Capital works — state integrated schools
Proprietors of state-integrated schools own or lease their school property and are responsible for capital works.
Capital works responsibilities
Proprietors can't contract out of this responsibility to boards of trustees, as they're agents of the Crown for property purposes.
Even if board funds are used to create capital works assets, those assets belong to the proprietor. The assets won't be eligible for integration and the board will be responsible for ongoing maintenance.
Boards can undertake capital works with the proprietor's and Ministry of Education's approval. However, it's important to follow the correct process when boards undertake and fund capital works on land owned by the proprietor, and that both parties understand the consequences.
Fundraising for capital works
Boards can fundraise on behalf of their proprietor for capital works but must make the purpose of that fundraising clear to their school community.
Funds raised should be credited directly into the proprietor’s accounts. However, the board may bank the funds and then transfer them to the proprietor along with attendance dues. The board must keep detailed records of these transactions and ensure that attendance dues and fundraised amounts are clearly distinguishable.
Applying to use board funds for capital works
If your board wants to use any of its own funds (including locally raised funds) for capital works, you must get the Ministry of Education's approval first. Here’s what you need to do.
First, you need to obtain the proprietor's written approval as owner. The proprietor may decline if, for example, capital works of this nature aren't included in the integration agreement.
Contact the Ministry of Education's local office with written confirmation that:
- the board won't exceed the borrowing limits (annual repayments of capital and interest must be within 10% of its annual operating grant) if it plans to borrow money for the capital works
- the purchase and operating costs of the capital works asset(s) will be met by the board without disadvantaging the school's operation
- the capital works won't negatively impact on the school,; for example, they won't create significant upgrading costs
- the project will bring educational advantages to the school
- the board has sought legal and accounting advice, if required, to support the expenditure
- the work isn't part of the proprietor's responsibility to upgrade the school assets to state standards (under the third schedule to the school's integration agreement)
- the completed capital work asset isn't eligible for integration. This means that the board must maintain the asset from resources other than its maintenance grant as maintenance funding is only granted for integrated property.
If the Ministry gives approval, we'll send a confirmation letter. You must include those capital works assets on the board’s balance sheet.
You'll need to show the approval letter to the auditor during the annual audit of the board's financial accounts.
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