What happens to all the money currently in our bank account?
This will be determined via the consultation over the finance policy but the principle is clear, the money will be moved to the Playcentre Aotearoa account and tagged to each centre.
What happens to members donations?
This will be determined via the consultation over the finance policy but the principle is clear. Donations made to local centres will be deemed as fundraising and tagged to that local centre. Donations made to Playcentre Aotearoa will go into general funds to support all centres.
Is the funding co-design with the Ministry conditional on us accepting the Trust deed?
The Ministry have not said that explicitly however as identified in the presentations, MoE does have concerns about our viability alongside our other regulators and funders and they are looking for change from our current state as part of a co-design discussion.
What if the Ministry's funding proposal doesn't actually cover enough kaimahi hours to do the job fully?
We are working on other funding streams which could cover this or if the Ministry funding does cover everything we need can then add additional revenue to provide more benefits. This model is also designed to allow growth in centres where parents and volunteers are doing all they can but cannot devote any more time to centre growth, which the Kaimahi can then support. All charities face funding challenges which can vary at different times. Plunket have just closed one of their services because of a lack of funding but that may present an opportunity for us to grow our revenue. Under the new proposal we will be in a better position to seek out and deliver on growth in all areas.
How will tagged funds be tracked and distributed once they have been transferred to Playcentre Aotearoa? Our Playcentre has significant savings (~$60k) which we have been saving through being frugal and fundraising, in particular for a couple of major projects including a renovation of our outdoor space. What will happen to these funds and how can we ensure that our Playcentre will be able to undertake these renovations using the funds that our whānau have worked tirelessly to save and fundraise?
The proposed detail of how finances will be managed is set out in the supporting documentation which is there for consultation. The Board want to recognise the hard mahi that has gone into centre fundraising, hence the tagging that will be done through the finance system with reports available to local centres. In practical terms, funds may be invested in such investments as are in the determination of the Trustees appropriate and consistent with the statement of investment policies and objects (SIPO) developed by the Trustees from time to time. They will be held safely and securely with all the national level layers of authorisation and security protocols to ensure they can only be spent on their designated purpose.
Playcentre Aotearoa funds can be equitably distributed to ensure that there are viable centres across the motu. Could Playcentre Aotearoa decide that a centre is not viable and wind it up?
Ultimately yes because the Trustee Board is ultimately accountable for the use of Playcentre resources. It may also be the case that there is no one left in the centre to make any decisions so the Trustee Board would have to. We face this situation at the moment. The proposed way forward is designed to enable growth so that even if there is no Whānau Community, we would still have a Centre Kaimahi in place to work on getting the centre up and running again. The proposed new structure also reduces the likelihood that centres that are not viable will close because at the moment, centres have to stand or fall on their own. With the new proposed approach of Playcentre Aotearoa Equity Funding, we will be able to move funds around to sustain unviable centres whilst we work with the Whānau Community and Centre Kaimahi to make them viable. Even if we cannot get to the point of full viability for whatever reason, the principles of Playcentre Aotearoa Equity Funding will mean that we can sustain that. Currently, we cannot.
If money is managed at a central level why would a centre self-license, either through members completing the education or benefiting from members who are already qualified with ECE qualifications? Self-licensing is a big commitment for those that choice to do so, they have to always be on-time/stay for the whole session/take on the responsibility of being the 'person responsible'. If there is no benefit to a centre in doing this, will not all centres move to paying for session facilitators and in the end costing PA more?
The current preference for volunteers to undertake the Playcentre education programme remains and the motivations for that remain the same. Centre choices remain the same as they do now.
Is a budget available for this proposed restructure?
The Trustees have done modelling to consider the financial viability of the proposed structure and believe that it can achieve financial stability. The financial modelling shows revenue of $31.284m, Expenditure of $30.879m and a Profit $0.405m when we reach a stable state of operation.
When/how will more detail about for the finance policy be released?
Feedback is open on the consultation document issued already and the next iteration will depend upon how much feedback is received and by when. We want to allow people time to absorb, consider and comment and so will be flexible to that need.
Will the centres with individual charity status retain it? Treasurer is currently one of the officers that have to be named for the charity register.
This will no longer be necessary.
Currently our annual budgets can aim to be in surplus funds for the purpose of saving towards a longer term project. Will there be a way for our annual budgets to tag a certain amount of money to be put towards a future project that can't be saved for in one year? Large projects really require more than fundraiser funds.
The proposed new Playcentre Aotearoa Equity Funding will be a major benefit here as you are quite right, at the moment local centres who have longer term projects often never see them come to fruition. The proposed new approach would enable to release of funds held in lots of small silos to make a positive difference much sooner. The principles outlined in the discussion document on financial manage also show that we absolutely want to recognise local efforts and ensure those funds are tagged for local centres.
Currently centre hires (including SPACE) are under a fundraising code in Xero. Are we able to continue to have all hire income tagged to our centre as funds raised?
With a Kaimahi in place, the administration and support for hireage and hence the income would be accounted for in the local budget. That being said, a clear statement has been made about recognising the local volunteer input so if volunteers ran the hireage as fundraising and took on the costs necessary within that to create a net fundraised amount, then it is perfectly possible.
What level of authority will centres have to choose new resources? Can they still opt to spend money on things like flowers for a significant volunteer contribution? Can there be a list of basic supplies that are purchased without having to come cap-in-hand (e.g. replacing a key broken toy or topping up supplies like printer ink and paint)?
There is no cap-in-hand needed. The proposed principles of how finance is managed shows that there will be an approved budget for each centre and a process to develop that. This will include all the things necessary to support local centres including volunteer recognition, which is so important to do because they are a key part of our organisation. The centre Kaimahi will take on the burden of administration for things like broken toys or topping up ink supplies unless a volunteer would like to do so.
Can centres choose their own suppliers? Recently, some of the "approved suppliers" recommended by Playcentre Aotearoa actually charged much more than other local options.
We want to get the best bang for our buck everywhere and there is more than enough flexibility to achieve that. We do want to look to getting more national deals by leveraging our collective buying power which in theory should save us money. If the theory doesn’t work out as it should, we have more than enough flexibility to adjust our approach to get the very best bang we can.
Will there be flexibility to ride roll fluctuations? Currently we run losses some years and surpluses other years. I'd hate to see sessions slashed in lean years.
Yes, and this will be enhanced by the pooled approach with Playcentre Aotearoa Equity funding rather than the current silo approach.
Will there be a commitment that a minimum percentage of funds will go to centre operating costs?
No because in line with the answer on roll fluctuations in some years we may need more than others and our Playcentre Aotearoa Equity Funding approach provides for that.
I hear our treasurer is talking about emptying our Playcentre bank account and transferring the money to some other account she is setting up. Can she actually do this?
As was explained in David’s presentation, if a treasurer colludes with another bank signatory to empty a centre bank account, then in practical terms, yes she can and there is nothing that can be done to prevent that, as was highlighted in the Audit Report. There would be implications as this could be classed as financial mismanagement and misuse of government funds. It would also have to be reported to the Charities Service as any money fundraised from the public would have been collected under the name of Playcentre for our charitable purpose and any grant providers would also have to be notified of the action. This would also potentially have consequences for all the other Playcentres, as MoE would be likely to lose further confidence in our ability to meet our compliance requirements. As we are currently heading into licensing re-negotiations with the Ministry, timing would be particularly unfortunate. Furthermore the public and grant providers would have no certainty that the money they provided under the Playcentre name and to support Playcentre charitable purposes would be used for those purposes and this would make future fundraising very difficult indeed. If the treasurer transferred the money into an account in her own name there would be serious personal implications. The good news is that there is no need for your treasurer to take this action and expose every centre and herself to all these risks because if centres do not wish to come under the authority of the Trustees, they can choose to operate independently in the second of the two votes.
What would be the time frame for centralised accounts? As a current treasurer whose youngest child will be starting school in T1 2023, I had planned to hand over the role at this AGM. However if the treasurer role is disbanded if the Trust is adopted - is it worth training a new treasurer or getting new signatories? This also applies to other officer roles that may be taken over by the Kaimahi.
It would be nice to not have to try and find and then train up a new Treasurer and then work though rearranging bank signatories and if the Trust Deed is approved we would look to move forward as quickly as possible however there will have to be a transitional period to realign the organisation. Our expectation is that we will develop the transitional plan in consultation with centres and the resources we will be able to put in place to come up with the best timetable possible.
Would any donations/fees be put in the central pool bank account?
All revenue would go into the main account and tagged for the Centre as per the proposed financial policy.
Would all fundraising money be put in a central bank pool?
All revenue would go into the main account and tagged for the Centre as per the proposed financial policy.
How many centres aren’t on Xero? - we were told they were all converted over. The then CFO won a prize for it. Was this not true?
Why aren’t these centres on Xero? How can they resist this directive for so long? Why have they not been brought into line?
When the CEO said only 25% of centres are using Xero to the extent they should, what does this mean? Have the problem centres received feedback they aren’t compliant? I’ve never had any feedback good or bad - but would be open to being pulled up on things. We just get lots of requests for info.
It means that only 25% of centres are following the requirements set out on the Treasurers’ Guide. Centres get feedback every year through the audit process on what is required. Currently our National Finance Team is not resourced to the extent necessary to provide the level of support that centres have shown is needed
I know of a cluster that has a paid bookkeeper. Was this considered an option to support centres without a Treasurer or those struggling with Xero or across the board for all centres? If not, why was this discounted as a viable solution?
This is a throwback to the previous Association model which was not sustainable. Leaving finances to centres with increasing rotation of volunteers with reducing time availability has too great a risk with current financial reporting requirements, audit reporting and Trustee liabilities.
What evidence of fraud have you seen? How many instances?
Fortunately none that we are aware of, however this is a significant risk noted by our auditors and by our funders.
How many centres don’t have dual authorisations for transactions? Or break other banking rules of engagement for a charity?
This is precisely the reason behind the change as we do not know this information which creates a risk for all centres. If any financial irregularities or fraudulent actions were reported in the media, this would impact significantly on all Playcentres in terms of reputation and funding, as well as there being potential legal repercussions for Playcentre Aotearoa.
How many centres don’t have a Treasurer?
Given the lack of reporting from centres and the increasing rate at which volunteers are rotating, we do not know. We do know many centres have reported finding this role to be a huge burden on their centre.
The word ‘oversight’ was used a lot - you don’t need access to the cash to have oversight. You can achieve this with access to Xero. Why are you taking it very significant step further?
The evidence shows that the old model is putting far too much administration burden on volunteers and is not compatible with accounting rules. The most efficient way to ensure that we can meet financial reporting requirements, manage the risk profile and relieve the burden on volunteers is the proposed way forward. Please remember that local volunteers will be actively encouraged to be involved whenever possible. From a perspective of fiduciary responsibility, it is not sufficient to be about to ‘see the money/transactions’, Playcentre Aotearoa must be able to act if necessary. Oversight means knowing what is happening and being able to make any changes necessary for compliance.
How huge would the finance team need to be to manage the transactions across all centres nationwide? How many invoices do you anticipate per payment run nationwide? Would they be able to pay on time? We have a poor reputation for this apparently, according to Property. Would they issue all invoices, receipts and donation receipts for every fee/koha per person per term and year? Would they invoice tiny things like centre hireage to members which would be more effort than the revenue they bring in?
We have done initial estimates for the finance resources necessary and these will be further validated as we progress. With the improved finance resource, service standards will be established and monitored to ensure we deal with our suppliers professionally and this would include receipts for donations. Yes, we will invoice for all revenue as this must be declared as this is the legal responsibility of any organisation New Zealand and even more so for a charity.
What would centres be left with to operate? Do we need approval for every tiny thing or only if we look to be getting over budget for a line item or category? Would you quibble with paying member expenses when they have incurred a cost on centre business? It sounds like having to come cap in hand which is quite unappealing, and to people who are far removed from our centre. How would this be efficient so we can replenish consumables as needed so we can offer a good play experience?
Centres will have all the costs of operating met by Playcentre Aotearoa based on their agreed budget. The local centre will work in co-operation with the Kaimahi to make this process simple and effective with no burden to volunteers. The proposal on how finances will be managed sets out the budget process and we have said that volunteers are actively encouraged to be involved. There will be no sense of people being far removed as the Kaimahi will be based in the centre.
What visibility would we have on our money/spend against budget at a centre level? There is only mention of reports on fundraised/grants monies being provided. Would we get reports on spend across all the budget as now? We need this to apply for grants and manage spend.
Under this proposal, centres would be freed up from the burden of having to manage spend unless any volunteer wishes to be involved. There will be standard reporting against budget available if that is the case.
Reporting on grants needs to be much more than once monthly - we’d need to know when funds land in the account, as timings vary greatly from org to org and this kicks off the ability to outlay costs. And we’d need reporting and information to support accountability reports back to the grant orgs.
This would only apply if centres has volunteers who wanted to take on this burden, otherwise it will all be done for centres.
Would you move to accrual accounting?
We already operate on accrual accounting.
Would you port across all direct debits/accounts for vendors and honour them? If you are operating at a loss would you have an OK credit rating to take on payment on account? We had to provide evidence of prompt payment etc when we set up accounts.
Would larger/more successful centres’ bulk funding be used to prop up smaller/failing centres? Who and how is it decided that a centre should remain open when failing? Do you have a view to keep a nationwide spread of centres even when there is not the demand? Do you see Playcentre naturally getting smaller with more financial pressures for caregivers to work, especially post covid?
The original purpose of the amalgamation was to prevent the decline of Playcentre across the motu and this proposal will enable Playcentre Aotearoa Equity Funding which will address that, There is a separate Q&A on centres closing. The purpose of this proposal is not just that Playcentre will survive but will actually grow and expand so everyone can genuinely benefit from our philosophy.
Where would koha go? This is given for the centre not a central pot, would people be willing to pay a koha if you don’t know if you can access it for centre use? You might not find it much money, but it represents a degree of support and commitment to the centre - and may now be at risk.
The proposed way in which we would manage finances covers the detail on this. Any koha received by a centre will be tagged to that centre. We actually want to grow our donation income as a national charity.
Where will the incentive be for centres to cut costs/trim budget? Find cheaper vendors/suppliers? Renegotiate utilities? When it’s all in one anonymous pot. Who will notice a water leak or electrical issue causing a bill to be higher than normal?
Everyone has a role in managing costs and this proposal enables that with the potential for leveraging our national buying power. Both volunteers at local centres who choose to be involved and certainly the Kaimahi will be able to notice.
There’s no mention anywhere of the HQ negotiating discounts/ getting economies of scale for instance with utilities or suppliers of goods in common. Could the op centre deliver this? It seems like a value add they could work on (telephony not a great example, but power maybe?) Or getting better interest rates on the funds all pooled together?
Our current model of effectively 400 uncoordinated spending centres does not allow this. Our proposed new model will which could deliver both improved service and reduced costs through leveraging our national buying power.
First aid (Auckland only maybe): provision of courses was ceased from the regional office, requiring us to organise and host our own. We buy and sell spaces from/to other centres. It’s cheaper than going to public courses. This was sold to us as a fundraising activity, but we’re taking from one centre to give to another which felt ethically off. How would first aid course provision work now when we can’t access our own account, raise an invoice and all money is in one pot anyway? This needs to be clear as sessions can’t run without a current first aider.
A national approach will enable this to happen easily and effectively without the ethical dilemma you are facing. For example, for an organisation of our size we can approach St. John or the Red Cross for a solution with our own national portal and preferential rate.
Do you see this announcement might cause a dash to spend centre money quickly to keep it out of centralised hands? Does that worry you that this spend may be unwise?
The current system means this can already happen for any number of reasons irrespective of this change. Playcentre people are values driven and we are confident that they would not be reckless or unwise.
Budget process - how would determining ‘known operational costs’ be decided upon?
Through an analysis of previous centre spending.
Success with grants comes from proving we are small and poor. You have to submit your centre’s P&L and bank balance too. Putting all accounts together makes us look huge, more flush with cash, less efficient/thrifty and therefore less needy for a grant payout/donation. This change would have a negative impact on grant success, therefore less income, which is undesirable. Grants have been a necessary and huge income stream for us and this would be at risk, when we have lost COGS and now cannot approach Lottery Communities either according to the last comms on this.
Grant providers are now more sophisticated than looking at the traditional small and poor. There are ongoing changes to fundraising and compliance reporting which will be increasing and it is our intention with the pooling of resources to be able to meet those demands. There will be ongoing changes for all grant providers and having the resources necessary to understand and meet this is enabled by this pooled approach.
If we’re at arms length from our funds and transactions, and need to submit a grant accountability report, we’d be raising admin requests for the proof we need. This adds to time for us and admin for Finance/kaimahi.
As there will be close integration between the local centre, the Kaimahi, the National Finance Team and grant support, there won’t be an at arm’s length issue. Centres will no longer face the burden of this isolated approach to grants with national sharing of ideas, experience and initiatives.
You can recognise the hard mahi of centres with grants and fundraising now, as it is available to report on in Xero, to which you have access, and we pass this information up at the close of every financial year in the Treasurer survey. We never got a ‘well done’ tho.
Our current resourcing does not enable this however when we have become aware of successes, we have congratulated the centres. Sorry for any we have missed and we do congratulate all centres on their fundraising efforts.
Why do we hire the centre out to space at a loss of $20 per session?
This is not a question specific to Ki te pae tawhiti but in the interests of transparency, overall SPACE is very beneficial for many centres beyond just financial and we aim to continue to improve that.
Are you aware Space and Beyond is in direct competition with Playcentre and allows kids to stay on beyond 2 years old? We have just lost two membership prospects in a month due to this rule-breaking.
This is not a question specific to Ki te pae tawhiti but in the interests of transparency we have regular meetings with Parenting Place so please pass the details of the rule breaking through to your current regional staff and we will follow up on that.
Can you please define what is meant by Playcentre Aotearoa Equity Funding? Is this a new avenue of funding?
Playcentre Aotearoa Equity Funding is the mechanism to free up resources held in individual centre accounts and use them to support other centres which otherwise would be unviable or can be supported for growth which can then generate more revenue which can then be drawn back into the equity pool. It is a way of ensuring that Playcentres can cover the whole country through national cooperation.
I am concerned and confused about equity funding. We are a centre that has a large financial reserve built up over many years of careful fundraising. I understand that the current financial proposal will make a plan to spend some of that money with our centre but then roll the remaining into the equity fund account. However I've also read that all the funds will remain linked to the centre. Could you please provide clarity on this.
We have put out a paper on financial management for consultation which outlines the principle and you can find the detail here. Our proposal is to free up funds locked away into individual accounts allowing for an initial 12 months period to retain funds tagged to centres so that centres can spend that money on any immediate needs that may have before the funds are freed up for Playcentre Aotearoa Equity Funding.
If you are confident this can work with existing funds why cant centres keep existing fund reserves tagged to their centre? It may help get the proposal over the line.
Freeing up funds held in separate centre accounts limits the ability for us to realise one of the key benefits of the amalgamation – Playcentre Aotearoa Equity Funding.
I have been treasurer coming up two years at my centre. I have learnt a lot and feel valued in my position. I must be honest and say I felt a little gutted when I read the proposal. It feels like all our hard work is completely undervalued, when we will no longer have access to or control over our own funds. I do understand concerns about needing to protect PC Aotearoa’s finances. However absorbing our funds seems a really extreme solution, that put into practice will be a nightmare. Surely we could add someone from the PC financial team as a signatory to our bank accounts and any transaction over a certain amount must be approved by this person. I know we can set different limits for different signatories at our bank, and I’m sure this would be possible for other banks too.
Thank you for your service to Playcentre and for all you have done for your local centre. The management of finances is beyond the local control of bank accounts as we need to enable Playcentre Aotearoa Equity Funding to provide support for centres across the motu. If the Trust Deed is accepted, then centres will be able to vote to come under the authority of the Trustees or to retain control of their own funds by acting independently.
The presentation said that our centres current funds will be tagged for our centre “for a period of time”. Also the draft trust deed stated that if we choose to come under the trust deed that our bank balance would ….“Absorb the balance into Playcentre Aotearoa general funds to support future equity funding”. Can you confirm our $$ stays tagged to us until we choose to use it. Or are you planning to “absorb” it for future equity funding?
The proposals are outlined in the financial management document out for consultation. We want to enable Playcentre Aotearoa Equity Funding hence suggesting a year period.
How will the funds to be tagged to a centre from our current bank accounts be calculated? Also why is there a set timeframe of one year to spend those funds, some bigger projects may have been fundraised for that may be a number of years into the future?
This is something we are consulting on as per the document on financial management. The basis for the 1 year to make sure that we can make full use of the Playcentre Aotearoa Equity Finding principle and free up any capital that is tied up at the moment. With our pooled funding approach, we will be better resourced to address those longer term project cooperatively rather than each centre being stuck in their own silo trying to fundraise for a project that is beyond their means alone.
How does taking volunteer roles and paying people to do it, adding in the cost of 400 kaimahi, putting money from strong, well supported centres into loss-making businesses and taking locally fundraised/ saved money away from their communities (therefore acting as a deterrent for people to give in the first place) and seemingly working to annual budgets (if we have to spend everything in the budget or risk losing it, how do you save for something bigger?) make any sort of economic sense? And how does this benefit the centres who are actually just fine right now? Also I agree with the person who commented that it is like Three Waters. Our community has given a lot and worked damned hard or the money we have, and in effect you’re stealing it off our kids.
There are a number of key benefits of Ki te pae tawhiti including matching liabilities to the authority to act, creating a way forward for a different funding model, addressing parental burn out, meeting the changing compliance requirements, providing for centres all across the country and securing our future to our centenary and beyond. If any local centre does not want to benefit from these and sees their way forward independently then the Trustees have created that option.
You mention donations being tagged to the centre. What about fees? Will we still be allowed to charge these instead of asking for a donation? We charge fees so we can access WINZ subsidies for our families which benefit the family and also bring in a decent income for our centre. If we can continue to charge fees, will they be tagged to our centre too?
We will work with each centre to make sure that any specific local requirements are taken into account with the budget process and your scenario here is one that we would want to see continued and developed to maximise the potential. The principle of Playcentre Aotearoa Equity Funding means that resources can be moved around the country to support different centres with the underlying costs of each centre met and Whānau Communities actively engaged in fundraising with their local community.
How will we manage fundraising endeavours without a local centre back account e.g. fund raising via sales where we need to reconcile that money has been received for orders of fundraising goods before making orders and then paying supplier? I'm not clear on how this will work with no local centre account?
This can all be managed through the finance system within which reconciliation is a standard function and linked to accountability. It’s the same principle just with a central account rather than a local one.
If Playcentre Aotearoa have access to all centres Xero accounts, and are planning to have a Kaimahi in each centre, assumably to have oversight and communication between centre and PCA, and to minimise admin for the centres. Then what is the benefit for centres of taking away centres bank accounts and financial autonomy?
Because the Trustees need to be able to manage all the capital and income of the Trust to align with their liabilities as Trustees. In addition, we are removing the local burden of administration and compliance that is causing parents to burn out.
What formula do you use to determine if a centre is viable or not?
Quantitively we would consider all the relevant revenue and costs and then take into account the local circumstances linked to the overarching desire to grow Playcentre. The principle of Playcentre Aotearoa Equity Funding will play a vital role here.
Currently we pay a book keeper to help us with financials, we also have a centre treasurer. We believe this is a sound, fair and secure way to leave centres in charge or their finances but also be double checked. Why can this not be applied to all centres going forward? Rather than removing financials from centres?
The issue here is about aligning liabilities with the authority to manage them. Currently the liabilities lie with the Trustees and the authority to manage them lies with the centre. By adopting the new Trust Deed and for all centres who vote Yes to the second vote, this will align them both with the Trustees. If centres vote Yes for the Trust Deed and No for the second vote, then the liabilities and authority to manage them will all lie with the centre and they are welcome to choose that option.
Centres aren't going to share their fundraising money as long as it's used within an adequate time period for the thing they fundraised for, correct?
Our document on how finances will be managed addresses this as all funds raised via local fundraising will be tagged for the local centre for the purpose of that
fundraising. Under the transition arrangements it is proposed that existing funds will be tagged and we will work with each centre to establish a plan for what those funds could reasonably be used for over the next year after which we will absorb the balance into Playcentre Aotearoa general funds to support future equity funding.
I thought Playcentre Aotearoa would have had a safety fund in place where all centres (or at least those with a healthy bank balance) would contribute a certain amount each year to ensure centres who are struggling can stay afloat. Could this have been done years ago to avoid the situation Playcentre Aotearoa and the board are facing now? Is it too late to do something similar now?
Hindsight is a great thing and with the proposal this is in effect what the Board are proposing to do now along with a raft of other measures all to designed to meet the changes in compliance and legislation and future proof the organisation to take us to our centenary and beyond.
You said in some of your answers that treasurers aren’t currently doing what they are suppose to and you don’t get reports etc…With all centres being on xero now, isn’t this something you can do anyway? Secondly - instead of looking to remove a centres independence, why don’t you look at instead providing assistance or a training or something of the likes to new treasures so they are clear on their responsibilities? Having taken over this roll at the start of the year I’ve had no guidance or communication with anyone outside of my immediate centre whanau in regards to this roll - which feels like a gap higher up?
We recognise that Treasurers are doing the best possible job they can and facing ever increasing levels of compliance alongside so many external family pressures. As you will know, reports from Xero are only as good as the information put into them whenever that is done. There is extensive resources available in the Guide for Treasurers however with ever increasing turn over in volunteers, it is becoming harder for them to get handovers. Continuing to pour more resources into such a difficult situation is not the best way forward and won’t address the need to align liability with the authority to act.
How much money are we going to lose or gain? If we get less then we currently do this will again make things harder for us - we fundraiser obviously a lot to have some money in our accounts. But with fundraising being made harder. This could put a lot of pressure on us. More details around an actual number would be great here.
At this point it is not possible to run a theoretical budget process for 400 centres to give you an actual number. The principles of the budgeting process are however clear in the document on financial management which will help your understanding of what will be done to get to an actual number.
Reports for fundraising- currently these are checked nightly currently to see who’s paid. If only check at the EOM it makes it harder for fundraising seeing who’s paid etc. especially if they are people out of our centre and within community we don’t know as we do a lot of outreach for promotion of our centre and for fundraising. How will this work? Will all fundraising have to be run so it lines up with your EOM reports and the hope they come on time to us every month? Or we will have to work on people being true to their word every time.
It seems like you have volunteers who are ready, willing and really on to it and the proposal allows for those great people to continue to be involved to the same extent.
Realistically what will be time frame for reimbursements? Currently we do this overnight - if only getting month end reports and paying bills monthly will this become the norm? If so, what new systems will be put in to make purchasing the likes of flour easier?
The easy answer for buying flour may be an account at the local New World or Pak n Save that voids the need for any reimbursement. If we can secure a national arrangement with New World or Pak n Save, the flour may even be cheaper. This is the sort of potential that the proposal opens up for us as we think about the collective buying power of our organisation.
We currently have a cleaner 10 hours a week after our 5 sessions, will we be able to keep this under operating costs?
Cleaning would be an operational cost within the budget and may be something that with more time some volunteers may be happy to do as there can be a certain satisfaction in doing it. The proposal allows for the freedom to choose.
Can you provide a similar organisation that is a charity and runs with this finance model successfully?
As there is no other organisation quite like Playcentre, there is no one else to follow. Playcentre has always been a pioneering organisation and we are using well proven financial management methodology and have a CFO who has financial management experience in a distributed centre environment.
What is the difference in revenue that will be required for this proposal? How will this additional funding be obtained (guessing not just MOE funding).
The financial modelling shows revenue of $31.284m, Expenditure of $30.879m and a Profit $0.405m when we reach a stable state of operation. The co-design work with MoE will be a principle source naturally and we are also exploring other revenue streams to supplement that.
The centralizing of funds sounds like communism and is worrying. What happens to hard earnt fundraising that a centre has made?
You can find the answer in the document on financial management on the Ki te pae tawhiti webpage as tagging will be used.
Will we be able to buy new resources quickly as we are now, especially around welcoming the culture of new whanaus? Will we have the financial freedom to quickly adapt to shifting memberships needs when it comes to cultural resources or resources to support high needs children?
The budgeting and payments processes are intended for this very purpose.
Will the annual $500 Thomas George Macarthy Trust Grant be allocated to each centre for them to use as intended, or will it be pooled? "The Thomas George Macarthy Trust donates to registered charitable or educational organisations operating in the old Wellington provincial district, defined as the area of the North Island which is south of Turangi and excluding Taranaki and Hawke's Bay"
We will always comply with any conditions attached to grants.
Will the centre have a say where to spend their allocated budget or is this in the kaimahi and national finance control?
As you will see in the paper on financial management we propose a very cooperative and consultative approach to budgeting.
How will the reimbursements work? Members are shelling out their own money and at our centre, we aim to refund them in a weeks time. If this timeframe not possible, I don’t think members will be willing to use their money. Will there be a petty cash introduced?
Petty cash and indeed cash itself is being used less and less. Naturally we will be looking to streamline all our processes and having one national organisation will make that a lot easier. At the same time we also know what it’s like to be involved in centre life and will make sure that members will always be reimbursed.
Our centre is a self-licensed centre. We don’t pay for educators and have a healthy cashflow and bank account. We don’t do fundraisers (only once a year) as this takes so much added work for members. With this model, seems like the pressure will shift from education and admin to fundraising. Especially since budget will be controlled by national finance.
Whilst we are clear that we want to encourage centres in their fundraising, that is the choice of the volunteers. This is not about shifting pressure as that is not a long term solution for our organisation. The intent of this proposal is to relieve parents from pressure and enable them to participate in the life of the centre, the growth of relationships and connections and enjoy being the first and best educators of their children to the fullest extent they want to.
I was concerned the read in the explanation about the way finances will work that the TB considers fundraising good advertising in our communities. I think it is poor advertising because it implies the workload associated with fundraising by being part of the group. Fundraising typically has a very poor return on time. Many centres are looking to reduce fundraising burden on parents, and one of my concerns is moving from away our centre's model where we don't require fundraising to be financially viable. Furthermore not all communities are financially able to afford to support fundraising, creating further disparity between centres. I would like to see a funding model co-constructed that doesn't require fundraising as an income stream for PCA to be financially viable.
The Fundraising Institute of New Zealand has a different view of the value and return on fundraising and done successfully it can yield very high returns as well engage local communities. The recent experience in Outram is a good example. It is hard to envision any charity in New Zealand not including fundraising but we are seeking to grow a range of revenue streams beyond our current ones.
Many centres have gone a long time with no CA. Many centres also meet licensing requirements within their parent team (no paid facilitator), and this $$ savings forms part of their income stream. (aka replaces fundraising). For centres where a kaimahi isn't required for licensing because parents have the necessary qualifications, or where one is unable to be employed eg no suitable applicants, will there be any financial consideration in their budget?
As part of the budgeting process, we will take into account the local circumstances.
Will centres still be able to set their own fees/donations?
Fees/donations would be part of the budget setting process for each centre and can vary by centre. We want to see full centre involvement in that process with all the local knowledge they bring provided the local centre wants to as this is about freeing up centres from compliance and administration burdens.
How will this affect applying for grants etc for our centre? Will we be able to do this still or will this become the responsibility of Playcentre Aotearoa or a Kaimahi?
Absolutely you will still be able to do this. We are encouraging the active involvement of volunteers in all aspects of centre life and we know that some really love the challenge of applying for grants and securing great results and will be encouraging them to do that and engage others in as well. As a charity we want o make the most of our charitable registration and maximise our fundraising efforts.
Will members be able to claim back small purchases with the restructure? As a small centre we often will have a member pick small things up for crafts or milk for coffee etc and then reimburse them. Will this be able to be done still or will everything need to be ordered via an account?
Naturally we will be looking to streamline all our processes and having one national organisation will make that a lot easier. At the same time we also know what its like to be involved in centre life and will make sure that members will always be reimbursed.
Will Equity funding (eg Isolation Funding) continue to be tagged entirely to the centre which qualifies for it?
We will comply with any tagged funding requirements whatever they may be from time to time so under the current terms, yes.
Currently many playcentres are not GST registered as they do not meet the required income level. With amalgamation of funds will this mean all playcentres income is now liable for GST this will mean a significant reduction in income as playcentres biggest expense is salaries which do not occur GST, it will certainly not be of benefit. Can you please inform the membership of the increased costs to the organisation if this is to be the case?
We do not know how many centres are registered for GST as we are still waiting for the responses to our last survey which asked for this information. We know that so many centres are under pressure to manage their basic compliance and administration so this is understandable but nevertheless means we do not have the data we need. We are also helping a number of centres to deal with historic GST issues at the moment. You are quite correct that we will pay GST as we are operating as one organisation and will also be able to claim GST on all eligible expenditure. The proposed new approach will naturally increase costs and is equally designed to increase revenue. The objective is to move to a balanced budget with a small annual contribution to the balance sheet to enable us to maintain sufficient reserves and support Playcentre Aotearoa Equity Funding. Our goal is to move the current $2m deficit to a $0.4m surplus and this will naturally be dependent upon being able to achieve the revenue targets.
With PA approving purchase requests what would be our options to spend on something that was deemed unnecessary but was still important to our centre families? Could we apply for grants, fundraise or challenge the decision? E.g. an upgrade/ renovation when other centres had a more urgent need Or an expensive version of a toy or piece of equipment.
Centre will be able to operate within their budget so the local Kaimahi will be able to approve purchases within that budget. As part of the budget setting process something that is deemed to be important to centre whānau would be given priority. Local centres will be actively encouraged to continue to engage in fundraising just as they do now and we intend to provide more support for grants as part of strengthening the National Finance Team to support centres.
When we fundraise, people pay into our account. How will this work with us no longer having an account? Sometimes we have a raffle with small $2 amounts coming in. How will this be allocated to our fundraising amount? Not everyone remembers to put in reference details. How will we be able to see who has paid for their fundraising items (e.g pies) before we order them? This is often needing to be checked the day the orders need to be placed. This sounds like a huge overhead in administration costs.
This can be handled the same way as it is now with immediate access available to information. Volunteers are still actively encouraged to be involved to the fullest extent possible however we need to be aware that more and more centres are struggling with parental burnout and finding volunteers to undertake roles at centres.
Our photocopier died, and we urgently needed it replaced. This is not a budgeted expense, but is very much needed. Under the new process will we have money to replace it, and how long will the process take for a new one to be up and running? It took us 2 weeks to sort and that was too long. Will we be allowed to choose the more expensive machine that is more economical to run?
Sorry to hear about your photocopier. The situation you have outlined could depend upon the lease contract you have and other issues such as the availability of spare machines with the current supply chain issues. These are all independent of the Trust Deed. Under the proposed new way forward, you would have a Kaimahi who would be able to manage the burden for you. Any decisions would be made in full consultation with the centre to achieve the best outcome.
You answered a previous question about fundraising for large projects by saying the new way will be better because you can amalgamate money from separate silos… so if you’re going to give out all this money, where is the incentive for anyone to fundraise for it in the first place? And if that happens then all the other silos will be empty too… so you’re heading into a decline pretty quickly. Or promising a whole lot more than is realistic. Both of which equate to dishonesty and the ultimate demise of playcentre anyway. Also, how long does money stay “tagged” to a centre? And if you think a centre has a strong history of community support, will you be expecting that to continue and handing out less from the national pool in expectation that their strong fundraising history subsidises it, or what will the approach be?
The incentive to fundraise will be the same as it is now, the incentive to be part of a group of families passionate about providing a fantastic learning environment for their tamariki, in a connected community committed to the guiding principles of Playcentre with a commitment the values such as manaakitanga and generosity of spirit and a passion to see Playcentre growing for the future. The principle of pooling funding is a proven methodology to move forward cooperatively in a way that cannot be done in separate silos with more results achieved earlier leading to improved revenue. The tagged funds would be managed under the financial management plans that are out for consultation and we certainly expect the strong connections that centres have with their community to continue.
I am the grants officer (among other things!) for our Playcentre. We have been very successful with grants over the past few years, and I think this is because we tell the unique story of our own Playcentre in our applications. We use our own charities registration, and our own Tier 4 financial report for our grant applications (not the Playcentre Aotearoa financial report). If we move our bank accounts to Playcentre Aotearoa, is there still a way to show our funders exactly what OUR Playcentre earns and spends in a year? Not what 400 Playcentres earn and spend in a year, as this is irrelevant to our centre.
Congratulations on your grant successes and thank you for all the hard work you have put into achieving them as we know it is not easy. Yes, we will be able to provide the financial reports necessary that are relevant for your centre.
Our centre currently banks with TSB, and in doing so we are favoured as a recipient of funding from the Toi Foundation (formerly TSB Community Trust). Last year we received $16,100 from them. Will Taranaki centres still have the same access to this funding if we are no longer banking with TSB?
We have talked about the one bank central bank account as the principle but in the way we do that, we can be smart and take into account circumstances like this to make sure we get every grant and donation dollar that we can. We will be happy to work through with TSB how we can make this happen.
Will centres just spend all their cash beforehand? Rather than see it transferred to the Playcentre Aotearoa account?
Centres can do that right now anyway so it depends upon how they view the support that cash could provide to other centres through Playcentre Aotearoa Equity Funding. In many ways its about giving forward as you never know when you might have a wonderful and amazing project that you could never fund alone but working in cooperation, we can.
What is the process that the kaimahi will go through to purchase consumable resources? If it is too much of a rigmarole, I worry that this may trigger centre members to set up their own personal accounts for Playcentre use. Which is exactly the type of thing you are trying to avoid! The purchasing process needs to be REALLY fast, easy and simple.
We agree that purchasing need to be fast, easy and simple. We are looking at more national account options that can be ordered on line with 24 hour delivery and automatic invoicing. We also see the need to have local access for purchasing. As we have said, there will be a transitional process for introduction and as a learning organisation we will learn from that process. We want to streamline all we do but as we have demonstrated with the Telecoms project, we are brave enough to freeze anything that is not working for centres and the look for better alternatives.
Can you give some examples where this financial management model is used successfully elsewhere? Especially in not-for-profits.
As there is no other organisation quite like Playcentre, there is no one else to follow. We are using well proven financial management methodology and have a CFO who has financial management experience in a distributed centre environment.
With families deciding to or not to offer a donation/fees each term to their Playcentre, each Playcentre probably has different term donation/fee amounts: Where will our families donations/fees be allocated to in the annual budget? What happens when Playcentres have different term amounts? or will every Playcentre have the same donation/fee amount for each term?
You are quite correct that different centres have different approaches to donations/fees and this can continue. Any donations/fees would be allocated to the income for that centre.
Where are they expecting to get all their income from to fund all the Playcentre projects? Where will they draw the line between what is funded by PA and what is funded by each individual playcentre?
This would come from the budget set for each centre following the consultation process as outlined in the financial management document. We encourage all centres to fundraise to support this.
From our understanding there will be a centralised bank account and each Playcentre will have an annual budget. For some items on the budget as a Playcentre we have local business accounts (Pak and Save for our consumables; baking goods and messy play items and Bin it bin for our Playcentre rubbish/green waste and petrol for our lawn mower or drop fees for when we do a big working bee) In terms of consumables: How does it work for purchasing weekly consumables and other things needed unexpectedly as we will no longer have a Treasurer to quickly reimburse? Will it be the same process (send in receipts and be reimbursed) but through playcentre Aotearoa through the centralised bank account?
The Kaimahi will be on hand to ensure that all the financial processes including reimbursement work smoothly and effectively in each centre.
In our centre, we invoice members for fees, but if term fees aren't paid after 6 months we have voided those invoices as the assumption is the family can't pay that right now. How will this be handled? Will Playcentre send debt collectors for non payment of fees, when we view them as a contribution only if you can? Will we have the ability to find out if fees haven't been paid, and what we want to do about it?
We cannot see any scenario in which we would be sending debt collectors to families. There will be a suite of financial reports made available and we can certainly add an outstanding contributions report to the list.