27 Jul 2017

School property funding needs overhaul - Auditor-General

9:08 pm on 27 July 2017

School property funding worth $270 million a year is not going to the schools that need it most and should be overhauled, the Auditor-General's office says.


Classroom Photo: 123RF

A report published today said the money for annual maintenance and long-term property renewal was allocated to schools on the basis of their size, rather than the condition of their buildings.

"This means that this part of the Ministry's property funding does not target those schools with assets that are most in need of investment. This is in direct conflict with the aims of good asset management at a portfolio level," the report said.

It said the system favoured big, modern schools, but smaller schools with low rolls often needed the most help with their property.

"We recommend that the Ministry of Education consider the way annual maintenance and renewal funding is allocated to schools so that it responds better to different property types, age, condition, and purpose of buildings," the report said.

The report said the ministry did not know whether schools were spending their annual maintenance funding wisely or getting value for money.

It recommended the ministry identified schools that were failing to maintain their property correctly, find out why, and intervene.

"Some schools believe that it is unfair that schools that have failed to use their funding wisely get national programme interventions to fix their property issues."

It said many school buildings were constructed in the 1950s and 1970s and were reaching a point where they needed a lot of maintenance.

"Many of the properties that are 30-40 years old are in a tired state, and many buildings constructed between 1994 and 2004 have been significantly affected by weathertightness problems," the report said.

It said capital spending on school property was peaking at over $900 million in 2017-18 and would continue at more than $600 million per year for the next four years.

The report said the ministry's target was for all schools to run at between 75-105 percent of their classroom capacity, but currently only 62 percent of schools fell within that range.

It said there was a shortage of 460 classrooms at the middle of last year, down from 660 in December 2014, and there were 4760 surplus classrooms.

The report said the ministry's property management had improved a lot since 2006, but there was room for improvement.

"Given the significance of the school property portfolio, in terms of its value to the Crown and its importance to the day-to-day operations of schools, we expected the property function to be integral to the Ministry's operations. Instead, property is not well integrated with other parts of the Ministry," it said.

The report said the ministry relied too much on local staff to make business cases for ministry-funded building programmes and instead should use its "whole-of-portfolio view" of property condition for decision-making.

The ministry's chief executive, Iona Holsted, said it would consider the report's recommendations.

She said the ministry had improved its property management capability and made progress against all the recommendations from the Auditor General's last audit in 2006.

"It's pleasing to see that the Auditor General's report records that, in the last five years, we have worked actively to ensure that management of school property supports the best possible education outcomes for students," Ms Holsted said.