Financial monitoring of tertiary education institutions

Te aroturuki ā-pūtea i ngā kura mātauranga matua

Last updated 22 December 2016
Last updated 12/22/2016

One of our core functions is to monitor tertiary education institutions (TEIs) and report to the Minister for Tertiary Education, Skills and Employment on the financial performance of the tertiary sector (s159KBA Education Act 1989).

This is done to ensure the public can have confidence in the stability of the tertiary education sector in New Zealand and to minimise risks to the Crown.

To do this, we require all TEIs to supply us with financial information twice each year:

  • the first submission requires the unaudited financial results for the year ending in December plus the budget for the upcoming year and two-year forecasts
  • the second submission is focused on audited results and re-forecasts.

Both submissions provide a current and forward looking view of financial performance.

Additional reporting may be required for individual TEIs with specific agreements in place, such as consents issued under s192 of the Education Act 1989.

We may also request more frequent and targeted reporting for TEIs assessed as being at risk via the Financial monitoring framework (see below).  

Financial monitoring framework

The financial monitoring framework is used to monitor TEIs' financial performance. We developed this framework, together with the sector, to assist in our monitoring obligations.

The framework provides clarity and transparency around the financial monitoring assessments we make, by:

  • using readily available information
  • considering both historical and future performance
  • using evidenced-based financial theory relevant to the sector
  • avoiding unnecessary complexity in the design and construction of the framework
  • applying a formulaic approach and a judgement about forecast confidence
  • having stable measures and scoring, and
  • enabling self-assessment by your organisation.

Read a full description of the Financial Monitoring Framework for TEIs (updated July 2016) (PDF, 1 Mb).

See a Financial Monitoring Framework example (XLS, 317 Kb).

We produce a one page summary report for each TEI each year, which summarises key metrics and provides an overall financial risk rating. These can occur more frequently for moderate or high-risk TEIs, or where new information becomes available.

TEI Financial Monitoring Framework – review and consultation

We are undertaking a review of the framework to ensure it remains fit for purpose. This is being done in conjunction with the Ministry of Education review of the Risk Assessment Criteria.

Why is the FMF being reviewed?

The FMF is an important tool for identifying potential financial risk, and assists us in determining appropriate monitoring arrangements. It is therefore important to periodically review the FMF to ensure that it remains fit for purpose. The last review was in 2011, and so it is timely to undertake another review.

The review will consider:

  • terminology used in the framework 
  • financial measures and thresholds used to identify risk 
  • the framework calculation methodology 
  • the framework one page summary presentation and layout 
  • reporting and feedback processes used by TEC. 

Read the consultation document:

TEI FMF Review consultation document (PDF, 353 Kb) 

What are the expected timelines for the FMF review?
Deliverable/Product or Milestone By When
Joint communications from TEC and MOE regarding FMF and RAC review Early November 2016

Finalise FMF consultation document and release for consultation

Mid – late December 2016

Consultation with the sector / meetings with peak bodies

December 2106 – February 2017
Consultation closes  21 February 2017
Write up results of FMF review and provide feedback to sector on findings Early March 2017
Make changes to FMF based on consultation findings and provide to sector Early April 2017

How do I provide feedback?

Feedback can be provided either via online survey or via email using the feedback form. Feedback can be submitted on or before 21 February 2017.

TEI FMF Review feedback form (Word, 396 Kb)   

Online survey (online feedback form)

Who do I contact if I want to discuss the review in more detail?

If you would like to discuss the FMF review in more detail, please contact Kirralee Mahoney – Senior Analyst Monitoring and Crown Ownership, on 04 476 5872 or

If you would like to discuss the RAC review, please contact Linda Cameron – Senior Policy Analyst Tertiary Policy (Ministry of Education) on 04 463 8467 or


Variable reporting based on TEI risk rating

Where the framework shows higher risk or that overall TEI risk assessments are higher, reporting requirements may increase.

We determine the appropriate level of monitoring for each TEI on a case-by-case basis.

We may request more frequent and targeted reporting, for example, copies of council financial management records.

For any enquiries please email: