MACKENZIE
Thank you for watching. In this video we'll talk about Start Strong for Community Preschools fee relief payments spending rules and provide information about surplus and refunds.
We acknowledge that we are recording this video from the lands of the Dharawal people. We also acknowledge the ongoing custodians of the various lands on which you all work today, and the Aboriginal and Torres Strait Islander people watching this video. We pay respect to Elders, past and present, as ongoing teachers of knowledge, songlines and stories. We strive to ensure every Aboriginal and Torres Strait Islander learner in New South Wales achieves their potential through education.
We'll start by looking at the fee relief payment spending rules.
So, the Start Strong for Community Preschools program provides funding to eligible community and mobile preschools in New South Wales to support services in delivering affordable, quality preschool for 3 to 5 year old children.
Funding is provided in two streams - program payments and fee relief payments, both of which are made directly to services.
The purpose of the fee relief payment is to reduce the cost of early childhood education and care for families.
Your service receives the funding to pass through to your families in the form of reduced fees.
We understand that fees differ across services in New South Wales, reflective of the different operating costs.
This means that some services may be able to offer 600 hours per year of preschool for no charge. Other services may need to charge a fee, and some services may have surplus fee relief funding once daily fees have been reduced to zero.
The spending rules provide guidance on how fee relief funding must be used, and how surplus fee relief funding can be used.
In the diagram, we can see the primary use of funding is to first reduce daily fees for 600 hours of preschool for families claiming fee relief.
If there's extra funding after reducing daily fees, the fee relief can be used to lower other charges like enrolment or excursion fees.
If all charges are covered, the remaining funds can be used to reduce costs for extra enrolment hours, lower daily fees for non-fee relief families or cover operating expenses as per program payment spending rules.
Funding amounts are based on the previous year's enrolment data, so the 2024 Annual Preschool Census informs 2025 funding.
Reserve fee relief funds may occur if enrolments decrease from the previous year, children attend multiple services and claim fee relief elsewhere, or families haven't completed a declaration form.
Payments are made on a per term basis, so we recommend tracking surplus and reserve funds on a per term basis for ease and accuracy.
We'll take a look at an example of fee relief funding in action across a year.
This scenario will be available on the website and we encourage you to review it in further detail there.
In 2023, Happy Learners Preschool reported 25 children enrolled for 600 hours or more in the Annual Preschool Census. This data determined their fee relief payment for 2024.
In Term 1, Happy Learners received funding for 25 children totalling $4,347 per child or $1,086.75 per child per term. Only 20 children claim fee relief, leaving 5 places of fee relief funding to allocate as reserved fee relief funds.
In Term 2, with 2 new enrolments claiming fee relief, Happy Learners now had 22 children receiving fee relief and 3 places as a reserve for relief funds.
Then in Term 3, when a child left in Week 4 the rest of the term was placed aside as reserved fee relief funds. A new enrolment in Week 7 meant the recently reserved funds were allocated to this child. The funds for weeks 5 and 6 became surplus fee relief.
Another child left in Week 8, leaving 2 weeks of reserve funds. There was no child enrolled to replace the child who left in Week 8, meaning the last 2 weeks of term moved from reserved funds to surplus fee relief funds.
In Term 4, Happy Learners started with 21 children claiming fee relief and 4 reserved places. No enrolment changes occurred during Term 4.
So in summary, at the end of the calendar year, the funding result for Happy Learners was 5 places of reserved fee relief funds in Term 1, 3 places of reserved fee relief funds in Term 2, 3 places of reserved fee relief funds and 4 weeks of surplus fee relief funds in Term 3, and 4 places of reserved fee relief funds in Term 4.
At the end of the calendar year, the reserved funds are kept aside and returned to the department. The service expended the surplus fee relief funds.
Now we'll take a look at surplus and refunds.
While providers are encouraged to expend all annual Start Strong funding in accordance with the spending rules, we understand that some providers may still have a surplus at the end of their reporting period. Providers are allowed to retain surpluses under a threshold, although they may choose to return it if they prefer.
If the surplus is over 10% of the service's annual funding, or $30,000, whichever one is higher, these funds may need to be returned to the department.
The department began a trial for services to retain 2023 surplus funds, provided they met certain criteria. The trial has now been incorporated into the program from 2024.
The financial accountability process is mandatory and will continue to be a mandatory component of the program in 2025. Providers will have the opportunity to apply to retain surplus funds.
So, to retain surplus funds above the threshold, services must follow the process outlined on the screen.
Firstly, all providers will complete the mandatory reporting and acquittals process.
Then, providers that have a surplus above 10% or $30,000, whichever one is higher and feel they have an operational need to retain the surplus, can submit the voluntary online SmartyGrants form requesting to retain their surplus.
Providers will need to outline how they will spend the surplus in line with program objectives, spending rules and indicate an expenditure timeline. The department will then consider the request and advise the provider of the outcome.
Thank you for watching. If you have any questions, please contact the department by calling 1800 619 113 or emailing ecec.funding@det.nsw.edu.au.
