HIGH SCHOOL FINANCE

Poverty Bay Herald, Volume LIII, Issue 16376, 25 June 1927, Page 8

HIGH SCHOOL FINANCE

DISPUTE OVER AGREEMENT

BOARD AND DEPARTMENT An agreement stated to have boon made- between the Education Department and the Gisbomc High School Board, involving the payment by the board of a sum of £f>(iii 13s -td, and an enquiry by the Department as to the condition of the board's funds in the event of the payment of that amount being made, wore matters which came before a meeting of the Board of Governors yesterday afternoon.

'' UNSATISFACTORY POSITION ''

The Director of Education wrote as follows in reference to the the board's financial position:—

"The debit balance of $606 13s 4d in buildings and sites capital account, represents the amount which your board promised to find from its own sources towards the purchase of Finn's property. Transfers should, therefore, lie made from the board's general account to liquidate this debit balance. I have to point out, however, that the board's general account is in a somewhat unsatisfactory position. At: December 31 last, the account had a credit balance of £3*2 2s lid and assets amounting to £l2 10s. The liabilities totalled £OS IDs Bd, leaving a, now credit in the account of £328 17s 3d. From this account the board has to find the COu'O 13s -Id mentioned above for Finn's section, and £1872 5s lid (the net endowment income) towards teachers' salaries for 1927. A transfer of this net income was made in the board's accounts in the returns for 1920, whereas the amount

is not deducted by the Department from the .teacher-' salary payments until this rear.

"The balance in the endowment income account at the end of each year should always represent the net income shown in return No. 0, and this sum should, be available in cash at December 31. Had this been so the board would have been in a position to have considerably reduced the overdraft at the bank. The position now is that if the mortgage is to be reduced by a substantial amount, the board will require to use cash which rightly belongs to the hostel and lower departments. I shall be glad to have a statement from the board on the subject, saying especially whether the board's promise to find the £66'(i 13s 4d is going to be embarrassing." NO UNDERTAKING The chairman, Mr. H. E. Bright, said the board had never undertaken to pay the £666. The suggestion had been that the board raise one-third, and public subscription should be responsible for one-third, while the Department should subsidise the amount raised by public subscription, .this to make the other third of the amount.

The secretary, Mr. C. H. Bull, commented as follows: "The board's finances have never been in a position where the general account, balance at the end of the year provided for '.he transfer made 2on account of salaries for the endowment account. Further:

"(1) In 1023 the Department required the board to transfer £I2OO out of its credit balance in the endowment income account to repay principal when its general aceount showed a credit balance of only £234 as at December 31. 1922, and a transfer had been made of £2456 9s 4d at this date for 1023 salaries.

"(2) In 1926 the Department recommended the board to pay off the bank loan account, about £700; when the general account stood in credit, £O7O, provision was required for a tiansfer of £2112 from the endowment, income for 1020 salaries.

"Tkerefor.o, the previous policy of the Department has been not to allow the board's general account to bo in credit sufficiently to meet the transfer fronu. endowment income for salaries for ftie Succeeding year. If it is now desired to alter this policy no deduction from grunts for teachers' salaries should be made for a year, and the board would then probably be in a position apparently desired by the Department's letter. "From a perusal of the secondary education report it will be seen that no secondary school whose transfer's for salaries are large has a general account balance that will meet the transfer at the end of the year. "Bank overdraft: As a set off exists between the board's overdraft and general accounts for the purpose of interest charged by the bank, only a minimum of interest has to lie found by the Department. Transfers aggregating £1250 have already been made to the loan account since February, 1920. and the balance now stands at £2500. The Department in its letter of September 21, 1925, was quite agreeable to an extension of Burk and Jamieson's mortgage of £3750., At the end of 1923 the board's indebtedness on loans was £5058 15s, on the whole of Avhich sum interest was being found by the Department; this year there is'onlv the bank loan account balance of £2500 and the interest borne by the Department is on this loan, less the credit balance of our general account which will vary up to £ISOO during the year and of /ourse includes our hostel credit balance."

The chairman said that in perusing the balance sheet he found the Gisborne High School Board was in a Letter position financially than most of tlio large schools. It was decided to write to the Department on the lines indicated in the secretary's statement.