the provisions of section 18(1) of the Education Act 1998 do not place an unnecessary administrative financial burden on national schools; if he is satisfied the insistence by an organisation (details supplied) that national schools must submit accounts online via an accountant, as opposed to the school treasurer, thus incurring a significant fee, does not place an unnecessary administrative financial burden on national schools; and if he will make a statement on the matter. [42354/19]

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Oral answers (7 contributions) (Question to Education)

Is the Minister satisfied the provisions of section18(1) of the Education Act 1998 do not place an unnecessary administrative financial burden on national schools, and that the insistence by an organisation that national schools must submit accounts online via an accountant, as opposed to the school treasurer, thus incurring a significant fee, does not place an unnecessary administrative financial burden on national schools? Will he make a statement on the matter?

It is important to ensure that appropriate governance arrangements are in place for transparency and accountability in the management of public money. All boards of management of schools, therefore, are obliged to comply with section 18 of the Education Act 1998 and the arrangements set out in my Department’s Circular 0060/2017 and Circular 0002/2018 on the operation of the financial services support unit, FSSU. This includes the submission of accounts to the FSSU by an external accountant or auditor who has a current practising certificate, professional indemnity insurance and is registered with a prescribed accountancy body in the State.

I am satisfied that this is the appropriate mechanism by which schools can comply with the requirement to make their accounts available for inspection by me in accordance with the Education Act 1998.

The independence of an external accountant or auditor provides assurance to the board and the State that the accounts are prepared in line with good accounting practice and standards. Use of the standard templates provided by the financial support services unit, FSSU, will help to reduce costs associated with the employment of an external accountant. These costs may be met from the capitation funding provided by my Department.

In budget 2020, I was pleased to have been able to provide for a further 2.5% increase in standard capitation funding for primary and post-primary schools that will apply from the start of the 2020 to 2021 school year. This is in addition to the 5% increase that applied from the start of the 2019 to 2020 school year.

I have been contacted by a trusted constituent who is a bookkeeper and accountant and has been the treasurer on his local school's board of management for 12 years. The board has always been fully compliant with PAYE and VAT to ensure value for money while keeping costs for parents to a minimum so that children's education costs are as low as possible. However, by its own admission there is one area where the board has not been fully compliant as it does not fully conform to all provisions of the Act referenced in my question.

The reason for this is simple. The school receives around €6,000 in capitation fees. Over the years, the treasurer of this school has made inquiries as to the cost of certification or audit costs. The lowest quote the treasurer could find for certification of the accounts was €350, while audits were in the region of €1,000. This treasurer maintains that spending money on something that is quite simply a box-ticking exercise that produces nothing tangible while running the school on a shoestring budget is a waste of valuable resources. Moreover, getting the accounts audited would require an outlay of 20% of the annual school funding on the audit itself. With these administrative costs, are we placing an undue financial burden on small schools operating on small budgets? I appreciate the need for oversight but there must be some sort of middle ground.

I always value people's ideas and suggestions. The Deputy's constituent has gone through the system and has contacted several public representatives with the same observation. However, transparency and accountability are two very important cornerstones here. The FSSU, is acting in line with the requirements of the Department. The relevant circulars clearly state that it is the responsibility of the board of management to ensure financial accounts are submitted to the FSSU through an external auditor. This would satisfy the requirement for schools to make their accounts available for inspection under section 18 of the Education Act 1998. I understand the Deputy's point about the pressures on capitation funding. There was a reduction of about 11% in 2011. Funding rose by 5% last year and 2.5% this year. That is not where I want it to be. This budget does not reflect where I want capitation to be, and it is something I will continue to pursue.

As a final comment, and while I appreciate what the Minister is saying, all I am saying is that this is an extra cost for small schools, particularly in rural Ireland, that may have two or three teachers. The Minister said it already. They receive a capitation grant of €6,000. A proper audit costs a minimum of €1,200. That is 20% of the €6,000. There is a qualified accountant on the board of this school who is willing to do the books free of charge and submit them to the Department. Could that not be considered? This is not a fly-by-night auditor. I agree with the Minister on accountability. Everything must be accounted for and money has to be well spent. However in this case a school could save a cost of €1,200 just to get a stamp on a request. There is already an accountant doing voluntary work who is willing to send it in. Could some system be put in place to make use of this? Maybe the Department could have an audit every five years to check on these accounts. No one is talking about deviousness with money or anything like that. This is about saving money for local schools that are under pressure.

The Deputy would not be raising this if he thought there was no value in doing so. There is value in raising a matter that will take pressure off individual schools. I am going to say something that is not policy. I am saying it as a Minister. I am looking at the future. I refer to the collection of small primary schools that are found even within one parish. The small school symposium will look at ways to run schools more effectively in the future. As the Deputy says, each of these individual schools currently has to submit accounts to the Department. It costs every single school the same amount. This is what we need from politics. We must be big enough and mature enough as a political system to say that if there are better, more competent and more proactive ways of doing things that will allow savings for schools that have to fill their tanks, pay for the gas, or look after the bread-and-butter issues, they will be discussed at the small schools symposium. I ask the Deputy to contact me formally on this issue if he would like it to be raised in that forum.

I am going to attempt to break all records and accommodate the three Deputies who are here, so I will ask the three Deputies to co-operate.