Managing the school property portfolio.

The school property portfolio, valued at about $14 billion at 30 June 2016, is one of the largest publicly owned portfolios of property assets. It is also arguably the most complex. Although the Crown owns the school property and the Ministry of Education has overall responsibility for its management, some of the responsibilities for managing school property rest with more than 2100 school boards of trustees.

The learning environment is a critical component of a student's educational success. The assets that make up the school property portfolio are inextricably tied to providing effective education. It is important that the school property portfolio is well managed and everyone involved clearly understands how to best invest in the school property portfolio to support educational outcomes.

We last looked at how the Ministry of Education manages school property in 2006. The Ministry did not have a strategic plan for managing the school property portfolio, did not have information on the condition of school property, and did not know how well schools were maintaining their buildings.

For this report, my staff looked at the effectiveness of the Ministry's property strategy and the Ministry's role as an asset manager.

The Ministry has considerably strengthened its approach to managing school property in the last 10 years. In 2013, the Ministry set up Education Infrastructure Services (a business unit in the Ministry) to manage the school property portfolio, which has improved the way the Ministry manages the portfolio and interacts with schools. Education Infrastructure Services has increased the Ministry's capacity and capability, particularly in planning and directing major programmes of work, providing high-quality technical guidance to those providing professional services to the sector, and communicating more clearly with schools. However, there is room for further improvement.

There is only limited consideration of property matters in the Ministry's accountability documents, strategic planning, risk management, and performance information framework. Property is seen by the Ministry as infrastructure supporting schools. There is no direct link made by the Ministry to how good property management can positively affect educational outcomes. We consider that property is more than bricks and mortar. It is critical to educational success. The Ministry needs to better integrate its property function with the rest of its core business.

The Ministry requires school boards of trustees to look after the land and buildings they use and have responsibility for planning and managing certain Ministry-approved school property projects. Because of the important role school boards of trustees play in managing school property, we asked a small sample of 39 schools for their views on school property matters and the support the Ministry gives them.

Schools have a limited understanding of the Ministry's property strategy, but are generally clear on their day-to-day responsibilities for managing school property. Some of the responsibilities are often delegated to external property planners and project managers. However, most schools we talked to felt they needed more training and support in property matters. Property is an important part of the school boards' and principals' role, and they need to be better equipped to carry out this role.

In my view, the following factors may prevent the Ministry from making the best use of the Crown's property investments:

  • We saw no evidence that the Ministry uses its whole-of-portfolio view of the condition of school property for decision-making. Instead, it has relied on its staff putting business cases forward for the schools most in need of investment.
  • The property funding given directly to schools for annual maintenance and renewals does not consider the type, age, condition, or use of buildings. This restricts the Ministry's ability to make the best use of these funds because funding does not take account of actual maintenance needs.

Our report includes eight recommendations for the Ministry, one of which was also a recommendation in our 2006 report.

I thank the Ministry of Education, the school boards of trustees and principals who completed questionnaires with their school auditors, and other stakeholders we interviewed, for their time and co-operation. I also thank Ernst and Young for carrying out the audit fieldwork on our behalf.

Signature - GS

Greg Schollum
Deputy Controller and Auditor-General

21 July 2017