Auditor finds schools close to 'tipping point' due to budget pressures

He made the comments in a new report on the financial health of schools that examined the extent to which schools have been able to manage within their delegated budget for the period 2012/13 to 2016/17 and whether schools’ surpluses or deficits are within the limits set by the Education Authority.

Mr. Donnelly said: “This report indicates an environment where there is pressure on school budgets, increasing pupil numbers and schools with sustainability issues. Therefore, it is clear the system is coming close to a tipping point and action needs to be taken as a matter of urgency.”

Among his findings were that between 2013 and 2017 the number of Controlled and Maintained schools in the North with a surplus fell from 856 to 711 whilst the number with a deficit increased from 197 to 315.

He found that schools with both surpluses and deficits were breaching Education Authority rules that state that overspends and underspends must not exceed five per cent of a schools delegated budget or £75,000, whichever is the lesser.

Almost 46 per cent of Controlled and Maintained schools in the North had accumulated surpluses in excess of the Education Authority’s prescribed thresholds at March 31, 2017.

The largest surplus at March 31, 2017 of circa £1.0 million was at a post primary school. The largest surplus at a primary school was circa £0.5 million.

Sixteen per cent of Controlled and Maintained schools had accumulated deficits in excess of the Education Authority’s prescribed thresholds at March 31, 2017.

Seven post-primary schools had a deficit in excess of £1 million at March 31, 2017. Only one school of the seven had more than 500 pupils, which is the minimum post-primary enrolment threshold in the Department’s Policy for Sustainable Schools as recommended by the Bain Review.

The largest deficit at a post-primary school was circa £1.6 million. The largest deficit at a primary school was circa £0.4 million.

Mr. Donnelly said: “The Department of Education and the Education Authority need to undertake a fundamental review of how schools are funded as well as ensuring the implementation of recommendations made by the Public Accounts Committee in its report on the Sustainability of Schools.”

Mr. Donnelly added: “The Department of Education and the Education Authority also need to ensure appropriate and effective interventions are developed and applied to reduce the risk of mismanagement of delegated budgets as well as ensuring mechanisms are in place to strengthen financial management in schools."