Simon Birmingham: Today I’m pleased to announce a positive resolution in relation to our inquiries into three schools and their eligibility for government funding. Starting way back in May of last year, the Commonwealth undertook an audit of six schools affiliated with the Australian Federation of Islamic Councils. And in our assessment of that we’ve carefully gone through the situations in each of those six schools. Two of those schools, the Malek Fahd School in Sydney and the Islamic College of Canberra, have had their funding terminated as a result of their failure to adhere to the highest standards of governance and accountability in relation to school education funding.

But I am pleased though that three of the schools we can declare today will continue to receive funding under strict conditions in terms of their support for their school communities in the future. Those schools are the Langford school here in Perth, as well as the Islamic College of Melbourne and the Islamic College of Brisbane. These three schools have cooperated with the process that’s been underway since the start of last year, and of course particularly the show cause notice that was given to all six schools late last year. We expect the highest standards of accountability in relation to the use of taxpayer funds in non-government schools, and we are applying those high standards of accountability. These three schools have demonstrated a willingness to cooperate, a willingness to reform their governance structures, to guarantee their school independence, and to have appropriate accountability about how taxpayer dollars are used. They will now operate under an arrangement of quarterly reporting until the conclusion of next year, where we will make sure that every single condition they have said that they will meet is adhered to and is applied to guarantee that taxpayers, as well as the parents and these school communities, can have confidence that the dollars that are given for the benefit of students are used for the benefit of those students.

Can I finally say in relation to the Islamic College of South Australia that we expect that there will be resolution in relation to that school in the coming days or weeks, and that we hope that we will be able to still see a positive resolution there, but the department is still working through careful issues in relation to that school community.

Question: What sort of financial irregularities were there that quarterly reporting is going to be needed going forward?

Simon Birmingham: Our expectation is that every school who receives government funding operates on a not-for-profit basis, is free of external influence, and that dollars are used solely for the education, welfare, and benefit of the students in that school community. The concerns that we’ve worked through in relation to all six of these schools where that their affiliations with AFIC, the way in which they operate, it did mean that there was some concern that funding was not used exclusively for that student welfare, and that they didn’t have the independence and autonomy in their governance structures that we’d expect.

Now these schools, the three schools today in Perth, Melbourne, and Brisbane, have given a commitment that they will actually change the way in which they operate, and they have taken steps to demonstrate they are implementing those reforms, and we will now hold them to all of those reforms.

Question: When you say they weren’t being used for student welfare, what was the money being used for?

Simon Birmingham: There are concerns that there were arrangements in place that enabled other external entities to generate a profit out of certain loan structures or other financial arrangements that the schools had in place. That is an unacceptable arrangement to have when those entities or those other external bodies may also be having some influence over the governance decisions within the school.

Question: What- your press release talks about substantial changes they’ve made to their operations, can you just talk about what specifically those are, those changes?

Simon Birmingham: The types of changes relate to the way in which the board of the school or the authorised entity for the school is comprised, who can serve on that board, how they are appointed and then of course the structures in which they operate around the financing of the school, the types of loan arrangements they have and accountability for the use of taxpayer and parent dollars in those school environments.

So, we’ve seen significant changes that relate very much to how the schools are governed, who is governing the schools and the way in which they operate in future.

Question: And as far as curriculum goes, were there issues around the clients there?

Simon Birmingham: These issues really related to the way in which public monies were being used and whether in fact taxpayer money that we give to non-government schools was being used for student welfare and student wellbeing. They weren’t so much about what was actually happening in the classroom.

Question: How much money would the Langford School in Perth receive from the Government?

Simon Birmingham: So, just to double check on that, the Langford College receives around $5 million as does the Melbourne College while the Brisbane College receives around $7 million. So, it’s significant sums of money. Now, we support non-government schools right across Australia as we do government schools. Students in government schools receive far more taxpayer funding than those in non-government schools do. Funding in non-government schools is assessed partly on the basis of a school community’s capacity to contribute. So, the less financially well off a school community is, the greater the level of support they will get but it is always less than what a government school receives.

Question: And Langford in particular, were there financial irregularities of those loan structures operating there?

Simon Birmingham: These were concerns held across all six of the different schools. What we saw was good faith negotiations undertaken by four of the schools to respond to federal government concerns. Unfortunately two did not and we took the difficult, but strong, decision to withdraw that funding which terminated effective last Friday.

Question: How were these concerns identified, I guess? Like how- what was the- or like the audit, how did that come about?

Simon Birmingham: There are regular reporting requirements under the Australia Education Act schools need to meet to continue to receive government funding. Now, for these schools who will continue to receive their funding, they will have to meet a heightened level of reporting on a quarterly basis to demonstrate their compliance with the types of reforms they’ve agreed to undertake.

But of course we identify problems through the usual reporting processes as well as any other feedback that we receive.

Question: What other conditions have been made? Because you mentioned there’s a number of them.

Simon Birmingham: So, the conditions really do focus in on school governance, the composition of school boards, who is entitled and authorised to appoint members to those school boards and guaranteeing the independence of those school boards so that they are clearly working for the welfare of the school community as well as then the way in which funds are used, financial arrangements maybe struck with the schools to again guarantee the taxpayer dollars are used exclusively for the welfare of students.

Question: What sorts of organisations were benefitting? When you say they were turning a profit because of these loan arrangements, what were the third parties that were benefitting from it?

Simon Birmingham: Well, the concerns related to the affiliations between these schools and AFIC body and of course from there it’s- it was, I guess, the congruence of influence of AFIC having an influence on the boards as well as in some of these financial arrangements.

Question: So, it was just between AFIC and the schools, not between any other- or any other third parties?

Simon Birmingham: In general, yes.

Question: Do you have any concerns about other schools? Since May last year since you started looking into these six, are there are any other schools that have come [inaudible]?

Simon Birmingham: There aren’t similar processes under way in relation to other schools at present but we are always monitoring and working with schools in relation to their compliance arrangements, usually these things can be dealt with in a department to school [inaudible].