EREA NSW Colleges Ltd Incorporation
Frequently Asked Questions
Below are the answers to some of the questions we expect will be raised about the change to the previously announced governance structure. We hope they will assist you to understand a little more about the reasons for the governance change.
Why incorporate a new subsidiary in NSW?
A key objective of the Incorporation project has been to ensure the restructure enables EREA to operate to the highest regulatory and compliance standard in every State and Territory. To this end, we have been testing our governance structure and seeking independent legal advice to ensure this objective is met.
Under the Education Act 1990, NSW Government funding must not be provided to non-government schools that operate for a profit. Section 83C of the Act, when read with the current Not-for-profit Guidelines for Non-Government Schools, has the effect that schools receiving NSW Government funding must not pay remuneration to members of school governing bodies in connection with their role on the school governing body. This would include directors of an entity that operated schools located in NSW.
We consulted a s83C expert from MinterEllison Lawyers who advised that keeping NSW Schools in the one entity, EREA NSW Colleges Ltd, will enable that entity and EREA Ltd to be managed in a way that ensures ongoing compliance with NSW laws, including section 83C. (For example, payments from EREA NSW Colleges Ltd may be quarantined so as not be a source of payment to any director of EREA Ltd). This is consistent with the approach adopted for Victorian schools.
For consistency across entities owning and operating EREA schools, none of these entities will pay directors fees.
Which NSW Schools will be governed by the new EREA NSW Colleges Ltd entity?
The following 7 NSW Colleges will move under the governance of EREA NSW Colleges Ltd:
Edmund Rice College, Wollongong
St Dominic’s College, Penrith
St Edward’s College, Gosford
St Patrick’s College, Strathfield
St Pius X College, Chatswood
Waverley College, Waverley
Who will govern the 2 NSW Special Assistance Schools and the 4 NSW Flexible Learning Schools?
St Mary’s FLC, Penrith, Wollongong FLC, Pambula Beach FLC & St Laurence FLC, Newcastle will still move to be under the governance of EREA Flexible Schools Ltd as previously announced. St Gabriel’s School, Castle Hill and St Edmund’s College, Wahroonga will now join the Flexible Schools governance structure.
Why are St Gabrielle’s School, Castle Hill & St Edmund’s College, Wahroonga moving under the Governance of EREA Flexible Schools Ltd rather than staying with EREA NSW Ltd?
Both Schools currently have Public Benevolent Institution (PBI) status with the ACNC. To maintain this status, the governing entity must meet the strict criteria imposed by the ACNC. EREA Colleges Ltd would not meet these criteria under the new structure. Additionally, the specific nature of the educational services provided by both St Gabriel’s and St Edmund’s is more aligned to the Flexible Schools network.
We have received legal advice that EREA Flexible Schools Ltd and in turn our Flexible School network would meet the criteria to obtain PBI status. This advice will ensure both St Gabriel’s and St Edmund’s retain their PBI status.
Why are NSW Flexi’s remaining under the governance of EREA Flexible Schools Ltd when they too need to meet the requirements of Section 83C?
Whilst the same Section 83C compliance and governance requirements apply to our 4 NSW Flexible Schools, we feel that it is important that they remain governed by EREA Flexible Schools Ltd to ensure consistency and alignment of their vision and delivery of educational services to the young people within their care.
The Board of EREA Flexible Schools Ltd will be voluntary, which fulfills a key Section 83C requirement.
What are the benefits of moving to this new structure?
NSW Colleges will have the dedicated oversight of a Director together with Compliance & Child Safety staff to ensure that all regulatory and compliance requirements are met in a targeted manner.
EREA can be also assured this new structure is best practice.
Does this mean other states will incorporate their own Subsidiary?
No. This structure enables EREA to meet the specific legislative requirements of New South Wales, which, together with Victoria have the highest regulatory standards of all states and territories in Australia. Our advice is that the structure as it now stands will enable governance and compliance at the highest level.
What is the structure going to be and how will it operate?
At this stage three key roles in the new entity will be a Director, a dedicated Compliance role and a dedicated Child Safety role. As with EREA Victorian Schools Ltd, the new NSW entity will utilise many of the services of EREA Colleges Ltd i.e. Land and Infrastructure, Formation etc. Further detail regarding the structure and how it will operate are still being worked through.
Will the addition of EREA NSW Ltd to the structure cost more to operate?
We are mindful of the financial burden on schools. With the Board being voluntary this will not add to the cost model. It is our intention to keep costs tightly monitored and any increases will attempt to be contained and will be well communicated.
Who will be on the Board and when will this happen?
The Board of EREA NSW Colleges Ltd is currently being recruited. All Board members will be appointed in a voluntary capacity, and it is anticipated the majority will be in place by 30 September 2022.
What happens to the current role of the Director of Schools NSW/ACT?
A new position, Director of EREA NSW Colleges Ltd is being established in the same way Victorian Schools Ltd has been set up. Given the change in core elements of the role including reporting to a Board, the position will be advertised externally and an appointment process will be undertaken.
Where does St Edmund’s College, Canberra fit into the new structure?
A key reason for the establishment of EREA NSW Ltd is to ensure consistent governance and in particular compliance with Section 83C. As this legislative requirement does not apply in ACT, St Edmund’s College, Canberra will move to Central/West region under the leadership of Director of Schools Brian Schumacher.
What happens next?
Work has commenced to register EREA NSW Colleges Ltd with ASIC, ATO & ACNC. The role of the Director will be advertised shortly. In the meantime, the process is underway to recruit Board members to the new entity.