IMPROVING SCHOOL
GOVERNANCE

3.4 Investing and fundraising

Why is this topic important?

Councils are responsible for how the school raises revenue (over and above the funding provided by the government) to fund improvements to the learning environment. Many schools engage in investing and fundraising activities and it is part of council’s role to consider and manage any financial and reputational risks that could arise, and to ensure that all legal requirements are met.

On completing this unit school councillors should be able to:

  • assess and decide on proposals from clubs and groups to raise funds for the school including identifying potential conflicts of interest
  • develop an investment policy and decide on the amount to be invested
  • develop a parent payments policy, in line with Departmental policy.

Councillors should also be aware of the possibility of using trust funds and cooperative loans in raising funds.

The following table shows the typical responsibilities of school council and the principal in terms of investing and fundraising.

The principal:

The school council:

  • assists with review of fundraising proposals
  • reports back to school council the profit and loss of any major fundraising over $2000
  • approves fundraising activity on the school's behalf
  • advises council about available cash and recommends investment
  • develops an investment policy
  • approves amounts to be invested
  • develops a parent payments policy
  • implements policies
  • contributes to and approves the parent payments policy

Assessing fundraising proposals

Members of parent clubs or other members of the school community may want to raise funds for the school, for example to buy playground equipment. Council must approve any fundraising activity on the school’s behalf, well before it happens.

When considering whether to approve a fundraising activity, council should find out:

  • what type of fundraising activity is planned
  • what, if any, risks the fund raising activity exposes the school or public to (for example, does the activity involve physical risks or risks to the school’s reputation?)
  • what legal requirements apply (for example, a permit to run a raffle might be needed)
  • whether reliable estimates of revenue and expenditure have been prepared to ensure that the funds raised will be greater than the costs of running the activity
  • what the funds raised will be spent on and how students will benefit?

Council can approve the activity if it is comfortable with the answers to these questions. If it is not, it must establish a sub-committee to recommend whether the proposed activity should be approved. This committee must consist of:

  • the president or president’s nominee (who will chair the committee)
  • one other councillor
  • 2 representatives of the club or group who have proposed the fundraising activity
  • the principal.

The Education and Training Reform Regulations 2007 require that:

  • council and the parents’ club discuss how funds raised will be spent, to determine what is in the best interests of the school
  • funds raised for a particular purpose are used for that purpose
  • funds raised for the school are held in trust (separately identified and accounted for) by council or by the parents’ club.

Investment policy and amounts to be invested

Council is responsible for making policy about investments.  If council decides only to invest in the high yield investment account which the Department makes available to each school, then the council meeting minutes stating this become the school's investment policy. 

If the school wants to hold other types of investments (such as term deposits or bills of exchange) then council must approve an investment policy. The school’s investment policy should be consistent with the Department’s guidelines and policy. Department guidelines and policy allow the school to invest only in certain types of low-risk products and only with regulated financial institutions. Council is responsible for minimising risks when school funds are invested and ensuring the school has internal controls to safeguard its investments.

Council is also responsible for deciding how much of the school’s funds will be invested. The principal or business manager will give council an estimate of funds available for investment, typically using a cash flow budget to estimate likely fund balances in upcoming months. Schools usually keep aside (either in the official bank account or in an at-call bank account, such as the high yield investment account) enough money to fund expenditure for the next two months or $10,000, whichever is greater. Council approves the amount to be invested.

Council decisions about investments should be minuted for action by the principal or business manager. Transfers of monies between the official bank account and investments should be approved by the principal and a delegated councillor. 

Council can keep track of amounts invested by reviewing the balance sheet, cash flow statement and investment register: interest earned will be shown in the operating statement. Council should monitor investments other than those in the high yield account regularly for compliance with the school’s investment policy.

Parent payments

The school may charge parents for essential student learning items (such as text books, personal stationery, or uniforms), offer educational items and services on a user-pays basis (for example, for extracurricular activities in which student involvement is optional), and may invite voluntary contributions from parents to fund buildings or specific equipment or services.

The school must apply the principle that no student will be disadvantaged in any way if their parent does not make payments or give a voluntary contribution.

School councils and principals set and approve parent payments. Costs must be kept to a minimum and be affordable for most families at the school.

Schools must also:

  • have strategies to ensure they understand the needs of their school communities when determining parent payments
  • communicate the reasoning for their decisions to the school community
  • review the impact of their parent payments practices on parents and students.

Schools must adopt the Department’s parent payments policy, using the Department’s template.  This outlines key school requirements.  School councils must also outline school-level parent payment arrangements, addressing the requirements listed in the template, and ensuring these are complaint with the Department’s parent payments policy.

Voluntary contributions

Councils often ask parents/guardians for voluntary contributions for things such as:

  • funding a building or a library
  • paying for specific equipment, materials or services (such as additional computers over and above those funded by the Student Resource Package or other Government grants) 
  • other purposes to be determined by the school (the invitation being for a general contribution or donation).

Parents may be invited to donate to the school but cannot be required to do so. Parents are more likely to make donations when the school describes how the money will enhance the school program or facilities.

Resources and links

Title

Link

Finance Manual for Victorian Government Schools

This document can be accessed under the heading School Financial Guidelines at

http://www.education.vic.gov.au/school/principals/finance/pages/default.aspx

Parent Payments

http://www.education.vic.gov.au/school/principals/spag/management/pages/parentpayments.aspx

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