Follow-up of Management of the Student Resource Package

Why the SRP is important

Government schools rely on Australian and Victorian government funding to operate.

In 2023 the department distributed $8.9 billion through the SRP for 1,573 government schools to teach 654,535 students.

The SRP has 3 funding streams:

Our 2020 audit

In 2020 we assessed if the then Department of Education and Training fairly, consistently and transparently allocated the SRP.

We found the department did not: 

• effectively oversee the SRP
• keep all the methods and data inputs it used to calculate funding allocations up to date
• have sufficient controls for the systems it used to calculate allocations
• transparently allocate funds. 

This meant there was a risk that schools were not getting the funds they were eligible for to meet their students' needs.

We made 7 recommendations for the department to address these issues. 

The department accepted all our recommendations. It told us it planned to address most of them by December 2021.

It also said it would continue to improve how it oversees and controls the SRP.

We did this review to assess the department's progress.

Commitment to improving the SRP

The department's actions in response to our recommendations demonstrate their commitment to improving the fairness, consistency, and transparency of SRP funding allocations.

The department addressed 4 recommendations by or close to the completion dates it gave us when it responded to our 2020 report. 

These recommendations related to:

• improving its internal governance arrangements for the SRP
• reviewing references against the SRP's objectives and refining them as required
• regularly reviewing individual references to make sure funding allocations align with schools' and students' needs
• developing and maintaining an SRP operating manual.

Recommendation addressed but significantly delayed

The department addressed one recommendation 32 months after its original completion date. This recommendation related to reviewing core student learning references under the student-based funding stream and advising the government on any required changes. 

The department planned to complete it in April 2021. But it revised the completion date to September 2023 and completed it in December 2023.

The department's work on the recommendation was delayed because it needed to pause an expenditure review so schools could prioritise student learning and wellbeing during the COVID 19 pandemic.

The expenditure review required significant involvement from schools.

Outstanding recommendations

Each year we send a survey to agencies to see how they are progressing with our recommendations. 

We publish their responses in our Responses to Performance Engagement Recommendations: Annual Status Update reports.

In the surveys for the 2021, 2022 and 2023 reports the department told us that it had completed actions to address 6 of the 7 recommendations. 

But in this review we concluded that 2 recommendations the department told us were complete had only been partially addressed. 

Stronger controls

In 2020 we identified a risk that staff could make unauthorised changes to the systems the department uses to calculate SRP funding allocations. 

The department has improved its controls by:

• reviewing who has access to the systems quarterly
• logging changes to the systems in a secure environment and monitoring any changes
• getting 3 staff to independently review the accuracy of its funding allocations on an ongoing basis.

This has addressed the risk we identified in 2020. 

Assuring data quality

In 2020 we identified a risk that if the department used inaccurate data to calculate SRP funding allocations, then schools:

• may not get the funds they are eligible for
• may get funds they are ineligible for.

The department has partially addressed this risk. It has:

• included information on the Victorian Government’s Data Quality Information Management Framework Standard (the data quality standard) in the SRP operating manual, which staff use to understand the data inputs, processes and calculations that determine funding allocations
• included a brief summary of its assessments against the data quality standard in the SRP operating manual
• started requiring program areas to attest to the quality of data the department uses to calculate SRP funding allocations. 

But the department has not given us any documentation to show that it:

• takes a risk-based approach to assuring data quality
• has processes and business rules to ensure program areas consistently assess data assets against the data quality standard.

Transparency of funding allocations

In 2020 we found gaps in the department's guidance to schools on the purpose, eligibility criteria or calculation methods for some SRP references. 

This meant some schools could not confirm they were getting the funding they were eligible for.

The department has partially addressed this issue. It:

• clarified the funding it allocates through the SRP in August 2021
• made the data it uses to calculate funding allocations available to schools in September 2023.

But the department had not addressed all the information gaps. Some references still do not:

• clearly explain the funding's purpose
• have a numeric formula or sufficiently explain how the department calculates them
• have clear eligibility criteria. 

The department told us it will review these references over the next 3 years.

Addressing these gaps will continue to make the SRP more transparent for schools. It will also make it easier for schools to confirm they get the funds they are eligible for.

What we recommended in 2020

We made this recommendation because the department: 

• did not have robust governance arrangements to oversee the SRP 
• had not delegated overall accountability for the SRP and its references. 

This meant there was no committee or individual responsible for making sure:

• schools get the funding they are eligible for
• the department allocates funding in line with the SRP's objectives.

Implementation status

The department addressed this recommendation by May 2021.

This was 2 months after the planned completion date.

SRP governance framework

The department developed an SRP governance framework to address this recommendation.

Figure 2 shows the reporting lines in the framework.

Figure 2: SRP governance framework

Source: VAGO, based on information from the department.

The governance framework also names the program areas responsible for each reference.

What we recommended in 2020

We made this recommendation because the department had not reviewed if the SRP was achieving its objectives since it introduced it in 2005.

Implementation status

The department addressed this recommendation by its planned completion date of December 2022.

Reviewing and updating the SRP's objectives

In December 2020 the department started assessing if the SRP's objectives were still suitable. 

It finished the review in December 2022.

The department found that the objectives were no longer suitable. It revised them to better align with:

• its strategic priorities
• best-practice principles for funding models 
• its goal-setting principles.

The case study below lists the revised objectives. 

The department communicated these objectives to schools in September 2023 through its Policy and Advisory Library.

Reviewing references against the revised objectives

In 2020 we found that the department had only reviewed 4 of the 52 references in 2018. 

The department's review of the 4 references led to it changing how it distributes funding between year levels for one reference. It uses this reference to allocate 70 per cent of SRP funding.

The review also led to recommended changes for the 3 other references. But the department did not make them. The department:

• reviewed 23 references in 2022 and 2023 to see if they aligned with the revised objectives
• plans to review another 46 references by the end of 2026
• plans to review the SRP objectives every 5 years. It has scheduled the next review in 2027. 

What we recommended in 2020

We made this recommendation because the department had not reviewed how much schools spend on staff and resources since 2002. 

This created a risk that SRP funding allocations no longer reflected the cost of staffing and resourcing a school.

Implementation status

The department addressed this recommendation when it finished an expenditure review and provided advice to the government in December 2023. 

This was: 

• 32 months after the completion date it gave us in 2020
• 3 months after its revised completion date.  

The delay was due to the department pausing work on the expenditure review in 2021 and 2022 to help schools prioritise student learning and wellbeing during the COVID-19 pandemic.

The review required significant involvement from schools.  

Expenditure review

In 2021 the department started an expenditure review to assess:

• if the SRP still reflected the costs of staffing and resourcing a school
• how these costs vary across different school contexts. For example, primary and secondary schools, or metropolitan and regional schools 
• how the SRP captures resource benchmarks.

Figure 3 shows the key dates for the expenditure review.

Figure 3: Expenditure review timeline

 Source: VAGO.

As part of the review, the department:

• ran semi-structured interviews with leaders from 70 schools to get insights on:
  • schools' operating conditions and challenges
  • school communities' needs 
  • how schools make strategic decisions
• surveyed 51 schools to better understand their spending on: 
  • operations and business administration activities
  • core teaching and learning activities
  • other activities related to student needs 
• checked all survey responses for completeness and reliability.

The department used a stratified sampling approach to analyse data meaningfully and reliably across different school types, sizes, locations and complexities.

But this meant the sample did not represent the Victorian school population.

For example, medium-sized schools represented 27.5 per cent of surveyed schools compared to 49.9 per cent of the statewide population. 

The survey only had a 30.4 per cent response rate. This was because schools experienced high workforce pressure in 2023, which meant they could not prioritise completing it.

Despite the low response rate and the fact the sample was not representative, the stratified sampling approach meant that results could be meaningfully compared. This allowed the evaluation team to make findings on the costs of staffing and resourcing schools.

The department advised the Minister for Education in December 2023 about the results of the expenditure review including findings that detail the department's ongoing review of school funding.

What we recommended in 2020

We made this recommendation because the department used some outdated data to assess schools' eligibility for funding.

This meant there was a risk that some schools:

• may not get the funding they were eligible for
• may get funding they were ineligible for.

Implementation status

The department addressed this recommendation by its planned completion date of March 2021.

The department still uses data that is up to 8 years old to calculate schools' eligibility for location‑based funding.

But it has confirmed this approach does not disadvantage any school.

Updating data to assess eligibility

In 2020 we found 6 references that used: 

• the University of Adelaide's Accessibility/Remoteness Index of Australia (ARIA) data, which gives information on a school's distance to the nearest town or service centre, from 1996 
• the Australian Bureau of Statistics' (ABS) Urban Centres and Localities (UCL) data, which gives information on an area's population density, from 1997. 

In 2021 the department updated its database with UCL and ARIA data from the 2016 Census.

The ABS updated UCL data in 2022 and the University of Adelaide updated ARIA data in 2023 to reflect the 2021 Census. 

The department could not update its database for the 2024 school year due to the timing of the ARIA data release.

This means the department will use data that is up to 8 years old to calculate schools' eligibility for 3 references in the 2024 school year.

The department told us that it:

• has done analysis that shows no school is disadvantaged by this approach
• will update its database in time for the 2025 school year
• intends to review these 3 references as part of a broader review into location based funding.

Aligning school classifications and the entity register

In 2020 we found that the department's school classifications in the eligibility criteria for some references did not align with its entity register classifications.

This created an inconsistent approach to allocating funds to schools that had classifications in the entity register which were not reflected in the eligibility criteria for individual references.

In 2021 the department reviewed and updated its school classifications to align with its entity register.

It also did annual compliance checks in 2022 and 2023 to confirm the school classifications aligned with the entity register. It plans to keep doing these annual reviews. 

In its 2023 review the department found no discrepancies between the school classifications and the register except for 3 known exceptions.

What we recommended in 2020

We made this recommendation because the department:

• relied on staff's implicit knowledge to manage the SRP
• had not documented enough information on SRP calculations to allow it to check the completeness and accuracy of funding allocations.

Implementation status

The department addressed this recommendation by its planned completion date of December 2021. 

SRP operating manual

The department released the first version of its SRP operating model in May 2021.

Since then it has revised it 7 times.

The manual collates information from several program areas.

The department reviews the template it uses to collect information from program areas at least once a year.

This has improved the quality and consistency of information they provide and helps the department make sure it is asking them for the right information.

What we recommended in 2020

We made this recommendation to reduce the risk of:

• staff making unauthorised changes in the systems the department uses to calculate SRP allocations
• schools not getting funding they are eligible for or getting funding they are ineligible for due to inaccurate or incomplete data.

Implementation status

The department reported this recommendation as ‘complete’ in our 2022 Responses to Performance Audit Recommendations: Annual Status Update report (see Appendix D for more information).

But we have not seen evidence that its processes for assuring data quality fully comply with the data quality standard.

As a result, we concluded that the department addressed 3 of the 4 actions in this recommendation by July 2021, which was a month after its planned completion date.

Strengthening and monitoring some controls

The department has reduced some of the risks we identified in 2020.

By July 2021 it improved how it monitors controls for the systems it uses to calculate allocations for SRP references.

For example, the department has started:

• reviewing user access to its SRP systems quarterly
• logging and monitoring changes to its SRP systems in a secure environment
• getting 3 staff to independently review the accuracy of its funding allocations and reporting the results to the SRP governance subcommittee on an ongoing basis.

The data quality standard

The data quality standard outlines the minimum activities agencies must do to maintain the quality of their data assets.

The standard applies to critical and shared data assets.

The standard says that at a minimum, an agency must:

• develop and maintain a data quality management plan for each critical (high-value and/or high-risk) data asset
• assess data assets against specified measures 
• create a data quality statement for all:
  • critical data assets
  • datasets it shares with other departments or external partners
  • data assets it releases to the public. 

Compliance with data quality standard

Since 2020 the department has improved its compliance with the standard in some areas.

However, the department has not been able to demonstrate that its processes for assuring data quality fully comply with the standard.

What we recommended in 2020

We made this recommendation because the department did not share information with schools to help them:

• confirm they receive the funds they are eligible for
• understand how the department uses data they submit to calculate their funding allocations. 

Implementation status 

The department reported this recommendation as ‘complete’ in our 2022 Responses to Performance Audit Recommendations: Annual Status Update report (see Appendix D for more information).

But it will not update some references to make them more transparent until 2026.

As a result, we concluded that the department:

• addressed 2 of the 3 actions in this recommendation by October 2021
• partially addressed the risks associated with it not sharing information about references with schools.

Improving transparency

The department has made it easier for schools to confirm they get the funding they are eligible for and understand how the department uses the data they submit.

It has done this by:

• transferring its guidance about SRP references to its Policy and Advisory Library in 2020, which makes it is easier for schools to access the information 
• adding new references for funding provided through the SRP 
• sharing the data it uses to calculate SRP allocations with schools. It improved the data it shares with schools in October 2021.

Updating guidance to schools

In 2020 we found that the department's guidance to schools on some SRP references did not have sufficient information.

The department has updated some of these references.

The department told us it will review the remaining references in 2024, 2025 or 2026.

But this means schools will not get the information they need to confirm they are eligible or have received the right amount of funding for some references until 2026.