Variable reporting based on TEI risk rating

The Financial Monitoring Framework (FMF) allows the TEC to assess risk levels in TEIs and implement progressively higher levels of monitoring and engagement as these risk levels increase.

Inputs into setting the level of reporting are:

• The overall FMF risk rating
• The existence (or absence) of a favourable outlook to each TEIs’ FMF risk rating
• The overall TEI risk assessment (which covers financial, educational and governance considerations)

The following table shows reporting combinations of overall FMF risk and overall TEI risk assessment and the related reporting levels. Where the FMF shows higher risk or overall TEI risk assessments are higher, reporting requirements increase. If the TEC has a positive outlook within the FMF, this moderates reporting requirements.

Reporting combinations:

Outcome of the overall FMF risk rating And the overall TEI risk assessment	Financial reporting level of risk
Low FMF risk and low overall risk assessment; or Moderate FMF risk and positive outlook combined with a Low overall risk assessment.	Low risk reporting
Low FMF risk and moderate overall risk assessment; Moderate FMF risk (neutral or negative outlook) and Low overall risk assessment; Moderate FMF risk and Moderate overall risk assessment; or A High FMF risk with a positive outlook and Low overall risk assessment.	Moderate risk reporting
High FMF risk with a neutral or negative outlook; A High FMF risk with a positive outlook and Moderate overall risk assessment; or High risk overall risk assessment.	High risk reporting

The reporting requirements based on this reporting level of risk are:

 

Financial Reporting level of risk	Reporting and monitoring requirements to the TEC
Low risk reporting	Two standard financial information collections per year (Actual and Forecasts)
Moderate risk reporting	Three standard financial information collections per year (Provisional, Actual and Forecasts) More intensive analysis against second tier of assessment areas to determine key areas of risk Low level interventions considered
High risk reporting	Three standards data collections per year (Provisional, Actual and Forecasts).  Requiring June reporting in TEIFM template format is being reconsidered based on experience to date Collection of specified information such as monthly financial management accounts and council papers More intensive analysis against second and third tier of assessment areas to determine key areas of risk Full range of interventions considered

The TEC determines the appropriate level of monitoring for moderate and high-risk TEIs on a case by case basis. The TEC may request more frequent and targeted reporting, for example, copies of council financial management reports. 

The TEC uses updates from TEIs to assess and/or reassess risk classification. TEIs are able to assess their performance against published TEC financial monitoring measures and benchmarks using the financial monitoring framework model. Refer to Annual financial reporting calendar and templates for 2010 and 2011 deadlines.