1 July 2019, the updated Guidelines to the Minimum Standards and Requirements for School Registration (Guidelines) come into effect.
Some of the changes in the updated Guidelines impact the not-for-profit standard. Here's an overview:
Changes to the not-for-profit requirements for schools under the 2017 Regulations
When the Education and Training Reform Regulations 2017 commenced on 25 June 2017, the not-for-profit requirements were significantly strengthened. The minimum standard now includes an additional requirement that the proprietor of a school must have controls in place to ensure school property and assets are not distributed or used for the profit or gain of another person or entity.
The definition of prohibited agreement or arrangement was also broadened to capture a wider range of transactions. Under the old Regulations, an agreement was only a prohibited agreement or arrangement if it was between a school or the proprietor of a school and a
for-profit entity. Under the new Regulations, an agreement can be a prohibited agreement or arrangement if it is with either
a for-profit or a not-for profit entity.
The new Regulations also clarify that a prohibited agreement or arrangement can exist between a third party and the school, a third party and the proprietor of the school, or between the school and its proprietor.
To help schools prepare for these changes, schools were afforded a period of 1 year to make any necessary adjustments to their arrangements to ensure compliance with the Regulations by 1 July 2018. Schools are reminded that:
- not-for-profit has a particular meaning under the Regulations which is more stringent then the meaning of not-for-profit in the general charity context
- all money and property received by the school or the proprietor of the school, irrespective of its source (for example, donations, government funding, fees), must be applied solely towards the conduct of the school
- loans to third parties or guarantees for the benefit of a third party will likely constitute a prohibited agreement or arrangement, as a loan or provision of a guarantee is made for a purpose unconnected to the conduct of the school. This is irrespective of whether the loan generates interest for the school
- you need to be cautious about entering into related party transactions and managing the conflicts of interest that may arise as a result.
Changes to the Guidelines
For non-government schools, there are new evidence requirements that you must meet to demonstrate compliance with the not-for-profit requirements. These are:
- copies of agreements, contracts or arrangements with third parties, including related entities or any for profit or not-for-profit organisation affiliated with the school
- copies of any loan agreements, guarantees and the like to or from third parties, including related entities and/or affiliated organisations
- details of the related entity and/or affiliated organisation and relationship between the school and that entity (if any agreement or loan is with a related entity or affiliated organisation).
Schools must also have a legally binding written agreement for any loans or arrangements for the delivery of services to the school or to its students.
The new evidence requirements, in addition to the strengthened not-for-profit requirements reflect the increased focus on schools having sufficient controls in place to meet the not-for-profit requirements.
Changes to the Guidelines follow the commencement of the ETR Regulations and extensive consultation with our school stakeholders and education community.
For a copy of the revised Guidelines, see:
For information about other key changes to the Guidelines, see: