Australia: Understanding the challenges that face independent and religious schools

Last Updated: 9 October 2013
Article by Joe Shannon

Understanding your challenges

Our education experts understand the unique needs of independent and religious schools and have a deep knowledge of the ever-changing challenges they face.

Moore Stephens has a long tradition of providing valued services to independent private and religious schools and college organisations across Australia, and has long been committed to being a leader of audit and advisory services to the Education sector. Our team of industry specialists has an unparalleled level of expertise in the education sector, offering a breadth of services tailored to supporting the unique needs of educational bodies.

Our advisors deliver personal and accessible service, keeping abreast of changes in the industry to ensure their advice is always both innovative and compliant.

The challenges for independent and religious schools are changing at a rapid pace:

  • The forecast of 20-25% increase in the student population in Australia over the next 10 years.
  • Expected increases in Australia's overall population in the next 20-25 years.
  • The recurrent and capital funding demands and social impacts for Governments and parents brought by these demographic changes.
  • The risks that arise from the ongoing political debate and regular reviews concerning school funding.
  • The ongoing demand for greater transparency and accountability concerning educational and financial outcomes from the sector.
  • Continuing changes to the regulatory requirements for all Not-for-Profit organisations in Australia.
  • The significant focus on changing accounting standards in the Not - for - Profit sector.
  • The changing governance structures emerging for many ministries within religious bodies.

Audit and assurance services

The provision of audit services is sometimes seen as purely a compliance program. The Moore Stephens Education Group consolidates the compliance process with a review and advisory process, allowing us to deliver reports that provide highly valued advice to management.

The advice is based on our extensive experience working with schools that deliver many facets of education to students.

Our education audit and assurance consultants have extensive experience conducting and issuing audit opinions and reports to schools across Australia.

These services range from issuing audit reports on a range of financial statements, through to the provision of acquittal of grants and assurance reports in relation to agreements.

Moore Stephens authors Australia's highest selling publications on financial reporting and disclosure. These publications have specific applications to both the profit and Not-for-Profit sectors -XYZ Model Financial Accounts.

The publications are the definitive guides to financial disclosure in Australia. Via these facilities, we are able to provide templates for the preparation of financial reports.

Our audit methodology is a risk based approach, specifically modelled for the school sector. The methodology focuses on examining key business processes that are critical to achieving the goals and objectives of the school. By understanding the underlying risks that impact your school's business drivers, we develop a comprehensive and effective audit strategy that provides you with more comprehensive risk coverage and increased value.

Our audit staff attend training programs tailored to the Education sector, ensuring they have the right knowledge and can communicate effectively with your management.

Moore Stephens provides audit services specifically tailored to the Education sector, providing value, knowledge, expertise and delivery.


The compliance requirements in the area of taxation are often varied and complex and have an extensive impact on independent and religious schools. At Moore Stephens, we structure your systems and processes to assist in the management of taxation compliance and ensure all major facets of your operation are addressed.

In the independent and religious schools environment, keeping tax front of mind can be time consuming, complex and risky. The result of non-compliance in a particular area may not only carry a financial penalty, but may also critically impact the perception of your brand image in the market.

Taxation compliance affects many areas:

  • Deductible gift recipient status of Building and Library Funds.
  • GST implications of non-core operations such as school shops, Parent and Friend associations.
  • Superannuation guarantee requirements for sub contractors such as maintenance personnel.
  • Fringe Benefit Tax application to salary packaging.
  • Salary packing and PAYG implications.
  • Fundraising activities and GST.

Offering highly personal and accessible solutions, our specialists help you establish appropriate systems to improve the management of the taxation requirements of your school. Our integrated approach helps to create a management framework which predicts your exposure, and provides the ability to quickly and accurately respond when necessary.

We will also liaise direct with the Australian Taxation Office on your behalf if and when necessary.

Our specialist school consultants have vast experience in assessing the processes and systems that should be in place, to ensure matters of taxation compliance are addressed. This will be reported to your Finance team in an easy and understandable report format that includes prioritisation of the management of risks identified.

Governance and risk management

The high expectations and varied needs of stakeholders require a strong but agile governance structure.

The independent and religious school sector has a complex mix of stakeholders including Government, industry, staff and students. The maintaining of proper governance practices and the management of risk is one of the major challenges facing senior management and leadership teams in today's ever changing world.

Governance encompasses the mechanisms by which entities and those in control are held to account. It influences how the objectives of an entity are set and achieved, how risk is monitored and assessed and how performance is optimised.

Incorporated within proper governance process is the management of risk. The management of risk is critical to the sound management of an entity and its success.

Good corporate governance ensures transparency, accountability and fairness, which are embedded in the decision making process. To achieve these, our team will work in partnership with you to develop an effective corporate structure with strong procedures.

Once in place, we can assist you with the maintenance and monitoring of your governance framework and procedures to ensure they continue to meet your needs and those of your stakeholders.

Our services encompass:

  • Governance reviews and advice on the implementation of proper governance processes (including compliance with ACNC governance standards).
  • Strategic business planning.
  • Risk management framework development.
  • Risk management strategies and compliance processes.
  • Compliance monitoring.
  • Internal control assessments, "Health Checks" and business process improvement.

Internal audit

Moore Stephens' dedicated internal audit division provides services to a broad spectrum of education providers. They can help you ensure that your systems are operating as effectively and efficiently as possible in the management of risk.

Your internal academic, operational, technology and financial processes need to be up to scratch and able to support your strategic and growth objectives.

A well executed audit can uncover lost opportunities and expose hidden threats. It can help identify areas of concern and empower staff to reach their greatest potential. Perhaps, even more importantly, it can encourage and build a culture that values governance and compliance while respecting each and every individual working within your school.

Our internal audit process investigates the ability of your academic, operational, technology and financial processes to meet the strategic growth objectives for your school.

We provide you and your Audit and Risk Committee with the peace of mind that you have an adequate governance and compliance culture which complies with relevant regulations, and that your systems, processes and controls are operating efficiently and effectively.


At Moore Stephens, we strive to build a long term partnership by providing integrated fraud review processes to ensure your systems are appropriate and risk management processes are in place.

Just like any other area of society, schools are subject to the risk of fraud.

Fraudulent activity can easily develop in an environment where stakeholder pressure and government obligations are high.

Independent and religious schools are operated to enhance the lives of their students, which brings with it a requirement of trust and confidence in the management of the school or college.

The internal control environment of schools is often constrained due to the small number of personnel involved in the administration and financial components. As such, this puts schools at risk of fraudulent activities in areas such as unauthorised payments to the handling and management of specific projects.

Proactively fighting fraud allows you to not only protect your school from possible financial loss and damages and manage your brand reputation, but assists in maintaining integrity in your workforce as well as staff morale.

The Moore Stephens team has many years of experience helping clients uncovering processes vulnerable to fraudulent activity.

Offering highly personal and accessible solutions, our specialists help you establish appropriate systems to create frameworks that drive a culture of integrity and trust in the system. This trust is sustained through ongoing support, maintenance and monitoring of your governance framework.

Our specialist consultants have extensive fraud related experience covering a wide spectrum of risks, such as:

  • Online payment systems where controls over master file details are not maintained.
  • Unauthorised usage of credit charge and charge facilities.
  • Unauthorised or non-existent persons on payroll.
  • Payments made for small incidental charges below the level of expenditure approval.

Financial benchmarks and modelling

Moore Stephens can provide you with an independent expert review, ensuring you have the right information to make the best organisational decisions.

As schools transform into more commercial operations, determining appropriate financial benchmarks allows you to understand the performance of your school or college relative to your peers, and provides unique and financial metrics for further school enhancements.

Benchmarks can provide insights that enlighten your school in areas that may not yet have been considered.

Schools are experiencing major changes which will impact on both revenue and costs. Keeping abreast of the effects of these changes on financial metrics is absolutely critical to the financial management of a school. It contributes to the educational outcomes of the school and ensures sustainability and development.

With over 50 years of combined experience in the sector, Moore Stephens can help you to understand and develop your financial metrics for the benefit of your school, and identify practical solutions to enhance your financial management.

Furthermore, we have developed a range of performance and sustainability benchmarks specifically to assist you in developing your financial metrics in line with your strategic goals.

Not-for-Profit Reform

The Not-for-Profit sector, which incorporates both independent and religious schools and colleges, has been undergoing major change over the last couple of years, with more changes to come. Moore Stephens has been a contributor to these changes in seeking to ensure the best positive outcomes for Not-for-Profit organisations.

The introduction of the Australian Charities and Not-for-Profit Commission (ACNC) and related legislation is the most significant overhaul of the Not-for-Profit sector since Federation. The maintenance of the public ACNC register of Charities has reformed the reporting agenda for NFPs. The introduction of Australian Information Statement (AIS) reporting requirements has introduced both financial and non-financial reporting for Charities (including schools). The introduction of the statutory definition of a Charity and ACNC registration could potentially have an impact on charity status, taxation concessions and government funding.

Moore Stephens education specialists have extensive experience in providing advice on the impact of these changes for all NFPs, including schools. From this deep and extensive experience, we have developed tools to identify potential issues and provide enhanced solutions.

The Moore Stephens 'Health Check' reviews

A major plank to the successful operation of a school is ensuring your management and compliance systems are robust and effective, to ensure transparency and probity.

Moore Stephens has developed a set of Health Checks for the key fiscal areas of your organisation. These cost effective Health Check processes allow us to review the legislatory and regulatory requirements of independent and religious schools and identify any issues and opportunities.

Once these reviews have been conducted, a high level report based on our key findings is issued to your school board.

Our team of specialists can provide Health Check reviews for your school in the following areas:

  • Governance.
  • Tax compliance (GST, FBT, Superannuation guarantee).
  • Financial Performance.
  • Fraud.
  • Not-for-Profit Reform Review.

Our services, tailored to your sector

There is no better asset than expert advice. Without it, you may miss out on uncovering an array of both hidden opportunities and risks. At Moore Stephens, we are committed to providing value added services to the independent and religious school sector.

Our team of experts provides your organisation with perceptive accounting and advisory services, including:

Audit & Assurance services

  • Assurance and financial reporting services.
  • Financial reporting and regulatory compliance.
  • Accounting and reporting on infrastructure costs and related public interest aspects.
  • Template financial reports.
  • Acquittal of grants and compliance with agreements.
  • Internal control, fraud and IT risk assessments.
  • Risk management assessments and internal audit needs.
  • Governance and compliance reviews.

Advisory services

  • ACNC and governance reporting.
  • Management of investments and policies.
  • Business planning and facilitation.
  • Financial viability of services provided by schools.
  • Balance sheet and liquidity management.
  • Budgeting and strategic advice on long term plans.
  • Financial modelling and forecasting.
  • Capital grant and loan applications.
  • School financial viability assessment.

Taxation services

  • FBT specifics for Not-for-Profit organisations.
  • Salary packaging and effective provision of benefits.
  • GST compliance reviews and liaison with the ATO.
  • Building, Library and Deductible Gift Recipient Funds advice.
  • Application of Superannuation Guarantee requirements.

Compliance with legislative requirements

  • Impact on financial modelling and strategic planning of Government funding models.
  • Key performance indicators, benchmarking and best practice in financial management.
  • IT security reviews and internal control.

Moore Stephens authors Australia's highest selling publications on financial reporting and disclosure – the XYZ Model Financial Accounts. These publications have specific applications to both the profit and Not-for-Profit sectors, and are the definitive guides to financial disclosure in Australia.

This publication is issued by Moore Stephens Australia Pty Limited ACN 062 181 846 (Moore Stephens Australia) exclusively for the general information of clients and staff of Moore Stephens Australia and the clients and staff of all affiliated independent accounting firms (and their related service entities) licensed to operate under the name Moore Stephens within Australia (Australian Member). The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Moore Stephens Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication. Copyright © 2011 Moore Stephens Australia Pty Limited. All rights reserved.

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