The education sector far from immune to the challenges facing business
7 May 2021
While a number of traditionally charitable industry sectors such as aged care and child care have faced increased competition from for-profit businesses, primary and secondary schools have largely remained the domain of the Government and charities.
There is a common misconception that schools run by charities do not encounter the same problems as any other business. However, recent examples demonstrate that challenges facing schools are no different than any other business; including:
Closure of schools due to declining student numbers.
Pricing pressures from changes to Government funding.
Privacy breaches over student information and cyber bullying.
Financial mismanagement by executive staff and Board members.
Resignation of Board members due to potential Goods and Services Tax (GST) liability risks.
Schools have evolved over time from focusing on educating children into integrated service providers to students and the wider community. These days, it’s common for schools to act as accommodation providers to students, staff, and third parties. They often put on community events and provide community facilities and host functions. They can even offer food catering by providing daily meals to students and catering for parents and external functions.
Like commercial businesses, schools need to generate surpluses necessary for future operations such as new or upgraded facilities, while meeting current financial demands such as:
Costs – rising costs in the form of services (e.g. electricity) and staff.
Pricing – what to charge given student demographics, grant funding and rising costs.
Tax – meeting their obligations for GST, Fringe Benefits Tax (FBT), and employment taxes e.g. Superannuation Guarantee Contributions (SGC).
At the same time there are non-financial demands including:
Employees – attraction and retention of quality staff.
IT – balancing connectivity while protecting students and data security.
Reporting – increased transparency (ACNC) to the public.
Governance – compliance with Government regulations.
Recognising the challenging business environment schools are faced with, Findex regularly works with schools to help them meet these business demands. Our experienced specialists can conduct:
Digital analysis for changing student demographics for catchment areas.
Performance consulting reviews for cyber security and recovery planning, governance procedures and Board structures, and budgets and costing models.
Financial guidance through auditing, grants acquittals and impact on new standards.
Advisory services on tax obligations and reviews of employee benefits and packages.
Watch our GST for Education webinar recording
Watch our webinar recording with Crowe Australasia Audit Partner Wicus Wessels and Findex Tax Advisory Partner Mark Reynolds, who help will ensure you are informed on the recent developments and provide an in-depth analysis of the GST issues applicable to schools.