Chapter 2.5: Associated Parties
2.5.1 Parent/Teacher associations
Parent/Teacher Associations (PTAs) or Home School Associations are voluntary organisations bringing together parents, teachers and sometimes students within a particular school. Normally, their aims are to help fundraise for developing parent involvement and community at school and other activities relating to the welfare of the school.
Good communication between the board and the PTA can help the two entities work together effectively for the school and its students.
For further information on parent/teacher associations, visit the New Zealand Parent Teacher Association website.
It is likely that PTAs or similar may need to be registered under the Charities Act 2005 in order to retain their charitable (and tax-free) status. All such organisations are encouraged to check with their parent organisations – or seek advice from the ministry’s financial advisors.
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2.5.2 Trusts
Refer also to Consolidation in Chapter 4 - Financial Reporting, especially for a discussion on ‘control’.
An independent trust may be operated for the benefit of the school yet be outside of the school's (board’s) control. In this case, the trust is considered as a separate entity and should not be consolidated within the school's accounts.
The board cannot transfer or gift any money or assets to any trust or other organisation that it (the board) does not control. If a gift or bequest is made directly to an independent trust, then that money is controlled by the trust and is not subject to the Education Act 1989. It can, therefore, be invested however the trust wishes.
School trustees can also be members of an independent trust board. However, that would make it more likely that the trust is within the school’s control and that their accounts should be consolidated. The individuals would need to be very careful to distinguish in which capacity they are acting and to avoid conflicts of duty and interest. In practice, it may be very difficult for the trustees to avoid conflicts of interest.
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2.5.3 Integrated schools
Those who are associated with state-integrated schools (as defined in the Private Schools Conditional Integration Act 1975) should note that any funds raised by PTAs or similar and that are transferred at any time to the school’s board of trustees, automatically become Crown funds and can only be spent on board-owned assets, ie, they cannot be spent on the proprietor’s property.
Fundraisers for integrated schools are encouraged to ensure that funds raised in support of school property are clearly identified as being in support of the proprietor and do not come under the control of the board at any time. Note this includes board-controlled trusts.