Financial Accountability Return Guide

The guide includes information on how early childhood education service providers can complete their annual financial accountability statement in accordance with the Early Childhood Outcomes grants programs Terms and Conditions and program guidelines.

1. Overview

The NSW Department of Education (the department) is committed to working with service providers to improve service accountability and to simplify grants administration through the Early Childhood Contract Management System (ECCMS).

This guide should be used in conjunction with the Financial Accountability - Information for Services page and the ECCMS Service Provider Guide (PDF 2.81 MB) (pages 63 to 73) which detail the steps for completing financial accountability statements through ECCMS.

1.1. Before you start

Visit the Early Childhood Education grants and funded programs webpages to review the relevant program guidelines before completing the financial accountability statement.

1.2. Financial accountability statement

Service providers are required to complete a separate financial accountability statement for each grant funding received, detailing how the funding was expended, including details of any unexpended funds. The financial accountability statement must be submitted through ECCMS.

If a service provider reports:

  • an overall nil balance or deficit for each service/funding specification, no further action is required.
  • a surplus, please see the Management of surplus funds section.

See the Financial Accountability – Information for Services for instructions on how to locate the funding specification financial accountability statement in ECCMS.

Note: Amounts noted on the financial accountability statement should clearly agree with the figures reported in the service’s audited/non-audited financial income and expenditure statements from your accountant or bookkeeper.

There should be a clear breakdown of income from all sources, and expenditure for the service funding specification.

The department's grant funding should not be combined into one line item of income on the service’s audited/non-audited financial income and expenditure statements from their accountant/bookkeeper. Please separate by program e.g. Start Strong Fee Relief Funding, Start Strong for Community Preschools program funding, Start Strong for Long Day Care, Start Strong Capital Works Grants, Disability and Inclusion Program, etc.

Note: Services should consult with their accountant or bookkeeper if there is not an identifiable breakdown of grants and other income on their audited/non-audited financial income and expenditure statements.

The financial accountability statement must be for the end of the approved funded provider’s reporting year, i.e. financial or calendar.

Statements from previous years can also be submitted if there are surplus funds from previous years required to be reported in the annual financial accountability statement. This information would normally be generated from the organisation’s accounting system or audited/non-audited financial income and expenditure statements.

1.3. Financial reporting requirements

Financial reporting requirements depend on whether the service provider is classified as a Tier 1 or Tier 2 organisation under NSW Fair Trading guidelines.

Some services may be classified as a registered charity with the Australian Charities and Not-for-profits Commission (ACNC). Requirements under Tier 1 and Tier 2 classifications are still applicable in this case.

Please refer to the tables below to determine Tier 1 or Tier 2 service providers to submit financial statements.

More detailed information on Tier 1 and Tier 2 organisations can be found on the NSW Fair Trading website.

Tier 1 Service Providers Accountability requirements
  • Associations with a total revenue as recorded in the income and expenditure statement (i.e. gross receipts) for a financial year is more than $250,000 or
  • An association with current assets more than $500,000
  • Complete the financial accountability statement through ECCMS.
  • Audited financial statements for the end of the funded provider’s financial year.
  • Income and Expenditure Statement - with a breakdown of all sources of income.
  • Asset Register (if required). Please refer to section 2.1.2: Asset/capital acquisition.
Tier 2 Service Providers Accountability Requirements
  • Associations with a total revenue as recorded in the income and expenditure statement (i.e. gross receipts) for a financial year is $250,000 or less, and
  • An association with current assets of $500,000 or less
  • Complete the financial accountability statement through ECCMS.
  • A copy of minutes of the meeting approving the financial statements and agreed to by all members of the board/management committee.
  • Statement signed by an independent qualified accountant verifying that the unaudited financial statements are true and fair.
  • Income and expenditure statement - with a breakdown of all sources of income.
  • Asset Register (if required). Please refer to section 2.1.2: Asset/captial acquisition.

2. Financial accountability guidance notes by program

Please navigate to the relevant program to find information and guidance notes to assist you to complete financial accountability statement through ECCMS.

Services should also read the Frequently Asked Questions on Financial Accountability - Information for Services for assistance with completing their financial accountability statements in ECCMS.

2.1. Start Strong for Community Preschools, Mobile Preschool Contracts and Mobile Preschool Funding Programs including Fee Relief Payments

This section is relevant to Start Strong for Community Preschools, Mobile Preschool Contracts and the Mobile Preschool Funding Program.

Visit Start Strong for Community Preschools and Mobile Preschool Funding Program web pages to access the guidelines.

Note: The financial accountability statement now combines the Fee Relief Payments and Program Payment in one accountability statement.

2.1.1. Part 1 – Fee Relief Payment

Part 1 – Fee Relief Payment should be completed before completing Part 2 – Program Payment.

The Fee Relief Payment aims to reduce the cost of early childhood education and care to families in the form of fee pass-through.

Income section

Fee Relief Payment amount is automatically pre-filled by ECCMS based on the total Fee Relief payments made to the service during the relevant reporting period.

Note: The 2023 Start Strong for Community Preschools and Mobile Preschool Funding Program financial accountability statement captures Fee Relief payments made to services for the 2023 calendar year.

Reserved Fee Relief Funds (quarantined funds) are funds that were not allocated to an enrolment e.g. The service had fewer children enrolled than funding was provided for, or for enrolled children where families have claimed fee relief elsewhere. Services are required to reserve these fee relief funds until a new eligible enrolment claims fee relief at the service. The amount in this section is manually entered by the service.

In reference to the Start Strong 2023 implementation support project delivered by Community Connection Solutions Australia (CCSA), these funds should be recorded in a liability account until they are used towards a new eligible enrolment.

Note: Only enter the reserved (quarantined) fee relief amount, where funds were not allocated to an enrolment because the service had fewer children enrolled than funding was provided for, or for enrolled children where families have claimed fee relief elsewhere.

Total Adjusted Income is an automatic calculation. It is the amount of the total Fee Relief Payments, less any Reserved Fee Relief Funds (not allocated to an enrolment) noted above.

The calculation for Total Adjusted Income
Total Fee Relief Payments from the department
Less: Reserved Fee Relief (Quarantined) Funds
Equals: Total Adjusted Income available

Total Adjusted Income is the amount of fee relief funds the service had available to use, for which the service should show expenditure.

Note: If a service had more enrolments claiming fee relief than the service was funded for, a negative figure should be entered next to the ‘Reserved Fee Relief Funds. This negative figure will be the difference of the amount paid by the department for fee relief and the total of fee relief passed on to families.

Services may be eligible for a funding top up in 2024 to address a 2023 fee relief accrued deficit because of providing fee relief to more enrolments than the service was initially funded for in 2023. Refer to Deficit fee relief funds under Fee Relief Payment in relevant Program Guidelines.

If your service has already received an adjustment payment for the 2023 Fee Relief Payment shortfall, do not enter a negative figure in the Reserved Fee Relief funds section.

Our service received funds for 50 children under Start Strong for Community Preschools fee relief funding. The total enrolments claiming fee relief at our service was 60 children.

How do I show this on the financial accountability statement?

Calculate the difference between the amount paid by the department, and the amount the service passed on to families. This figure should be displayed as a negative in the ‘Reserved Fee Relief Funds’ section. This amount will be considered in the next Fee Relief Payment adjustment from the department.

How do we cover the cost of the additional families claiming fee relief at our service?

Services should cover the cost of additional families claiming fee relief from their retained profits. The preschool funding team is available to provide support, advice, or answer any questions relating to the Start Strong Program.

All services can access support by contacting the funding team on 1800 619 113 or ecec.funding@det.nsw.edu.au.

When will our service be reimbursed by the department for the additional enrolments claiming fee relief at our service?

Services may be eligible for a funding top up in 2024 to address a 2023 fee relief accrued deficit because of providing fee relief to more enrolments than the service was initially funded for in 2023. Refer to Deficit fee relief funds under Fee Relief Payment in relevant Program Guidelines.

The service will need to clearly show the breakdown of actual expenditure of the Total Adjusted Income amount for the reporting period. This is the amount of actual fee reduction provided to children’s daily fees up to 600 hours.

Expenditure section

Services are required to apply the Fee Relief Funding in the order listed in the Fee Relief Spending Rules under the relevant program guidelines to:

  • reduce the daily fees as much as possible for 600 hours per year of enrolment for eligible children accessing fee relief at the service, then
  • reduce the cost of additional charges to families accessing fee relief at the service e.g. enrolment, administration, resources, excursions etc., then
  • i) reduce the cost of enrolment above 600 hours per year (e.g. third day fees); or
    ii) reduce the daily fee for 600 hours per year of enrolment for eligible children not accessing fee relief at the service, e.g. children of families with greatest need; or
    iii) # reduce the service’s operating expenses per the Program Payment spending rules.

Note: The 2023 Fee Relief Payment is applied differently to the 2022 Start Strong Free Preschool Payment. Please review the Fee Relief Payment spending rules in the 2023 Start Strong for Community Preschool program guidelines to ensure fee relief has been applied to the specific expenditure line items.

The amount entered in Part 1 – Fee Relief Payment Expenditure item iii) # above will be automatically deducted from Part 2 – Program Payment DoE Funds column operating expenses. This is because the service will be acquitting that amount already under Part 1 – Fee Relief Payment expenditure.

Only record amounts where Fee Relief Payment has been used to cover costs. Services should only record amounts where fee relief funds were actually used to cover the costs of what families would have normally been required to pay e.g. where fee relief funds were used to cover the cost of enrolment fees, administration fees, resources, excursions.

If families actually paid additional fees such as enrolment ‘gap’ fees, administration, 4th and 5th day fees, resources, excursions etc., do not record that amount in Part 1 Fee Relief Payment.

Actual ‘gap’ payments paid by families are recorded in the Income section in Part 2 – Program Payment.

Simple rule: If families actually paid ‘gap’ fees, include this in Part 2 Program Payment section. If Fee Relief Payment funding was used to cover fees, and families did not pay, include the amount in Part 1 Fee Relief Payment section.

A separate statement that reconciles with the Fee Relief Income and Liability accounts should be attached to this financial accountability statement.

For the 2023 reporting period, this statement can be a simple spreadsheet high-level summary, or a high-level summary extract of fee relief income and expenditure from the service’s software system. Services also have the option of using the section of their audited/non-audited financial income and expenditure statements from their accountant or bookkeeper that shows the Fee Relief in their Income and Liability accounts.

Note: For future supporting statements, services will be required to supply an extract summary from their financial software.

Services were required to complete a mandatory fee relief data collection in early 2024. The fee relief data collection required services to outline their fee relief usage throughout 2023 and identify an amount of reserved fee relief funds or deficit if any.

More information on the spending rules for Fee Relief Payment can be found under Program Requirements of the relevant program guidelines.

Can I use any surplus from fee relief for operational expenses after I have applied the funding to level 1 ‘reduce the daily fees as much as possible for 600 hours per year for eligible children accessing fee relief at the service?

No, services must first apply the funding in the order noted in Fee Relief Payment spending rules in the 2023 Start Strong for Community Preschool program guidelines i.e. if there is any surplus after applying the funding to level 1 ‘reduce the daily fees as much as possible for 600 hours per year for eligible children accessing fee relief at the service’, you must firstly apply this surplus to level 2 ‘reduce the cost of additional charges to families accessing fee relief at the service’.

If there is any surplus after applying against level 2, then any surplus funds can be applied against one or all of the options at level 3 which includes reducing the operating expense of the service per the Program Payment spending rules.

Note: The amount entered in Expenditure item iii) # will be automatically deducted from the operating expenses noted in Part 2 Program Payment.

Services must confirm that:

  • fee relief in the form of a reduction to fees has been passed on to families
  • signed fee relief declaration forms have been received for each child enrolled at the service where families have not claimed the fee relief at another service. This is applicable to Start Strong for Community Preschools program only.

For more information, please see Fee Relief Payment Spending Rules of the relevant program guidelines.

Note: Declaration forms related to fee relief funding are different to consent forms.

2.1.2. Part 2 – Program Payment

There are two columns within the financial accountability statement where services are required to complete both income and expenditure as noted below: DoE (funding received from the department) and non-DoE (funding received from other sources - not from the Department of Education Early Childhood Grants and Funding Program).

DoE Funds Non-DoE Funds
Includes:
  • total program payments as income
  • DoE Funds surplus carried forward from previous financial accountability statement
  • expenditure by line-item relating to the Start Strong for Community Preschools, Mobile Preschools Contracts or Mobile Preschool Funding Program grant only.
Includes:

Note: Amounts noted on the financial accountability statement should clearly agree with the figures reported in the service’s audited/non-audited financial income and expenditure statements from your accountant or bookkeeper. There should be a clear breakdown of income from all sources, and expenditure for the service funding specification.

Income section

This column includes the Start Strong for Community Preschools/Mobile Preschools Contracts/Mobile Preschool Funding Program funding provided by the department during the reporting period, which is automatically prefilled.

Note: No values are required for the greyed-out cells.

The final surplus noted in DoE Funds column on the previous year's financial accountability statement will be automatically carried forward to this current year’s financial accountability statement.

This column should only include funds received from sources other than the department.

Don’t include any other department grant funding amounts e.g. Free Relief Payments, Disability and Inclusion Program, Community Grants etc.

These grants will be acquitted on their own financial accountability statement.

Enter income received from families paying to use the early childhood education and care service. This is not Fee Relief Payment funding. It is the fee amount families actually paid after applying fee relief funds.

Simple rule: If families actually paid ‘gap’ fees, include in Part 2 Program Payment section. If Fee Relief Payment funding was used to cover fees, and families did not pay, include the amount in Part 1 Fee Relief Payment section. Do not include initial daily fee amount prior to applying fee relief funds. If there was a balance ‘gap’ fee families actually paid after applying fee relief funds, include that amount only.

Note: Do not include other grant program funding e.g. Fee Relief Payment, Start Strong Free Preschool Disability and Inclusion Program, Quality and Participation or any other department grant funding under this section. These grants will be acquitted on their own financial accountability statement.

Enter any grant income received from other sources not provided by the Department of Education Early Childhood funding. This may include specific assistance funding from other NSW Government departments, local councils, commonwealth funding and local community associations etc e.g. landcare projects, water tanks, etc.

Enter profit/gain from the sale of an asset that was purchased with department funding.

Enter other income as reported in your audited/non-audited financial income and expenditure statements that is not acquitted elsewhere e.g. traineeship grants, paid parental leave payments or for older accountabilities, the JobKeeper and JobSeeker, Cashflow Boost payments.

Note: Do not include Fee Relief Payment funding or any other department grant funding under this section. These grants will be acquitted on their own financial accountability statement.

Surplus funds in the DoE column on the previous year's financial accountability statement will be automatically transferred to the current year financial accountability statement.

Surplus funds noted in the Non-DoE column on the previous year's financial accountability statement should be manually entered on this current year financial accountability statement. Please don't enter a deficit amount.

Note: This is not the surplus amount noted on your audited/non-audited financial income and expenditure statements from your accountant/bookkeeper. The surplus noted on your audited/non-audited financial income and expenditure statements is a combination of all your income and expenditure.

Expenditure section

Expenditure should be divided between the two columns provided.

Please split and show expenditure relative to both DoE Funds and Non-DoE Funds in each column.

Note: You must enter values into each column. Please refer to the two guidance notes below:

  • For some expenditure categories where splitting is difficult (such as 'Salaries and Wages'), a revenue % apportion basis can be used as a guide e.g. if the total income for DoE Funds is $60,000 and Non-DoE Funds is $40,000 totaling to $100,000 then 60% of expenditure can be apportioned to DoE Funds column and 40% to Non-DoE Funds column.
  • If the Department of Education Early Childhood funding is the major funder e.g. if total income for DoE Funds is $90,000 and Non-DoE Funds is $10,000 totaling to $100,000, then expenditure should be shown first in the DoE Funds column bringing the balance to $0, and remaining expenditure shown under the Non-DoE Funds column.

Services that do not have an exact breakdown of the DoE and Non-DoE portions of their yearly expenditure can use the split outlined above and contact their accountant/bookkeeper to request the breakdown of each grant program for the income and expenditure sections in their financial statements.

Your accountant/bookkeeper can assist you to establish a costing structure to easily identify income and expenditure activity relating to each of your funding grants from the department. In some financial accounting systems this is called a ‘funding code’ or a ‘project number’ for each grant.

See more information in the Financial Accountability – Information for Services FAQs and the 2023 Start Strong for Community Preschool FAQs.

Keynote to consider

Where services receive multiple funding grants from the department e.g. Start Strong for Community Preschools / Mobile Preschool Program Payment and Fee Relief Payment, Disability and Inclusion funding, Quality and Participation funding etc., the income and expenditure amounts shown on your audited/non-audited financial income and expenditure statements from your accountant/bookkeeper are a combination of all grants / income streams and expenditure across all programs.

Remember to extract the income and expenditure relative to each program, e.g. Disability and Inclusion Program funding, Start Strong for Community Preschool funding when completing your financial accountability statement.

It is not correct to transpose the total line-item amount e.g. salaries and wages from your audited/non-audited financial income and expenditure statements unless Start Strong for Community Preschools, Mobile Preschool Contracts or Mobile Preschool Funding Program grant funding is the only grant income your service received from the department.

Download our example excel table to break up your income and expenditure across all programs if not already separated.

If you received funding for the Disability and Inclusion Program or the Start Strong Pathways Program, remember to first deduct wages paid to staff under these grants, from the total wages line-item on your audited/non-audited financial income and expenditure statements from your accountant/bookkeeper.

Do this before you enter the wages amounts into each wages line items on the financial accountability statement.

Service delivery staff: Enter expenditure for staff directly involved in service delivery.

Administration and management staff: Enter expenditure for employees not directly involved with the service provision, such as administration, management, accounting, and co-ordination staff.

Use the guidance notes above to apportion the wages across the DoE Funds and Non-DoE Funds columns for both service delivery and administration and management staff.

Note: The total wages line item on your audited/non-audited financial income and expenditure statements is a total of all wages paid using all sources of income.

It is not correct to transpose the total wages line-item amount on your financial statements unless Start Strong for Community Preschools, Mobile Preschool Contracts or Mobile Preschool Funding Program grant funding is the only grant income your service received from the department.

Traineeship and Paid Parental Leave Wages: If the service received Traineeship grants (through Training Services NSW) or Paid Parental Leave payments (through the Commonwealth Government)or previously JobKeeper and JobSeeker payments that were related to previous funding periods, the wages expenditure of these amounts should be noted against wages expenditure line items for service delivery staff or administration / management staff in the ‘Non-DoE Funds’ column. This is because these funds were received from other sources and not the NSW Department of Education Early Childhood funding grants.

Traineeship wages paid using the Grow Your Own funding grant should not be recorded on the Start Strong for Community Preschools/Mobile Preschool Funding Program financial accountability statement. Record these wages amounts on the Grow Your Own (ECEC) program financial accountability statement.

Use the guidance note above (if required) to apportion the operating costs across the DoE Funds and Non-DoE Funds columns. Enter day-to-day operational expenses, not directly involved with the service provision.

Note: Do not include Fee Relief Payment, Free Preschool or any other DoE grant expenditure under this section. These grant amounts have their own financial accountability statement.

Depreciation is a non-cash expense which represents the decline in value of an asset over an asset’s estimated useful life. To the extent that the asset is being utilised for direct service delivery of department funded services and the asset is reflected on the Balance Sheet, the service can claim depreciation expenses as expenditure against department annual funding.

Only enter assets or capital items purchased using Start Strong for Community Preschool / Mobile Preschool Funding Program funding programs into the DoE funds column.

Enter the loss incurred from the sale of an asset that was purchased with department funding.

Enter other expenses reported in the financial statements that have not been reported elsewhere. These could be financing expenses, compliance costs, legal and consultancy fees, etc. For mobile preschool operators, these could be vehicle costs, including usage and maintenance and leasing arrangements.

Note: The amount entered in Part 1 Fee Relief Payment Expenditure item iii) # will be automatically deducted from the DoE Funds column operating expenses. This is because the service will be acquitting that amount already under Part 1 Fee Relief Payment expenditure.

It is expected that services will expend the full amount of department grant funds (DoE Funds) first, then cover any expenses over and above the department funding amount from other sources of funding (Non-DoE Funds) and any retained profits.

If a service has used all department funding, the DoE Funds column total at this section should be $0.00 showing all department grant funds have been expended.

Note: There should not be a deficit noted in the DoE Funds column if a surplus is noted in the Non-DoE Funds column. Services would have used their Non-DoE Funds to cover the deficit noted in the DoE Funds column.

It is acceptable for the service to have surplus funds in the Non-DoE column after all DoE grant funds have been expended (showing $0.00 balance).

A deficit in both DoE Funds and Non-DoE Funds columns is acceptable if a service used all DoE Funds income as well as their Non-DoE Funds income and were required to use any retained profits to meet the shortfall to keep operating.

Any Balance in the DoE Funds column will carry over to Part 3 – DoE Funding Surplus Overview and Declaration section. This is applicable to Start Strong for Community Preschools only. See further information below.

Add any additional notes on how the funds were spent.

Suggestion: Add a note if any fee relief surplus funds were applied to your program operational expenses.

2.1.3. Part 3 – DoE Funding Surplus Overview and Declaration

This section is applicable to Start Strong for Community Preschool only and is not relevant to Mobile Preschool Funding Program

This section is used for trial purposes in 2023 Start Strong for Community Preschools Program Guidelines. New surplus and refunds guidelines will only be applicable from 2024 onwards.

Services should read information on Surplus and Refunds in the 2023 Start Strong for Community Preschools Guidelines before choosing to retain any surplus up to, or greater than 10% of the Start Strong for Community Preschools annual program. Visit Start Strong for Community Preschools to access the guidelines.

Services are required to expend all annual Start Strong for Community Preschools funding in accordance with the spending rules in the program guidelines during the relevant program period.

A surplus amount will be noted in the bottom row at ‘Total Surplus’ with a calculated percentage of what that surplus amount is compared to the funding paid under the 2023 Start Strong for Community Preschools Program.

Surplus (DoE Funding) Amount ($) excluding GST
Part 1 – Fee Relief Payment balance (excluding Reserved Fee Relief Funds) $0.00
Part 2 – Program Payment balance $0.00
Total Surplus $0.00
Service Total Program Surplus Percentage Calculation %

The department understands that some providers may have a surplus at the end of their reporting period which needs to be returned to the department according to the Terms and Conditions.

Surpluses will be identified and validated through the annual financial accountability process.

Surplus thresholds and options for providers (please select Option A or Option B).

Use the ECCMS calculated percentage of the surplus threshold to choose the Option relative to your service.

Option A: Approved services can choose to retain surpluses below 10% or $30,000 (whichever is higher) of the Start Strong for Community Preschools *annual program funding or choose to return their surplus funds.

Option B: Approved services can choose to retain surpluses up to, and greater than 10% or $30,000 (whichever is higher) of the Start Strong for Community Preschools *annual program funding.

For Option B, the service will be required to make application to retain the surplus funds by completing a separate Surplus Application Form and checking the confirmation box on the financial accountability statement.

The service can also decide to return the surplus which is greater than 10% or $30,000 (whichever is higher) of the Start Strong for Community Preschools annual program funding* or choose to return all their surplus funds (up to and greater than 10% or $30,000).

*This amount is the total income for both Part 1 – Fee Relief Payment and Part 2 – Program Payment.

How do I know how much of the surplus I can keep?

The service will firstly need to calculate 10% of the annual Start Strong for Community Preschools Program Funding.

See the examples below:

  1. The service will calculate the 10% of the annual Start Strong for Community Preschools Program funding e.g. $380,000 x 10% = $38,000. This is calculated using the annual program funding (total of Fee Relief Payment plus Program Payment).
  2. ECCMS will calculate the surplus amount into a percentage e.g. $27,000 ÷ $380,000 x 100 = 7.1%,

If the surplus is up to 10% or $30,000 (whichever is greater) of the annual program funding, the service should select Option A.

If the surplus threshold is greater than 10% or $30,000 (whichever is greater) of the annual program funding, the service should select Option B.

Example 1 – Option A
Total Program Funding (including Fee Relief and Program payments) $380,000
Total Surplus at Part 3 $27,000
ECCMS Surplus % Calculation ($27,000 ÷ $380,000 x 100) 7.1%
10% of Start Strong Annual Program (10% of $380,000) $38,000

Service can choose to keep the amount below 10% of program funding or $30,000 (whichever is greater).

As $27,000 is less than $38,000 (10% of the annual program funding), the service can opt to keep the surplus to carry over to the next funding period.

Example 2 – Option B
Total Program Funding (including Fee Relief and Program payments) $380,000
Total Surplus at Part 3 $42,000
ECCMS Surplus % Calculation ($42,000 ÷ $380,000 x 100) 11.05%
10% of Start Strong Annual Program (10% of $380,000) $38,000

Service can choose to keep $38,000 (up to 10% of program funding).

Additionally, where the service has an operational need to retain the surplus, they can apply to the department to keep the surplus amount which is greater than 10% or $30,000 (whichever is higher).

The service is first required to complete the Surplus Application Form and then select the confirmation box (the top box at Option B) on the financial accountability statement.

When completing the Surplus Application Form the service can choose to keep the additional $4,000 which is the amount above the $38,000 (higher than 10% or $30,000).

Further information on the management of surplus funds can be found in the Management of Surplus Funds section below.

Financial Attachments

Financial reporting requirements depend on whether the service provider is classified as a Tier 1 or Tier 2 organisation under NSW Fair Trading guidelines.

This year there is an additional attachment in the list. Services will need to attach a separate statement that reconciles with the Start Strong Fee Relief Income and Liability accounts.

For further information on the required documents to attach under this section, please refer to the Financial Reporting Requirements section above.

2.2. Start Strong for Long Day Care 2023 (SSL) Program, including Fee Relief, Program and 3 Year Old Trial Payments

This section is relevant to Start Strong for Long Day Care (SSL) Program which includes the Fee Relief Payment for eligible children aged 4 and above, Program Payment and 3 Year Old Trial Payment.

Visit 2023 Start Strong for Long Day Care program to access the guidelines specific to this financial accountability statement.

Note: The financial accountability statement combines the Fee Relief Payment, Program Payment and 3 Year Old Trial Payment into one accountability.

2.2.1. Part 1 – Fee Relief Payment

Part 1 – Fee Relief Payment should be completed before completing Part 2 – Program Payment.

Income section

Fee Relief Payment amount is automatically pre-filled by ECCMS based on the total Fee Relief payments made to the service during the relevant reporting period.

Note: The 2023 Start Strong for Long Day Care financial accountability statement captures Fee Relief payments made to the service for the 2023 calendar year.

Fee Relief Payment from transferred service is applicable only to services that received Fee Relief Payment funds from a transferring (out) service during the 2023 calendar year. If this does not apply to you, please leave this line blank on the financial accountability statement.

Unexpended Fee Relief Funds (reserved or quarantined funds) are funds that were not allocated to an enrolment e.g. the service had fewer children enrolled than funding was provided for, or for enrolled children where families have claimed fee relief elsewhere. Services are required to retain these fee relief funds until a new eligible enrolment claims fee relief at the service. The amount in this section is manually entered by the service.

In reference to the Start Strong 2023 implementation support project delivered by Community Connection Solutions Australia (CCSA), these funds should be recorded in a liability account until they are used towards a new eligible enrolment.

Note: Only enter the unexpended (reserved or quarantined) fee relief amount, where funds were not allocated to an enrolment. This amount is not the unspent funds from Fee Relief payments after applying fee relief as a weekly deduction to reduce session or gap fees, additional charges, or operating expenses, and should not be included in the ‘Funding Used to Reduce Fees/Expenditure’ section below. This unexpended (reserved or quarantined) fee relief amount must be shown separately as noted above.

Total Adjusted Income is an automatic calculation. It is the amount of the total Fee Relief Payments, less any Unexpended Fee Relief (reserved or quarantined Fee Relief Funds not allocated to an enrolment) noted above.

The calculation for Total Adjusted Income
Total Fee Relief Payment from the department
Less: Unexpended Fee Relief Funds
Equals: Total Adjusted Income available

Total Adjusted Income is the amount of fee relief funds the service had available to use.

The service should show how this funding was used to reduce session or gap fees, additional charges, or operating expenses by entering a breakdown in the ‘Funding Used to Reduce Fees/Expenditure’ section below.

Note: If a service had more enrolments claiming fee relief than the service was funded for, and the service was required to use their own retained profits to temporarily cover the cost of fee relief to reduce session fees, gap fees and additional charges, a negative figure should be entered next to the ‘Unexpended (reserved or quarantined) Fee Relief Funds’ section. This negative figure will be the difference of the amount paid by the department for fee relief and the total of fee relief used to reduce session fees or gap fees for families across the service’s total number of operating weeks for the 2023 calendar year.

Services may be eligible for additional funding in 2024 to address a fee relief related deficit accrued because of providing fee relief to more enrolments than the service was initially funded for in 2023. Refer to Fee Relief Funding Adjustments section in the 2023 Start Strong for Long Day Care program guidelines and Fee relief funding adjustments flowchart for services (PDF 192 KB).

If your service has already received an adjustment payment for the 2023 Fee Relief Payment shortfall do not enter a negative figure in the Unexpended (reserved or quarantined) Fee Relief Funds section.

Our service received funds for 50 children under 2023 Start Strong for Long Day Care fee relief funding. The total enrolments claiming fee relief at our service was 60 children.

How do I show this on the financial accountability statement?

Calculate the difference between the amount paid by the department, and the amount by which the service reduced costs to families for children enrolled at the service where families have elected to claim fee relief. This figure should be displayed as a negative in the ‘Unexpended Fee Relief Funds’ section.

When will our service be reimbursed by the department for the additional enrolments claiming fee relief at our service?

Services may be eligible for Fee Relief Adjustment Payment where there was a fee relief related deficit accrued because of providing fee relief to more enrolments than the service was initially funded for in 2023. Refer to Fee Relief Funding Adjustments section in the 2023 Start Strong for Long Day Care program guidelines and Fee relief funding adjustments flowchart for services (PDF 192 KB).

Where required, prior to the adjustment, Program Payment funds may also be used as an interim measure to provide fee relief to the families of eligible children.

The department will use data from the January to June 2023 data submission (submitted Jul-Aug 2023) and July to December 2023 (submitted from Mar 2024) periods to calculate any adjustment.

The 2023 Start Strong for Long Day Care Fee Relief data submission for the period 1 July to 31 December 2023 was open in March 2024.

Note: Initial Fee Relief Payment adjustments were paid to services in September 2023.

The service will need to clearly show the breakdown of how this funding was used to reduce session or gap fees, additional charges, or operating expenses by entering a breakdown in the Funding Used to Reduce Fees/Expenditure’ section below.

Expenditure Section (Funding Used to Reduce Fees / Expenditure)

The approved provider must use Fee Relief Payment funds to provide fee relief to the families of eligible children at least 4 years old on, or before, 31 July 2023.

Services are required to apply the Fee Relief Payment funding in this order:

  1. Firstly, as a weekly reduction to a family’s gap fees across the total service operating weeks for the calendar year.
  2. After reducing family gap fees to zero, the Approved Provider must then spend the funds to cover any additional charges imposed on the eligible children, such as levies.
  3. Remining funds may then be used to:
    i) reduce the fees for eligible children not accessing fee relief at the service, e.g. children of families with greatest need; or
    ii) # in line with the Program Payment spending rules, used to reduce the service’s operating expenses

The amount entered in Item ii) # above will be automatically deducted from Part 2 – Program Payment expenditure. This is because the service will be acquitting that amount already under Part 1 – Fee Relief Payment expenditure.

Add any additional notes on how the funds were spent.

Suggestion: Add a note if any fee relief surplus funds were used in line with Program Payment spending rules to reduce your program operational expenses.

Services must confirm:

  • fee relief in the form of a reduction to fees has been passed on to families
  • signed fee relief declaration forms have been received for each child enrolled at the service where families have not claimed the fee relief at another service
  • fee relief data has been submitted to the department through the ECCMS system.

Note: Amounts noted on the financial accountability statement should clearly agree with the figures reported in the department’s data capture submission and the service’s financial accounting records.

For more information, please see Fee Relief Payment Spending Rules of the relevant program guidelines.

Note: Fee Relief Declaration forms are different to the Start Strong child consent forms.

Can I use any surplus from Fee Relief Payment for operational expenses after I have applied the funding to level 1 ‘as a weekly reduction to a family’s gap fees across the total service operating weeks for the calendar year’?

No, services must first apply the funding in the order noted in Section 4.1.2 Fee Relief Payment Spending Rules i.e. if there is any surplus after applying the funding to level 1 ‘as a weekly reduction to a family’s gap fees across the total service operating weeks for the calendar year for eligible children accessing fee relief at the service’, you then apply this surplus to level 2 ‘to cover any additional charges imposed on the eligible children, such as levies.

If there is any surplus after applying against level 2, then the approved provider may plan for and then use any remaining funds from Term 4 for operational expenses in line with the 2023 Start Strong for Long Day Care Program Payment Spending rules:’.

For more information, see the 2023 Start Strong for Long Day Care FAQs.

2.2.2. Part 2 – Program Payment

This section is relevant to services who received Program Payment funding under the Start Strong for Long Day Care Program (SSL).

Income Section

Program Payment is automatically pre-filled by ECCMS based on the total payments made to the service for the 2023 calendar year under this program.

Program Payment from transferred service is applicable only to services that received Program Payment funds from a transferring (out) service during the 2023 calendar year period. If this does not apply to you, please leave this line blank on the financial accountability statement.

Expenditure section

Expenditure of funds should be divided up between the respective line items on the financial accountability statement.

Spending rules allow services to spend funding on one, or any combination of:

  • pay salary and wages for early childhood teachers and educators delivering the quality early childhood education program
  • purchase of functional or education resources (excluding capital works projects) for the benefit of all children aged 4 and above
  • develop an early childhood education program based on the Early Years Learning Framework, including associated staffing costs
  • develop staff, including upgrading qualifications from a certificate to a diploma and/or a diploma to a 4-year degree and associated staffing costs, traineeships, study leave, course fees, backfilling of staff undertaking development
  • attract and retain early childhood teachers and educators, including advertising early childhood teacher and educator positions and bonuses for retention or recognition of service and experience
  • wellbeing supports for early childhood teachers and educators.

Add any additional notes on how the funds were spent.

2.2.3. Part 3 – 3 Year Old Trial Payment

This section is relevant to services who received 3 Year Old Trial Payment funding under the Start Strong for Long Day Care Program (SSL). Services are strongly encouraged to read the Start Strong for Long Day Care Program guidelines - Appendix 1: 3 Year Old Trial prior to completing this section.

Income Section

3 Year Old Trial Payment is automatically pre-filled by ECCMS based on the total of 3 Year Old Trial Payment made to the service for the 2023 calendar year period under this program.

3 Year Old Trial Payment from transferred service is applicable only to services that received 3 Year Old Trial Payment funds from a transferring (out) service during the 2023 calendar year period. If this does not apply to you, please leave this line blank on the financial accountability statement.

Expenditure Section

Expenditure of funds should be divided up between the respective line items on the financial accountability statement.

Spending rules allow services to spend funding on one, or any combination of:

  • purchase of functional or education resources (excluding capital works) required to provide a quality preschool program to 3 year old children
  • design or deliver an early childhood education program for 3 year old children based on the Early Years Learning Framework, including associated staffing costs
  • develop staff to increase their capacity to design or deliver 3 year old programs, including professional development, study leave, course fees and backfilling of staff undertaking career development
  • pay salary and wages for early childhood teachers to deliver quality early childhood education program to 3 year old children
  • reach out to local community to inform families of the benefits of 3 year old children accessing preschool programs through Long Day Care services
  • reduce non-fee related barriers that families of enrolled 3 year old children face when accessing quality preschool program provided by Long Day Care services.

Add any additional notes on how the funds were spent.

2.3. Quality and Participation Grants Program (QAP & QAPA)

The financial accountability statement for the Quality and Participation grant funding is divided into two parts:

  1. Quality and Participation – Categories 1 to 3
  2. Quality and Participation – Additional Funding

Services should read the Quality and Participation Grants Program guidelines before completing the financial accountability statement.

2.3.1 Part 1 Quality and Participation Categories 1 – 3

This section is relevant to services that received funding under the Quality and Participation Grants Program (QAP) during the relevant reporting period.

Income section

This section is automatically pre-filled by ECCMS based on the total payments made to the service under this program.

Expenditure section

Expenditure of funds should be divided up between the respective Spending Rules line-item categories on the financial accountability statement.

Category 1: increase participation and access for children experiencing vulnerability and disadvantage, by delivering targeted initiatives and support for Aboriginal children and children from low-income families.

Category 2: improve quality learning environments to positively impact experiences and outcomes for preschool aged children.

Category 3: support the implementation initiatives to meet the Preschool Reform Agreement (up to $2,500)

Note: Please read the Quality and Participation Grants Program guidelines to understand what expenditure items are excluded from this funding.

Additional information

Add any additional notes on how the funds were spent under each category.

2.3.2 Part 2 Quality and Participation - Additional Funding

This section is relevant to services that received funding under the Quality and Participation Grants Additional Funding (QAPA) program during the relevant reporting period.

Income section

This section is automatically pre-filled by ECCMS based on the total payments made to the service under this program.

Expenditure section

Expenditure of funds relative to the Additional Transport Initiatives only should be noted against the line item on the financial accountability statement for:

  • purchase of a transport vehicle (services are not able to apply for this category if they have previously received funding for a vehicle through this program)
  • other transport initiatives (such as vehicle maintenance, repair cost, hiring a driver or vehicle).

Note: Grant funding through this stream must be used for transport initiatives only.

Refer to the Financial Accountability Return Guide for additional information.

Additional information

Add any additional notes on how the Additional Transport Initiatives funds were spent.

Note: As per the Quality and Participation Grants program guidelines services have until 30 June 2024 to spend Quality and Participation Program funding and Additional Transport Initiatives funding.

The Quality and Participation program financial accountability statement includes check boxes at the end of the document. The check boxes are for those services that received funding under the old Quality Learning Environments or Community Grants streams 1 or 2 programs, where the service received a spend extension for either one of the old programs and submitted their financial accountability statement with a $0.00 expenditure noted.

Ticking the relevant year and program checkbox will confirm that funds have now been spent.

Services are not required to ‘re-submit’ any previously submitted Quality Learning Environments or Community Grants streams 1 or 2 program financial accountability statement that had a $0.00 expenditure noted.

Services that have not submitted the old Quality Learning Environments or Community Grants financial accountability statements to date should still submit the financial accountability statement via ECCMS noting the full expenditure. The checkboxes are relative only to services that have previously submitted these financial accountability statements with a $0 expenditure balance.

We have not spent our Quality and Participation grant funding as yet. We expect to spend it before the spend due date of 30 June 2024. I have received the email notification from ECCMS to advise the financial accountability statement is ready to complete. Should I complete the financial accountability statement now, or wait until the funding has been spent before 30 June 2024?

As per program guidelines, services have until 30 June 2024 to spend Quality and Participation Program funding and Additional Transport Initiatives funding.

Services that have not spent their allocated funding at the time of the financial accountability release should not submit their financial accountability statement until funding has been spent by 30 June 2024.

We do not anticipate we will spend the funds until after 30 June 2024, what should we do?

The department must be notified of exceptional circumstances whereby approved funding cannot be expended by 30 June 2024. Notification should include an explanation for why funding has not been expended and a timeline for spending the outstanding funds. Decisions regarding unspent funds will be made by the department on a case by case basis. Decisions will be confirmed by the department in writing.

Please do not submit your financial accountability statement until funds have been fully spent.

Why are there check boxes on the bottom of the financial accountability statement?

The check boxes are for those services that received funding under the old Quality Learning Environments or Community Grants streams 1 or 2 programs, where the service received a spend extension for either one of the old programs and submitted their financial accountability statement with $0.00 expenditure noted.

Ticking the relevant year and program checkbox will confirm that funds have now been spent.

Do I still need to re-submit a Quality Learning Environments or Community Grants accountability statement again to add the expenditure amount if I have previously submitted with a $0.00 expenditure noted?

No, services are not required to ‘re-submit’ any previously submitted Quality Learning Environments or Community Grants streams 1 or 2 program financial accountability statement that had a $0.00 expenditure noted.

We received funding under the old Quality Learning Environments or Community Grants but have not submitted the financial accountability statements for the two programs as yet. Should we just tick the boxes on the Quality and Participation financial accountability statement?

No, services that have not submitted the old Quality Learning Environments or Community Grants financial accountability statements to date should still submit the financial accountability statement via ECCMS noting the full expenditure. The checkboxes are relative only to services who have previously submitted these financial accountability statements with a $0 expenditure balance.

2.4. Start Strong Capital Works (CapWorks)

This section is relevant to services that received funding under the Start Strong Capital Works Program during the last reporting period.

Services should read the 2022-2023 Start Strong Capital Works Grants Program guidelines before completing the financial accountability statement. Historical guidelines for grantees under previous rounds are also available on the website.

Income section

This section is automatically pre-filled by ECCMS based on the total payments made to the service for the project under this program.

Expenditure section

Expenditure of funds should be noted against the respective line item on the financial accountability statement:

  • Major Capital Fund
  • Crisis Fund
  • Minor Capital Fund
  • Mobile Fund.

Note: At the completion of a capital works project, services are required to complete a Final Works Report. The final works report is required to receive the final milestone payment from the department.

Services are required to complete the financial accountability statement showing how funding was expended against the project. This is separate to the Final Works Report.

Additional information

Add any additional notes on how the funds were spent for each category.

2.5. Start Strong Pathways (SSP)

This section is relevant to services that received funding under the Start Strong Pathways Program (SSP) during the last reporting period.

Services should read the Start Strong Pathways program guidelines.

Income section

This section is automatically pre-filled by ECCMS based on the total annual payments made to the service during the relevant reporting period.

The final surplus noted on the previous year's Start Strong Pathways financial accountability statement will be automatically carried forward to this current year’s financial accountability statement if it has not been refunded already.

Expenditure section

Services must provide details of how the funding was spent in accordance with the Start Strong Pathways program guidelines spending rules.

See more information on the spending rules in the program guidelines.

Expenditure of funds should be divided between the respective spending rules line items on the financial accountability statement.

Add further information to how funds were spent in the Additional Information section.

Additional information

Add any additional notes on how the funds were spent.

Note: Start Strong Pathways related wages recorded on the Start Strong Pathways financial accountability statement should not be included in wages expenditure on the Preschool/Mobile Preschool or Disability and Inclusion Program financial accountability statements. Only record wages that were paid using this program funding.

Service providers are required to certify that funds have been spent in accordance with the Terms and Conditions of the early childhood education grants program.

Financial attachments

Financial reporting requirements depend on whether the service provider is classified as a Tier 1 or Tier 2 organisation under NSW Fair Trading guidelines.

For further information on the required documents to attach under this section please refer to the Financial Reporting Requirements section above.

2.6. Disability and Inclusion Program (DIP)

This section is relevant to services who received funding under the Disability and Inclusion Program during the relevant reporting period.

Services should read the guidelines for High Learning Support Needs Funds (HLSN) and DIP Minor Capital Works Fund (MCW) via the Disability and Inclusion Program page before completing the financial accountability statement.

Income section

This section is automatically pre-filled by ECCMS based on the total payments made to the service for each component under this program.

The financial accountability statement is separated into two components – HLSN and MCW.

A $0.00 will be noted in the income and expenditure box if the service did not receive one of the two grant fundings.

Expenditure section

Expenditure of funds should be divided up between the respective line items on the financial accountability statement.

Please refer to the individual spending rules under each component of the funding:

  • HLSN
  • MCW.
Additional information

Add any additional notes on how the funds were spent under each relative Additional Information section.

Note: HLSN related wages recorded on the DIP financial accountability statement should not be included in wages expenditure on the Preschool/Mobile Preschool or Start Strong Pathways financial accountability statements. Only record wages that were paid using this program funding.

2.7. Aboriginal Families as Teachers (AFaT)

This section is relevant to services that received funding under the Aboriginal Families as Teachers program during the last reporting period.

Services should read the Aboriginal Families as Teachers (AFaT) program guidelines.

Income section

This section is automatically pre-filled by ECCMS based on the total annual and one-off payments made to the service during the relevant reporting period.

Expenditure section

Services must provide details of how the funding was spent in accordance with the Aboriginal Families as Teachers (AFaT) program guidelines spending rules.

See more information on the spending rules in the program guidelines.

Additional information

Add any additional notes on how the funds were spent.

2.8. Ninganah No More (NNM)

This section is relevant to services that received funding under the Ninganah No More program during the relevant reporting period.

Services should read the Ninganah No More program guidelines.

Income section

This section is automatically pre-filled by ECCMS based on the total annual and one-off payments made to the service within this program.

Expenditure section

Services must provide details of how the funding was spent in accordance with the Ninganah No More guidelines spending rules.

See more information on the spending rules in the Ninganah No More program guidelines.

Additional information

Add any additional notes on how the funds were spent.

2.9. Grow Your Own (ECEC)

This section is relevant to services who received funding under the Grow Your Own program for Early Childhood Education and Care (ECEC) during 2021-2022 and 2022-2023.

Services should read the Grow Your Own for ECEC program guidelines.

The Grow Your Own funding was launched by the department in the 2021-2022 financial year. This is the first time a financial accountability statement is being released for this program.

Note: The financial accountability statement will capture funding paid to services during 2021-2022 and 2022-2023.

Income section

This section is automatically pre-filled by ECCMS based on the total payments made to the service under this program.

Expenditure section

Services should only include expenditure relating to the funding received from the department under this program on the financial accountability statement.

Trainee scholarship subsidies (amounts paid by the department to trainees) are not included in the financial accountability statement.

Note: Wages paid to trainees under this program included in this financial accountability statement should not be noted on your Start Strong for Community Preschool financial accountability statement.

Additional information

Add any additional notes on how the funds were spent.

3. Management of surplus funds

The department’s Early Childhood Outcomes grant unspent/surplus funding may need to be returned to the department.

3.1. Funding deficits from previous years

If a service has incurred a deficit in prior years, this deficit cannot be carried forward and should be absorbed by the service provider. Fee relief accrued deficits will be reviewed by the department and any required adjustments processed.

3.2. Transfer/reallocation of funds

Service providers cannot transfer grant funding between services from different grant programs, unless specifically permitted in the program guidelines e.g. Start Strong fee relief funds to Start Strong Program payment.

Additionally, any surplus funds cannot be transferred to other service providers, between services or across funded programs, unless it is permitted specifically in the program guidelines.

3.3. Recovery of funds

As outlined in the Early Childhood Outcomes Grants Terms and Conditions, a service provider is required to return any unspent/surplus funds in accordance with the department’s requirements. Unspent/surplus funds are Early Childhood Outcomes grant funding not actually spent or committed for the purposes specified in the relevant program guidelines.

Service providers with any unspent/surplus funds to be recovered or returned should contact the department. The department will advise the service provider, after reviewing the accountability statement, whether these funds will be recovered by offset or if they should be returned to the department.

3.4. Offsets against future payments

In some cases where program guidelines specifically permit, a surplus will be recovered by offsetting future grant payments. Money owed to the department will be deducted from future payments to the service provider until the entire surplus is recovered.

3.5. Process for return of funds to the department

In instances where an offset cannot be used to recover a surplus, for example where a service provider no longer receives Early Childhood Outcomes grant funding or where it is not allowable under program guidelines, funds must be returned in accordance with the department’s requirements.

If a service provider is required to return funds to the department, they will receive an invoice for payment, specifying the program, amount and the service to which the request relates, as well as payment options.

4. Financial accountability statement review

The following review process will be undertaken:

  • Financial accountability statements will be reviewed by the department.
  • If any issues have been identified the service provider will be contacted to clarify and amend the financial accountability statement where necessary.
  • The financial accountability statement may also be reviewed by an external auditor engaged by the department.
  • If there are any compliance issues identified, the department will contact the service provider.

If a service provider is seeking clarification of a financial accountability statement review, a written request should be made to ECEAudit.funding@det.nsw.edu.au.

Category:

  • Early childhood education
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