Transparency

DID YOU KNOW?

Brindabella has repeatedly failed to comply with its regulatory financial reporting obligations to the ACNC and Federal Department of Education. BCEL has been red flagged by the ACNC, the charity regulator, as a 'double defaulter' on multiple occasions. Significant delays in reporting 2019, 2020, 2021 and 2022 audited financials means parents and tax payers cannot see where or how their school fees and commonwealth funds have been spent by the school, nor assure themselves of the schools competency in financial management. A pressing concern, given insolvency claims raised recently at the AAT.

Recent submissions made by the Federal Education Minister to the AAT Final Hearings, at the end of March 2023, revealed BCEL was the only school in Australia not to have submitted its 2021 audited financials at the time! The ACNC Charity Register shows BCC receives a revenue of around $20 million annually of which approximately 45% is commonwealth funding.

Is BCC's lack of transparency, and failure to meet regulatory reporting deadlines, consistent with the Christian virtues of "excellence" and "integrity" BCC boldly claims to be "dedicated in pursuing"? (WISE motto)

Parents, as fee paying service recipients, have rights and options to demand financial transparency from BCC Board Members by sending an email to board@bcc.act.edu.au

To ensure accountability, we recommend you 'cc' the Federal Education Minister: Jason Clare (jason.clare.mp@aph.gov.au) and the ACNC (compliance@acnc.gov.au) Australian Charities and Not-for-Profit Commission in all correspondence with the Board.

Detailed Info

MORE DETAILS

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Four Auditor's in Four Years

Federal

Federal Minister Identifies Concerns Over Use of School Funding

Between 2019 and 2021 an investigation was carried out by the Department of Education (formerly DESE) into Brindabella Christian College (BCC) and its governing entity, Brindabella Christian Education Limited (BCEL), including an independent audit by Bellchambers Barrett.

On the 17 May 2021, as a result of this investigation, the Federal Education Minister made the decision that Brindabella Christian Education Limited (BCEL) was not a fit and proper person to be the Approved Authority for Brindabella Christian College.

Concerns were expressed around the school’s compliance with the Education Act 2013 and issues raised around: BCEL's not for profit status, related party transactions, possible benefits to directors and ongoing financial viability.

As a result of this decision, the Minister varied BCEL’s Approval imposing conditions for BCEL requiring a review and changes to governance arrangements to improve the financial management of BCC, engage an independent review of the school’s financials and report specifically, related party transactions, in the 2020, 2021, 2022 and 2023 financials.

Immediately following this decision, the Directors of BCEL successfully applied for a Review in the Administrative Appeals Tribunal (AAT) and requested a stay (pause) on the conditions. AAT records show a stay was granted on 25 June 2021 pending the results of the Review, which is still ongoing.

AAT Records (BCEL and Minster for Education and Youth [2021] AATA 4629 (25 November 2021) show the Minister expressed specific concerns about whether BCEL/BCC was complying with the Education Act 2013 requirements:

to not conduct the school for profit, pursuant to section 75(3),
be financially viable, pursuant to section 75(4),
be a fit and proper person to be an approved authority for the school, pursuant to section 75(5).

Final hearings were held at the AAT's Canberra Registry for four days from Monday 27 March 2023. We are still awaiting the outcome of this Review.

BCEL

Multiple Undeclared Director Conflicts, Related Party Transactions and Personal Benefit Identified

According to records* and submissions tabled in the Review by the Administrative Appeals Tribunal (AAT), conditions were imposed on BCEL by the Department of Education 17 May 2021 to help BCEL improve its governance and financial management. (* BCEL and Minster for Education and Youth [2021] AATA 4629 (25 November 2021)

Some of these conditions included: a requirement for comprehensive reviews of the school’s financial management and of its governance; record keeping requirements imposed to ensure proper management and disclosure of conflicts of interest; and full disclosure of related party transactions in the 2020, 2021, 2022 and 2023 financials.

The wrong financial reporting:

In 2016, BCEL changed its form of financial reporting from General Purpose Financial Reports to Special Purpose Financial Reports resulting in related party transactions no longer being disclosed.

Bellchambers Barrett, in their 2020 audit commissioned by the Department of Education, report this change coincided with Mr Zwajgenberg becoming Board Chair. Saward Dawson, the schools nominated auditor, is noted in AAT Documents as having previously provided BCEL with advice that "best practice (and important for true and fair) for not-for-profit entities is to disclose signifiant related party transactions". General Purpose Financial Reports provide for such disclosure and transparency.

Risks to stakeholders identified:

AAT records show, the Minister, via the Department of Education, identified concerns around Directors use of school resources for possible personal benefit, or an improper purpose, which could potentially breach Section 75(3).

The Ministers submissions to the AAT Review indicate in early 2020 the Department of Education had sought information from BCEL to "make a full and proper assessment of BCEL's compliance" with the Education Act 2013 and Regulation. However, information subsequently provided by BCEL did "not fully address the departments' concerns around conflicts of interest and related party transactions" triggering a commissioning of Bellchambers Barrett to conduct an independent audit into potential conflicts of interest and related party transactions for the period 2012-2020.

The Bellchambers Audit Report, dated 21 January 2021, identified:

"a range of issues in relation to BCEL's

governance, operational and financial management"

and concluded that their audit observations...

"present ongoing risks to stakeholders of the school

and will require remediation actions, which subject to

legislative authority, should involve increased oversight

by the department to avoid further escalation".

In the interests of transparency, the Association has made request to the AAT for a copy of the full Bellchambers Audit Report, along with subsequent audits carried out by McGrath Nichol and KPMG. As at 14 April 2023 we are still awaiting a response by the Senior Member.

Multiple undeclared director conflicts, related party transactions and personal benefit identified:

AAT Documents made available to the Association reveal, the Bellchambers Audit identified multiple undeclared director conflicts, related party transactions and transactions in which Board members had a material personal interest. Along with consideration for the manner in which these were dealt with by BCEL, the Department decided that:

"BCEL demonstrated that it does not have the

governance arrangements of a fit and proper person".

Consequently, on 12 February 2021 BCEL was "informed of the Departments conclusion that BCEL was not currently compliant with the requirements in Section 75(5) of the Act to be a fit and proper person to be the approved authority for Brindabella" and a proposed decision to "vary BCEL's approval".

The Association can reveal the conflicts, related party transactions and material personal benefits identified primarily concerned:

- numerous transactions between BCC and BCEL Board Chairman Greg Zwajgenberg (and/or a number of his personal companies) over many years and under the oversight of differing BCC Business Managers and differing fellow BCEL Directors; and

- rent arrangements and payments between BCC and Life Unlimited Church where BCEL Director Alyn Doig shares a Directorship with Life Unlimited Church (Life UC), landlord of BCC's Charnwood campus and Director Greg Zwajgenberg has identified Life UC as his local church for the past 33 years, and of which he was founding Director, and signatory to the mortgage when the Charnwood property was purchased by Life UC (formerly Life Projects Pty Ltd).

AAT Documents reveal "BCEL did not accept that the Bellchambers Audit had identified significant issues with its governance and operation and expressed significant misgivings about the audit report".

Further information subsequently provided by BCEL, to support their claims and misgivings, given to the Department was reviewed by Bellchambers on 13 May 2021. However, AAT documents show the Department of Education notes this did not result in any new information or material which would vary the findings of the Bellchambers Audit Report.

Protecting the Interests of the Charity and its Stakeholders

The Federal Education Minister has sought to protect the school and its interests by varying BCEL's approval and imposing conditions which the three BCEL Directors determined to appeal in the Administrative Appeals Tribunal with legal costs alone amounting to almost $300,000 (as indicated by BCEL Lawyers during AAT Final Hearings).

Why are these valuable school resources being diverted away from the classroom to defend poor governance and mismanagement?

On 17 May, 2021 BCEL the Department gave BCEL notice that it was

"not presently complying with the ongoing fit and proper person

requirement under Section 75(5) of the Act and decided to

vary BCEL's approval as an approved authority",

imposing conditions with the intention to ...

"assist BCEL with its governance and financial management

so it may regain its status as a fit and proper person

to be the approved authority for the school".

The Department also determined at the time "BCEL's financial viability risks have substantially increased as a result of its recent capital expenditure and current loan arrangements" with specific reference made to "the fact that BCEL's directors had certified its solvency in BCEL's 2019 audited financial statements and that that had not been qualified by BCEL's auditor".

The Association notes 2021 financials are still unavailable and the 2020 financials contain conditional statements regarding solvency by Saward Dawson, the appointed auditor. These can be viewed on the Charity Register here.

What are related party transactions?

A lack of public transparency around related party transactions can undermine confidence and trust in the school’s leadership and how it is managing school resources.

Related party transactions refer to financial transactions between two parties who have a pre-existing relationship. This could be between two companies under the same ownership or a company and its owners or management. This can be a problem because it can create conflicts of interest and not necessarily be in the best interests of the company or charity.

ASIC and the ACNC provide some examples which demonstrate the potential risk associated with related party transactions and the importance of ensuring that these transactions are conducted fairly and transparently.

ASIC found that a director of a mining company used his position to approve excessive payments to a related company, of which he was also a director. This led to the mining company losing over $6 million in funds.
The ACNC reported that a charity organisation paid its CEO a salary that was significantly higher than what was appropriate for the size of the organisation. The CEO was also involved in a related company that provided services to the charity at inflated prices, resulting in a conflict of interest.
ASIC found that a director of a listed company authorised the purchase of an asset from a related party at an inflated price, resulting in a loss to the company's shareholders.
The ACNC reported that a non-profit organisation entered into a lease agreement with a related party for a property that was not being used, resulting in a significant loss to the organisation.
ASIC found that a director of a financial services company authorised loans to related parties without appropriate security or documentation, resulting in significant losses to the company's shareholders.

In Australia, the Corporations Act 2001 requires companies to disclose related party transactions in their financial reports to make sure everything is fair and above board. This includes details of the nature and extent of the related party relationships and transactions, as well as any outstanding balances or guarantees.

The Act requires that the disclosures be made in a clear and concise manner so that stakeholders (in BCC’s case parents, employees, regulators and the general public as tax payers) can understand the implications of the transactions for the company's financial performance and position.

The Act also requires that any material related party transactions be approved by the board of directors or shareholders BEFORE they are entered into. In some cases, they might need to also obtain an external expert, or additional quotations, to ensure the transaction is at a fair and reasonable value.

The purpose of these requirements is to ensure transparency and accountability in the reporting of related party transactions, and to protect the interests of any shareholders and stakeholders.

The Australian Securities and Investment Commission (ASIC) and the ACNC hold records of current and historical directors of companies and charities for public access and set out requirements for companies under the Corporations Act, which includes charities, such as BCEL.

BCC

BCC Financials Remain Overdue

Contrary to its statutory reporting obligations, Brindabella has failed to produce its financial reports by regulatory due dates for 2019, 2020, 2021 and 2022. This failure rest squarely with the BCEL Board of Directors.

Up until commencement of the AAT Proceedings on 27 March, 2023 both the 2020 and 2021 financials remained more than two years overdue, resulting in the school being red-flagged by the ACNC.

BCC's 2020 audited financials were published on the ACNC Charity Register on 27 March 2003 and report a $3 Million loss. They can be viewed here. We note the Auditor was unable to give a qualified opinion on the 2020 financials due to insufficient information being made available by BCEL Board. The school remains red-flagged by the ACNC.

BCC's 2021 audited financials were also published significantly overdue and report a $2.8 Million loss. They can be viewed here. The auditor Saward Dawson states in his report - "a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern".

BCC's 2022 audited financials due on 30 June 2023 were published 28 September 2023 reporting a $1 Million loss and continuing "material uncertainty" which may cast significant doubt on the company's ability to continue as a going concern. The loan facility with NAB has not been extended beyond September 2024, raising questions around how BCEL will resolve its significant long term debts. The 2022 financials can be viewed here.

Ministerial documents from the AAT Proceedings reveal Brindabella Christian College was the ONLY school in Australia not to have reported its Financial Questionnaire, its Acquittal Statement (how it spent commonwealth and state recurrent funding) or its audited financials for 2021 as at March 2023 AAT Hearings.

The ACNC

To remain registered as a charity with the Australian Charities and Not for Profit Commission (ACNC), Annual Information Statements and Annual Audited Financial Reports must be reported within six months of the end of the reporting period (for schools this on a Calendar Year basis - eg 31 December each year). If a charity fails to submit two or more Annual Information Statements, it risks becoming a 'double defaulter' charity and, as a result, having the ACNC revoke its charity registration.

Under recent legislation administered by the ACNC, there are new special arrangements in place for non-government schools to report which allows for reports submitted to the Department of Education (formerly DESE) to be accepted by the ACNC rather than the school needing to report directly to the ACNC. Where this information hasn't been provided, the ACNC will follow up directly with the school regarding its reporting obligations.

The Association is unclear how the ACNC is addressing BCC's overdue reports and red flagged status. When complaints have been made to the ACNC compliance team about the lack of transparency, accountability concerns, and overdue reporting, the ACNC consistently responds advising they cannot provide any details due to strict privacy and secrecy provisions.

The ACNC Charity Register shows BCC’s 2022 Financial Reports and Information Statement were due 30 June 2023 and are now also Overdue.

The Department of Education

As an Approved Authority under the federal Education Act 2013 and Education Regulations 2013, BCEL has mandatory regulatory reporting obligations which includes Annual Financial Reports, Schools Census Data, My School Data and various compliance reports.

The Education Act 2013 is principally concerned with facilitating commonwealth funding for school education and recurrent funding is paid to a school's Approved Authority. For government schools, the approved authority is the relevant state or territory. For non-government schools, the approved authority is the body corporate approved by the Minister for the school.

Under Section 81 of the Act, if a school fails to meet its obligations as an approved authority under the Act, the Minister may vary or revoke an approved authority’s approval.

BCC's Overdue Financials

According to documents obtained under Freedom of Information Laws, BCC's 2019 financial information was not made publicly available until the ACT Ombudsman intervened, directing their release on 29 October 2021. The ACT Education Directorate had previously refused an FOI request for the information, a decision supported by the College. The Ombudsman overturned this decision, ordering all the financial information requested in the FOI, which included the 2019 financials, be made available to the applicant.

The Association notes evidence from the ACNC Charity Register shows the 2019 financials were finally submitted on 9 November 2021, just 10 days after the Ombudsman’s decision on 29 October 2021.

Records of the original FOI request, Education Directorate’s FOI refusal, BCC’s rationale for opposing release and the Ombudsman’s decision can all be viewed on the ACT Education Directorate’s Disclosure Log FOI 2021-011.

Subsequent requests under Freedom of Information Laws for the 2020 and 2021 financials has revealed these financials do not appear to exist with either the ACT Education Directorate, Ministers Office or the Department of Education.

"School red-flagged by ACNC" reports Riot Act (13 April 21)

BCC's 2020 audited financials finally appeared on the ACNC Charity Register on 27 March 2023, almost two years overdue reports the Canberra Times on 28 March 2023.

Brindabella Christian College made $3 Million loss in 2020 reports The Canberra Times (28 March 2023)

Schools

$1 Million Spent on "Other Expenses"

BCC's 2019 Profit and Loss Statement shows over $1 Million was spent on “Other Expenses”, without providing suitable detail. The Association highlights this is a 50% increase in Other Expenses from costs reported in BCC's 2018 financials.

BCC's 2020 Profit and Loss Statement shows another $1 Million ($953,988) was spent on "Other Expenses" without suitable detail. The Association also notes the school reported a $3 Million loss.

2021 and 2022 financial statements show "Other Expenses" category has increased to around $1,430,000 per annum. What expenses are included in this category?

Recent correspondence to the BCEL Board to please explain, has been ignored.

Parents have options to demand transparency and accountability from the Board. Write to them directly at board@bcc.act.edu.au. If the Board is unresponsive, parents can seek intervention from the Federal Education Minister Jason Clare , ACT Education Minister Yvette Berry and the Australian Charities and Not-for-profits Commission (ACNC) or push for constitutional reform.

The Association lacks confidence in the former approach and invites all BCC stakeholders to join them in pursuing the latter. Become a member of CCR@BCC to help us seek lasting change where the school and our children’s needs are put first.

ACT Ombudsman

ACT Ombudsman Intervention Required to Direct the Release of BCC's 2019 Financials

According to documents obtained under Freedom of Information Laws, Brindabella’s 2019 financial statements were not made publicly available until the ACT Ombudsman intervened and directed their public release following an initial FOI refusal.

At of the time of the Ombudsman’s intervention, the school was almost two years late in submitting its 2019 audited financial reports to the ACNC and media reports indicated unrest and uncertainty concerning student number reporting discrepancies and financial viability concerns at a regulatory level.

Relevant Sources

"Brindabella Under Investigation" The Canberra Times (28 Oct 19)

Federal Minister tells Brindabella he's looking closely Riot Act (30 March 20)

Investigation into Financial Viability of BCC Dropped Due to Covid 19 The Canberra Times (2 October 20)

Documents Show Reporting Discrepancy Dropping Enrolments at BCC Riot Act (4 January 21)

The FOI Request

In an effort to gain transparency regarding the schools financial standing, a Freedom of Information request was made to the ACT Education Directorate on July 5, 2021 seeking: “Documents related to Brindabella Christian Education Limited, trading as Brindabella Christian College, specifically:

1. Annual Financial Reports and Statements provided to the Education Directorate since 1 January 2019.

2. Any explanatory notes or additional correspondence between the Directorate and College (or its

representatives) regarding point 1.” The Directorate’s FOI Team identified three documents being:
- Deed of Grant - ACT Non-Government School Grants - 2015-2020 between BCEL and the Directorate,

signed 25 September 2015
- BCEL Financial Statement 2019
- Deed of Grant - ACT Non-Government School Grants - 2020-2025 between BCEL and the Directorate,

signed 16 September 2020.

However, the Education Directorate FOI Team refused access to all documents. Under Section 73 of the FOI Act, the applicant sought a review of this decision by the ACT Ombudsman.

The ACT Ombudsman Review

Brindabella and the Education Directorate opposed the release of the documents on the basis of commercial in-confidence information, however the Ombudsman overturned this decision and ordered the three documents, which included the 2019 financials, be made available to the applicant on the basis that “the oversight of expenditure of public funds remains relevant after funds are spent for the purposes of government transparency and accountability”. The College’s “Financial Reports are prepared in the knowledge they are routinely and mandatorily published.”

She did NOT accept “the contention that disclosing information at issue (BCEL financials) could reasonably be expected to prejudice Brindabella Christian College’s business affairs” (para 37).

In making her decision to set aside the previous decision, the Ombudsman identified two factors favouring disclosure of the financial information would:

- Contribute to positive and informed debate on important issues or matters of public interest

- Ensure effective oversight of expenditure of public funds EDU FOI 2021-011 on the Directorates Disclosure

Log, “BL and Education Directorate [2021] ACTOFOI 13 (29 October 2021)” reveals the Ombudsman upholds

the importance of public transparency and accountability:

27. “Transparency about the financial affairs of schools does contribute to positive and informed debate on the education of children, which is a matter of considerable public interest. The information at issue, which concerns the finances of Brindabella Christian College and terms agreed on with the ACT Government, could reasonably be expected to promote this factor to a significant extent“.

30. “Brindabella Christian College receives funding from the ACT Government. The information at issue could reasonably be expected to ensure effective oversight of this expenditure by revealing the terms on which the ACT Government agreed to grant funding to Brindabella Christian College between 2015-2020 and 2020-2025 and financial information about Brindabella Christian College which is routinely published on the Australian Charities and Not- for-Profits Commission web page".

Publishing financials onto the ACNC Register

The Association observes the ACNC Charity Register shows BCC’s 2019 audited financials were submitted on 9 November 2021, just 10 days after the Ombudsman’s decision on 29 October 2021, almost two years overdue.

Subsequent attempts under FOI Laws to obtain BCC's financials for subsequent years have all been unsuccessful with no such documents held by government regulators, as recently as end 2022.

Financial Viability

Financial Uncertaintity

Letters seen by the Association, and media reports, show parents both individually and collectively (through the P&F’s and parent groups such as “Parents for BCC”) have been requesting transparency around Brindabella Christian College's governance and financial management since 2015.

"BCC Parents and Staff Raise Governance Concerns" reports The Canberra Times (30 Nov 17)
"BCC Slates Review as Parents Raise Governance Concerns" reports The Canberra Times (3 Sept 15)

There has growing public interest in the school's governance and financial management since then, reflect in over 30 news articles published on the topic with concerns also raised around transparency more formally from the Australian Education Union, an Independent Charity Reviewer, and more recently ACT Government and the Federal Education Minister.

The schools most recent publicly available financials (2019) are out of date and largely irrelevant for gauging its current financial situation, being three years old. However, they do show around 45% of the school's annual revenue comes from government funds (ACNC 2019 BCC financial reports), public monies deserving of transparency through publicly available and timely reporting.

Documents obtained under Freedom of Information shows the schools expansion activities, its significant capital works and significant student departures has raised concerns for the ACT Education Minister Berry on a number of occasions and as early as the school’s re-registration in 2018.

Overdue Financial Reports and a Long History of Identified 'Financial Viability' Concerns:

2018 Financial Viability Concerns

At the point of five yearly re-registration in 2018, the school's financial viability was independently assessed under directions from ACT Education Minister Yvette Berry on 23 October 2018 (Doc 15 EDU FOI 2020-014) The Minister requested a “high level analysis” around the independent assessment in light of “expansion activities and significant capital works”.

The assessment stated financial viability

“is dependent on the continued receipt of government grants” and “based on assumptions in the business plan including higher than projected salary inflation and no change to the low student to teacher ratio (11- 2 at Dec 2017), the school maintained adequate financial capacity to withstand these cost impacts (capital works program) and continue operations”.

Further, the assessor notes

“capital expenditure is relatively discretionary works can be deferred if the school encounters financial pressures that may jeopardise its financial viability” and “expansion works undertaken to date allow for increased student numbers, which in turn will generate greater revenues (and expenditure) for the school”.

Whilst the school was found to be financially viable in the short to medium term, the Association observes student projections provided by the school at re-registration in 2018, have still not been reached in 2023.

2019 Financial Viability Concerns

Concerns were raised by parents and staff to ACT Education Minister Berry, and by the Education Directorate itself, around significant student departures and high losses of teachers and staff in 2019.

An Authorised Persons Audit was subsequently carried out by the Education Directorate identifying significant student number reporting discrepancies (as much as 41%) which triggered another reassessment of the school's financial viability and compliance with its conditions of Registration. (EDU FOI 2020-010 Doc 71, 94, 96).

Education Directorate documents obtained under FOI Laws reveal the Minister agreed to support the Education Directorate in requesting BCC demonstrate their compliance with the Education Act and their conditions of Registration by providing a detailed business plan for the remainder of the schools current registration period outlining “how the school intends to remain financially viable in light of the significant student departures that have and will occur in 2019.”

The school responded to the Ministerial request, declining to provide transparency around its financials, providing a fully redacted five year business plan only showing student number projections. (EDU FOI 2020-010 Doc 122).

Further investigation into the school’s financial viability was subsequently paused until the schools next re-registration (2023) due to the disruptions caused by Covid 19. It is unclear what action the Minister is taking this year in regards the schools regulatory obligation to be financial viable.

"Investigation into Financial Viability Dropped" reports The Canberra Times

The degree of public interest in BCC at the time caused Business by The Book, a registered charity that provides independent reviews of Christian charities to help donors and others make their decisions, to a look at BCC’s Financial Report. The reviewer, Ted Sherwood submitted a list of questions to the Board. These, along with the fact the Board did not respond, were subsequently published on the Business by The Book website.

2020 and 2021 Financial Viability Concerns

Media reports indicate ACT Education Minister, Yvette Berry requested the involvement of the Federal Education Minister urging “the minister to ensure the Department of Education, Skills and Employment exercises its oversight of the school's compliance with governance and management obligations under federal laws.” Riot Act 7 Oct 2020.

As a result of the Federal Ministers investigation, records held by the Administrative Appeals Tribunal (BCEL and Minster for Education and Youth [2021] AATA 4629 (25 November 2021) reveal BCEL was found not to be a fit and proper person as the Approved Authority for Brindabella Christian College (17 May 2021) and conditions were imposed requiring change in governance arrangements and improved financial management.

AAT records show the Ministers delegate

“also expressed concerns as to whether the applicant continues to meet the financial viability requirement to be an approved authority. However, at the time the decision was made, there was not sufficient evidence available to determine whether the applicant was non-compliant.”

BCEL immediately lodged a request with the Administrative Appeals Tribunal (AAT) for Review of the Ministers decision and was successful in obtaining a "stay" on the Ministers decision, pausing conditions until the Review is completed.

The review is still ongoing with final hearings due to commence on 27 March 2023 at the Canberra Registry (Case # 2021/3753).

"BCC has Failed to Submit its 2019 Financials" reports The Canberra Times (13 April 21)

Debt to Student Rato

BCC's Current Debt per Student Ratio

A significant increase in debt over recent years without a correlating increase in enrolments (its revenue source) has raised serious concerns for the ongoing viability of the school.

A 'debt per student ratio' comparison (below) across other ACT schools is perhaps helpful for understanding the unique situation Brindabella currently faces and why its immediate solvency is of significant concern.

AAT Documents indicate McGrath Nichol, commissioned by the Minister for the AAT proceedings, also took into consideration the schools debt to student ratio during their audit, noting it had increased from $252 per student in 2016 to $19,387 per student.

BCC's debt largely correlates with the decision to engage in significant capital works and expansion activities, including the Charnwood campus over recent years. The Association observes the schools current enrolments (it's revenue source) are yet to meet its enrolment peak in 2019, and yet to meet enrolment projections provided by the Board to the Education Ministers.

The NSW Education Standards Authority's Financial Viability Framework provides that a debt per student ratio over $15,000 indicates a high financial viability risk.

The image above shows a table provided in submissions by BCEL (the applicant) to the AAT on 2nd February 2023 likewise showing the increase in the debt per student ratios and reported annual losses as well as its anticipated future financial position.

Generally speaking, schools with high levels of student debt may be more financially vulnerable, as they may have to use a larger percentage of their resources to service debt rather than investing in academic programs and other initiatives. By keeping the debt-to-student ratio low, schools can maintain financial stability and invest in their future.

Current debt is any debt that needs to be paid in the next twelve months (it’d be like you have to pay your entire home loan back in the next year!).

According to Brindabella's financials at the end of 2019, the school was due to repay $14,877,924 in bank loans in the following twelve months. That would be like paying two thirds of the money it received in 2019 to the bank. However, at the end of 2020, audited financials show borrowings remained at $14,312,514 and Total Current Liabilities had increased to just under $19 Million with ongoing servicing of loan facilities now noted at risk and a current debt to the ATO as at 24 March 2023 also reported as $4.8 Million.

A lack of any audited financials for 2021 or 2022 means the true extent of BCC's debt, and its solvency, remains unclear.

Inadequate

Inadequate Reporting and Lack of Authentic Parent Engagement

No BCC Annual Reports

Contrary to requirements under Section 80 of the Territory's Education Act 2004, and unlike most other non-government schools across Canberra, Brindabella has not published any Annual Reports since 2019.

Section 80 requires “the principal of the school to make available to parents of students at the school and to the staff and students of the school, information about the school’s educational programs, policies and the operations of the school”. The school previously also reported information around its operations in its College Year Books, however these have not been produced either since 2019.

The absence of Annual Reports can be an issue for parents because these reports provide important information about their child's learning environment and the overall performance of the school. Without these reports, parents may not have a clear understanding of how the school is being governed and by whom or how the school is performing overall.

Annual school reports typically include information about the school's curriculum, teaching methods, academic standards, student achievement data, and any special programs or initiatives the school has implemented. This information can be helpful for parents in determining if the school is the right fit for their child and if they are receiving a quality education.

Additionally, annual school reports can also provide transparency and accountability for the school. By making this information publicly available, parents and the wider community can hold the school accountable for its performance and ensure that it is meeting the expectations and standards set by education authorities.

The lack of regular Annual School Reports is compounded by a lack of Financial Reports submitted to the ACNC.

No Functioning Parents & Friends (P&F) Group

The absence of a functioning P&F at Brindabella since 2019 likewise limits the ability of parents to participate in decisions that impact them or their children and means there is no mechanism for collective representation of parent’s issues and concerns to the school leadership or Board.

BCC introduced a new Code of Conduct for Parents, Carers and Visitors introducing a broad range of new measures which allow the school to regulate parent interactions and communications. Any breaches being at the sole discretion of BCC.

The Code of Conduct states

"Serious breaches of the Parent, Carer and Visitor Code of Conduct may result in the annulment of the enrolment contract" (exclusion of your child from the school).

BCC Code of Conduct for Parents

Four

Four Auditors in Four Years

Frequent changes in Auditor's is highly unusual.

ASIC Records and BCC’s financial reports to the ACNC show the following Auditor appointments:

2014) Thomas Davis & Co – JG Ryan
2015) No Financial Reports
2016) Nexia Australia & Nexia Duesbury
2017) Nexia Australia – GJ Murphy
2018) KS Black & Co – Scott Bennison
2019) Saward Dawson
2020) Saward Dawson
2021) Unaudited
2022) Unknown
2023) Unknown

Ask BCC's Board (board@bcc.act.edu.au) why four different auditors?

Independent Audited Accounts by a professional body are a requirement of ACNC for large charities and a requirement as an Approved Authority to receive commonwealth funding from the Department of Education. Independently audited accounts by a professional body are essential to ensure confidence and trust is maintained around the proper use of commonwealth funds and in a charities financial operations.