Financial monitoring of tertiary education institutions

Te aroturuki ā-pūtea i ngā kura mātauranga matua

Last updated 22 December 2016
Last updated 12/22/2016

One of our core functions is to monitor tertiary education institutions (TEIs) and report to the Minister responsible for Tertiary Education on the financial performance of the tertiary sector (s159KBA Education Act 1989).

This is done to ensure the public can have confidence in the stability of the tertiary education sector in New Zealand and to minimise risks to the Crown.

To do this, we require all TEIs to supply us with financial information twice each year:

  • the first submission requires the unaudited financial results for the year ending in December plus the budget for the upcoming year and two-year forecasts
  • the second submission is focused on audited results and re-forecasts.

Both submissions provide a current and forward looking view of financial performance.

Additional reporting may be required for individual TEIs with specific agreements in place, such as consents issued under s192 of the Education Act 1989.

We may also request more frequent and targeted reporting for TEIs assessed as being at risk via the Financial Monitoring Framework (see below).  

Financial monitoring framework

The financial monitoring framework is used to monitor TEIs' financial performance. We developed this framework, together with the sector, to assist in our monitoring obligations.

The framework provides clarity and transparency around the financial monitoring assessments we make, by:

  • using readily available information
  • considering both historical and future performance
  • using evidenced-based financial theory relevant to the sector
  • avoiding unnecessary complexity in the design and construction of the framework
  • applying a formulaic approach and a judgement about forecast confidence
  • having stable measures and scoring, and
  • enabling self-assessment by your organisation.

Read a full description of the Financial Monitoring Framework for TEIs (updated July 2016) (PDF, 1 Mb).

See a Financial Monitoring Framework example (XLS, 317 Kb).

We produce a one page summary report for each TEI each year, which summarises key metrics and provides an overall financial risk rating. These can occur more frequently for moderate or high-risk TEIs, or where new information becomes available.

Variable reporting based on TEI risk rating

Where the framework shows higher risk or that overall TEI risk assessments are higher, reporting requirements may increase.

We determine the appropriate level of monitoring for each TEI on a case-by-case basis.

We may request more frequent and targeted reporting, for example, copies of council financial management records.

For any enquiries please email: teifm.info@tec.govt.nz.