Business Manager’s Report 4
Overview
Fees
2007 was a year in which we made significant progress in a number of key areas within the school’s financial management. We achieved a significant increase in operating surplus well ahead of budget and a cash flow surplus well above expectations.
The basic fee structure remained unchanged from the previous year in 2007. Parents continued to take up the various electronic payment options for fee payments such as direct debit and BPay. In 2007 we received over 70% of our fees this way. This is a more cost effective payment form for the school and reduces cash and cheque handling at the school.
The results are pleasing given the significant additional investment of more than $400k in buildings, equipment and furniture. This is a 24% increase in expenditure over 2006. Our financial performance is a direct result of parents paying their fees on time, as well as the school’s ability to manage payments and bank accounts to maximise interest income. With a particular focus we reduced our uncollected fees in 2007 dramatically. This outcome particularly contributed to our ability to achieve a better cash position than budgeted. As a result of a second external audit a number of financial management recommendations were made and have been implemented with favourable results. Under the guidance of the Board, a Financial Committee was established in 2006. The group consists of Board members and Executive involved in the financial management of the school. This has proven to be very worthwhile as a number of process improvements have come about as a result. The group was actively involved in the budget process for 2008. One of our key aims during the process was to keep the fees as low as possible. This is consistent with the Board’s goal of providing affordable Christian education to Christian parents, yet still delivering a high standard of Christian education, and maintaining and improving our buildings and grounds to satisfactory levels. Our DA for the adjoining land was approved by the Warringah Council in May 2007. In conjunction with the approval, the Board agreed to a change of Architect and Project Manager for the next phase. The newly appointed MCA Architects are currently in the process of reviewing a building redesign to meet the schools future educational needs and current financial situation. The Transition class, established in 2006, has been a great success as indicated by enrolment numbers and parent feedback. Transition was full for the year 2007 and is full for 2008. Transition has also assisted with higher Kindergarten enrolments in 2008 with 40 students enrolled. Last year’s sound financial management allowed us to meet our obligations to staff and creditors in 2007. The school is able to meet all its current liabilities, whilst the 2007 result has set a foundation for the school for its development in 2008 and beyond.
Covenant Christian School Annual Report 2007
In 2007 the fee discounts were slightly realigned for those families with more than one child. The sibling discounts were reduced to more accurately reflect the costs of educating siblings. The Board continues to be committed to ensuring that fees at Covenant remain as affordable as possible to families. Fees increased for a first child by 7% in 2007. The 2007 fee increases were necessary because the cost of education during the 2006/07 years increased at a greater rate than the general market indicators. The school continues to support a number of families with bursary assistance (fee relief) so that their children can be part of our student community. As at 1 July 2006 the Bursary Fund was established. This was very pleasing as the school desires to support Christian families who desire a Christian education for their children but struggle due to financial limits. As a result other families can now contribute to this fund and receive tax deductible receipts.
Accounts 2007 The School Board recognises the need to create an appropriate surplus each year with a view to future building projects. The Financial Accounts for 2007 show a net operating surplus of $264k. The cash position at the end of the year increased by $573k to a total of $1.19m. A budgeted net operating surplus of $130k was approved for 2008. A number of facilities were improved with more than $400k invested in 2007. This included: • the Senior Pavilion/Locker Room & Music Lab project, • G21 Hospitality classroom was refurbished including new commercial equipment, • synthetic grass was laid, • the terrace built at the front of school, • more than 300 new plants planted at the front of school, • new IT servers purchased, • carpets replaced and walls painted in a number of classrooms, • air conditioning units installed, • water tanks installed, • primary playground equipment upgraded, • verandahs and paving areas repaired. In the IT sector a significant strategic decision was made to engage an external business partner to provide IT support. This has proven to be very successful for the school and provides greater access to IT knowledge than we have previously had. This will be increasingly helpful with the ever developing requirements of the schools IT needs. During 2007 we avoided using the overdraft facility and reduced our loans by $303k. This is a great achievement which speaks volumes to bankers and others about our solid financial credentials. We are positioning the school so that we can borrow for the new Building A in 2009/10. General Building Fund donations of approximately $33k were raised in 2007; plus an additional $50k donated for the Senior Pavilion/Music Lab