THE PROCESSES AND PROCEDURES OF THE CAPITAL GRANTS PROGRAM. Association of Independent Schools of NSW Block Grant Authority Limited.

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1 THE PROCESSES AND PROCEDURES OF THE CAPITAL GRANTS PROGRAM Association of Independent Schools of NSW Block Grant Authority Limited Version: 2017(1)

2 THE PROCESSES AND PROCEDURES OF THE CAPITAL GRANTS PROGRAM Contents 1. Introduction Governance Structure... 4 (a) Board of Directors AIS NSW BGA Ltd... 4 (b) The Capital Grants Quality Assurance Committee... 5 (c) The Capital Grants Appraisal Panel (CGAP)... 5 (d) The Grants Management Team (BGA Secretariat) Assessment of Individual Applications... 6 A) Eligibility and Assessment Requirements... 6 a) Approval for Australian Government Recurrent Funding... 6 b) Participation in the BGA.. 7 c) Financial Viability... 7 d) Financial Need... 7 e) Demonstration of Sound Educational Planning f) Proposed Project g) Other BGA Assessment Considerations (i) Enrolment Patterns and Growth Projections (ii) Master Plans (iii) Minimum Viable Project (iv) Estimates of Costs (v) Project Design h) Uses of Funds (i) Allowable Projects (ii) Funding Not Available for Certain Facilities (iii) Land Acquisition B) Priority C) Finalisation of Plans and Costs For Successful Applicants Other Processes Expressions of Interest (Pre-application) Mandatory Application Briefing Session School Visits Conditions and Agreements Reviews of CGAC Decisions (Appeals) P ag e

3 Forward Funding Cost Overruns Project Variations and Redefinitions Project Delivery and Tenders Documents required from the School Project and Financial Accountability Payment Schedule Contact Information Application Process Timetable P ag e

4 1. INTRODUCTION The CGP is an ongoing program of assistance to schools for capital works that has been operating for nearly 30 years. The criteria that follow apply to the Capital Grants Program (CGP). The Association of Independent Schools of NSW Block Grant Authority Limited (BGA) is a not-forprofit company and is the corporate vehicle for administering this program on behalf of the Commonwealth and State Governments for the benefit of the independent school sector. BGAs were set up under the authority of Australian Government legislation and there is a formal "agreement" between the Australian Government and each BGA. That agreement outlines the terms and conditions of the working relationship between the BGA and the Australian Government with respect to the Program. As the terms and conditions of the more recent funding agreement between the AISNSW BGA and the NSW Department of Education and Communities for the Building Grants Assistance Scheme (BGAS) are similar to the terms and conditions of the Commonwealth Government agreement, the processes and procedures adopted for the Capital Grants Program (CGP) have been adopted by the BGA for the NSW equivalent. The BGA administers funding granted under the applicable Government legislation, being the Australian Education Act 2013 and is guided by the Australian Education Regulation 2013 and the Capital Grants Programme (CGP) for Non-Government Schools: CGP Operating Manual (2016 Update) and the State Government s Building Grants Assistance Scheme guidelines as appropriate. A copy of each documents is available on the BGA website. 2. GOVERNANCE STRUCTURE Administration of the BGA is carried out by various committees and boards. (a) Board of Directors of AISNSW BGA Ltd The Board determines overall policy directions for the BGA in the light of the Australian Government s guidelines for the Capital Grants Program. Its membership comprises the following people: The Chairman of the AIS NSW Board Member of the AIS NSW Board Member of the AIS NSW Board Member of the AIS NSW Board Member of the AIS NSW Board Executive Director (ex officio) - Mr J Ralston (or his nominee) - Mr L Dell (Treasurer) - Dr P Macarthur (Chair) - Mr A Baker - Mr M Jones - Dr G Newcombe The Board has the responsibility of making recommendations for grants to the Australian Government s Minister Education and Training or the NSW Department of Education Minister for approval. It ensures that the BGA s obligations and responsibilities have been met in relation to the legal and guideline requirements of the Australian or State Government. 4 P ag e

5 (b) The Capital Grants Quality Assurance Committee The role of this committee is to review all decisions and recommendations made by the Capital Grants Assessment Panel to ensure that the Committee has applied the processes to all applicants equally, and that the relevant Guidelines pertaining to Capital Grants have been adhered to. The Committee is comprised of 4 people, namely, the Chief Executive of the AISNSW BGA, the Deputy Chief Executive of the AISNSW BGA, a Board Member from AISNSW BGA and the Capital Grants Program Director. Two members of this Committee will take no part in the decision-making of the capital grants application process. (c) The Capital Grants Appraisal Panel (CGAP) This panel reviews and evaluates the recommendations made by the Capital Grants Assessment Team to finalise which school s capital development projects will be recommended to the respective Government Ministers for a capital grant as a contribution to that project. The procedures outlined in this document have been determined for the operation of the CGAP having regard to the mandatory requirements and guidelines of the Australian and NSW Governments and the terms of reference from the AIS NSW BGA. The CGAP endeavours to ensure that the best possible value in terms of both quality and quantity of school facilities is achieved by as many schools as possible. The CGAP is appointed by the BGA Board and the final recommendations of the panel are presented to the BGA Board prior to submission to the relevant Ministers of Education. Members of the CGAP are drawn from a pool of appropriately qualified and experienced people with expertise in the capital works projects in schools. The panel of 5 members may change for each application hearing however it will always comprise the following positions: Chair - AIS NSW Deputy Executive Director Executive - Capital Grants Program Director Architect (2) Finance Professional (2) Educational Professional (2) For 2017 the 3 latter positions on the panel will comprise: Architects: Mr Peter Reed architect Mr Andrew Pender architect Finance Professionals: Mr David Jennings business manager of an independent school Mr Recep Aydogan business manager of an independent school Education Professionals: Mr Paul Cockrem principal of an independent school Mr Dean Bennetts - principal of an independent school The panel chair may invite others onto the CGAP as needs or circumstances require. 5 P ag e

6 (d) The Grants Management Team (BGA Secretariat) This in-house team comprises: David Buley Chief Financial Officer, AIS NSW Capital Grants Program Director Wendy Godden Manager, Grants Administration Michelle Hayman Projects Officer Hamidee Hanna Financial Analyst Monica Rouel Financial Analyst It administers the operations of all previously awarded grants that the BGA may administer from time to time, including but not limited to: Capital Grants Program (Australian Government CGP) Building Grants Assistance Scheme (NSW Government BGAS) This team also conducts the assessment of each Capital Grants Program application, working with schools to ensure applications are complete and liaising with those schools which have lodged applications. In the course of the assessment process, the grants team: (a) reviews all data pertaining to the educational or other non-financial need for the schools for the project, and (b) conducts extensive financial analysis of the school s submitted financial information. This comprehensive analysis provides the basis for the recommendations to the CGAP for their consideration. 3. ASSESSMENT OF INDIVIDUAL APPLICATIONS In assessing applications the CGAP must have regard to the mandatory requirements and guidelines of the Australian and/or NSW Governments as well as the terms of reference developed by the BGA. There are three basic steps in the assessment process before recommendations are made by the BGA to the relevant government: A) Assessment of the "eligibility" of the project with regard to the program guidelines and certain BGA assessment considerations; B) Assessment of the school s financial state with regard to viability and financial need for the project applied for; and C) Determination of the "priority" order of all eligible applications 6 P ag e A) Eligibility and Assessment Considerations The Australian and NSW Government guidelines require that all applications be examined to determine their "eligibility" for funding. Eligibility is determined by a number of factors the most crucial of which are described in detail below. Applications that do not satisfy ALL Government eligibility requirements cannot be supported for capital funding. The necessary requirements are: a) Approval for Australian Government General Recurrent Funding. This approval is a prerequisite for funding under any of the Australian Government s special purpose programs including the Capital Grants Program. Newly established schools must be able to demonstrate

7 to the BGA that approval for recurrent funding has been obtained or is likely to be obtained. b) Participation In The BGA - The Australian Government requires that all schools be listed as participating in one of the existing BGAs (the AIS BGAs or that administered by the Catholic Education Commission (CEC)). Independent Catholic schools have the choice of joining either BGA. The AISNSW BGA currently represents some 390 schools, with enrolments in the vicinity of 154,000 pupils. Application for participation in the BGA is open to any independent school in New South Wales irrespective of membership of the AIS or of any of the other involved organisations. Schools wishing to participate in the BGA are required to complete and return a BGA Participant Application Agreement. This Agreement must be renewed each time the governing legislation changes. c) Financial Viability: The school must also be able to demonstrate to the BGA that it is financially viable, that is, the school must be likely to remain financially solvent and be able to, and intend to, continue to be eligible to receive Commonwealth Recurrent funding at the site of the proposed project for the foreseeable future. The assessment team will use the submitted financial data to assess whether a school may be at risk of becoming insolvent in the timeframe covered by the current project. If this were to eventuate, this would trigger a breach of the Agreement and potentially require repayment of the grant to the BGA, further putting pressure on the school s financial situation. The assessment team will look at historical and forecasted indicators such as profitability, cash flow, liquidity, and debt per pupil, among others prior to determining whether a school is financially viable for the purposes of the Capital Grants Program. (See Requirements and Guidelines for Submission of Financial Statements on the Capital Grants (BGA) website) Schools will be advised by the assessment team if they consider the current project to be outside the allowable risk parameters set by the BGA Board each year with respect to the project submitted. d) Financial Need: The Australian and NSW Governments regard the existence of a financial need for assistance as central to the assessment process for the CGP and it demands that BGAs provide clear evidence of financial need when recommending projects for Government assistance. In particular it must be established that the school and its community does not itself have the capacity to meet the total cost of the project, either from its own available cash reserves and projected cashflow from operations, from current or potential borrowings, or from a combination of both factors. Where a financial need is demonstrated, the grant level will be the difference between the estimated total cost of the project and the assessed capacity of the school to contribute to that cost. This level becomes the amount of any Australian or NSW Government grant which may be recommended. The application form asks schools to nominate a level of school contribution to the cost of the project. While the financial assessment team notes the school s own assessment of its contribution" it will make its own assessment of financial capacity using the financial data submitted on the application form and from the audited financial statements. In doing so, the team will consider if the school could fund the project from cash resources, future operational surpluses, potential capacity to borrow from financial institutions or parent bodies, fundraising and donations, or a combination of all of these. Having done so the team will compare its assessment with the school's contribution assessment, and make a determination of financial need. The assessment team examines the school's finances over a four year period - the past year, 7 P ag e

8 the current year and two future years. If available, the team may also take into account financial data in years preceding the most recent financial year so that it may gain a better picture of the school s financial history. In addition, current indebtedness is examined together with current and future school building commitments. While account is taken of any capital development already underway which will make calls on the school's resources, schools should be aware that they should be deploying any available funds to the current project and not sequestering funds for a project beyond the timeframe covered by the current application (within 2 years of the application date). It is important to note that each school's financial capacity is independently assessed and that subvention levels are not fixed or pre-determined in any way. The panel determining this is drawn from people very experienced in school financial management and they are assisted by a financial assessment which uses a combination of technical indicators and subjective appraisals to determine if those schools applying for grants have access to sufficient funds to complete their proposed project without Government assistance. The Committee employs a range of historical and future indicators for: profitability, cash flow from operations, debt per pupil and total debt, capacity to service debt although it may use other indicators and evidence additional to these, including assessment against education sector benchmark data prior to making a determination. In assessing financial need the assessment team adopts the following principals: (i) It is assumed that any surplus cash (or investments) will be available for the project unless evidence is provided that demonstrates that cash is committed to another capital project. It is assumed funds specifically earmarked for capital works (e.g. building funds, capital fees etc) will be available for the project; (ii) It is assumed that part of any future surpluses being produced will be available to either pay for intended capital works or service the debt on a loan for the project. Current levels of indebtedness and the school's capacity to service borrowings are carefully examined; (iii) Monies preserved for employee entitlements, either at the school, or at a group head office, are considered to be available for capital works; (iv) Contributions from supporting bodies outside the school are included as part of the school's contribution to the project; [NB. Whilst the support of the community is paramount to most schools and schools may expect donations for capital works to be forthcoming, care should be taken in realistically assessing the quantum and timing of donations to ensure the school is not detrimentally impacted by donations less than expected.] (v) The value of any land that the school is situated on, whether owned or leased, cannot be considered part of the school s contribution. To assist with its assessment of financial need in the 2017 application round the BGA requires schools submit a copy of their audited 2014 and 2016 financial statements. The BGA receives between applications annually so to assist with the timely assessment of all applications, where financial statements have not been provided by 31 st May the school s application may lapse and the school will be contacted if that is the case. Since 2013 the BGA has stipulated that General Purpose Financial Statements (Reduced Disclosure Regime is acceptable) are to be submitted with each application to ensure all 8 P ag e

9 financial information required for a fair and equitable financial assessment is included. These must be based on Australian Accounting Standards and other mandatory reporting requirements. Schools may have a governance structure that may make GPFS difficult on a per-school basis so those schools may wish to apply beforehand to the BGA to request the use of Special Purpose Financial Statements. Schools should note however there are specific requirements pertaining to Special Purpose financial statements and schools will need to show cause as to why they are unable to provide General Purpose Financial Statements. Regardless of the format, consistent with ASIC requirements, all the measurement and recognition principles of all the AASB statements should be applied and the disclosure requirements of specific AASB statements should be applied, which are noted in the table below: AASB 101: AASB 107: AASB 108: AASB 110: AASB 1031: Presentation of Financial Statements Cash Flow Statements Accounting Policies, Changes in Accounting Estimates and Errors Events after the Balance Sheet Date Materiality The BGA also requires the following additional disclosures in order to ascertain other financial commitments and aspects of the school s operations. These additional AASB statements are noted in the table below. AASB 117: AASB 118: AASB 124: AASB 137: Leases Revenue Related Party Disclosure Provisions, Contingent Liabilities and Contingent Assets Further to AASB 118 (Revenue), the BGA will also require the following items separately disclosed in your accounts in either the revenue section or in a separate note: 1. Federal Government recurrent grants (per capita) 2. State Government recurrent grants (per capita) 3. State Government interest subsidy 4. Federal Government targeted grants 5. Federal Government BGA grants (Capital Grants Program) 6. State Government BGA grants (Building Grants Assistance Scheme) 7. Federal Government Secure National Solar Scheme or Secure Schools Grants 9 P ag e

10 Other required inclusions vary from year to year according to new ASIC and AASB announcements. These will be communicated to schools prior to the application opening date. e) Demonstration of Sound Educational Planning: The project proposed must be shown to be consistent with sound educational planning, within the school and the environment within which it is operating, especially in relation to the cost, size and use of the facilities to be funded. Submission of a comprehensive facility Master Plan to support this is mandatory. f) The proposed project must be consistent with the Australian Government's Program objectives as outlined each year in the Capital Grants Programme (CGP) for Non-Government Schools: CGP Operating Manual g) Other BGA assessment considerations: Enrolment Patterns and Growth Projections - In assessing applications the BGA pays particular attention to each school s enrolment projections. Past and current enrolments by year and by grade are closely examined to help validate projections. Schools must be able to justify projections either in terms of past and current enrolments, documented evidence of demographic trends in the catchment area or by producing waiting lists for entry. Other evidence may be required also. The BGA will focus in particular on enrolment projections two years ahead as these enrolments will form the basis of each school s application in terms of educational planning and facility need. For example, a successful applicant will apply in 2017 and build in 2018 to accommodate projected 2019 enrolment needs. This approach may lead to a series of staged developments over time that should be reflected in the school s facilities master plan. Master Plan - Projects must be consistent with a long-term development or master plan for the school. Such a plan will take into account the educational facilities needed to satisfy realistic enrolment projections, and is achievable within realistic financial constraints. The plan will specifically relate to the number and suitability of classrooms, specialist rooms and other facilities needed by the school at particular stages of its overall development. The factors that affect this consideration include for example, the school's class sizes, streaming arrangements, registration requirements, curriculum/subject choice and room occupancy rates. In addition, consideration will be given to the immediate past history of the school and the degree/extent of continued community support it has received. Each of these factors is considered by the CGAP in consultation with school authorities. It is essential for schools applying for capital grant assistance to demonstrate how the facilities requested in the application fit into the school s master plan. A Master Plan has been a mandatory requirement for schools intending to apply for a capital grant since Minimum Viable Project - In determining eligibility the CGAP aims to establish in conjunction with school authorities a minimum viable project (mvp) that meets the immediate major educational needs of the school when projected two years ahead. To establish the mvp a detailed assessment of all of the factors listed in e) and f) above are taken into consideration with particular emphasis placed on enrolment projections and basic classroom (including specialist rooms) requirements. In addition the application should demonstrate that the project being applied for is cost effective, avoids design features that may increase construction costs, maintenance costs or operating costs (eg air conditioning), and that it meets current environmental requirements. 10 P ag e

11 The design should be aesthetically pleasing and make use of good quality materials. Although not a requirement, schools are encouraged to consider sustainability and energy reduction features in the design. Estimates of Costs for Application Purposes In estimating the cost of projects schools are required to seek professional advice from their architects/quantity surveyors prior to submitting the grant application. The application form is designed to extract costing data across multiple construction and oncost categories and these are required to be completed by all applicants. Presenting an application with only a total figure will not be considered acceptable for the Panel to adequately scrutinise the project costs. The school will be advised by the BGA Secretariat if this is the case and the application may not progress unless sufficient data is included. Project Design for Application Purposes Schools must submit preliminary project drawings with their applications and have more comprehensive drawings prepared for the Panel hearing. It is recommended that schools seek professional assistance from their architects prior to submitting the grant application to ensure the following factors have been given adequate consideration: project site location orientation aspect delivery method materials likelihood of Council approval linkages with other school facilities Facilities receiving Government funding must be of a suitable standard and comply with all relevant building codes. The CGAP utilises the services of professional architects who are very familiar with school buildings to advise them where the school s planning may be deficient. h) Uses of Funds: Allowable Projects - Grants for capital expenditure will be considered for the following: The planning, erection, alteration, extension, demolition (including asbestos removal) or refurbishment of a building, part of a building or other facility including student residential accommodation, and attached supervisor s quarters; The development or preparation of land for building or other services; The installation or upgrading of water, electricity or any other services; The provision of furniture or equipment, including information technology equipment, where they form a lesser part of a larger capital project; The provision of library materials and the goods for cataloguing a library, where the current project is a library; Teacher accommodation in rural areas; Capital grants to assist students with disabilities; To supplement the construction of projects funded through other Commonwealth programs. The purchase of land in special circumstances. While the above purposes will all be considered for a grant, the program is by its nature competitive and aims to address enrolment growth as well as comfortable learning spaces. Accordingly the BGA may prioritise projects for learning facilities ahead of landscaping and other land preparation projects. 11 P ag e

12 Funds are not available for facilities: which have religious worship as a principal purpose; in a co-educational school where those facilities will not, as far as practicable, be equally available to male and female students at the school; for which retrospective* approval is sought. *retrospective projects, or projects that have already commenced or have been completed are not eligible for funding Land Acquisition Special Circumstances The Capital Grants Programme (CGP) for Non-Government Schools: CGP Operating Manual states that grants for capital expenditure may be used for the purchase of land, with buildings or parts of buildings, or in special circumstances, without buildings. The use of Capital Grants for the purchase of land without buildings is problematic because the application process can take many months before a grant to be approved by the Minister, during which time the sale price may have substantially increased or the opportunity to purchase the land may have lapsed because action couldn t be taken quickly enough. There have also been instances where the land wasn t actually available and the grant application was purely speculative. In some cases, the funds allocated to proposed land purchases that did not eventuate we ve had to return the funds to the government. This is especially regrettable as the funds could have been allocated to schools ready to proceed with constructing buildings. As the funds available for the 2017 application round for the Capital Grants Program are limited, and to avoid the requirement that unused funds are returned to the Department of Education and Training, the purchase of land without buildings will not be considered except in special circumstances. Each case will be assessed on its merits and you will need to discuss your situation with the BGA office in order to determine if your circumstances warrant special consideration. NB. The NSW Department of Education does not permit the purchase of land in its guidelines at all. Facility Maintenance Plans - Schools are required to demonstrate to the CGAP that they have a facilities maintenance plan in place to ensure that buildings which have been funded (either wholly or partially) by Government grants are kept in working order and appearance. A sample maintenance plan is available on the BGA website. B) Priority: Once the above eligibility and other assessment requirements have been satisfied, the CGAP has the task of determining a priority listing for the eligible applicants. This difficult task is necessary because the funding available to the BGA for distribution is always less than the demand for grants support. The Australian & NSW Government guidelines require that a number of factors in determining priority be considered. Eligible projects will be placed in order of priority on the basis of: (i) the relative educational disadvantage of the student population of the school with the more disadvantaged being given priority over the less disadvantaged. Educational disadvantage should be assessed on the basis of relative educational outcomes of the students at competing schools. Where this is not possible other indicators of educational disadvantage 12 P ag e

13 may be used. Until further notice, the BGA will continue to use the relative socio-economic ranking of schools using the SES ranking provided by DET (and used for general recurrent grants purposes prior to 2014). Schools that cannot be differentiated on the basis of the relative educational disadvantage of their students may have their ranking refined by reference to the combined effects of the appropriateness of the cost, size and use of facilities in relation to sound educational planning. In determining appropriateness the BGA will take into account factors such as geographic and demographic trends, the grade structure of the school, particular curriculum requirements, local area costs and State Government facility area standards. (iii) The condition, suitability and number of existing facilities in relation to the level of facilities needed. (iv) The relative contribution of the project to the Australian Government s program objectives to: provide and improve schools capital infrastructure, particularly for the most educationally disadvantaged students; ensure attention to refurbishment/upgrading of existing capital infrastructure, while making provision for needs arising from new demographic and enrolment trends; pursue the Australian Government s other priorities and objectives for schooling C) Commitment to the Project for Successful Applicants Having established "eligibility" and "priority" the BGA will informally advise each school whether it intends to recommend them for a Government grant, and seek to obtain clarification of the school s willingness to commit to the project with the level of grant recommended and for the MVP developed by the Panel. If approved by the Minister. Schools will proceed to the next phase. 4. OTHER PROCESSES Expressions of Interest In late November each year, the BGA will ask schools intending to apply for a CGP grant to submit an Expression of Interest embedded as page 1 of the online application form. Schools may outline the scope of their project, the proposed school contribution, and the timeframe for completion. This allows the Grants Management Team to review and advise whether the Capital Grants Program is a suitable funding source for the school s intended project or whether it s outside the scope of the program. Application Briefing Session In February each year, schools intending to apply for a Capital Grant must attend a briefing session at AIS NSW (sessions may be held in country areas via video links if required) in order to fully understand the Capital Grant Program application components and the assessment process. Schools that do not have a representative attend the briefing session may be advised their application is unable to progress to the pre-assessment or hearing stage of the process. School Visits 13 P ag e

14 a) Application Since 2014, school visits have been on an as needed basis only. As schools therefore may not have the opportunity to explain, in person, their educational needs and present plans to support their written applications it is vital that applications be comprehensive, complete and accurate and be accompanied by all required supporting documentation. This is important as the assessment team will scrutinise the data contained in the application and in the supporting documents and can only formulate a recommendation based on what has been provided. Project recommendations will be reviewed by the CGAP once the assessment team has analysed the financial, costing and educational content provided in the application. If a school visit should be considered by the BGA as necessary, this will be individually arranged and the following people should be considered mandatory attendees and that meeting. Others may be present if the school requires. Principal Business Manager Architect Board Chair You are advised to ensure that any personnel needed to answer likely questions arising from the application are available for that meeting as there will be no follow-up meetings. b) Pre-Completion Generally a visit to the school will be arranged near the conclusion of each project that was successfully awarded a grant to verify that the completed project aligns with the project scope and description approved from the original application or any subsequent variation as approved by the relevant Government. Conditions and Agreements Under the BGA arrangements the Australian and NSW Governments require that formal agreements exist between schools and the BGA. There are two base Agreements: (a) To be eligible to apply for a grant, a school must have signed a BGA Participant Agreement - an agreement as to the conditions associated with participation in the BGA. All schools that have joined the AISNSW BGA have already completed this agreement for the period covered by the Australian Education Act New schools should contact the AISNSW to become members. Catholic Independent schools may join either the AISNSW or the NSW Catholic Block Grant Authority (b) A BGA Participant (Capital Funding) Agreement must be executed between any school for which a Government approves a grant and the AISNSW BGA. This is necessary to establish the conditions associated with the administration of each Commonwealth or State grant. The Agreement will be executed shortly after your school is formally notified by the Minister of the success of your grant application. Reviews of CGAP Decisions (Appeals) The CGAP makes recommendations to the BGA Board on grant funding. Should an applicant school consider that its application was not correctly assessed in relation to the Program guidelines or that it had not been provided with a reasonable opportunity to present its case 14 P ag e

15 fully, or that the decision has treated the school harshly, a separate Committee is responsible for reviewing the school s application, the CGAP assessment and decision. The Capital Grants Appeals Committee (CGAC) will adjudicate in such cases and convey its deliberations back to the BGA Board. This decision will also be conveyed to DET. The CGAC are comprised of people who are familiar with independent school operations and the working of the Capital Grant Program but who have not been involved in the CGP process. The exact composition of this Committee will be advised to the school and to DET at the time of the appeal. Forward Funding Applicants under the Program should be aware of the "forward funding" nature of the program. There are long lead times involved with the Program due to a relatively long and complex application and assessment process, the time required to prepare plans and call tenders, and the time required to actually complete the approved project. For this reason the Australian Government has a policy which allows the BGA to forward commit funds. For example, this means that for the 2017 application round, the BGA may allocate funds to successful projects from the 2018 or 2019 calendar years, or a combination of these years. The BGA s decision as to which year/s the school s grant funding will be drawn from will depend on the proposed commencement date and the time required to complete the project. Generally the expectation would be that schools approved for a grant in 2017 would commence construction during 2018 and so initial payments of grant funding would be available within that year dependent on the progress of the project. The earliest year will determine the timeframe within which the school must demonstrate a legally binding commitment (ie sign a construction contract) to proceed with the project however it is possible that schools may not receive any government funding until the next year. This time delay may require schools to enter into finance arrangements for the period between the commencement of construction and the receipt of the grant funding. Cost Overruns Historically, the BGA has had a policy of fully allocating all available funds for that year in each round in an attempt to assist as many schools as possible. As a result, excess funds are minimal and will usually only occur as a result of a school forfeiting its grant (rare) should a project be withdrawn. Requests from schools for reimbursement of "cost overruns" may be considered but only when it can be demonstrated that increases were unavoidable and could not have been foreseen by sound planning, adequate investigation or prudent estimation by the school. In addition such requests will be subject to competition with other applications for available funds. It should be noted that distribution of excess monies are still subject to DET s review and approval. Schools, and their architects, should be particularly careful therefore, when estimating the final costings to be submitted to the BGA as these costings are included in the recommendations made to the Australian or NSW Government. These costings should be as accurate and as comprehensive as possible and should include any likely increases anticipated before construction actually commences. Project Variations and Redefinitions Often schools find that the project for which they applied can t be commenced due to either funding (or borrowing) falling through or the need to be rescoped due to a change in priorities or need at the school with respect to the required facilities. When this happens schools will 15 P ag e

16 often request to reduce the scope of the project, or change the project altogether, usually with a complementary request to retain the full value of the grant. While the BGA understands that these events can happen, schools must be aware that the Guidelines state that reductions (or project savings) must also reduce the value of the grant. The value of the school contribution remains the same. Schools may apply to the BGA to vary the project scope or school contribution and if accepted and supported by the BGA, this request will be forwarded to the relevant Government for approval, however schools are advised that variations can take time to be considered and aren t always successful. Any application for a variation should be supported with documentation with full justification of the proposed amendment and including any financial or educational grounds for the request. Project Delivery and Tenders Due to the public funding nature of the grant program, schools are required to demonstrate competitive pricing for their project works. This is usually accomplished by a public tender for the project however the BGA will consider other delivery methods provided the school can still demonstrate competitive pricing can be accommodated. In some circumstances where a sufficient number of responses from tenders has not been obtained, the school may request the BGA permit a reduction in the number of tenders to ensure quality quotes however the school must still demonstrate value for money for the proposed project. Schools are required to provide a detailed summary of the tender results to the BGA on a document template provided by the BGA prior to contracting with the preferred tenderer. The BGA may also request a copy of the tender specification/documents to be assured the process undertaken by the school has been open and withstands a probity check. These conditions are embedded in the BGA Participant (Grant Funding) Agreement where further details can be obtained. Once the BGA is satisfied the conditions with respect to tendering have been met, it will then approve the school move onto the next phase - construction. Documents that may be requested from the School The relevant agreement between BGA and the school will set out more exactly these requirements however it is important to note that throughout the application process, the tendering stage, engagement of a builder, the construction phase, and eventually project acquittal, the BGA will require certain documents to assure them that the school is keeping the appropriate records, contracts, agreements and payment documents, and that these documents are valid and properly executed. These documents may include but will not necessarily be limited to: A copy of the full set of documents sent to prospective tenders including drawings and site plans, as well as responses from the tenders and the tender scoresheet (including assessment protocol) A copy of the contract with the builder A project ledger Copies of invoices pertaining to the project A copy of the occupancy certificate (if applicable), and A copy of subsequent Financial Statements It is important that the school commence the project with the expectation that the BGA may request these documents at some stage of the project and have them readily available. These documents may be requested prior to payments being made or before the school s project can progress from one stage to the next. 16 P ag e

17 Note that the school is still required to maintain records of all applications, assessment, tendering, payment and accountability processes for at least 7 years after the completion of the project. Project and Financial Accountability Within 7 months of completion of the project, the school will be required to ensure completion and return of the following documents which will be provided by the AISNSW BGA: A certificate by the architect, builder or project manager stating that the project has been completed according to the scope outlined in the Agreement. A certificate from the Principal confirming final costs, completion details and that any government recognition requirements have been complied with. A certificate from an independent qualified accountant # confirming: o the final expenditure of the project, o that the project was completed as approved, and o that the grant monies were spent only on the approved project. An occupancy certificate from your local Council or private certifier, whichever is appropriate for the project. In some circumstances an Interim Occupancy Certificate may be acceptable. However, these often have conditions attached that can sometimes limit the use of the facility, and which may mean the project is effectively unusable, please provide a copy to the BGA who will consider and advise whether the IOC is sufficient for acquittal purposes. # The BGA definition of a qualified accountant is that stipulated by DET which is described in the Corporations Act 2001: A qualified accountant is defined in s88b of the Corporations Act as a person meeting the criteria in a class declaration made by ASIC. Under our class order [CO 01/1256] you are a qualified accountant if you: belong to one of the following professional bodies at the declared membership classification, and you comply with your body's continuing professional education requirements. Professional bodies Chartered Accountants Australia and New Zealand CPA Australia National Institute of Accountants (NIA) Declared membership classifications CA, ACA and FCA CPA and FCPA PNA, MNIA and FNIA 17 P ag e

18 Offer and Acceptance of Grant Offer from Minister Execut e BGA Par t icipant Agreem ent. Schools instructed to prepare tenders and proceed. BGA approves tender results. Dem onstrate commitment in required tim efram e by entering into contract with Builder. Normal Payment Schedules for BGA Grants Payment Frequency Paym en t s norm ally m ade over 2-3 year period First Payment Once school has spent its contribution, the BGA will m ake an initial payment com m ensurate with project size, grant amount, and level of completion. Subsequent Payments Subsequent payments made at periodic intervals dependent upon data in monthly p r o g r essive expenditure statements. Final Payment Final payment (10% ) m ade when occupancy certificate submitted and acquit t al documents signed by qualified (ext ern al) accountant received by BGA Contact Information: David Buley Chief Financial Officer Capital Grants Program Director dbuley@aisnsw.edu.au Wendy Godden Manager, Grants Administration wgodden@aisnsw.edu.au Michelle Hayman Projects Officer mhayman@aisnsw.edu.au Monica Agassi Financial Analyst magassi@aisnsw.edu.au Hamidee Sassine Financial Analyst hsassine@aisnsw.edu.au 18 P ag e

19 2017 CAPITAL GRANT APPLICATION PROCESS Date Activity 2016 Thursday 1 st December Expressions of Interest available online 2017 Wednesday 8 th February CGP Briefing Session Please note this is mandatory. Non-attendance at this session may result in applications not progressing Friday 28 th April Closing date for application submission May Application pre-assessment and review by architect s panel 2017 Wednesday 31 st May Closing date for submission of Audited and Signed 2014 and 2016 General Purpose Financial Statements 2017 June - July BGA assessment team conducts educational and financial assessments 2017 August Capital Grants Appraisal Panel (1 day) and Quality Control Panel September Recommendations are submitted by AIS NSW BGA to DET and NSW DoE 2017 October 2017 January 2018 a) government representatives check submissions and submit BGA Recommendations to Minister/s for approval. b) DET/DoE advises successful schools and advises AISNSW BGA. c) AIS provides in principle offer of funding and agreement to successful schools NB: no construction contract should be signed by the school until a BGA Participant (Capital Funding) Agreement has been negotiated between the school and the AISNSW BGA and the Results of Tender have been approved by the AISNSW BGA. 19 P ag e