There may be times when SCEA staff in schools ask the question: ‘How is the SCEA Office funded?’ and ‘How does the SCEA system differ from ‘standalone’ schools?‘
This can even lead to staff jumping to the conclusion that the SCEA Office withholds Nationally Consistent Collection of Data (NCCD) funding, which is received by schools to support students with disabilities.
As part of our commitment to transparency and humility, the information below seeks to clarify the funding model for the SCEA Office and the SCEA schools that we work in.
SCEA receives funding from three major sources:
- the WA State Government,
- the Federal Government,
- and tuition fees from parents
From the WA State Government, all independent schools receive what is called ‘per-capita’ funding, which is an amount per student enrolled in a school. In addition to this, some specific purpose grants are also received (e.g. Universal Access to support Kindergarten Programs). Similarly, SCEA receives from the Federal Government ‘per-capita’ funding and additional payments made to support students with disabilities (e.g. NCCD), some of which is administered by the Association of Independent Schools of WA (AISWA).
When school systems like SCEA receive their funding, the way it is distributed to schools varies. In our case, each school receives 100% of their funding entitlements, and these are distributed to schools – however, with the Commonwealth funding that is in transition to a new Gonski-based funding model, some adjustments are required prior to distribution to ensure all of our schools receive an equitable portion. In each school’s financial accounts, 100% of the full funding allocated is shown, and there are amounts that are set aside to pay for the ‘shared services’ provided by the SCEA Head Office and ICT team – these are referred to as ‘levies’. In each school account, reference is made to the ICT and ADM levies – below are details of the value of each of these levies for the 2021 calendar year and what services are provided.
In 2021, this levy represented 3.83% of the total income received from the funding sources described above. 50% of this contribution received from schools via the levy covers the salary costs of the ICT staff working on our school sites and the SCEA Head Office. The remaining 50% covers:
- The costs of the hardware infrastructure across schools and in the SCEA Office (servers, telephone systems, wireless routers, backup systems, internet services).
- Software Licensing for all schools and the SCEA Office (e.g. Microsoft, TASS, Adobe, etc).
The costs associated with the provision of ICT services across our schools has been benchmarked against industry standards, and there is a high degree of confidence that this is very reasonable. One of the benefits we derive as a system is the capacity to take advantage of our group purchasing capacity. It must also be noted that in many areas, each school is able to determine what level of provision they require. For example, schools determine their own software needs and the relevant costs are then apportioned to them. In reality, the ICT Levy will vary between schools because of their capacity to make these decisions. However, the value of this levy, when aggregated across our schools in 2021, was the equivalent of 3.83% of the total income received.
In 2021 this levy represented 3.55% of the total funding received. This levy covers the cost of services provided by the SCEA Head Office (excluding the salary of the ICT staff).
The ADM Levy covers the costs of:
- Payroll services
- Financial support services including:
- audit and related costs
- lending and debt management
- Human Resource services
- Education Support Services
- Marketing Support Services
- Governance and leadership
Like the ICT levy, there is great confidence that when benchmarked against similar systems operating across Australia, the rate of this levy is very reasonable.
There are also benefits that we gain in this area by operating as a system. Take, for example, audit fees. If each of our schools was operating in isolation, the cost of auditing would be around $20k per school, which would represent a total cost for our seven schools of $140k. SCEA currently pays $40k for our audit because we operate one single set of financials for all of our schools, a net saving of $100k for the benefit of all.
We currently already enjoy the financial benefit of centralised negotiated items for electricity, internet and telephone services, printing, insurance, etc. There is no doubt that there are further savings that can be made in the area of procurement as we increasingly embrace our capacity to operate interdependently.
Capital funding and debt management
The only other funds administered by the SCEA Office are associated with major capital funding. We know that healthy schools and sustainable school systems generate what is called an ‘operating margin’ that covers the cost of interest payments on loans and investment in capital items (i.e. building refurbishments, new facilities etc.). The industry standard is generally 15% of the income generated. For the past five years, SCEA has not been achieving this percentage, but we have put in place transitional targets that, over time, will allow us to reach it.
When new staff begin at SCEA and ask the questions: ‘How is the SCEA Office funded?’ and ‘How does the SCEA system differ from ‘standalone’ schools?‘, you can now answer the question with a level of clarity and confidence. Let us continue to strive for clarity, transparency and unity in all that we do in our schools in order to be good stewards of what God has given us to educate young people in our care.
If you have any questions about the figures or structures in this article, feel free to send an email to firstname.lastname@example.org