Supervision of financial management
The Inspectorate’s supervision of financial management is an integral part of the supervision of educational quality. This means that we examine the financial management of every governing body in primary and secondary education (including intermediate vocational education).
- Is the governing body’s financial condition sound enough for it to continue to provide good education? (continuity of education)
- Is the way the governing body spends its funding effective (effectiveness)? Do the institutions receive the maintenance funding they are entitled to, and are their expenditures proper and correct? (the legitimacy of the acquisition and expenditure of maintenance funding)
We assess continuity and legality annually (if the governing body receives a four yearly governing body inspection we inspect this as part of the whole inspection. In other years we assess them separately). Effectiveness is only assessed during four yearly inspections of governing bodies.
If our standards on legality or continuity are not met we impose a recovery order. This can be in the report of our four yearly governing body inspection or a separate financial supervision report. Both are published on our website.
Risk-based supervision of financial continuity
The Inspectorate annually (more often if necessary) assesses whether any financial risks are present at governing bodies or institutions that could jeopardize the continuity of education.
The governing bodies send their annual report to the Education Executive Agency (DUO) by 1 July. The Inspectorate carries out an automatic risk detection procedure on the institutions’ key financial indicators. If these indicators are below certain values, then there may be a financial risk. In this case, we will conduct further analysis. We occasionally detect risks after receiving a notification.
If we suspect financial risks, then we conduct further analysis. To this end, we may request a governing body to supply us with additional information. If we detect a threat that may jeopardize the continuity of education within the next two years, we will place the institution under modified financial supervision. The governing body or institution must then prepare an improvement plan that will lead to the continued provision of good education and conscientious financial management within two years. An institution may pursue these activities on its own or in cooperation with third parties (through merger or transfer). If bankruptcy becomes inevitable, the Inspectorate will ensure that pupils, participants or students are enabled to continue their education elsewhere.
A governing body is required to adhere to its improvement plan. If it fails to do so, we will report on its shortcomings in public reports. Under certain circumstances, the Minister of Education may intervene by issuing a directive.
We publish a monthly list of boards that have been placed under modified financial supervision on our Dutch website. This list is only available in Dutch.
Supervision of financial legitimacy
The Inspectorate relies on the annual accountant’s audit of the governing body. To this end we have an educational protocol which specifies points of scrutiny during annual audits. If the accountant sees something that is not permitted, we inspect legality. In assessing legitimacy, our aim is to ascertain whether the governing body acts transparently and with integrity, and whether it properly accounts for the way it secures and spends its funding from the central government. The institution’s own accountant is primarily responsible for auditing this. In most cases, the Inspectorate can rely on the accountant’s report.
Our inspection reports are public documents and may be used to order a governing body or institution to take remedial measure or to reclaim funding.
Supervision of effectiveness
We look into whether educational resources have been allocated efficiently and cost-consciously. We assess whether the institution is allocating its government funding to the benefit of its own ambitions regarding effective education and the development of all of its pupils. The ambitions must be specified in the school plan. Our activities in this area largely falls under the category of motivational supervision unless the school board has spent its funding extremely ineffectively (then we can judge the standard as inadequate).