Schools deal with millions of dollars each year, whether they be Government, Independent or Systemic and they often rely on a high degree of trust from employees and others connected to the school in the management of their finances.
Australian schools are not immune from fraud with a number of instances over recent years including the use of ‘ghost’ employees on the school payroll and the unauthorized transfer of funds into personal bank accounts by staff.
It is absolutely critical that schools have a sound accounting system in place with strong internal controls, to ensure the safeguarding of their assets and in particular cash.
Basic steps for good internal controls include:
multiple cheque signatories
multiple passwords for electronic payment systems
regular reconciliations (especially Bank)
A periodic review of the internal control and accounting procedures either by the school’s auditor or an external party is also encouraged to see if there are areas of potential weakness and to look at operations at a more detailed level. Such reviews not only protect the school, but also those working with finances in it.
It is far better to regularly review and update a school’s financial operations than to wait until a major problem arises and then have to deal with the fallout. No school or organisation can say that it will never happen to them!
This article was written by Resolve and appeared in Directions In Education published by the Australian Council for Educational Leaders.