Carry Forward Policy (Schools)

Direction and guidance for schools on managing State Consolidated Fund (Fund 6100) and Consolidated Fund Carry Forward (Fund 6101)

Changes since previous version

2021 Jul 28 - New implementation document: Carry Forward (Schools) Guidelines

Document history

2021 Apr 22 - New policy

Superseded documents

  1. Policy statement
    1. Schools are allocated funds for the current year’s cohort of students, which are provided to support their learning and wellbeing needs. Schools establish and manage their school budget in accordance with the school’s Strategic Improvement Plan.
    2. School funding is to be expended in the calendar year in which it is received to uplift student outcomes. Retaining allocated funds at the end of the school year poses a risk to achieving improved student learning and wellbeing outcomes.
    3. In this policy:
      1. ‘State Consolidated Fund’ refers to all money schools receive in the annual School Budget Allocation Report (SBAR), as well as budget adjustments, intercompany journals and sundry tax invoices received throughout the year under Fund 6100.
      2. ‘Carry forward’ refers to the process of transferring unspent State Consolidated Funds from the end of one school year to the beginning of the following school year.
      3. ‘Automatic Carry Forward’ refers to the capped amount that a school can carry forward in Fund 6100 without requesting approval.
    4. Where schools have declared an opening balance from State Consolidated Funds in January 2021, they will only be able to draw on this until 31 December 2024. The department has transferred this balance into a new Fund 6101 – Consolidated Fund Carry Forward, which will separate these funds from in-year funding and enable schools to track the balance.
      1. Schools are expected to spend funds from Fund 6101 – Consolidated Fund Carry Forward evenly across the four-year period up to December 2024.
      2. Unspent amounts in Fund 6101 will be centralised at the end of December 2024. Requests to carry forward these unspent amounts after December 2024 will be permitted only in exceptional circumstances.
    5. For the first four years from the end 2021 to the end of 2024, schools with unspent State Consolidated Funds at the end of the school year can automatically carry forward a limited amount of funds, as outlined below. Any remaining funds will be centralised.
      School year ending Automatic carry forward amount allowed Capped amount Floor amount

      2021

      3% full budget

      $100,000

      $15,000

      2022

      3% operating expense budget

      $50,000

      $10,000

      2023

      2% operating expense budget

      $40,000

      $5,000

      2024

      1% operating expense budget

      $30,000

      $5,000

    6. From the end of the 2025 school year, unspent State Consolidated Funds will not carry forward to future opening balances. Schools are required to expend funds in accordance with their Strategic Improvement Plan.
    7. Schools will only be able to request to carry forward unspent amounts beyond December 2024 in exceptional circumstances. Approval of requests for carrying forward State Consolidated Funds is managed on a case-by-case basis and is not guaranteed.
      1. A Director, Educational Leadership may support a school to submit a request to carry forward unspent State Consolidated Fund allocations, for the current or subsequent years, to the Finance Directorate.
      2. Schools must justify the proposed retention of funds, including links to the school’s strategic directions and improved student outcomes.
      3. For existing or new capital projects, carry forward amounts must be agreed with School Infrastructure NSW, in accordance with established procedures.
      4. The Chief Financial Officer will assess the carry forward request recommended by the relevant Director, Educational Leadership or School Infrastructure NSW, for approval by NSW Treasury.
  2. Audience and applicability
    1. NSW public school principals and staff responsible for school budget management.
    2. Corporate staff working with NSW public schools in relation to budget management.
    3. This policy does not apply to carry forward adjustments in corporate areas of the department.
  3. Context
    1. The principles outlined in this policy are aimed at establishing long-term robust financial management practices that mitigate the risk that State Consolidated Funds will be significantly underspent in schools.
    2. The requirements set out in this policy are consistent with supporting legislation and Treasury directions.
    3. A summary of relevant law and policy is provided below.
      1. Constitution Act 1902 (NSW), s39, provides that all public money (including all revenue, loans and other moneys whatsoever) collected or received by any person (including a NSW Government agency) for or on behalf of the State is to be paid into the Consolidated Fund.
      2. Government Sector Finance Act 2018 (NSW), s4.6, provides that money must not be paid out of the Consolidated Fund except under the authority of an Act.
      3. Government Sector Finance Act 2018 (NSW), s4.7, identifies deemed appropriation money as government money that a GSF agency receives of a kind prescribed by the regulations that: (a) forms part of the Consolidated Fund, and (b) is not appropriated under the authority of an Act.
      4. Government Sector Finance Act 2018 (NSW), s4.8, provides that every unused appropriation for an annual reporting period for the NSW Government lapses with the exception of an unused appropriation under section 4.7.
      5. NSW Treasury Circular (TC 15/08 – Agency Carry Forwards) outlines the Carry Forward criteria and the assessment and approval process for the various categories of Carry Forwards as part of the State Budget process.
      6. School Excellence policy provides direction for schools to lead strategic improvement planning and annual reporting, to self-assess, and undertake external validation using the School Excellence Framework.
      7. Financial delegations list the powers granted to specific staff by the Minister or Secretary under various Acts, to perform financial functions on their behalf.
  4. Responsibilities and delegations
    1. Principals:
      1. establish and manage their school budget revenue, expenditure and carry forward adjustments within the calendar year in line with the School Excellence Policy
      2. identify and manage potential underspends/overspends
      3. inform Directors, Educational Leadership as soon as possible when it is not possible to manage potential underspends/overspends within their existing budget.
    2. Directors, Educational Leadership:
      1. monitor financial performance of schools and identify potential underspends/overspends
      2. approve Strategic Improvement Plans including plans for investment of Fund 6101 – Consolidated Fund Carry Forward
      3. work collaboratively with schools and Finance Directorate to recommend carry forward requests, where exceptional circumstances exist
      4. provide advice and support to principals on the carry forward adjustment process.
    3. Executive Directors, Educational Leadership:
      1. monitor overall financial performance of operational directorates and related principal networks
      2. provide advice and support to Directors, Educational Leadership on the carry forward adjustment process.
    4. School Infrastructure NSW – Asset Management Unit:
      1. works collaboratively with schools and Finance Directorate to recommend carry forward adjustments to support capital projects.
    5. Finance Directorate:
      1. provides strategic financial advice and analysis, assist with annual planning, reporting, complex decision-making and applying financial policies in schools
      2. works collaboratively with Directors, Educational Leadership to prepare and recommend carry forward adjustments for endorsement by the Chief Financial Officer and submission to NSW Treasury
      3. reviews school carry forward requests for consideration by the Chief Financial Officer.
    6. Chief Financial Officer:
      1. endorses carry forward adjustment requests and submits these for approval by the NSW Treasurer.
  5. Monitoring and review
    1. The Chief Financial Officer monitors the implementation of this policy and reviews its effectiveness, at least every three years.
  6. Contact
    Finance Manager, Financial Excellence, Finance Directorate
    FinanceExcellence@det.nsw.edu.au
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