Updated June 2020
Contents
Introduction 4
3.1 Management and Operation of the School 5
NESA Requirement 3.9.1 5
NESA Requirement 3.9.2 ‘Responsible persons’ and previous refusal or cancellation of registration 7
NESA Requirement 3.9.3 Proper Governance – Policies and Procedures 9
NESA Requirement 3.9.3 Proper Governance – Conflict of Interest 12
NESA Requirement 3.9.3 Proper Governance – Related Party Transactions Register 15
NESA Requirement 3.9.3 Proper Governance – Professional Learning 17
NESA Requirement 3.9.3 Proper Governance – Induction Process 19
NESA Requirement 3.9.3 Proper Governance – Independent Audit 22
NESA Requirement 3.9.4 Financial Viability 24
NESA Requirement 3.9.5 Notification of Matters 27
Appendix A: Fit and Proper Documentation Templates (3.9.1) 31
Appendix B: School Constitution (3.9.3.1) 35
Appendix C: Delegations Schedule (3.9.3.1) 36
Appendix D: Supervisory Arrangements (3.9.3.1) 40
Appendix E: Code of Conduct Framework (3.9.3.1) 41
Appendix F: Legal Compliance Framework (3.9.3.1) 42
Appendix G: Risk Management Framework (3.9.3.1) 43
Appendix H: Board Status Report Template (3.9.3.1) 61
Appendix I: Meeting Minutes Template (3.9.3.1) 62
Appendix J: Confidentiality Undertaking (3.9.3.1) 65
Appendix K: Conflict of Interest Checklist (3.9.3.2) 66
Appendix L: Conflict of Interest Declaration (3.9.3.2) 67
Appendix M: Meeting Agenda – Declaration of Interest (3.9.3.2) 69
Appendix N: Related Party Transactions (3.9.3.3) 71
Appendix O: Professional Learning Register (3.9.3.4) 75
Appendix P: Induction of Responsible Persons Register (3.9.3.5) 76
Appendix Q: NESA Requirement 3.9 Assurance Statement Template 77
Governance Resource Manual | Advice for Member Schools 2020
Introduction
The AISNSW Governance Resource Manual (GRM) was developed to assist member schools meet their registration requirements in relation to governance: standards for the ‘proper governance’ of independent schools were introduced by Board of Studies, Teaching and Educational Standards (BOSTES) in October 2014.
On 1 January 2017 NSW Education Standards Authority (NESA) replaced BOSTES. The June 2020 edition of the GRM has been updated to reflect the changes in the NESA Registered and Accredited Individual Non-Government Schools (NSW) Manual.
The GRM concentrates on the requirements to meet Section 3.9, Management and Operation of the School.
The Manual has also been restructured to help schools efficiently manage the process of documenting their policies and procedures in relation to governance. This new structure does not remove the necessity for schools to contextualise their governance processes. The revised GRM also provides an extended set of resources in the Appendices, especially in relation to risk management, the legal compliance framework and an assurance checklist for the whole of Section 3.9.
Using the GRM
The GRM follows the order and enumeration of the requirements in Section 3 of the NESA Registration Manual.In preparing governance documentation for registration it is recommended that schools closely follow this sequence.
For each numerical NESA requirement, the GRM sets out:
The NESA Requirement
The Evidence of Compliance
The Key Concept – This explains and clarifies the requirement.
Role of the Governing Body – This highlights the role of a school’s governing body in meeting the NESA Requirements.
Example Policy – This provides a model policy schools can use or adapt to address the requirement.
Example Procedures – The sample procedures specifically address each element of the ‘evidence of compliance’. The procedures describe the action to be taken to enact policy, but enable schools to determine their own actions in terms of POSITION/TITLE, WHEN, WHERE, WHAT and HOW.
Example Documentation – These Appendices provides sample registers, codes, declarations and other proformas relevant to the requirement.
The GRM is available to all AISNSW member schools and can be downloaded from the AISNSW website. The document is in Word format. Alternatively, the GRM can be emailed to member schools on request.
Abbreviations
GRM AISNSW Governance Resource Manual
ACE Assessment Certification Examination
COI Conflict of Interest
HSC Higher School Certificate
KLA Key learning areas
NESA NSW Education Standards Authority
RoSA Record of School Achievement
RPs Responsible Persons
RPTs Related Party Transactions
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3.1 Management and Operation of the School
NESA Requirement 3.9.1 Each person defined under the Education Act as a ‘‘responsible person’, and any other person or body exercising similar functions in relation to the school as those of a ‘responsible person’, is a fit and proper person or body.
Key Concept
Responsible persons (RPs) must demonstrate sufficient competence and character to discharge their duties.
Evidence of ComplianceThe proprietor of a non-government school must have and implement documented policies and procedures in relation to the requirement for the school’s ‘responsible persons’ and governing body to be fit and proper with specific reference to:
maintaining information to demonstrate that the school’s ‘responsible persons’ and governing body have the experience and expertise to administer a school that provides an education for school students
each ‘responsible person’ for the school signing a fit and proper statutory declaration prior to commencing as a ‘responsible person’ for the school and at least on an annual basis while the person continues to be a ‘responsible person’ for the school
the statutory declaration is to include a response as to whether or not the ‘responsible person’ has- ever been convicted of an offence against a law of an Australian state or territory or the
Commonwealth of Australia- ever become bankrupt, insolvent or placed under external administration- been convicted of, or charged with, an offence, including an offence in relation to children,
dishonesty or violence- ever been determined not to be a fit and proper person as prescribed under any law of an Australian
state or territory or Australian Commonwealth- ever engaged in a deliberate pattern of immoral or unethical behaviour- been a ‘responsible person’ for a non-government school or proposed non- government
school where registration was refused or cancelled
maintaining a copy of each ‘responsible persons’ declarations for a period of seven (7) years after ceasing to be a ‘responsible person’ for the school
responding to information suggesting that a ‘responsible person’ for the school may not be fit and proper in order to ensure that the school’s ‘responsible persons’ and governing body are fit and proper at all times
notifying NESA as soon as practicable if the school’s proprietor or a ‘responsible person’ or governing body of the school determines that a ‘responsible person’ or governing body of the school is not fit and proper. Such notification should be forwarded to the Director, School Registration and Accreditation, GPO Box 5300, SYDNEY NSW 2001 or by email [email protected].
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Role of the Governing Body
To be considered ‘fit and proper’, a school’s responsible persons (RPs) must have the necessary skills, knowledge, experience, diligence and soundness of judgment to undertake the duties of their roles. As such, the board, or a committee of the board, should clearly document the required level knowledge, skills and experience for each position, and have processes to verify the fitness and propriety of each director on an ongoing basis including having them sign a statutory declaration and conducting appropriate checks. Where a RP does not qualify as fit and proper, the governing body must ensure that NESA is notified as soon as practicable.
Example Policy
The RPs for ABC SCHOOL have processes of selection, induction, declaration and notification to ensure that its RPs are
fit and proper.
Example Procedures
POSITION/TITLE maintains a register of the qualifications and expertise of its RPs to demonstrate their competence
to govern an individual non-government school. This register is updated at least prior to the commencement of each
school year, retained for NUMBER years and accessed/stored WHERE.
ABC School’s RPs sign a ‘fit and proper’ statutory declaration at the start of each school stating they have not:
- ever been convicted of an offence against a law of an Australian state or territory or the Commonwealth of Australia
- ever become bankrupt, insolvent or placed under external administration- ever been convicted of, or charged with, an offence, including an offence in relation to children,
dishonesty or violence- ever been determined not to be a fit and proper person as prescribed under any law of an Australian state or
territory or the Australian Commonwealth- ever engaged in a deliberate pattern of immoral or unethical behaviour- ever been a responsible person for a non-government school or proposed non- government school
where registration was refused or cancelled.
If any ABC SCHOOL RP cannot sign the fit and proper declaration POSITION/TITLE will notify NESA as soon as
practicable.
ABC SCHOOL maintains a copy of these statutory declarations for 7 years following the RPs ceasing to be RPs. POSITION/TITLE collects, checks and files these RP statutory declarations annually and they are stored/accessible
WHERE. ABC SCHOOL RPs responds to information suggesting that a RP may not be fit and proper by notifying NESA as
soon as practicable of any determination that a RP is not fit and proper.
Example Documentation to assist you Board Nomination Form – Please see Appendix G: Fit and Proper Documentation Templates on page 31
Statutory Declaration – Please see Appendix G: Fit and Proper Documentation Templates on page 33
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NESA Requirement 3.9.2 ‘Responsible persons’ and previous refusal or cancellation of registration
Section 47(1)(c) of the Education Act provides that any refusal to register, or cancellation of registration, of the school or any other school under section 56 or 59, occurring during the period of five (5) years immediately before the application for registration is made has not been largely attributable to the actions of a ‘responsible person’ or proposed ‘responsible person’ for the school, or any other person or body having similar functions in relation to the management or operation of the school to those of a ‘responsible person’.
Key Concept
Assurance must be provided that cancellation or refusal of a school’s registration was not the result of previous actions of a RP.
Evidence of ComplianceA registered non-government school must have in place processes of notification and disclosure by which it can assure NESA that any refusal or cancellation of registration in relation to a non-government school or proposed non-government school in the past five (5) years has not been largely attributable to the actions of a ‘responsible person’ for a school.
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Role of the Governing Body
Under NESA Requirement 3.9.2, during the past five years, the actions of a responsible person or a proposed responsible person cannot contribute towards the refusal or cancellation of a school’s registration. Therefore, the board must ensure the school has in place a notification process to assure NESA that any refusal or cancellation of registration of the school under section 56 or 59 of the Education Act 1990 is not attributable to the actions of:
A responsible person for the school, or
Any other person or body exercising similar functions in relation to the management or operation of the school to
those of a responsible person.
Example Policy
ABC SCHOOL has a notification process to assure NESA that any refusal or cancellation of registration of the school
under section 56 or 59 of the Education Act 1990, occurring five years before an application for registration is made, is
not largely attributable to the actions of:
A responsible person for the school, or
Any other person or body exercising similar functions in relation to the management or operation of the school to
those of a responsible person.
Note:
Schools will need to consider who, other than the Principal and governing body members, should be treated as a responsible person.
Example Procedure
ABC SCHOOL will notify NESA via RANGS Online if any of its RPs have acted in ways which have contributed to a
school having its registration cancelled or refused. Notifiable actions must have occurred in a 5-year period
immediately before an application for registration is made.
POSITION/TITLE at ABC SCHOOL will retain notification documents which will be archived for NUMBER years and
access/store them WHERE.
Example Documentation Please see the Sample Declaration in Appendix G, paragraph 6 on page 33
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NESA Requirement 3.9.3 Proper Governance – Policies and ProceduresA registered non-government school must have policies and procedures for the proper governance of the school in place.
3.9.3.1 Policies and Procedures
Key Concept
RPs are accountable for the proper governance of the school. Proper governance requires RPs to have in place structures, policies and procedures for governance, leadership, authority, decision-making, accountability and transparency.
Evidence of ComplianceThe ‘responsible persons’ for a registered non-government school must have in place and implement policies and procedures in relation to, but not limited to, the following:
a school charter or document identifying the governance structure of the school and the respective authority, role and responsibilities of each of the school’s ‘responsible persons’ and any other person or body concerned in the management of the school
a delegations schedule to
- identify the respective authority within the governance structure - describe the process for withdrawing a delegated authority
a document to set out supervisory arrangements and reporting requirements for the school’s ‘responsible persons’ including any governing body and school executive
a code of conduct for the school’s ‘responsible persons’
maintenance of records of governance decisions and actions made by the school’s ‘responsible persons’, including minutes of formal meetings of the school’s ‘responsible persons’, on and from 1 September 2014 and retaining such records for a minimum period of seven (7) years before archiving
a document describing the school’s legal compliance process to facilitate the school’s compliance with all relevant legislation and reduce any risk of non-compliance
a document describing the school’s risk management framework or plan for developing, implementing and reviewing risk management strategies in relation to strategic direction, governance, operation and finance and the associated risk register.
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Role of the Governing Body
The board is the most senior policy-making body of the school. The board’s policy framework allows for the proper
operations of the school, consistent with the school’s values, its strategic direction and the requirements of the law.
However, school boards should be aware of the boundary between governance policy and operational policy, and accept
that it is the role of the principal and other staff to choose the educational and administrative means of realising board’s
overall policy direction. Thus, the responsibilities of a school board include:
Ensuring relevant governance policies are in place, e.g. board charter, delegations of authority, code of conduct,
conflict of interest, risk management; and
Approving the content of major school policies, e.g. admissions and enrolments.
Example Policy
ABC SCHOOL develops, implements and reviews policies and procedures to govern and operate the school in order to
satisfy its legal obligations, manage risk, provide strategic guidance and monitor performance.
Example Procedure
ABC SCHOOL develops, implements, reviews and retains the following documentation, for the statutory period required
in relation to:
A document which identifies the governance structure of the school and the role and responsibilities of each
responsible person or body (Constitution/Charter/Trust Deed dated WHEN)
A delegation schedule which identifies the respective authorities within the governance/management structure and
which describes the process for removing or varying a delegated authority (Delegations Schedule)
A document which sets out supervisory and reporting arrangements for RPs of ABC SCHOOL
(Governance/Management Organisation Chart)
Responsible persons’ code of conduct (Code of Conduct)
Records of governance decisions and actions (Minutes of Board Meetings)
A document which describes the school’s legal compliance process to facilitate compliance with relevant legislation
and reduce risk of non-compliance (Legal Compliance Framework).
An up-to-date school risk management framework (Risk Management Framework/Risk Register)
A status report on the implementation of the school’s strategy (Board Status Report)
POSITION/TITLE is responsible for notifying NESA via RANGS Online of any changes to responsible persons within
28 days.
These documents are managed by POSITION/TITLE, reviewed by POSITION/TITLE, WHEN, by HOW, and
stored/accessed WHERE.
The governing body, or a committee delegated with the task, will review all policies and procedures relevant to NESA Requirement 3.9 every TIMING or more frequently if necessary due to changes in regulations or circumstances.
The ABC SCHOOL chair and principal will provide an assurance statement to the governing body each year as to the school’s compliance with NESA Requirement 3.9.
Example Documentation to assist you School Constitution – Please see Appendix H: School Constitution on page 35
Delegations Schedule – Please see Appendix I: Delegations Schedule on page 36
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Supervisory Arrangements – Please see Appendix J: Supervisory Arrangements on page 40
Code of Conduct Framework – Please see Appendix K: Code of Conduct Framework on page 42
Legal Compliance Framework – Please see Appendix L: Legal Compliance Framework on page 43
Risk Management Framework – Please see Appendix M: Risk Management Framework on page 44
Board Status Report – Please see Appendix N: Board Status Report Template on page 62
Minutes of Board Meetings – Please see Appendix O: Meeting Minutes Template on page 63
Confidentiality Undertaking – Please see Appendix P: Confidentiality Undertaking on page 66
(Note: This is not a NESA requirement but recommended by AISNSW as good practice)
Please see Appendix W: NESA Requirement 3.9 Assurance Statement Template on page 78
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NESA Requirement 3.9.3 Proper Governance – Conflict of InterestA registered non-government school must have policies and procedures for the proper governance of the school in place.
3.9.3.2 Conflict of Interest
Key Concept
RPs must avoid situations in which personal interests or the interests of a relative or close associate may conflict with decisions made by the governing body.
Evidence of Compliance
The ‘responsible persons’ for a registered non-government school must have in place and implement policies and procedures in relation to dealing with conflict of interest with specific reference to:
an overarching statement defining conflict of interest within the context of the school’s governance structure
documented processes for
- an annual declaration by each ‘responsible person’ for the school in relation to any actual, perceived or potential conflict
- maintaining records of the annual declaration of each ‘responsible person’ for the school on and from 1 September 2014 and retaining such records for a period of seven (7) years before archiving or disposing
- requiring each ‘responsible person’ at formal meetings of the school’s ‘responsible persons’ to raise any actual, perceived or potential conflict with regard to items on the agenda for the meeting and for recording in the minutes of the meeting any conflict that is raised
- each ‘responsible person’ with a conflict of interest (including but not limited to a pecuniary interest or a related party transaction) mitigating the ensuing risk in a way that is acceptable to the other ‘responsible persons’ involved (for example, by absenting themselves from participating in any associated decision-making or advisory role).
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Role of the Governing Body
Conflict of interest is a common law principle that refers to the existence or perception of divided loyalties and can be
difficult to comply with for some board members. A conflict of interest may be:
Actual: When a board member has a private interest that is sufficiently connected to his/her duties and
responsibilities as a director that it influences the exercise of these duties and responsibilities.
Perceived: When reasonably well-informed persons could reasonably perceive that a board member has a
conflict of interest, even where, in fact, there is no real conflict of interest.
Potential: When a board member has a private interest, which could affect his/her decision about matters
proposed for discussion.
The fiduciary obligations imposed on the members of a school board encompass a duty to avoid situations where,
without the prior consent of the board, a material personal interest of a board member conflicts or may conflict with their
duty to the school. Thus, a declaration of conflicts of interest should be a standing preliminary item on the agenda for
school board meetings so that board members may declare any actual or potential conflict of interest before further items
on the agenda are discussed.
A board member may also give a standing notice of the nature and extent of a possible conflict of interest. A standing
notice means that the board member will not be obliged to bring his or her interest to the attention of the board every
time a potentially conflicting matter arises.
The issues relating to a board member’s conflict of interests can be complex and will, in most circumstances, depend on
the individual circumstances. Poor handling of conflicts of interest can reflect badly on a school and relationships within
the school, raising ethical and legal issues. As such, the board must have in place a policy and documented processes
to deal with conflicts of interest.
Example Policy
ABC SCHOOL discloses as necessary, and avoid where possible, situations in which their personal interests or the
interests of a relative or close associate may conflict either directly or indirectly with decisions made by the governing
body, whether the conflict is actual, perceived or potential.
Example Procedure
ABC SCHOOL maintains the following documented processes in relation to Conflicts of Interest:
An overarching statement defining Conflicts of Interest in the context of ABC SCHOOL (School to Provide).
A Checklist to assist ABC SCHOOL RPs assess whether they have a Conflict of Interest (Conflict of Interest
Checklist)
An annual Conflict of Interest Declaration which is:
1. Completed annually by each RP;
2. Retained from 1 September 2014, and retained for 7 years for each RP before archiving;
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3. Collected and checked by POSITION/TITLE, and stored/accessed WHERE;
4. Updated by POSITION/TITLE when circumstances change (Conflict of Interest Declaration).
A Declaration of Interest is placed at the head of the agenda at each formal meeting of the ABC SCHOOL governing
body (Meeting Agenda – Declaration of Interest).
ABC SCHOOL governing body will determine and minute the process for managing any declared conflict of interest,
actual, perceived or potential.
Example Documentation to assist you Definition of Conflict of Interest – School to provide
Conflict of Interest Checklist – Please see Appendix Q: Conflict of Interest Checklist on page 67
Conflict of Interest Declaration – Please see Appendix R: Conflict of Interest Declaration on page 68
Meeting Agenda – Declaration of Interest – Please see Appendix S: Declaration of Interest on page 70
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NESA Requirement 3.9.3 Proper Governance – Related Party Transactions RegisterA registered non-government school must have policies and procedures for the proper governance of the school in place.
3.9.3.3 Related party transactions register
Key Concept
All contracts and financial transactions made by an individual non-government school should be at ‘market value’, and ‘required’ for the operation of the school. (Section 83C, NSW Education Act).
Related party transactions (RPTs) are transactions made by the school to individuals and organisations related to the school. Transactions and payments should be conducted at arm’s length to ensure the interests of the school are served ahead of the interests of related parties. Related party transactions potentially involve conflicts of interest.
Evidence of Compliance
The ‘responsible persons’ for a registered non-government school must have in place and implement policies and procedures related to related party transactions:
requiring each ‘responsible person’ for the school to disclose any related party transactions made on behalf of the school’s proprietor or governing body.
maintaining a register of all related party transactions on and from 1 September 2014 and retaining such records for a period of seven (7) years before archiving or disposing.
the degree of materiality of the transaction will determine the degree of detail required to be included in the register.
arranging an external audit of the school’s register of all related party transactions on an annual basis
retaining a record of each external audit report of the register of all related party transactions on and from 1 September 2014 and retaining such records for a period of seven (7) years before archiving
notifying NESA if the contract or arrangement with the school’s external auditor is terminated by the school or external auditor prior to the expiry of the term of the contract or arrangement and the reason(s) for that termination.
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Role of the Governing Body
A related party transaction or benefit occurs when a business deal or arrangement is entered into by two parties (i.e.
people or companies) who have a family or business relationship prior to the deal. For example, a business transaction
between a board member and the school, such as a contract for the board member’s company (or a company owned by
his or her daughter) to carpet the school library, would be regarded as a related party transaction.
Under NESA Requirement 3.9.3.3, a related party transaction includes any transaction through which a ‘“responsible
person” for the school acting on behalf of the school provides a financial or other tangible benefit to a related party (such
as themselves or another “responsible person” for the school or their spouse, other relatives or close associates and
other related organisations)’. Without further guidance, a ‘financial or other tangible benefit’ must be interpreted broadly
and would include transactions where there was no payment or other consideration for a benefit.
Related party transactions are closely related to conflicts of interest and the board should have in place a policy,
processes for dealing with related party transactions and a register of all related party transactions which is validated by
an external independent auditor.
Related party transactions should be declared at each board meeting and school boards should as a matter of course
resolve that a board member exclude himself/herself from the approval process where a related party is involved in a
transaction.
Example Policy
ABC SCHOOL maintains a register of all related party transactions. This register is validated by an external independent
auditor. Additional procedures ensure all RPTs occur at arm’s length.
Example Procedure
ABC SCHOOL RPs:
Disclose any related party transactions (RPT) via ABC SCHOOL’S Conflict of Interest Declaration at each formal
meeting of ABC SCHOOL governing body.
POSITION/TITLE maintains a Related Party Transaction Register commencing from 1 September 2014 (Related
Party Transactions Register). The Register lists all RPT approvals, details the nature of the transaction, the nature
of the relationship, the date of approval and any conditions attached to the approval.
Arrange for an annual external audit of the RPT Register.
Retain audited RPT Registers from 1 September 2014 for a period of 7 years. POSITION/TITLE will manage the
RPT Register which can accessed at WHERE.
ABC SCHOOL will notify NESA if the contract with the school’s external auditor is terminated by the school or the
auditor prior to the expiry of the term of the current audit contract, and identify the reason(s) for the termination.
Example Documentation to assist you
Related Party Transactions Register – Please see Appendix T: Related Party Transactions Register on page 72
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NESA Requirement 3.9.3 Proper Governance – Professional LearningA registered non-government school must have policies and procedures for the proper governance of the school in place.
3.9.3.4 Professional learning
Key Concept
Continuous professional learning for RPs is conducted to develop the skills, knowledge and qualifications of RPs so the school can be governed properly.
Evidence of ComplianceThe ‘responsible persons’ for a registered non-government school must have in place and implement policies and procedures for the ongoing professional learning of the school’s ‘responsible persons’ with specific reference to:
the mandatory completion of a minimum twelve (12) hours of professional learning with regard to governance for each ‘responsible person’ for the school over each three (3) year period from the time of commencing as a ‘responsible person’; to be delivered by a NESA approved training provider
relevant professional learning for ‘responsible persons’ with responsibilities for areas of governance requiring particular qualifications, skills or expertise, for example in relation to finance, compliance, risk management and/or education, delivered by a NESA approved training provider
maintaining a register of professional learning and training undertaken by each ‘responsible person’ for the school including the following details for each year:
- name of ‘responsible person’ - role or position of responsibility - professional learning (date, nature, provider and hours)
retaining the register of professional learning on and from 1 September 2014, including relevant records such as evidence of completion of professional learning, and retaining such records and each entry into the register from the date of entry for a minimum period of seven (7) years before archiving or disposing.
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Role of the Governing Body
Board members need to possess a range of skills – being familiar with their duties and responsibilities, having sound
financial skills, possessing a certain familiarity with the school’s legislative framework, having knowledge of risk
management and compliance issues and being aware of the various stakeholder relationships that are important to the
school’s success.
To be most effective, the development of individual board members must happen within the context of the development
of the board as a whole, and within the context of the individual school. The starting point for development is an
assessment of the board’s strengths and weaknesses, which can be achieved through a regular skills analysis.
Board members need to develop themselves and update their knowledge continuously to attain the levels of competence
demanded of them as members of the school board. Consequently, the board should have a policy that places an
expectation on all board members that they will commit to at least 1 day of professional development each year. The
board should also allocate an annual budget to encourage board members to participate in the training and professional
development they require to meet their responsibilities.
Example Policy
ABC SCHOOL provides professional learning for its RPs to ensure they have relevant qualifications, skills and
knowledge to govern the school properly.
Example Procedure
ABC SCHOOL RPs:
Determine priority areas of professional learning relevant to the needs, skills and experience of its RPs, in relation to
compliance, risk management, finance, legal obligations, conflict of interest, related parties and education
WHEN/FREQUENCY.
Participate in at least twelve hours of governance training for each RP over a 3-year period from becoming a RP.
Ensure professional learning for RPs is delivered by a NESA-approved training provider.
POSITION/TITLE maintains the register of each RPs professional learning annually (Responsible Persons’
Professional Learning Register). This register will record the names, role, date, nature and hours of professional
learning and can be accessed WHERE.
POSITION/TITLE will retain the RPs’ Professional Learning Register for a minimum of seven years, commencing on
1 September 2014 before archiving.
Example Documentation to assist you
Responsible Persons’ Professional Learning Register – Please see Appendix U: Responsible Persons’
Professional Learning Register on page 76
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NESA Requirement 3.9.3 Proper Governance – Induction ProcessA registered non-government school must have policies and procedures for the proper governance of the school in place.
3.9.3.5 Induction process for new ‘responsible persons’
Key Concept
Induction is conducted for new RPs to better understand and more effectively discharge their proper governance responsibilities.
Evidence of ComplianceThe ‘responsible persons’ for a registered non-government school must have in place and implement policies and procedures for the induction of new ‘responsible persons’ with specific reference to:
an induction process for new ‘responsible persons’ including, at a minimum, the mandatory successful completion of a NESA approved training program by a NESA approved training provider in relation to proper governance prior to taking up the role of ‘responsible person’ or within three months of becoming a ‘responsible person’ for the school
a school-based induction program to provide each new ‘responsible person’ with a copy of the following documents
- a copy of all the school’s documents, policies and procedures specified at 3.9.3.1 of the Manual and any other key policy document for the school
- the school’s most recent audited financial statements - recent minutes of meetings of the school’s ‘responsible persons’
maintaining evidence that each new ‘responsible person’ has received a copy of all of the documents specified above
maintaining a register of the induction process identifying the following details for each new ‘responsible person’
- name - date of becoming a ‘responsible person’ for the school - position of responsibility - details of any qualifications and/or experience relevant to the particular position of responsibility - details of the successful completion of a NESA approved training program in relation to proper
governance (date(s), provider, nature of training)
retaining the register of induction on and from 1 September 2014 and retaining each entry into the register from the date of entry for a minimum period of seven (7) years before archiving or disposing.
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Role of the Governing Body
Board member induction, sometimes called board member orientation, is a process designed to help new board
members become effective as quickly as possible. A new board member will value a well-designed induction program, as
it will give them an understanding of their rights and obligations, current school structure and operations, governance
policies and good practice processes and procedures.
The process should, at the very least, involve:
meeting with the Chair;
meeting with fellow board members;
meeting the principal and other key personnel;
visits to the campus or campuses;
familiarisation with the school’s educational philosophy and curriculum;
familiarisation with the education sector;
review of:
‒ constitution of the school;
‒ strategic plan;
‒ codes of conduct; and
‒ board protocols and policies including the board charter.
While the board should have a generic induction process, it may be necessary to design specific induction training for
some individual newcomers. For example, if a new board member is joining the board to fill a skills gap, but has had no
previous exposure to the independent schools or education sector, the induction program may need much greater
emphasis on these topics; for example, the economics, participants and future outlook.
Ideally, the board will have in place an induction and board member professional development policy.
Example Policy
All new ‘responsible persons’ participate in an induction program provided by ABC SCHOOL governing body and
management within three months of their appointment to the Board.
Example Procedure
ABC SCHOOL RP inductees complete the following processes within 3 months of commencing as a RP:
complete the four one-hour on-line modules, Introduction to School Governance, developed by AISNSW, or a similar
program delivered by an NESA-approved provider, and approved by ABC SCHOOL’S governing body;
meet the Principal and the Chair of ABC SCHOOL’S governing body;
tour ABC School to inspect its buildings, grounds and facilities;
receive key ABC SCHOOL governance documents. These include the constitution, code of conduct, delegation
schedule, legal compliance and risk management frameworks, minutes from last NUMBER meeting(s) and audited
financial statements;
sign a statement attesting these documents have been received by the inductee;
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are advised of the primary governance responsibilities of acting in the interest of ABC School, confidentiality and
conflicts of interests by POSITION/TITLE.
ABC SCHOOL RPs
Maintain an Induction Register recording the new RP’s
- name
- date of becoming a RP
- position of responsibility
- qualifications and experience
- date for meeting Principal and Chair
- received key ABC SCHOOL governance documents
- details of completion of an NESA-approved training program including dates, provider and content of
training.
Keep the Induction Register from 1 September 2014 and retain each entry for a minimum of seven years from the
date of entry before archiving.
POSITION/TITLE oversights the Induction Program and maintains the Induction Register for ABC SCHOOL; this is
accessed WHERE.
Example Documentation to assist you
Induction of Responsible Person’s Register – Please see Appendix V: Induction of Responsible Person’s
Register on page 77
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NESA Requirement 3.9.3 Proper Governance – Independent AuditA registered non-government school must have policies and procedures for the proper governance of the school in place.
3.9.3.6 External independent attestation audit of Annual Financial Statements
Key Concept
Annual Financial Statements must be audited annually by external independent auditor.
Evidence of ComplianceThe school’s proprietor is to certify or is to provide other evidence that the audit and accompanying certificate:
have been completed by an auditor recognised by CPA Australia, Chartered Accountants Australia, the Institute of Public Accountants or another recognised accounting body approved by NESA.
comply with any other requirements imposed by Commonwealth or NSW Government agencies providing funding to the school
have not been completed by a person or body with whom the school has another business relationship in addition to audit services or with whom any of the ‘responsible persons’ of the school has a conflict of interest.
The school must have policy and procedures for notifying NESA if the contract or arrangement with the school’s external auditor is terminated by the school or external auditor prior to the expiry of the term of the contract or arrangement and the reason(s) for that termination.
The school’s audited and certified annual financial statements in relation to any period on and from 1 September 2014 are to be available for inspection and are to be retained for a minimum period of seven (7) years after the end of the period to which the annual financial statements refer before archiving or disposing.
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Role of the Governing Body
As part of its oversight role, the board must ensure the school has procedures in place that ensure the annual financial
statements are audited and certified by an external independent auditor who is a member of a recognised accounting
body approved by NESA.
Example Policy
ABC SCHOOL has procedures to ensure that annual financial statements are audited and certified by an external
independent auditor who is a member of a recognised accounting body approved by NESA.
Example Procedure
ABC SCHOOL’s proprietor will certify that the audit and accompanying certificate:
have been completed by an auditor of a recognised accounting body approved by NESA
comply with any other requirements imposed by Commonwealth or NSW Government agencies providing funding to
the school
has not been completed by a person or body with whom the school has another business relationship in addition to
audit services or with whom any of the RPs of ABC SCHOOL has a conflict of interest.
ABC SCHOOL’s POSITION/TITLE will notify NESA if the contract with the school’s external auditor is terminated by
the school or the auditor prior to the expiry of the term of the current audit contract, and identify the reason(s) for the
termination.
ABC SCHOOL’s audited and certified annual financial statements are kept from 1 September 2014 and retained for
a minimum of seven years after the date of each year’s audit before archiving.
POSITION/TITLE will oversight the annual process including the retention of all audit records.
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NESA Requirement 3.9.4 Financial ViabilityA registered non-government school must be financially viable.
Key ConceptRPs have a responsibility to ensure an individual non-government school is financially viable.
Evidence of Compliance
The proprietor of a non-government school is required to maintain evidence to demonstrate the current financial
viability of the school at the time of making an application for initial or renewed registration. The required evidence of
financial viability is prescribed by NESA based on a risk assessment, and is to be in the form of a certification or
warrant by a body or person approved by NESA for that purpose.
The prescribed form of certification or warrant will be one of the following:
certification from the principal of the school as required in the online application form for renewal of registration, or
Certification of Financial Viability from a NESA approved body or person assessed against the NESA Financial
Viability Framework, or
a Financial Viability Warrant from a NESA approved body or person providing assurance of financial viability.
The NESA Certification of Financial Viability, Financial Viability Framework, Financial Viability Warrant and an
overview of the risk assessment approach of NESA are published on the NESA registration website RANGS.
During the assessment of an application for registration, an Inspector may request additional information if concerns
about compliance are identified.
The proprietor of a registered non-government school must have policies and procedures for:
assessing the school’s financial viability at regular intervals with specific reference to the records and documents
to be used in making the assessment
retaining the school’s audited and certified financial statements on and from 1 September 2014 for a minimum
period of seven (7) years before archiving or disposing
retaining a copy of the financial viability certification or warrant in the form prescribed by NESA by the NESA
approved body or person for that purpose on and from 1 January 2017 for a minimum period of seven (7) years
before archiving or disposing
notifying NESA if the contract or arrangement with the school’s external auditor is terminated by the school or
external auditor prior to the expiry of the term of the contract or arrangement and providing the reason(s) for the
termination
notifying NESA if the affairs of the proprietor are under any form of external control, such as the control of a
manager, under any law. Such notification should be forwarded to the Director, School Registration and
Accreditation, GPO Box 5300, SYDNEY, NSW 2001 or by email [email protected].
In determining a school’s financial viability, an Inspector may require a school to provide relevant documentation such
as:
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audited annual financial statements, an independent audit report and independent auditor’s management letter
compliance with any requirements imposed by state or Commonwealth agencies providing funding to the school recent Commonwealth Financial Questionnaire completed by the school
current school year operating financials (management accounts)
schedule of loan agreements, if applicable
property lease or rental agreements, if applicable, including the length of the lease or rental agreement and the
annual cost of accommodation services
information about any remuneration paid to members of the governing body and the award or agreement under which staff salaries are being paid
current school business plan
current year’s budget and forecast budgets for three to five years
insurance policies covering risk areas for the school
any other relevant materials.
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Role of the Governing Body
School boards have a responsibility to ensure that there are appropriate systems and processes in place to enable not
only good governance and management of the school; accountability to all stakeholders; and compliance with all
regulatory and legislative requirements placed on the organisation; but also, that the organisation remains solvent and
complies with all its financial obligations.
Example Policy
ABC SCHOOL’s proprietor maintains relevant evidence to demonstrate ABC SCHOOL’s financial viability at the time of
registration/re-registration (select one).
Example Procedure
ABC SCHOOL RPs
when required by NESA, provide relevant financial data to NESA in the prescribed form of a certification or warrant.
monitor key financial accounts and relevant financial management reports at each formal meeting of ABC SCHOOL
Governors to assess financial viability.
maintain ABC SCHOOL’s audited and certified financial statements for seven years from 1 September 2014, before
archiving. These are accessible WHERE and managed by POSITION/TITLE.
retain a copy of the financial viability certification/warrant for seven years before archiving. These are accessible
WHERE and managed by POSITION/TITLE.
notify NESA if ABC SCHOOL is under any form of external control. POSITION/TITLE makes the notification.
have available and provide to a NESA inspector all financial documentation that a NESA inspector may require.
Note:
Board members of schools which are incorporated as companies limited by guarantee also have a duty to prevent insolvent trading under section 588G of the Corporations Act. Individual penalties and personal liability for debts can apply to each school director for failure to prevent insolvent trading.
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NESA Requirement 3.9.5 Notification of MattersNESA must be notified of certain matters
Key ConceptCertain matters relating to the governance and operation of the school must be notified to NESA.
Evidence of Compliance
A registered non-government school must demonstrate that processes are in place by which:
the proprietor of the school, and, if the proprietor is a corporation, each director, trustee or person concerned in the management of the school
each member of the governing body of the school, and
the principal
are informed of their responsibilities under the Education Act, any Regulation under the Education Act and NESA requirements, including any duties of disclosure or notification.
A registered non-government school must provide, and document its process for providing, a return to NESA if, following an investigation by a relevant agency or authority, the school is formally notified in writing by that agency or authority of an alleged breach by the school of any of the following legislation:
Ombudsman Act 1974 Child Protection (Working with Children) Act 2012 The Children and Young Persons (Care and Protection) Act 1998 Teacher Accreditation Act 2004 Disability Discrimination Act 1992 Work Health and Safety Act 2011 Environmental Planning and Assessment Act 1979 Food Act 2003 Explosives Act 2003 Building Code of Australia.
Such notification must be provided to NESA within fourteen (14) working days of the formal notification of an alleged breach. Such notification should be forwarded to the Director, School Registration and Accreditation, GPO Box 5300, Sydney, NSW 2001 or by email [email protected].
A registered non-government school must provide, and document its process for providing, a return to NESA using NESA’s online facility, RANGS Online when changes occur to the:
management and operation of the school
- where a notification in relation to a ‘responsible person’ is required (see sections 3.9.5 (1) and (2) of this Manual), the notification should be forwarded to the Director, School Registration and Accreditation, GPO Box 5300, Sydney, NSW 2001 or by email [email protected].
- commencing from 1 July 2016, where a ‘responsible person’ for the school commences or ceases in the role of a ‘responsible person’, NESA must be notified within twenty-eight (28) days of the change by updating the school’s details on RANGS Online
- where a notification in relation to financial viability is required (see section 3.9.4 of this Manual), NESA must be notified within one (1) month of such change(s)
- where there has been an appointment of a new principal (or equivalent), or a change in the contact details for the school’s existing principal (or equivalent), NESA must be notified within one (1) month of
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such change(s)
- commencing from 1 July 2016, the maintenance of details of persons who are ‘responsible persons’ for the school (apart from the school’s principal) including each person’s name, role, date of commencing and, when relevant, date of ceasing to be a ‘responsible person’ for the school within twenty-eight (28) days of a change being made and maintaining these records for a period of seven (7) years from the date of each entry before archiving or disposing
- where there has been a change in the contact name or other contact details for a registered campus, NESA must be notified within one (1) month of such change(s) occurring
- where the school has been sold, written notice is to be given by the purchaser to NESA within seven (7) days of completion of the sale
- where the school’s proprietor changes for any other reason, written notice is to be given by the new proprietor to NESA within seven (7) days of the change
- where a school’s existing proprietor changes its name or contact details, NESA must be notified within one (1) month of such change(s) occurring
- where the school intends to change its name, or the name of a registered campus, NESA must be notified at least one (1) month prior to such change taking effect
- where there has been a change in the school’s postal address or other contact details, NESA must be notified within one (1) month of such change(s) occurring
- where the school closes or ceases to operate, as a school, or for specific Years of schooling, (see section 2.4.10 of this Manual), NESA must be notified within one (1) month of the change.
staffing of the school – where there is a turnover of half or more of the teaching staff during any twelve (12) month period, NESA must be notified at the commencement of the next new term
curriculum – where the school
- increases the scope of its curriculum by teaching one or more courses in a KLA from which it has not previously taught any courses, NESA must be notified within one (1) month of such a change being implemented
- intends to deliver additional Years of schooling at a registered campus, NESA must be notified at least three (3) months prior to the implementation of such a change
- intends to decrease the Years of schooling it delivers at its main site or at a registered campus, NESA must be notified within one (1) month of such a change being implemented
- intends to deliver all or a significant part of students’ courses of study by means of distance education, the school must notify NESA seeking approval at least nine (9) months prior to the implementation of such a change. This excludes situations where a school that does not normally deliver courses by means of distance education provides units of work/activities for a student who has been granted leave by the principal and/or courses of study that its students access through outside tutors or external providers
premises and buildings – where the school intends to
- add another campus, NESA must be notified at least three (3) months prior to the implementation of such a change
- move to a new site, NESA must be notified by the principal (or equivalent) and/or proprietor of the school within three (3) months prior to the relocation
- close or cease operating a campus, or specific Years of schooling at a campus, (see section 2.4.10 of this Manual), NESA must be notified within one (1) month of such a change
schools with boarding facilities where:
- The school intends to relocate the boarding facilities on the school site or move the facilities to a new site, NESA must be notified by the principal (or equivalent) and/or proprietor of the school within three (3) months prior to the relocation
- there is a turnover of half or more of the full-time staff with supervisory responsibilities for boarders during any twelve (12) month period, NESA must be notified at the commencement of the new term
Schools intending to provide boarding facilities
- where the school intends to provide regular overnight accommodation for students at the school, either itself or by contractual arrangement, the school must notify NESA to seek approval at least nine (9) months prior to the intended date of initial provision of such facilities.
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Role of the Governing Body
As part of its oversight role, the board must ensure the school provides, and documents its process for providing, a return
to NESA when there is a breach of legislation or changes occur to the:
management and operation of the school, e.g. where the school intends to change its name;
staffing of the school, e.g. a turnover of half or more of the teaching staff during any twelve 12 period;
curriculum, e.g. the school increases the scope of its curriculum;
premises and buildings, e.g. the school adds another campus; and
boarding facilities, e.g. where the school intends to provide regular overnight accommodation for students at the
school.
Example Policy
ABC SCHOOL notifies NESA of all matters set out in the current Registered and Accredited Individual Non-government
Schools (NSW) Manual (the Manual) according to specified timelines and notification methods.
Example Procedure
ABC SCHOOL’s POSITION/TITLE will notify NESA, within timeframes specified in the Manual, in relation to
responsibilities under the Education Act including:
Alleged breaches of the following legislation:
- Ombudsman Act 1974
- Child Protection Working with Children Act 2012
- Teacher Accreditation Act 2004
- Disability Discrimination Act 1992
- Work Health and Safety Act 2011
- Environmental Planning Assessment Act 1979
- Food Act 2003
- Explosives Act 2003
- Building Code of Australia.
Relevant changes to the management and operation of the school
Relevant changes to staffing of the school
Relevant changes to the curriculum
Relevant changes to premises and buildings.
POSITION/TITLE will maintain notification records and store them WHERE.
Example Documentation to assist you
Please refer to the NESA online notifications portal at
https://rego.nesa.nsw.edu.au/registered-individual-non-government-schools/registration-requirements/management-
and-operation-of-the-school/notifications-and-disclosures
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AppendicesExample Documentation
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Appendix A: Fit and Proper Documentation Templates (3.9.1)
Board Nomination Form Template
Name:
Address:
Phone:
Email:
I would like to nominate for the board of ABC SCHOOL and agree to abide by the roles and responsibilities should I be appointed to the board.
We, the undersigned persons entitled to vote at the forthcoming school board elections nominate the candidate for the board of ABC SCHOOL:
Name and Signature of Nominator*:
Name and Signature of Seconder*:
*Note the nominator and seconder must be persons entitled to vote for the nominee pursuant to the school Constitution and/or regulation.
Information Concerning Nominee1. What has motivated you to apply for a position on the ABC SCHOOL board?
2. Please provide a brief biography (maximum 250 words), along with a photo of yourself.
3. Please summarise your current and previous employment and experience (maximum 80 words)
4. Formal Qualifications (if applicable):
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5. Skills Matrix Questionnaire:
Please rate the level of skills and/or experience in a particular area using the following ratings:
(1) No experience or knowledge
(2) Little experience or knowledge
(3) Reasonable experience or knowledge
(4) Considerable experience or knowledge
(5) Expert experience or knowledge
SKILLS AND EXPERIENCE RATING COMMENTS OR SUPPORTING EVIDENCE
Education sector experience
Finance, accounting and business acumen
Legal skills
Strategic human resource management skills
Risk management experience
Marketing experience
Information technology experience
Capital development experience
Governance experience
Other:
DIRECTOR CAPABILITIES RATING COMMENTS OR SUPPORTING EVIDENCE
Ability to assimilate and synthesise complex information
Capacity to develop and deliver a logical argument
Innovative thinker
Leadership ability
Interpersonal and relationship management skills
Time availability
PERSONAL ATTRIBUTES RATING COMMENTS OR SUPPORTING EVIDENCE
Honesty and integrity
High ethical standards
Network of relevant contacts
6. Names and contact details of two referees to support the information provided in the Skills Matrix above.
Signed: Date:
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Statutory Declaration Template
Statutory Declaration under the New South Wales Oaths Act 1900 for a responsible person for a NSW non-government school to be fit and proper
Statutory declaration of a responsible person for a NSW non-government school to be fit and proper as defined under the Education Act 1990.
I, …………………………………………………………………………………………………………………………………………..[insert full name of Responsible Person]
of …………………………………………………………………………………………………………………………………………[insert address]
solemnly and sincerely declare that:
1. In respect of …………………………………………………………………………………………………………………..
………………………………………………………………………………………………………………………………….[insert full proper name of the legal entity] (“the Proprietor”)
Which trades as ………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………….[insert name(s) of the non-government school(s)].
2. I am authorised to make this statutory declaration as a Responsible Person.
3. I understand that I am required to sign a fit and proper statutory declaration prior to commencing as a ‘responsible person’ for the school and at least on an annual basis while continuing to be a ‘responsible person’ for the school.
4. I understand that the NSW Education Standards Authority will rely on evidence tendered by the school including this Statutory Declaration, in assessing the school’s compliance with the Education Act 1990 as identified in NESA’s Registered and Accredited Individual Non-government Schools (NSW) Manual.
5. I declare that I have not:
(i) ever been convicted of an offence against a law of an Australian state or territory or the Commonwealth of Australia;
(ii) ever become bankrupt, insolvent or placed under external administration;
(iii) ever been convicted, or charged with, an offence, including an offense in relation to children, dishonesty or violence;
(iv) ever been determined not to be a fit and proper person as prescribed under any law of an Australian state or territory or Australian Commonwealth;
(v) ever engaged in a deliberate pattern of immoral or unethical behaviour;
(vi) been a responsible person for a non-government school or proposed non-government school where registration was refused or cancelled.
6. I will advise the school immediately if any of the declarations made in paragraph 5 cease to be correct.
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I make this solemn declaration, conscientiously believing the same to be true and by virtue of the Oaths Act 1900.
Declared at: …………..………………………………………. on …………..……………………………………….[place] [date]
……..………………………………………..[signature of declarant]
In the presence of an authorised witnessa, who states:
I, …………..………………………………………., a …………..……………………………………….,[ name of authorised witness] [qualification of authorised witness]
certify the following matters concerning the making of this statutory declaration by the person who made it:
[*please cross out any text that does not apply]
a) *I saw the face of the person OR *I did not see the face of the person because the person was wearing a face covering, but I am satisfied that the person had a special justification for not removing the covering, and
b) *I have known the person for at least 12 months OR *I have not known the person for at least 12 months, but I have confirmed the person’s identity using an identification document and the document I relied on was …………..……………………………………….[describe identification document relied on]
…………..………………………………………. …………..………………………………………. [signature of authorised witness] [date]
a An authorised witness is either a justice of the peace, a solicitor or barrister with a current practicing certificate issued under S6 of the Legal Profession Act 2004 in NSW, a notary public, a commissioner of the courts for taking affidavits or any person authorized to administer on oath.
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Appendix B: School Constitution (3.9.3.1)
Refer to your School’s constitution. Its front page should look something like this.
ABC School ConstitutionA public company limited by guarantee under the Corporations Act 2001 (Cth)
ACN 123 456 789
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Appendix C: Delegations Schedule (3.9.3.1)
The School Board is responsible for the governance and management of the School. The Board, while retaining ultimate
responsibility, may delegate responsibilities to the Head, the Business Manager, sub-committees or another person or
persons as it sees fit. Attached to the right to delegate, the Board has a responsibility to ensure that delegations are
being carried out within the requirements of statute and common law and the School’s own policies.
The Board must ensure that adequate risk management processes and internal controls are in place. Appropriate
supervision of management by the Board can be exercised through a number of mechanisms. The Board should receive
operational and compliance reports from and through the Head at its regular meetings. In some cases, an Audit
(Compliance and Risk) Committee may be established to report to the Board in specific areas of school operations and
at particular times. The Board must be aware of the requirement for it to implement an appropriate level of supervision
and monitoring of the School management while not engaging at any level in the micro-management of school
operations.
The day to day management of the operation of the School is, in general, delegated to the Head. This policy is based on
a principle of delegation by exception. Matters not delegated to the Head or delegated jointly to the Head and, say, a
Board sub-committee need to be separately identified, documented and the policy framework underlying the delegation
clearly articulated.
Examples of Head and Board joint delegations may include the appointment and termination of senior positions such as
the Business Manager, the Deputy Head, Head of the Junior School and the Chaplain. It may also include the
representation of the School within the media. For matters delegated to the Head conditional upon executive limitation or
a particular policy restriction, such as capital expenditure or student expulsion, an appropriate Delegated Authority must
be completed.
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Sample Delegation Schedule
Item Activity Authority
Banking Accounts - Opening and closing bank accounts - School Board
- Authorised Signatories to bank accounts- School Board members x 2- Head- Business Manager
Cheques - Cheque signing (dual) - Any two authorised signatories- Holder of cheques - Business Manager
Credit Cards - Allocation of cards - School Board- Card Limits - School Board
Online - Administrator of online access - Business Manager- Administrator access authority & limits - School Board- Setting EFT transfer limits - School Board- EFT transfers to creditors - Any two authorised signatories- Payroll authorisation - Any two authorised signatories
Loans & Investments - Loans to Staff or other persons - School Board- Loans to associated organisations - School Board- Loans to non-associated organisations - School Board
- Entering into borrowing/overdraft facilities – Temp <$200k- Business Manager in consultation with
Finance Committee- Entering into borrowing/overdraft facilities – Temp >$200k - Head in consultation with School Board- Entering into borrowing/overdraft facilities – Long Term - School Board- Investment of Funds – approved policy - School Board- Investment placement including rate and term - Business Manager
Information Technology - Allocation of access - IT Manager & Business Manager/ HeadBudget Approval - annual recurrent budget - School Board
- annual capital budget - School Board- Re-allocation – up to $25k - Business Manager- Re-allocation – $25k and over - Finance Committee
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Item Activity Authority
Fixed Assets Purchase (capital expenditure)
- within budget - $100k or more - School Board- within budget - >$1k and <$100k - Head & Business Manager- within budget - $1k or less - Budget account holder- outside budget - School Board
Sale/Disposal - $50k or more - School Board- Less than $50k - Head & Business Manager
Operating / Recurrent Expenditure within approved budget and cash flow
- $50,000 or more - Head- $5,000 to less than $50,000 - Business Manager
- $1,000 to less than $5,000- Head of Campus, IT Manager, Director
of Development, Director of Professional Learning
- Less than $1,000 - Department HeadFees Setting Annual fees - School Board
Discounts - School BoardSpecial fee allowances and levies - Head
Bad Debts Write off recommendation - Head & Business ManagerWrite off endorsed and approved - School Board/Finance Committee
Students Scholarships Policy setting with regards to type, value and selection criteria - School BoardAwarding - Head / subcommittee?
Bursaries / Hardship
Policy setting with regards to type, value and selection criteria - School BoardAwarding - Head / subcommittee?
Prizes Awarding - HeadStaffing Employment Senior Positions - School Board and/or Head
Employment of other staff aligned to MEA - HeadEmployment of other staff non-aligned to MEA – within budget FTE - Head
Remuneration Head - School BoardBusiness Manager - School BoardOther Senior Staff – non-MEA aligned - School BoardOther Staff – MEA aligned - Head
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Item Activity Authority
Leasing Capital assets Capital cost greater than $50,000 and period more than 4 years - School BoardAmount and period less than the above - Business Manager
Real Property Rental agreement greater than 12 months - School BoardRental agreement less/equal to 12 months - Business Manager
Hire of Premises Associated organisations - HeadNon-Associated organisations - School Board
Other Honorarium or Ex Gratia Payment - School BoardContractual agreements for more than one year and greater than $50,000 per annum
- School Board
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Appendix D: Supervisory Arrangements (3.9.3.1)
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Appendix E: Code of Conduct Framework (3.9.3.1)
Section 1: Introduction
To include:
Statement of support for the Code of Conduct (“the Code”) from Chair (on behalf of Board) and Head
Mission Statement
Detailed values statement
Scope and application of the Code
Statement outlining the provision of resources to support implementation and monitoring of the Code.
Section 2: Areas of Compliance
Directors and officers must:
1. Act honestly, in good faith and in the best interests of the School
2. Use care, skill and diligence in fulfilling their duties
3. Use the power of their position for a proper purpose
4. Not make improper use of information acquired by their position
5. Not allow personal interests or those of associates, to conflict with the interests of the School
6. Exercise independent judgement in decision making
7. Maintain confidentiality (see attached Sample confidentiality undertaking).
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Governance Resource Manual | Advice for Member Schools 2020
Appendix F: Legal Compliance Framework (3.9.3.1)
CATEGORY KEY DOCS/LEGISLATION REQUIREMENTS RESPONSIBILITY
LATEST REVIEW / REPORT
COMMENTS TRAFFIC LIGHT(G/O/R)
Corps Act Corporations Act 2001 Annual accounts Business Manager 30/4/2014 Filed with ASIC 30/4/2014
AGM Company Secretary 15/5/2014 AGM held 15/5/2014
Constitution Memo and articlesFull compliance
(especially Board and members)
Board 30/6/2014 Reviewed compliance 30/6/2014
Education Acts
Consumer Laws
Privacy
Taxation
WHS
Environmental
Discrimination
Industrial Relations
Child Protection
Duty of Care
Workers Compensation
Charities & fundraising
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Governance Resource Manual | Advice for Member Schools 2020
Appendix G: Risk Management Framework (3.9.3.1)
SAMPLE RISK MANAGEMENT POLICY
2. INTRODUCTION
ABC SCHOOL recognises the management of the school’s risks are an important and serious responsibility. The school, and its stakeholders, may face a myriad of risks that threaten the achievement of academic, safety, financial, reputation, regulatory and strategic objectives. The need to manage risk is driven by numerous factors including changes in society, growing expectations from parents/guardians and regulators, increased litigation, competition and global events.
The ABC SCHOOL Board recognises that, together with the Principal and staff, they are responsible for instilling a strong risk-aware and control-conscious culture throughout the school. As a result, the likelihood and impact of risks are reduced and actual or potential problems that may emerge can be best identified, managed and resolved in the normal course of the school’s operations and in the best interests of the school’s stakeholders.
The Australia Risk Management Standard AS/ISO 31000:2018 forms the basis of the school’s Risk Management Framework. ABC SCHOOL will therefore:
Identify reasonably foreseeable risks associated with its activities that may have a material impact on the school;
Assess identified risks; Put in place controls and treatments to reduce risks to a target level that is consistent with the school’s
requirements; Communicate issues in relation to risks and risk management activities to key stakeholders; and Perform on-going monitoring and review of key risks to ensure that changes to the risks affecting the school are
identified and managed in a timely manner.
2. SCOPE
[Complete in relation to the school’s range of activities]
3. DEFINITIONS
Consequence The expected outcome or impact of a risk event.
Current risk The risk that remains after mitigating actions or controls have been considered. Current risk is assigned a rating based on current consequence and current likelihood (commonly considered the residual risk rating).
Inherent risk Rating of a risk assuming no controls are in place.
Likelihood The probability or chance of a risk event occurring.
Operational risk Key risks arising from ABC SCHOOL’s operational activities. Operational risks are component risks within each strategic risk.
Residual risk The level of risk that remains after assessing the effectiveness of the controls, management strategies and other mechanisms in place to mitigate a particular risk (treated risk).
Risk Risk is often characterised by reference to any event that will have an impact on the school or any of its activities. Risk is measured in terms of the consequences that could arise from an event (including changes in circumstances), and the likelihood of that particular consequence occurring. Risks to ABC SCHOOL are generally assessed in terms of their people, reputation, business operations, governance, financial and educational/ academic outcomes respectively.
Risk appetite The risk appetite of ABC SCHOOL is the amount and type of risk that the school is willing to take in order to meet its strategic objectives.
Risk assessment The overall process of risk identification, risk analysis and evaluation.
Risk identification The process of determining the what, where, when, why and how something could happen.
Risk Management Framework
Framework enabling the consistent management and reporting of risk throughout ABC SCHOOL. The framework includes a risk policy, risk assessment protocol, risk reporting protocol and risk register.
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Risk rating A categorisation or prioritisation of risk combining likelihood, consequence and mitigating actions. See current risk and target risk.
Risk register Register that defines and assesses key components of each risk.
Risk treatment The process of implementing measures to modify risk.
Strategic risk Risk categories that represent the key risk areas for ABC SCHOOL. Strategic risks impact on the achievement of the organisation’s strategic objectives
4. POLICY
4.1 Policy Statement
ABC SCHOOL is committed to:
Protecting valuable assets, inclusive of people, processes, property, products and reputation; Improving our planning processes by enabling the key focus to remain on core business and to help ensure
continuity of service delivery; Reducing the likelihood of potentially damaging occurrences and assist with preparing the school to effectively
manage challenging events; Contributing to the development of a positive organisational culture, in which people not only feel safe but also
understand their purpose, roles and direction in a risk-aware culture; Improving accountability, responsibility, transparency and governance in relation to both decision-making and
outcomes; Fulfilling our fiduciary obligations; Ensuring to the best of our ability that the school environment is a safe place for all students.
4.2 Policy
This policy sets out ABC SCHOOL’s overall approach to risk management.
4.2.1 Understanding risk management
Risks have been described in terms of combination of the impact or consequences of an event occurring and its likelihood of occurring.
Risk is the chance of something happening that will have an impact on objectives and risk management can be described as the culture, processes and structures that are directed towards realising potential opportunities while managing an adverse effect.
ABC SCHOOL’s Risk Management Framework is designed to identify the risks the school faces and put measures in place to keep those risks to an acceptable minimum. The existence of risk presents both threats and opportunities to the school.
Risk Owners have been assigned responsibility for the identified risks in the school Risk Register. ABC SCHOOL’s risk assessment matrix is used as the benchmark in planning and implementing the risk management measures.
The risk management process consists of the following main elements:
Identify: identify a risk (threats or opportunities) and document the risks captured by the Risk Register owner. Assess: the primary goal is to document the net effect of all identified threats and opportunities, by assessing:
‒ Likelihood of threats and opportunities (risks);‒ Impact of each risk;‒ Proximity of threats; and‒ Prioritisation based on scales.
Plan: preparation of management responses to mitigate threats and maximise opportunities. Implement: risk responses are actioned. Monitor and review: monitor and review the performance of the risk management system and changes to
business initiatives. Communicate and consult: communicate with internal and external stakeholders throughout the risk
management process. Record and report: the risk management process and its outcomes should be documented and reported
through appropriate mechanisms. This includes providing regular reports to the Principal, POSITION TITLE(S), Audit and Risk Committee (ARC) and Board at agreed times.
Risks are effectively managed at ABC SCHOOL through the effective implementation of various controls, which include:
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Governance Resource Manual | Advice for Member Schools 2020
Board approved Risk Management Framework; documented policies and procedures; maintenance of registers; implementation of risk-based systems and processes; ongoing monitoring of regulatory obligations; checklists to guide activities and project plans to record actions; and internal and external reporting.
5. RESPONSIBILITIES
5.1 Board
The Board ultimately responsible for approving, and committing to, the risk management policy and setting and articulating ABC SCHOOL’s appetite for risk. The Board’s responsibilities include:
Receiving and challenging the school’s risk appetite on a regular basis; Approving the Risk Management Framework on an annual basis; and Reviewing and approving risk information (including independent audits of the Risk Management Framework
and external disclosures) that is provided to the Board by the ARC from time to time.
5.2 Principal
The Principal is responsible for:
Ensuring all Risk Owners, staff, students and volunteers adhere to the Risk Management Framework; Reviewing and endorsing any information provided by the Audit Committee to the Board.
5.3 Audit and Risk Committee (ARC)
The Board delegates the Audit and Risk Committee with responsibility for overseeing the risk management activities at ABC SCHOOL. Functions of this role include:
The ARC, has responsibility under its Charter for:
Ongoing review and approval of the Risk Register in accordance with risk reporting protocols; Annually reviewing and recommending to the Board any proposed changes to the Risk Management
Framework; Monitoring adherence to the Risk Management Framework; Promoting awareness of the Risk Management Framework throughout the school; and Providing any relevant risk information (e.g. independent audits of the Risk Management Framework or external
disclosures) to the Board for approval.
5.4 Senior Management Team (SMT)
The Senior Management Team has responsibility for communicating and consulting with staff to ensure risks are identified, appropriate controls are in place and any necessary treatments are addressed in relation to the operational activities of the school.
The SMT comprises those persons incumbent in the positions of:
Principal; Business Manager; POSITION TITLE; Etc.
5.5 Risk Owners
Risk Owners are individuals who have been allocated ownership of strategic or operational risks and are responsible for managing, monitoring and reporting on the status of the risk to the Board and ARC. Risk Owners should follow the Risk Management Framework in fulfilling their obligations which include:
Monitoring and updating risks and their associated ratings on at least a quarterly basis; Reporting any new or re-rated risks in accordance with the Risk Management Methodology; Reviewing all risks in their area at least once per year.
5.6 Staff, Contractors and Volunteers
Risk management is the responsibility of all ABC SCHOOL staff, contractors and volunteers. This group should be aware of and are responsible for applying risk management principles and practices relevant to all areas of their work.
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5.7 Parents/Guardians and Members of the School Community
Parents/guardians and members of the school community are responsible for maintaining awareness of, and complying with, the school’s policies, instilling risk-awareness in their children and bringing risk-related matters to the school’s attention.
5.8 Students
Students are responsible for complying with the school’s policies; following the instructions of staff and adopting appropriate behaviour.
6. REVIEW
ABC SCHOOL’s Risk Management Framework is evolving. It is an ongoing process and it is recognised that the level and extent of the Risk Management Framework will evolve commensurate with the growth of the school. This will include an annual review of this policy by the ARC.
7. REFERENCES
7.1 Related Policies, Procedures and Registers
Risk Appetite Statement Risk Management Methodology Risk Register Child Protection Policy Etc.
7.2 Related Documents and Legislation
Education Act 1990 (NSW) NESA Registered and Accredited Individual Non-Government Schools (NSW) Manual Australia Risk Management Standard AS/ISO 31000:2018 Work Health and Safety Act 2011 (NSW) Etc.
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SAMPLE RISK MANAGEMENT METHODOLOGY
1. INTRODUCTION
The ABC SCHOOL Risk Management Framework provides a systematic approach to identifying, assessing and treating risks.
The Risk Management Framework describes the criteria that will be used by ABC SCHOOL to assess consequence and likelihood, leading to an overall risk rating. The overall risk rating will be measured for current risk (the risk level at the present time that takes into account all controls) and target risk (a future risk level that ABC SCHOOL would like to reach in the short to medium term).
The Board has considered the Australian Risk Management Standard AS ISO 31000:2018 in developing its risk assessment process. It has developed its process using likelihood and consequence measures, and building these into a risk level matrix. Risk will be assessed on an inherent basis (before controls are applied), and on a residual risk basis (following the application of controls).
The Risk Management Framework also describes the ownership, monitoring and management requirements for each level of overall risk.
The factors that are critical to the success of the school’s Risk Management Framework include:
embedding a risk-aware culture throughout the school; communicating our risk management strategy to all stakeholders; acknowledging that ‘it can happen here’; adopting innovative techniques to mitigate risks; effective identification and management of school-related strategic risks in addition to the operational risks; engaging staff and students in discussions on risk and control concepts; and adopting a continuous improvement philosophy.
2. RISK MANAGEMENT PROCESS
The risk management process from the Australian Standard is outlined in Figure 2.1 and elaborated below.
Figure 2.1: Risk Management Process
Adapted from: AS ISO 31000:2018
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2.1 Scope, Context, Criteria
By establishing the scope, context and criteria, the school will be able to articulate its objectives and define the external and internal parameters to be considered when managing risk, as well as set the scope and risk criteria for the remaining process.
The external parameters refer to:
the socio-cultural, political, legal, regulatory, financial, technological, economic, natural and competitive environment, whether international, national, regional or local;
key drivers having an impact on the school; relationships with key external stakeholders.
The internal parameters refer to:
governance, organisational structure, roles and responsibilities; policies, procedures and strategies; resources, training and knowledge; relationships with key internal stakeholders.
2.2 Risk Identification
Identifying risk involves considering what, why, when, where and how things happen.
The goal of the risk identification process is to generate a comprehensive array of risks that may impact on the school. In establishing the context of risks key questions may include:
when, how, why and where are the risks likely to occur, or arise from the activity; what is the consequence should the risk or event occur, consider time and monetary impact; what are the threats and opportunities; what are the significant factors in both the internal and external environment that may affect the outcome; what is the source of the risk, has this occurred before, and how likely is it to eventuate; what is the impact should this occur; what controls are in place to mitigate this risk; and who are the stakeholders?
A range of procedures at ABC SCHOOL are used to identify risks, these include for example:
Discussion and identification of non-physical risks by the ABC SCHOOL Board and Board committees; Identification of risks through discussion at Senior Management Team (SMT) meetings; Safety reports completed by external auditors; Annual review of school policy and procedures; Etc.
A broad range of risks including operational, compliance, financial, reporting, technology, human resource and strategic risks are considered. Table 2.1 sets the risk categories and examples of the key areas of risk identified through the process.
Table 2.1: Risk Categories and Examples
RISK CATEGORY EXAMPLEBusiness continuity • Emergency response
• Crisis management
• Disaster recovery
Brand and reputation • Reputation damage
• Stakeholder communication failure
Bullying and violence • Student bullying
• Staff bullying
• Code of conduct enforcement
Child protection • Failure to embed a child safe culture
• Failure to provide adequate resources to meet objectives
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RISK CATEGORY EXAMPLE
Compliance with legislation and regulation
• NESA Requirements
• ACNC reporting
• Privacy
Educational • Failure to engage students in curriculum
• Student outcomes
Financial position • Financial performance
• Financial management
• Funding
Governance • Failure to develop and maintain a high-performing board
• Poor decision making due to lack of appropriate information
• Inadequate/inappropriate governance processes and practices
Health and safety • WHS
• Duty of care
• Student safety and wellbeing
Human resources • Teaching staff turnover/retention
• Teacher workload and stress
• Non-teaching staff turnover/retention
IT systems and cybersecurity • IT systems failures
• Data breaches
• Technology innovation in education
Misconduct • Inappropriate behaviour
• Fraud or corruption
Operational • Lack of defined policies, processes, procedures or delegations of authority
• Complaints handling
• Audit
Property • Equipment and facilities
• Grounds
• Security
Strategic • Resourcing
• Failure to implement strategic objectives
• Strategic targets and priorities not realistic
2.3 Risk Analysis
Risk analysis involves developing an understanding of the risk and provides an input to risk evaluation and to decisions on whether risks need to be treated, and if so, on the most appropriate risk treatment methods. This analysis can also provide input into the options to address risks and inform the decision making required across different types and levels of risk.
Risk analysis should seek to identify potential causes and sources of risk in order to analyse their consequence and the likelihood that the consequence will occur.
All risks within the school are assessed using a common scale that considers:
the likelihood of a risk eventuating; and the potential consequences if the risk were to occur.
Determining likelihood can be subjective, particularly where data are not available. However, historical data that take into account frequency of exposure and statistical data are often available and can be used to determine whether the likelihood of an event is:
Almost certain Likely Possible
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Unlikely Rare.
The likelihood of the risk occurring is linked to probabilities. The higher the probability; the higher the likelihood. The likelihood rating scale in Table 2.2 has been developed as a tool to assist with the likelihood assessment.
Table 2.2: Likelihood Rating
Likelihood Rating Likelihood Frequency Indicative Probability
Range5 Almost Certain Risk is expected to materialise multiple times
over a 1-year period>95%
4 Likely Risk is expected to materialise once in a 1-year period
75-95%
3 Possible Risk is expected to materialise once in a 1 to 5-year period
25-75%
2 Unlikely Risk is expected to materialise once in a 5 to 25-year period
5-25%
1 Rare Risk is expected to materialise less often than once in a 25-year period
<5%
The impact of the risk event requires an assessment of the highest cost outcome, taking into account ancillary costs as well as direct costs that will be incurred if the risk event takes place. The Board has determined that a ‘material’ risk is one that has the potential, if realised, to:
Adversely affect the interests of students, staff and other stakeholders; or Have a significant impact on the school’s operations, reputation, profitability or net assets.
The Risk Impact Rating scale in Table 2.3 has been developed to assist with quantifying the impact.
The measurement of the consequences that do not have a natural monetary value, for example, reputation loss, need to be determined. The main purpose of placing a value on the consequence is to get a feel for the magnitude of risk and its priority.
Table 2.3: Risk Consequence and Impact Ratings
Impact Rating
Level of Consequence Description
People (Staff, Students,
Volunteers, Contactors)
Operations FinancialEducational/
Academic Outcomes
Reputation
5 Catastrophic Severely impairs the ability of the school to operate as a going concern
• Business failure due to capability failures or death or multiple life-threatening injuries
• Critical system failure, bad advice or ongoing non-compliance
• Operations severely affected
• x% of revenue or
• x % reduction in enrolments
• High (%) reduction in students graduating with an HSC result; serious loss of recognition as leading school in educational delivery; narrowing extra-curricular activity delivery impacting reputation and enrolments
• Regulatory / government intervention
• Impacts organisational viability
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Impact Rating
Level of Consequence Description
People (Staff, Students,
Volunteers, Contactors)
Operations FinancialEducational/
Academic Outcomes
Reputation
4 Major Will have a significant impact on the operations of the school
• Parts of business fail due to capacity/ capability failures or life-threatening injury or multiple serious injuries causing hospitalisation
• Strategies not consistent with organisation’s agenda
• Trends show service is degraded
• Significant and repetitive control failures leading to major impact in business operations
• x% of revenue or
• x % reduction in enrolments
• Material (%) reduction in students graduating with an HSC result; substantial loss of recognition as leading school in educational delivery; narrowing extra-curricular activity showing possible impact on reputation and enrolments
• Intense public, political and media scrutiny
• Significant impact on enrolment base
3 Moderate Requires Principal and SMT intervention to manage and resolve; may consume considerable resources to manage taking attention from day-to-day operations; notification to Board
• Repetitive failure in business capacity/ capabilities causing some reputational impact or serious injury causing hospitalisation or multiple medical treatment cases
• One or more key accountability requirements not met. Inconvenient and disruptive but not threatening to the school as a whole
• x% of revenue or
• x % reduction in enrolments
• Moderate (%) reduction in students graduating with an HSC result; loss of recognition as leading school in educational delivery; narrowing extra-curricular activity
• Adverse capital city media coverage
• Internal disruption some disaffected students / staff / parents or guardians
2 Minor Requires executive-level intervention to manage and resolve; notification to Principal
• Minor capacity/ capability failures or minor injury or first aid treatment case
• Policy procedural rule occasionally not met or services do not fully meet needs
• x% of revenue or
• x % reduction in enrolments
• Small trend showing reduction in students graduating with an HSC result; increasing instability in curriculum and delivery resulting in some parent complaints
• Adverse local media coverage only
• Minor disruptions in business
1 Insignificant Is expected and can be managed through already-approved operations
• Minor irregular capacity / capability failures or injuries or ailments not requiring medical treatment
• Minor errors in systems or processes requiring corrective action, or minor delay without impact on overall business
• x% of revenue or
• x % reduction in enrolments
• Immaterial reduction in students graduating with an HSC result; minor changes in curriculum and delivery expect in line with normal school management
• No adverse media attention
• Expected consequence of conducting business
Risk analysis is undertaken based on the existing status of the risk, with consideration of the controls that may already be in place, identifies the inherent risk (i.e. the risk prior to the implementation of any controls) and residual risk (the risk rating after the application of controls). This common approach to risk rating is necessary to ensure that the most significant risks to the school can be readily identified and prioritised in a way that has the greatest overall benefit to the school.
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The Inherent Risk Rating equals the sum of the Likelihood Rating and the Impact Rating (see Table 2.4).
The Inherent Risk Rating is then classified as per Table 2.4.
Table 2.4: Risk Rating
Risk Rating Classification Required Action
9 to 10 ExtremeAdvise Board and monitoring required by Audit and Risk Committee
7 to 8 HighAdvise Board and monitoring required by Audit and Risk Committee
5 to 6 ModerateRegular monitoring required by Principal and Senior Management
Below 5 LowGeneral monitoring required by staff
The risk matrix in Table 2.5 can be used to combine LIKELIHOOD and CONSEQUENCE to obtain a risk score.
Table 2.5: Risk Analysis Matrix for Determining Level of Risk
CO
NSEQ
UEN
CE
CatastrophicModerate
2
High
3
High
3
Extreme
4
Extreme
4
MajorModerate
2
Moderate
2
High
3
High
3
Extreme
4
Moderate Low
1
Moderate
2
Moderate
2
High
3
High
3
Minor Low
1
Low
1
Moderate
2
Moderate
2
High
3
InsignificantLow
1
Low
1
Low
1
Moderate
2
Moderate
2
Rare Unlikely Possible Likely Almost Certain
LIKELIHOOD
2.4 Evaluate the Risks
The purpose of risk evaluation is to assist in making decisions, based on the outcome of risk analysis, about which risks need treatment and the priority for treatment implementation.
Decisions should take account of the wider context of the risk and include consideration of the school’s risk appetite and tolerances across categories of school activity as well as the actual and perceived consequences to external and internal stakeholders. Legal, regulatory and other requirements may also impact on the evaluation.
The rating of a risk, together with the categories of school activity and the related risk appetite as identified within the ABC SCHOOL Risk Appetite Statement, are used to determine:
The urgency with which action should be undertaken; The nature of the action that is required; The reporting requirements for the risk; How the risk is to be monitored.
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That is, risk evaluation identified those risks where the inherent risk is greater than risk tolerances and therefore where risk treatment is required to further manage the risk.
2.5 Risk Treatment
Controls and mitigating actions are required for all risks. Where risk treatment is required, it involves selecting one or more options for modifying the risk and implementing those options. Risk treatment is required when the residual risks remain unacceptably high, or where there is a desire to bring this risk down, with regard to the school’s risk appetite. Once implemented, treatments provide or modify the controls.
An evaluation of each risk once undertaken determines those risks that are acceptable and those that require further treatment. To treat unacceptable risks, the school may improve existing controls or develop and implement new controls. Controls are mechanisms that modify risk and are designed to address the root cause of risk. They are (typically) policies, processes, procedures, and strategies. Controls are used to calculate the current (controlled) risk level and identify the extent to which controls are modifying the risk.
Risks with a ‘treated risk’ rating of low or medium are deemed to be acceptable and should be managed locally. Those risks with a ‘treated risk’ rating of high or extreme require specific treatment actions and the attention of the Principal or SMT.
Risk treatment involves an iterative process of:
formulating and selecting risk treatment options; planning and implementing risk treatment; assessing the effectiveness of that treatment; deciding whether the remaining risk is acceptable; and if not acceptable, taking further treatment.
Risk treatment options are not necessarily mutually exclusive. Nor may they be appropriate in all circumstances when giving due consideration of current risk appetite. The purpose of this step is to put in place one or more options (controls) to reduce the level of residual risk to a level that is considered acceptable by the school.
Selection of the most appropriate treatment option involves balancing the potential benefits derived in relation to the achievement of the objectives against costs, effort or disadvantages of implementation:
As highlighted in Table 2.6, responses to risk will fall within the categories of risk avoidance, mitigating/reducing, transferring or sharing and acceptance.
Table 2.6: Risk Response Categories
Avoid the riskNot to proceed with the activity or choosing an alternative approach to achieve the same outcome.Aim is risk management, not aversion.
Mitigate
Reduce the likelihood – Improving management controls and procedures.
Reduce the consequence – Putting in place strategies to minimise adverse consequences, e.g. contingency planning, business continuity plans, liability cover in contracts.
Transfer the risk Shifting responsibility for a risk to another party by contract or insurance. Can be transferred as a whole or shared.
Accept the riskControls are deemed appropriate.These must be monitored and contingency plans developed where appropriate.
Table 2.7 sets outs some of the considerations that may need to be determined when deciding what treatment options are appropriate for a given risk.
Table 2.7: Considerations for Treating Risk
TOPIC QUESTIONS
Acceptability Is the option likely to be accepted by relevant stakeholders?
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TOPIC QUESTIONS
Administrative efficiency Is this option easy to implement or will it be neglected because of difficulty of administration or lack of expertise?
Authority Who has the authority to apply this option, e.g. the Principal, the Board?
Compatibility How compatible is the treatment with others that may be adopted?
Continuity of effects Will the effects be continuous or only short term? Will the effects of this option be sustainable? At what cost?
Cost effectiveness Is it cost-effective? (Could the same results be achieved at lower cost by other means?)
Economic and social effects What will be the economic and social impacts of this option?
Effects on the environment What will be the environmental impacts of this option?
Equity Are risks and benefits distributed fairly, e.g. do those responsible for creating the risk pay for its reduction?
Individual freedom Does the option deny any basic rights?
Leverage Will the treatment options lead to additional benefits in other areas?
Objectives Are organisational objectives advanced by this option?
Political acceptability Will it be acceptable to the school community? Is it likely to be endorsed by the relevant government authority, if required?
Regulatory Does the treatment (or lack of treatment) breach any regulatory requirements?
Risk creation Will this treatment introduce new risks or unintended consequences?
Timing Will the beneficial effects be realised quickly?
The next step involves the determination of the expected Residual Impact, that is, the Inherent Impact calculated earlier reduced by the effect of the mitigators which limit the quantum of the impact and / or the probability.
The methodology used to determine the Residual Risk is similar to that used to determine the Inherent Risk. The only difference is that the Likelihood Rating and Impact Rating are determined after consideration of the influence of controls in place to reduce the likelihood and / or consequence.
The Residual Risk is then classified as Extreme, High, Moderate or Low using the scale used for Inherent Risk.
The tolerance for the Residual Risk needs to be determined. Tolerance is the amount that can be foregone each year in respect of the risk. This amount must be aligned with the risk appetite approved by the Board.
For controllable risk, the residual risk would normally be expected to be within tolerance where the effectiveness of the mitigation strategies was assessed as either ‘Acceptable’ or ‘Effective’.
If the Residual Risk is in excess of the tolerance for any risk, an Action Plan (see Appendix 2 for the Risk Treatment Schedule and Action Plan Template) setting out the steps to be taken to reduce the risk to tolerable levels together with a reasonable time frame in which the Action Plan will be implemented must be prepared for management approval.
The controls in place need to be assessed. The criteria for the assessment of mitigation effectiveness is set out in Table 2.8.
Table 2.8: Risk Mitigation Effectiveness
RATING CRITERIA
Ineffective • The design of controls overall, is ineffective in addressing key causes and/or consequences.
• Documentation and/or communication of the controls does not exist (e.g. policies, procedures, etc.).
• The controls are not in operation or have not yet been implemented.
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RATING CRITERIA
Needs Improvement • The design of controls only partially addresses key causes and/or consequences.• Documentation and/or communication of the controls (e.g. policies, procedures, etc.)
are incomplete, unclear or inconsistent. • The controls are not operating consistently and/or effectively and have not been
implemented in full.
Acceptable • The design of controls is largely adequate and effective in addressing key causes and/or consequences.
• The controls (e.g. policies, procedures, etc.) have been formally documented but not proactively communicated to relevant stakeholders.
• The controls are largely operating in a satisfactory manner and are providing some level of assurance.
Effective • The design of controls is adequate and effective in addressing the key causes and/or consequences.
• The controls (e.g. policies, procedures, etc.) have been formally documented and proactively communicated to relevant stakeholders.
• The controls overall, are operating effectively so as to manage the risk.
2.6 Recording and Reporting
Recording and reporting aims to:
Communicate risk management activities and outcomes across the organisation; Provide information for decision making; Improve risk management activities; Assist interaction with stakeholders including those with responsibility and accountability for risk management
activities.
2.6.1 Recording
Recording is important for the following reasons:
it gives integrity to the process and is an important part of good corporate governance; it provides an audit trail and evidence of a structured approach to risk identification and analysis; it provides a record of decisions made which can be used and reviewed in the future; and it provides a record of risk profiles for ABC SCHOOL to continuously monitor.
Key records will include:
Risk Management Policy – Establishes commitment and provides a high-level overview of risk management framework;
Risk Management Framework– Details the risk management framework processes and activities; Risk Register – the key risks and controls for ABC SCHOOL’s activities and processes; Risk Treatment Plans – strategies to treat risk levels higher than acceptable risk tolerances.
2.6.2 Reporting
The risk management process and its outcomes are reported to the Principal, SMT and the Audit and Risk Committee. Outcomes are also made available to staff where appropriate. This assists with decision making, improving risk management and transparency and the monitoring of risks against the school’s stated risk appetite.
Table 2.9 provides an overview of risk reporting at all levels.
Table 2.9: Risk Reporting Matrix
Strategic Risks Operational Risks Responsible to
Board • Ensure that the strategic risk profile is reviewed annually
• Establish, implement and monitor the business plan and objectives
• Review and approve risk information from ARC
• Oversight of all operational risks through the Principal and SMT
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Strategic Risks Operational Risks Responsible to
Audit and Risk Committee (ARC)
• Oversight of all strategic risks – implementation, monitoring, review and approval
• Review annually and monitor adherence to the Risk Management Policy
• Oversight of all operational risks through the Principal and SMT
• Report to Board quarterly on all operational and strategic risks with a high or very high-risk rating
Principal • Action plans and management responsibility allocated for all high and very high-risk areas
• Ensure all risk owners, staff, students and volunteers adhere to the Risk Management Policy
• Report to Risk Management Committee on changes to strategic and operational risk areas quarterly and on any new, changed or re-rated risk as needed
Senior Management Team (SMT)
• Action plans and management responsibility allocated for all high and very high-risk areas
• Responsible for identification, monitoring and reporting of all operational risks
• Report to ARC via Principal on changes to strategic and operational risk areas quarterly and on any new, changed or re-rated risk as needed
Risk Owners • Responsible for identification, monitoring, review and reporting on specific strategic risk area
• Responsible for identification, monitoring, review and reporting on specific risk area
• Report to SMT quarterly• Report on any new,
changed or re-rated risk as needed
2.7 Communication and Consultation
It is essential throughout the risk management process that those involved in managing risk are aware of and understand why particular actions are necessary. Risks may be communicated by written or verbal means. Records of any decisions that arise from communication and consultation activities are kept for future reference and accountability purposes.Communication and consultation related to risk matters occurs at ABC SCHOOL at a number of levels and through a variety of mechanisms. Some of these mechanisms include:
Staff professional learning, e.g. Staff and student consultation, e.g. consultation with students is conducted through the Student Representative
Council Parent/guardian and school community consultation, e.g. information evenings, emails School procedures, e.g. all position descriptions and contracts capture the relevant risk responsibility for each
staff member.
2.8 Monitoring and Review
Few risks remain static. Risks will be continuously monitored and reviewed; and the effectiveness of the controls in place and of the risk treatment plans will be assessed to ensure changing circumstances do not alter risk priorities. Feedback on the implementation and the effectiveness of the Risk Management Framework will be obtained from the risk reporting process, internal audits and other available information.
Risks will be monitored regularly in line with their significance. At minimum, the risk register will be reviewed every six months in line with the school’s planning cycle.
Key Risk Indicators (KRIs) will be developed to monitor risks on an ongoing basis. KRIs are operational in nature and should be determined by the risk owner once risks and their causes have been identified. An example of a KRI might be to monitor the number of student enrolments and determine a certain percentage reduction or change which would alert the accountable person that a potential risk to the school was forming.
KRIs are designed to be predictive in nature and identify changes in emerging risks. They are linked to risk factors that may impact on the achievement of a particular strategy.
Key questions to ask during this stage include:
Are the risk treatments effective in minimising the risks? Are risk treatments comparatively efficient and cost effective in minimising risks? Are the management and accounting controls adequate?
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Do the performance indicators address the key success elements for risk treatment? Are the assumptions, including those made in relation to the environment, technology and resources, still valid? Do the risk treatments comply with legal and regulatory requirements, and school policies? How can improvements be made?
3. RISK REGISTER
The ABC SCHOOL Risk Register is a centralised register of all strategic and operational risks that may have an impact on the school achieving its strategic and operational goals.
In addition to the ABC SCHOOL Risk Register, each unit or functional area is required to compile a risk register and review this register quarterly.
Each direct report to the Principal has responsibility for maintaining risk registers for their areas of responsibilities. The registers are to:
use a system of unique Risk IDs that provide a linkage of risk to the school’s core strategies and functional areas;
list the risks which could cause losses to be incurred and possible causes; determine the likelihood of the risk occurring list the consequences; provide an assessment of the inherent risks; detail the existing risk controls; provide an assessment of the strength of the controls; provide an assessment of the residual risks; detail any action plans to reduce residual risks.
Whenever any functions or systems are developed or changed, or new strategies, products or projects are considered, management is required to carry out a risk appraisal. This review is carried out using the procedures and tools set out in the Risk Management Methodology. The respective risk register is to be updated accordingly and any changes incorporated in the central Risk Register via the POSITION TITLE.
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Appendix 1: Example Risk Register TemplateR
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# The broad categories of risk identified by the school, e.g. financial, compliance, reputational.Each risk identified will be classified into one of the risk categories that define business activity. If a risk has aspects that relate to more than one category, the predominant category is recorded in the Risk Register
This is a brief description of the risk including the cause(s) of the risk in order to develop strategies to mitigate that risk
This is an assessment of how likely the risk is to occur before controls are in place, i.e. “Rare” to “Almost Certain”, based on pre- determined descriptors in the Risk Management Methodology (see Table 2.2)
This is an assessment of how serious the impact would be if the risk occurred, i.e. “Insignificant” to “Catastrophic” – this can be in financial, reputational, etc. terms (see Table 2.3)
A pre-determined scale (matrix) gives an un- controlled risk rating from “Low” to “Extreme” based on these (see Tables 2.4 and 2.5) Likelihood and Consequence assessments
What is being done to reduce the Likelihood and/or Consequences of the risk is shown here and these actions (policies, procedures, reviews, inspections, etc.) should be directed towards the previously identified cause(s) of that risk
The controls in place need to be assessed. The criteria for the assessment of risk mitigation effectiveness is set out in Table 2.8 of the Risk Management Methodology
This is a re- assessment of how likely the risk is to occur now, after controls are in place and their effectiveness is considered (see Table 2.2)
This is a re- assessment of how serious the impact now is, again, after the existing controls are considered (see Table 2.3)
Using the same scale as previously, the “left-over” risk is now rated for acceptability or to indicate that further action is required (see Tables 2.4 and 2.5)
If further action is required (i.e. the level of risk remains unacceptable even after controls are in place), that action is shown here
Who will monitor this risk and its treatment, i.e. who is the risk owner?
Activity time frames; due dates
A1 Child Protection – School culture
There is a risk the school does not develop a culture of child safety
Possible(example only)
Major(example only)
High(example only)
• Implement child safety risk management strategy.
• Adopt and apply risk management procedures to identify, assess, evaluate, treat, monitor, review and report child safety risks.
• Child safety policy and statement of commitment.
• Child safety code of
Acceptable(example only)
Unlikely(example only)
Moderate(example only)
Moderate(example only)
• Inclusion of child safety obligations in staff position descriptions.
• Develop and distribute regular school bulletins containing material related to child safety to inform the school community.
• Conduct periodic reviews of the effectiveness
Principal Ongoing
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conduct.• Adopt
practices to embed an organisational culture of child safety.
• Utilise best practices for child safe organisations.
• Implement human resources practices for child safe organisations.
• Appointment of a child safety officer/champion for the school.
• Child safety a standard discussion item on SMT meetings and all staff meetings.
• Staff, volunteers, visitors and contractors’ induction regarding the school’s current child safety standards and practices.
of the child safety risk management strategies put into practice and, if considered appropriate, revise those strategies.
• The Board will develop strategies to deliver appropriate education about:
- standards of behaviour for students attending the school;
- healthy and respectful relationship;
- resilience; and
- child abuse awareness and prevention.
A2 Child Protection – Non-reporting
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Appendix 2: Risk Treatment Schedule and Action Plan Template
Organisational unit / function / activity: Ref:
Risk: Date of review:
Summary – Recommended response and impact:
Risk rating after treatment:
Action plan1. Proposed actions
2. Resource requirements
3. Responsibilities
4. Timing
5. Reporting and monitoring required
Complier ……………………………………. Date …………………………………….
Reviewer ……………………………………. Date …………………………………….
© The Association of Independent Schools of New South Wales 2020
Governance Resource Manual | Advice for Member Schools 2020
Appendix H: Board Status Report Template (3.9.3.1)
An example of a reporting tool for strategy is to have the principal report to the school board on the success of the major strategic initiatives of the school using a stoplight system; green for on-target, amber for off-target with small difficulties and red for off-target with major difficulties. Such a report should also be accompanied with relevant KPIs and, where the strategy is off-target, a summary of the issues and what is being done to rectify the problem.
CORE STRATEGY STRATEGIC PROGRAM REPORTING PERIOD
1 2 3 4 5 6 7 8
1. [Core strategy name]1.1 [Program name] [Explanation]
1.2 [Program name] [Explanation]
2. [Core strategy name]2.1 [Program name] [Explanation]
2.2 [Program name] [Explanation]
3. [Core strategy name]
3.1 [Program name] [Explanation]
3.2 [Program name] [Explanation]
3.3 [Program name] [Explanation]
3.4 [Program name] [Explanation]
4. [Core strategy name]
4.1 [Program name] [Explanation]
4.2 [Program name] [Explanation]
4.3 [Program name] [Explanation]
Colour Coding
Exceeds target/schedule or complete
Meets target/schedule
Behind target likely to recover/missed target but within tolerance
Behind target unlikely to recover/missed target and outside acceptable tolerance
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Appendix I: Meeting Minutes Template (3.9.3.1)
The minutes of board meetings are:
The written record of the board’s discussion and activities;
Legal documents as well as historical records of school business;
A way to share proceedings with board members and other interested parties who did not attend;
A way to prevent disagreement over recommended actions and board decisions; and
A way to establish that directors have exercised proper care and diligence in their decision-making.
A standard minutes template allows for consistency and makes the job of compiling the minutes much simpler. The following template follows the format of the Meeting Agenda Template in Appendix S on page 70.
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Minutes of the [SCHOOL NAME] Meeting
Held at [LOCATION]
[DATE]
Meeting Open:
Present:
In Attendance:
Apologies:
Minutes of the Previous MeetingThe minutes of the previous meeting were accepted [with/without change]Business Arising from the Minutes[ITEM AND RESOLUTION] Action[ITEM AND RESOLUTION] Action:
Matters for Decision
Annual School Budget Action:[ITEM AND RESOLUTION] Action:[ITEM AND RESOLUTION] Action:Matters for DiscussionPrincipal’s Report and ResolutionFinance Report and Resolution Action:Chair’s Report and Resolution Action:[ITEM AND RESOLUTION] Action:Matters for NotingBudget Adjustment Action:[ITEM AND RESOLUTION] Action:[ITEM AND RESOLUTION] Action:Next Board Meeting Date
Confidential Business
See attachment A
The meeting closed at [TIME]
Signed by the Chair:___________________________ Dated: ___/___/___
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Action List – [MEETING DATE]
Meeting Action Who When Action
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Appendix J: Confidentiality Undertaking (3.9.3.1)
This is not specifically a NESA requirement, but completion of the Confidentiality Undertaking is recognised as good practice.
SAMPLE CONFIDENTIALITY UNDERTAKING
I ___________________ (name) understand that:
1. I am required to give this Undertaking to the School as a condition of my appointment to the Board
2. As a member of the board I may receive confidential information concerning the operations of the School
including:
a. technical and business information relating to operations,
b. existing and/or contemplated services, income, costs, surplus and margin information,
c. finances and financial projections,
d. information about Staff, Parents, Students – past, present and future,
e. marketing and development plans and projections, and
f. current or future school business and facility plans and models,
regardless of whether such information is designated as “confidential information” at the time of its disclosure
(Confidential Information).
I agree and undertake to the School that I will not disclose any Confidential Information that I receive in my capacity as a
Board member except as required in the proper performance of my duties as a Board member or as required by law.
This undertaking will continue after I cease to be a Board member whilst such information continues to be confidential.
Dated: ___________________
Name: ______________________________________
Signature: ______________________________________
Signed in the presence of
Witness
Name: ______________________________________
Signature: ______________________________________
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Appendix K: Conflict of Interest Checklist (3.9.3.2)
In assessing whether you have a conflict of interest it would be helpful to answer the following questions. The test when
assessing the situation is to ask: “Could this conflict with my duties as a Responsible Person at the School?” If you
answer YES to any of the questions below, you may have an actual, reasonably perceived or potential conflict of
interest.
• Would I or anyone associated with me benefit from or be detrimentally affected by my proposed decision or
action?
• Could there be benefits for me that could cast doubt on my objectivity?
• Do I have a current or previous personal, professional or financial relationship or association of any significance
with an interested party?
• Would my reputation or that of a relative, friend or associate stand to be enhanced or damaged because of the
proposed decision or action?
• Do I or a relative, friend or associate of theirs stand to gain or lose financially in some covert or unexpected
way?
• Do I hold any personal or professional views or biases that may lead others to reasonably conclude that I am
not an appropriate person to deal with the matter?
• Have I contributed in a private capacity in any way to the matter my School is dealing with?
• Have I made any promises or commitments in relation to the matter?
• Have I received a benefit or hospitality from someone who stands to gain or lose from my proposed decision or
action?
• Am I a member of an association, club or professional organisation or do I have particular ties and affiliations
with organisations or individuals who stand to gain or lose by my proposed decision or action?
• Could there be any other benefits or factors that could cast doubts on my objectivity?
If the answer to any of these questions is yes or if you still have any doubts about your proposed decision or action, you
should seek direction from the School’s Business Manager or Head.
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Appendix L: Conflict of Interest Declaration (3.9.3.2)
Register of Interests
The Disclosure Statements will be used by the [Company Secretary/Business Manager] to update the Register of
Interests. This Register will formally be tabled at every Board meeting. The School will ensure that declarations of conflict
of interest are retained for at least seven years.
SAMPLE CONFLICT OF INTEREST DECLARATION
This form is to be completed by any Responsible Person who has a real or perceived conflict of interest or a potential
conflict of interest in undertaking their duties. A copy of the completed and signed form is to be retained by [ ].
I, (Insert full name) __________________________________________ of
(Insert address)______________________________________________________________________________
hereby declare I have no conflicts of interest to declare or a conflict of interest considered to be:
Nil
Conflict Real Potential Perceived
Please provide a brief outline of the nature of the conflict if applicable (details may be included privately in a separate
confidential envelope if appropriate).
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
Please detail the arrangements proposed to resolve/manage the conflict if noted above (attach separately if appropriate).
________________________________________________________________________________________________
________________________________________________________________________________________________
________________________________________________________________________________________________
I, (insert full name)…………………………………………………… hereby agree to:
update this disclosure throughout the period of my tenure as a Responsible Person on an annual basis or until
such time as the conflict ceases to exist, or at such a time a conflict arises;
comply with any conditions or restrictions imposed by the School to manage, mitigate or eliminate any actual,
potential or perceived conflict of interest and/or commitment.
Signature.................................................................................................Date……………………………………
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REVIEW BY CHAIR OF BOARD
I, (insert full name) ………………………………………………………. have reviewed the conflict of interest disclosure
(and plan) and have taken the following action in relation to this matter:
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
Signature.................................................................................................Date……………………………………
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Appendix M: Meeting Agenda – Declaration of Interest (3.9.3.2)
The meeting agenda is a simple but highly effective governance tool. Its use is so commonplace and habitual that its
potential to improve the quality of board decision making and governance is often overlooked. A well-constructed
agenda:
focuses attention on strategic priorities
at the same time enables recurring matters of compliance, risk and fiduciary responsibility to be considered
appropriately
manages the flow of information
enables best use of directors’ time
specifies what needs to be done
schedules time for confidential and contentious matters
provides a measure of achievement
sets priorities and allocates appropriate time.
Given the vast range of school matters to consider and limited time, the agenda is a screening process which selects the
most significant matters for discussion and/ or decision. Many school boards have a formal policy about who ‘sets’ the
agenda and determines which matters are to be brought to the Board’s attention. Typically, this occurs between the
Head, the Chair and the Business Manager, although responsibility to prepare the draft agenda usually resides with
whoever acts as the company secretary or its equivalent. Best practice recommends that the person(s) responsible for
the development of the agenda should be determined by a formal policy of the Board and documented in the School’s
Governance Charter.
The following agenda format in Table 1.1 has been used successfully and can be adapted to suit most school board
contexts.
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Table 1.1
Item Inclusions
Meeting details School name
Title Council Meeting Agenda
Date, time and venue
In-camera session (if required)
Meeting opening Apologies
Declaration of conflict of interest
Previous minutes
o confirmation
o matters arising/action list
Matters for decision Major strategic decisions
Routine decisions
Matters for discussion Principal’s report
Finance/Business manager’s report
Forthcoming strategic decisions
Discussion arising from Committee activities
Other matters for discussion
Chair’s update
Presentations by management
Matters for noting Major correspondence
Committee minutes
Common seal if relevant
Revised board calendar
Other matters for noting
Meeting finalisation Review actions to be taken
Decision/ items for communication
Meeting evaluation
Next meeting
Meeting close
Source: Adapted from Kiel G, Nicholson G, Tunny J, & Beck, J., (2012) Directors at Work: A Practical Guide for Boards
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Appendix N: Related Party Transactions (3.9.3.3)
GUIDANCE NOTES IN RESPECT OF RELATED PARTY TRANSACTIONS
New transactions
Where the School proposes to enter into a related party transaction, the following procedure applies:
the relevant responsible officer must inform the [Business Manager/Head (as appropriate for your school)]
about the proposed transaction, including the proposed parties and how they are related, details of the
proposed transaction and where arm’s length terms may be evidenced;
the [Business Manager/Head (as appropriate for your school)] will review the transaction, and consider external
legal advice where appropriate in considering the transaction;
the [Business Manager/Head (as appropriate for your school)] will inform and advise the Board of the proposed
transaction and obtain the Board’s approval for the School to undertake the transaction or approval in respect
of a class of transactions;
a register of all Board approvals in respect of related party transactions shall be maintained under the
supervision of the [Company Secretary/Business Manager/Head (as appropriate for your school)] and it shall
include details of the nature of the transaction, the date of the approval and any key conditions to which the
approval is subject; and
when Board approval is obtained, the transaction must proceed in accordance with any procedures and
conditions outlined by the Board.
Annual review
At the beginning of each year, the [Business Manager/Head (as appropriate for your school)] will write to all responsible
persons as per sample related party transactions disclosure letter.
The register of related party transactions will be updated to reflect these disclosures and submitted for audit by the
School’s auditor.
Retention of records
The School will ensure that records of related party transactions, including the registers and audit reports thereon, are
retained for at least seven years.
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Who is a related party?
For the purposes of these procedures, the following persons are considered related parties of the School:
a. all responsible persons and all members of the School’s Senior Management Team, including their spouses, de facto spouses, parents, children and siblings; and
b. entities controlled by these persons.
A person or entity is also a related party of the School at a particular time if the person or entity:
was a related party at any time within the previous 6 months; or
the entity believes or has reasonable grounds to believe that it is likely to become a related party of the School at any time in the future.
A full definition is set out in Accounting Standard AASB 124.
What is a financial benefit?
The legal definition of the term ‘financial benefit’ is broad. A non-exhaustive list of examples includes:
a. providing finance or property to a related party;
b. buying or leasing an asset from or selling an asset to a related party;
c. supplying or receiving services from the related party;
d. issuing securities or granting options to the related party; and
e. taking up or releasing an obligation of the related party.
A financial benefit includes giving a financial benefit indirectly through an interposed entity and does not require the
payment of money. For the purposes of this Policy, reasonable remuneration within parameters approved by the Board is
excluded from the definition of “financial benefit”.
What makes a transaction “at arm’s length”?
A transaction is at arm’s length if the relevant parties have dealt with each other as parties normally do when they are not
related, so that the outcome of their dealing is a matter of genuine bargaining, and although not necessarily technically
an open market price, the terms are those that might reasonably have been agreed between arm’s length parties.
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SAMPLE RELATED PARTY TRANSACTIONS DISCLOSURE LETTER
Dear < xxx >
As part of the preparation of our Annual Accounts we are required to collate information on transactions between the
School and related parties. This information will potentially require disclosure in the notes to the accounts in accordance
with AASB 124 and the BOSTES requirements. Related parties include directors, senior management and persons
connected to them, e.g. by virtue of family relationship or business partnership. For your further information, a detailed
definition of related parties is set out in AASB 124. Transactions potentially requiring disclosure include:
a. purchases, sales, leases and donations (including donations which are made in furtherance of the School’s
objects) of goods, property, money and other assets such as intellectual property rights to or from the related
party;
b. the supply of services by the related party to the School, and the supply of services by the School to the
related party. Supplying services includes providing the use of goods, property and other assets and finance
arrangements such as making loans and giving guarantees and indemnities; and
c. any other payments and other benefits which are made to directors under express provisions of the governing
document of a School or in fulfilment of objectives.
Please supply details of any such transactions on the pro-forma register attached at Appendix 1 [Sample related party
transactions register] by <date>. If there are no such transactions, please return Appendix 1 marked “nil return”.
In addition to the items disclosed at items (a) to (c) above, we are required to disclose the aggregate amount of expenses
reimbursed to trustees. However, you do not need to supply this information as central records are maintained of these
expenses. [Delete if not applicable].
You do not need to include amounts received by you under your contract of employment with the School. [Include where
this letter is sent to employees].
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SAMPLE RELATED PARTY TRANSACTIONS REGISTER
Name of Responsible Person: Director 1
Item Name of transacting party (if different from above)
Relationship between Responsible Person and transacting party
Description of transaction
Amount of transaction and of any outstanding balances
Date transaction approved by School Board and basis for approval
1. XYZ plc Director 1 is the CEO of XYZ plc
XYZ plc provides daily cleaning service to the School in accordance with the contract dated 20/2/2012
Annual contract
$100,000.
Payments in line with contract and fully up to date.
15/2/2012
The contract was awarded to XYZ following a tender process as outlined in the note to the Board papers for the 15/2/2014 meeting
2. Joe Smith Joe Smith is Director 1’s brother
Joe Smith is Head of the Senior School
Joe Smith is employed as a Band 3 Teacher with a Leadership 4 allowance
15/11/2011
Joe Smith’s employment as Head of Senior School was confirmed following the review as explained in the Board minutes of the 15/11/2011 meeting
3.
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Appendix O: Professional Learning Register (3.9.3.4)
SAMPLE PROFESSIONAL LEARNING REGISTER
YEAR: 2014
NAME ROLE RECORD OF PROFESSIONAL LEARNING COMPLETED 4 HOURS
DATE NATURE OF PL PROVIDER HOURS
Director 1 Chairman 28/2/2016 Governance Workshop AIS 6 ✔
Director 2 Director, Chair of Marketing Sub-Committee 28/2/2016 Governance Workshop AIS 6 ✔
XXX
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Appendix P: Induction of Responsible Persons Register (3.9.3.5)
SAMPLE INDUCTION OF RESPONSIBLE PERSONS REGISTER
NAMEDATE
BECAME RPROLE
QUALIFICATIONS / EXPERIENCE
DATE MEETING
PRINCIPAL AND CHAIR
REC’D GOVERNANCE DOCUMENTS
(When/How)
RECORD OF INDUCTION TRAINING
INDUCTION COMPLETEDDATE PROVIDER NATURE OF
TRAINING
Director 2 28/1/2016 Director, Chair of
Marketing
Sub-Committee
BBus (Marketing) 31/1/2016 X 28/2/2016 AIS Governance
Workshop
✔
XXX ✔
XXX
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Appendix Q: NESA Requirement 3.9 Assurance Statement Template
NESA Requirement 3.9 Assurance Statement
1. GENERAL
ABC SCHOOL must comply with NESA Requirement 3.9 and all relevant legislation and regulations including:
Education Act 1990 (NSW);
Ombudsman Act 1974
Child Protection (Working with Children) Act 2012
Children and Young Persons (Care and Protection) Act 1998
Teacher Accreditation Act 2004
Disability Discrimination Act 1992
Work Health and Safety Act 2011
Environmental Planning and Assessment Act 1979
Food Act 2003
Explosives Act 2003
Building Code of Australia.
The governance of ABC SCHOOL is concerned with the systems and processes that ensure the overall direction, effectiveness, supervision and accountability of the school. Members of the governing body along with the principal are responsible for setting the directions for the school and ensuring that its goals and objectives are met in line with its constitution, and all legal and regulatory requirements governing the operation of the business are met.
The governing body has fulfilled its responsibilities under NESA Requirement 3.9 to ensure these obligations are met and we submit the following representations for SEMESTER/DATE after making appropriate enquiries and according to the best of our knowledge and belief. This statement covers all material items in each of the categories listed above and set out in the Statement of Assurance Checklist at Attachment 1.
2. INTERNAL CONTROLS
We acknowledge our responsibility for the design and implementation of internal controls in relation to NESA Requirement 3.9.
We have maintained proper documentation and have established and maintained adequate policies and procedures to ensure the school is in accordance with its legislative responsibilities including, but not limited to, NESA Requirement 3.9, and relevant legislation and regulations.
4. KEY PERFORMANCE INDICATORS
We have reviewed the board’s chosen key performance indicators in relation to the NESA Requirements and provided commentary as appropriate in the COMPLIANCE DASHBOARD/REPORT presented at each board meeting.
5. RISK MANAGEMENT
We acknowledge our responsibility to identify the risks the school is exposed to in relation to NESA Requirement 3.9 and to measure, assess and develop a prioritised action plan. We confirm that an appropriate framework of controls is in place at ABC SCHOOL.
___________________________
NAME
Board Chair
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___________________________
NAME
Principal
DATE
ATTACHMENTS
Attachment 1: NESA Requirement 3.9 Statement of Assurance Checklist
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Governance Resource Manual | Advice for Member Schools 2020
Attachment 1: NESA Requirement 3.9 Statement of Assurance Checklist
NESA RequirementCompliance
CommentsYes No n/a
NESA Requirement 3.9.1Responsible persons – fit and properThe school has documented policies and procedures in relation to: maintaining information to demonstrate that the school’s ‘responsible
persons’ and governing body have the experience and expertise to administer a school that provides an education for school students
each ‘responsible person’ for the school signing a fit and proper statutory declaration prior to commencing as a ‘responsible person’ for the school and at least on an annual basis while the person continues to be a ‘responsible person’ for the school
maintaining a copy of each ‘responsible persons’ declarations for a period of seven (7) years after ceasing to be a ‘responsible person’ for the school
responding to information suggesting that a ‘responsible person’ for the school may not be fit and proper in order to ensure that the school’s ‘responsible persons’ and governing body are fit and proper at all times
notifying NESA as soon as practicable if the school’s proprietor or a ‘responsible person’ or governing body of the school determines that a ‘responsible person’ or governing body of the school is not fit and proper.
NESA Requirement 3.9.2‘Responsible persons’ and previous refusal or cancellation of registrationThe school has in place processes of notification and disclosure by which it can assure NESA that any refusal or cancellation of registration in relation to a non-government school or proposed non-government school in the past five (5) years has not been largely attributable to the actions of a ‘responsible person’ for a school.
NESA Requirement 3.9.3.1Proper governance – policies and proceduresThe board has in place policies and procedures for the proper governance of the school in relation to: a school charter or document identifying the governance structure of
the school and the respective authority, role and responsibilities of each of the school’s ‘responsible persons’ and any other person or body concerned in the management of the school
a delegations schedule to:• identify the respective authority within the governance structure• describe the process for withdrawing a delegated authority
a document to set out supervisory arrangements and reporting requirements for the school’s ‘responsible persons’ including any governing body and school executive
a code of conduct for the school’s ‘responsible persons’
maintenance of records of governance decisions and actions made by the school’s ‘responsible persons’, on and from 1 September 2014 and retaining such records for a minimum period of seven (7) years before archiving
a document describing the school’s legal compliance process to facilitate the school’s compliance with all relevant legislation and reduce any risk of non-compliance
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Governance Resource Manual | Advice for Member Schools 2020
NESA RequirementCompliance
CommentsYes No n/a
a document describing the school’s risk management framework or plan for developing, implementing and reviewing risk management strategies in relation to strategic direction, governance, operation and finance and the associated risk register
NESA Requirement 3.9.3.2Proper governance – conflict of interestThe board has in place policies and procedures in relation to dealing with conflict of interest including:
an overarching statement defining conflict of interest within the context of the school’s governance structure
documented processes for• an annual declaration by each ‘responsible person’ for the school
in relation to any actual, perceived or potential conflict• maintaining records of the annual declaration of each ‘responsible
person’ for the school on and from 1 September 2014 and retaining such records for a period of seven (7) years before archiving or disposing
• requiring each ‘responsible person’ at formal meetings of the school’s ‘responsible persons’ to raise any actual, perceived or potential conflict with regard to items on the agenda for the meeting and for recording in the minutes of the meeting any conflict that is raised
• each ‘responsible person’ with a conflict of interest (including but not limited to a pecuniary interest or a related party transaction) mitigating the ensuing risk in a way that is acceptable to the other ‘responsible persons’ involved (for example, by absenting themselves from participating in any associated decision-making or advisory role)
NESA Requirement 3.9.3.3Proper governance – related party transactions registerThe board has in place policies and procedures related to related party transactions:
requiring each ‘responsible person’ for the school to disclose any related party transactions made on behalf of the school’s proprietor or governing body
maintaining a register of all related party transactions on and from 1 September 2014 and retaining such records for a period of seven (7) years before archiving or disposing
arranging for an external audit of the school’s register of all related party transactions on an annual basis
retaining a record of each external audit report of the register of all related party transactions on and from 1 September 2014 and retaining such records for a period of seven (7) years before archiving
notifying NESA if the contract or arrangement with the school’s external auditor is terminated by the school or external auditor prior to the expiry of the term of the contract or arrangement and the reason(s) for that termination
NESA Requirement 3.9.3.4Proper governance – professional learning for ‘responsible persons’The board has in place policies and procedures for the ongoing professional learning of the school’s ‘responsible persons’ with specific reference to:
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Governance Resource Manual | Advice for Member Schools 2020
NESA RequirementCompliance
CommentsYes No n/a
the mandatory completion of a minimum twelve hours of professional learning with regard to governance for each ‘responsible persons’ for the school over each three-year period from the time of commencing as a ‘responsible person’; to be delivered by a NESA approved training provider
relevant professional learning for ‘responsible persons’ with responsibilities for areas of governance requiring particular qualifications, skills or expertise, for example in relation to finance, compliance, risk management and/or education, delivered by a NESA approved training provider
maintaining a register of professional learning and training undertaken by each ‘responsible person’ for the school including the following details for each year:• name of ‘responsible person’• role or position of responsibility• professional learning (date, nature, provider and hours)
retaining the register of professional learning on and from 1 September 2014, including relevant records such as evidence of completion of professional learning, and retaining such records and each entry into the register from the date of entry for a minimum period of seven (7) years before archiving or disposing
NESA Requirement 3.9.3.5Proper governance – induction of new ‘responsible persons’The board has in place policies and procedures for the induction of new ‘responsible persons’ with specific reference to: an induction process for new ‘responsible persons’ including, at a
minimum, the mandatory successful completion of a NESA approved training program by a NESA approved training provider in relation to proper governance prior to taking up the role of ‘responsible person’ or within three months of becoming a ‘responsible person’ for the school
a school-based induction program to provide each new ‘responsible person’ with a copy of the following documents• a copy of all the school’s documents, policies and procedures
specified in NESA Requirement 3.9.3.1 and any other key policy document for the school
• the school’s most recent audited financial statements• recent minutes of meetings of the school’s ‘responsible persons’
maintaining evidence that each new ‘responsible person’ has received a copy of all of the documents specified above
maintaining a register of the induction process identifying the following details for each new ‘responsible person’• name• date of becoming a ‘responsible person’ for the school• position of responsibility• details of any qualification and/or experience relevant to the
particular position of responsibility• details of the successful completion of a NESA approved training
program in relation to proper governance (date(s), provider, nature of training)
retaining the register of induction on and from 1 September 2014 and retaining each entry into the register from the date of entry for a minimum period of seven (7) years before archiving or disposing
NESA Requirement 3.9.3.6Proper governance – external independent attestation audit of annual financial statementsThe school’s proprietor is to certify or provide other evidence that the audit and accompanying certificate:
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Governance Resource Manual | Advice for Member Schools 2020
NESA RequirementCompliance
CommentsYes No n/a
have been completed by an auditor recognised by CPA Australia, the Chartered Accountants Australia and New Zealand, the Institute of Public Accountants or another recognised accounting body approved by NESA
comply with any other requirements imposed by Commonwealth or NSW Government agencies providing funding to the school
have not been completed by a person or body with whom the school has another business relationship in addition to audit services or with whom any of the responsible persons of the school has a conflict of interest
The school has a policy and procedures for notifying NESA if the contract or arrangement with the school’s external auditor is terminated by the school or external auditor prior to the expiry of the term of the contract or arrangement and the reason(s) for that termination.The school’s audited and certified annual financial statements in relation to any period on and from 1 September 2014 are to be available for inspection and are to be retained for a minimum period of seven (7) years after the end of the period to which the annual financial statements refer before archiving or disposing.
NESA Requirement 3.9.4Financial viabilityThe school has: evidence to demonstrate the current financial viability of the school in
the form of a certification or warrant by a body or person approved by NESA
policies and procedures to assess the school’s financial viability and notify NESA where required
NESA Requirement 3.9.5Notifications to NESAThe school has documented processes by which each of the following are informed of their responsibilities under the Act, any Regulation under the Act and NESA requirements, including any duties of disclosure or notification: the proprietor of the school, and, if the proprietor is a corporation, each
director, trustee or person concerned in the management of the school,
each member of the governing body of the school, and
the principal
The school has documented processes by which a return is made to NESA if, following an investigation by a relevant agency or authority, the school is formally notified in writing by that agency or authority of an alleged breach by the school of any of the following legislation: Ombudsman Act 1974 Child Protection (Working with Children) Act 2012 Children and Young Persons (Care and Protection) Act 1998 Teacher Accreditation Act 2004 Disability Discrimination Act 1992 Work Health and Safety Act 2011 Environmental Planning and Assessment Act 1979 Food Act 2003 Explosives Act 2003 Building Code of Australia.The school has documented processes by which a return is made to NESA using RANGS Online when changes as specified in NESA Requirement 3.9.5 occur to:
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Governance Resource Manual | Advice for Member Schools 2020
NESA RequirementCompliance
CommentsYes No n/a
management and operation of the school
staffing of the school
curriculum
premises and buildings
boarding facilities
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