Boards of Trustees: Specific responsibilities

This information gives boards of trustees more detailed information about their responsibilities for the annual audit of their school.

The Auditor-General is the statutory auditor of all state schools under section 14 of the Public Audit Act 2001. The Auditor-General appoints auditors (known as appointed auditors) under section 32 of the Act to carry out the annual audit of the financial statements of all school Boards of Trustees. The following information is provided so that Boards have detailed information about their responsibilities for preparing the financial statements and for financial management and accountability matters.

Note to boards of trustees: We need to make arrangements with you to keep our audit staff safe while they are working at your premises. We expect you to provide a work environment for our audit staff that is without risks to their health and safety. This includes providing adequate lighting and ventilation, suitable desks and chairs, and safety equipment, where required. We also expect you to provide them with all information or training necessary to protect them from any risks they may be exposed to at your premises. This includes advising them of emergency evacuation procedures and how to report any health and safety issues.

Responsibilities for the financial statements

Legislation requires the Board to prepare financial statements that comply with generally accepted accounting practice in New Zealand. The financial statements must fairly reflect the financial position of the Board and the results of the Board's operations and cash flows where required.

The Board must also ensure that any accompanying information in its annual report is consistent with that reported in the audited financial statements.

Legislation also requires the Board to prepare its financial statements and provide them for audit within 90 days of balance date (that is, by 31 March). It is normal practice for the Board to set its own timetable to comply with statutory reporting deadlines.

See also: The appointed auditor's specific responsibilities

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Responsibilities for the accounting records

The Board is responsible for maintaining accounting records that:

  • correctly record and explain the transactions of the Board;
  • enable the Board to monitor the resources, activities, and entities under its control;
  • enable the Board's financial position to be determined with reasonable accuracy at any time;
  • enable the Board to prepare financial statements that comply with legislation (and that allow the financial statements to be readily and properly audited); and
  • are in keeping with the requirements of the Commissioner of Inland Revenue.

See also: The appointed auditor's specific responsibilities

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Responsibilities for accounting and internal control systems

The Board is responsible for establishing and maintaining accounting and internal control systems (appropriate to the size of the Board), supported by written policies and procedures, designed to provide reasonable assurance as to the integrity and reliability of financial reporting.

See also: The appointed auditor's specific responsibilities

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Responsibilities for being effective and efficient, minimising waste, and ensuring that decisions and actions are taken with due regard to probity and financial prudence

The Board should ensure that it meets Parliament's and the public’s expectations that its use of resources and its activities, including entities under its control, are carried out so that they:

  • are effective, meaning the actual effect of an activity meets its objectives and has its intended effect;
  • are efficient, meaning that minimum resources are used to achieve a given quantity and quality of output, or a maximum output is gained with a given quantity and quality of resources;
  • minimise waste, meaning that spending or the use of public money or other public resources are not made in ways that are, or could be, wasteful;
  • have due regard to probity, meaning that decisions and actions are taken in accordance with Parliament’s and the public’s expectations of an appropriate standard of behaviour; and
  • have due regard to financial prudence, meaning that decisions and actions are not taken that commit the Board to a course of action that may be beyond an entity’s means, that may reflect reckless behaviour, or that may reflect an act or omission in bad faith in disregard to their functions.

See also: The appointed auditor's specific responsibilities

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Responsibilities for preventing and detecting fraud and error

The Board is responsible for preventing and detecting fraud and error by applying internal control systems (appropriate to the size of the Board), supported by written policies and procedures.

We expect the Board to consider reporting suspected fraud to the appropriate law enforcement agency, which will decide whether to institute proceedings for a criminal offence. We expect the Board to immediately inform the auditor of any suspected fraud.

See also: The appointed auditor's specific responsibilities

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Responsibilities for compliance with laws and regulations

The Board is responsible for ensuring that it has systems, policies, and procedures (appropriate to the size of the Board) to ensure that all applicable legislative, regulatory, and contractual requirements that apply to the activities and functions of the Board are complied with. Such systems, policies, and procedures should be documented.

See also: The appointed auditor's specific responsibilities

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Responsibilities to establish and maintain appropriate standards of conduct and personal integrity

The Board should, at all times, take all practicable steps to ensure that its members and employees maintain high standards of conduct and personal integrity. The Board should document its expected standards of conduct and personal integrity in a "Code of Conduct" and, where applicable, support these with policies and procedures.

The Board's expected standards of conduct and personal integrity should be determined by reference to accepted "Codes of Conduct" that apply to the school sector.

See also: The appointed auditor's specific responsibilities

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Responsibilities for conflicts of interest and related parties

The Board should have policies and procedures to ensure that its members carry out their duties free from bias. In particular, the Board must comply with the Education Act's requirements for conflicts of interest.

The Board should maintain a full and complete record of related parties and their interests. It is the responsibility of the Board to record and disclose related-party transactions in the financial statements – in keeping with generally accepted accounting practice.

See also: The appointed auditor's specific responsibilities

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Responsibilities for publishing the audited financial statements on a website

The Board is responsible for the electronic presentation of the financial statements on the Board's website. This includes ensuring that there is enough security and controls over information on the website to maintain the integrity of the data presented.

If the Board intends to publish or reproduce the financial statements, together with the audit report, on a website, the Board must, before publication, provide the appointed auditor with a draft version of the documents to read and must obtain the appointed auditor's approval to include the audit report.

If the audit report is reproduced in any medium, the Board should present the complete financial statements, including notes.

If the Board intends to post any new material not previously read by the appointed auditor, the Board must advise the appointed auditor before posting the new material.

See also: The appointed auditor's specific responsibilities

Page last updated: 2 August 2016

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