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Annual Report 2005-2006 Department of Employment Education and Training



Annual Report 2005-2006 Department of Employment Education and Training

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Tabled paper 647


Tabled papers for 10th Assembly 2005 - 2008; Tabled papers; ParliamentNT






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148 Financial Report > DEET Annual Report 2005-06 Notes to the Financial Statements (f) Consolidation The delivery of education in the Territory is provided through a devolved system whereby school communities play an integral role in the provision of education activities. To facilitate this, school councils have been incorporated under the Education Act. Amongst the functions of a school council is the responsibility for financial management of the schools activities. School councils are not responsible for the ownership of school land and buildings. School councils are considered to be controlled entities as defined in Australian Accounting Standards AASB 127 Consolidated Financial Reports. As such, the agency is required to incorporate the financial activities of schools within the agencys consolidated financial report. Consolidation will be undertaken using a phased implementation approach. The consolidation of school financial statements into the agency financial statements is to be completed by 2006-07. 2005-06 is the fourth year the agency has been required to prepare financial statements on an accrual basis. Consolidated annual financial statements could not be prepared as the schools financial data was not available in a uniform format and school councils were not able to provide reliable data on an accrual basis. Earlier reviews of school financial data revealed significant weaknesses and inconsistencies in the schools financial data. A Financial Management Improvement and Support Project for Schools was commenced to improve financial management in schools and the reliability of the schools data. Significant progress has been made since the project commenced with training provided to registrars and principals in accrual accounting, uniform chart of accounts, strengthening internal controls and Mind Your Own Business (MYOB), the accounting package employed in schools. As a result, schools financial data has now been converted to a uniform format and a preliminary consolidation of the schools financial information for the quarter ended 31 March 2006 was prepared and is summarised in Tables 1 and 2 below. It should be noted that in compiling these results DEET has not undertaken an audit of the financial statements submitted to it. As part of this project additional training is being provided to school principals and registrars to improve the integrity of the schools financial data. The presentation of the data is to illustrate the progress with consolidation. Table 1 details the operating status by Cluster for the quarter ended 31 March 2006. Clusters City Northern Suburbs Rivers Palmerston & Rural Arnhem Desert Oaks Central Storm Total $000 $000 $000 $000 $000 $000 $000 $000 DEET Funding to Schools 3 445 3 093 2 095 3 827 1 914 1 684 1 502 17 560 As per Schools Data Income 6 602 5 921 4 069 7 106 3 372 3 176 2 630 32 876 Expenses 4 619 4 070 2 255 5 071 3 030 2 336 1 680 23 061 Operating Surplus See dot point 3 below 1 983 1 851 1 814 2 035 342 840 950 9 815 Table 1 should be read in conjunction with the following key observations: Financial statements in schools are prepared on a varying basis cash, accrual and hybrid. The principles of accrual accounting have not been fully adopted by a number of schools School councils have not accrued employee expenses and related provisions in the majority of the financial accounts The operating status comprises more than half the years income whereas the expenses are for the period 1 January 2006 to 31 March 2006. Consolidation in future years will match income and expenses for the financial year.

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