Schools need to be aware of financial dishonesty

Media Release

Schools need to be aware of financial dishonesty

The New Zealand School Trustees Association is urging schools to be vigilant of financial dishonesty and fraud.

Schools need good checks and balances to keep them safe, says the association’s Graham Henricksen.

A trustee himself, Graham Henricksen says schools operate on trust and though financial dishonesty and fraud aren’t common, it does occur and steps should be taken to help prevent it from happening.

“As much as the money involved, the way it occurs and the damage it does from a trust perspective is where the harm lies. It’s a particularly disruptive act to happen to a school, and the impact on the culture of the school can be very significant.”

Mr Henricksen will talk about ways to reduce the risk of fraud in schools at the annual New Zealand School Trustees Association conference being held at the Skycity Auckland Convention Centre from July 3-5.

One of the most important things schools can do is to have well documented procedures for the handling and management of school finances.

“There are lots of simple things you can do - monitor spending against budgets, test that the rules and systems are actually being followed and investigate anything that looks odd.”

Recent court cases involving fraud in schools in Huntly and Rotorua have highlighted the issue.

Mr Henricksen says that given the current economic climate, which could lead to a potential increase in temptation, now is a good time for schools to review their systems to ensure they are not vulnerable.

He says investigating financial dishonesty and fraud runs a fine line between trust and protecting the school from the misuse of funds.

“Schools, by their very nature and learning culture, operate on trust. Financial dishonesty and fraud in them is a rare occurrence, but by the same token we do have to ask the right questions and have the systems in place to be able to prevent it from happening.”

Like many other organisations, there are a large number of cash transactions in schools, such as lunch money or payments for school trips, and this can sometimes lead to temptation, says Mr Henricksen.

He says there is the potential in schools for dishonest people to divert funds and schools should acknowledge this and think about how they can best mange it.

“The vast majority of people working in schools are totally trustworthy and are working towards the common aim of the students’ education. However, as in any organisation, there may be an unscrupulous element that needs to be guarded against.”

Mr Henricksen says you can never make your school absolutely watertight but a small investment of time in making sure you have sound financial procedures can pay off in minimising the likelihood of the students’ education being harmed by financial dishonesty.

The School Trustees Association conference will attract more than 650 trustees from all over the country. It is based on the theme Effective governance: no excuses, no exceptions, high expectations.

ENDS

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