Financial viability

Under the Education Act 1990, a registered non-government school must be financially viable. The requirements for financial viability are described in the school registration and accreditation manuals.

What is financial viability?

A financially viable school is one that is:

• expected to continue as a ‘going concern’ throughout its term of registration.
• administered and provides an education for school students while remaining financially solvent.

In considering a school’s financial viability, NESA will have regard to the affairs of the proprietor including:

• current finances
• funding
• loan agreements
• lease or rental agreements
• business plan
• current and future budgets.

The effective ongoing operation of non-government schools is underpinned by:

• sound financial management
• informed decisions
• the incorporation of appropriate controls.

This requires a proactive approach to preventing, detecting and treating any signs of financial stress which left untreated, would place the school’s financial viability at risk.

Who can certify financial viability?

NESA requires schools applying for initial registration or renewing registration to demonstrate financial viability. The evidence of financial viability a school needs to provide will be based on a risk assessment.

This may include either a:

• certification from the principal
• Certification of Financial Viability from a NESA-approved body or person assessed against the NESA Financial Viability Framework
• Financial Viability Warrant from a NESA-approved body or person providing assurance of financial viability.

Risk assessment overview

The Overview of the Risk Assessment Framework (PDF 167.31KB) provides details of the categories of schools and the evidence required by NESA.

NESA-approved bodies to certify financial viability

The following bodies are approved by NESA to certify or warrant Financial Viability:

• The Association of Independent Schools of NSW
• Catholic Schools NSW
• System authorities
• Christian Schools Australia
• Christian Education National
• Lutheran Church of Australia Victorian District
• Resolve Consulting Group Pty Ltd.

If a body or person wishes to be approved by NESA to make a certification or warrant of financial viability, they should contact schoolrego@nesa.nsw.edu.au.

Certification outcomes

A principal’s certification will be made in the school’s application to NESA.

An approved body will certify the school’s risk profile as Low, Medium or High. Medium and High ratings will have a report identifying the risk and the remedial action required. The report may recommend monitoring of the school.

An approved body will warrant that the school or system of schools is financially viable for the period of registration being sought.

An Inspector may request additional information if concerns about compliance are identified during the assessment of an application.

Record keeping

The school’s proprietor must have policies and procedures for regularly assessing financial viability, including what documents the school uses to make the assessment and retain externally audited and certified financial statements for seven years.

It is a requirement to notify NESA in RANGS Online if the contract or arrangement with the school’s external auditor is terminated by either party before it expires, and if the proprietor’s affairs are under any form of external control.