Category: KB

A school building fund has the following characteristics:

A school is a place where people come together to be instructed in an area of knowledge or activity. Schools are not limited to those focused on academic pursuits. They include, but are not limited to, recreational, technical, arts and agricultural schools.

A school must be an institution and have a real, separate, institutional existence. This may be within or part of another institution.

Factors that are not required but can help show there is a school, are:

• a set curriculum
• instruction or training by suitably qualified persons
• enrolment of students
• some form of assessment and correction
• the creation of a qualification or status that is recognised outside of the organisation.

The term ‘building’ has its ordinary meaning and includes one building, a group of buildings, a part of a building or additions to a building.

A building should be a permanent structure, roofed and usually with walls and flooring that provides protection from the elements. Therefore, structures such as an outdoor swimming pool, sports oval or a tennis court are not buildings as they are not enclosed and do not provide protection against the elements.

A permanent structure, such as a covered outdoor learning area that does not have walls is capable of being a building if it is fixed to the ground and has a roof.

Fixtures are accepted as part of a building. They are affixed to a building and are unable to be detached without substantial damage to the item itself or that to which it is attached. Fixtures include ducted heating systems, fixed air conditioning systems and carpets permanently fixed to the floor.

Non-fixtures such as computers, furniture, training equipment and laboratory equipment do not form part of the building.

For a building to be characterised as a school building, a qualifying body needs to control the use of the building in its capacity as operator of the school. A qualifying body is a government, a public authority or a non-profit society or association.

While regard must be given to the actual use of the building, a building may be inferred not to be a school building where the school organisation cannot determine how the building is used.

The building must be used by a qualifying body for a purpose connected with the instruction provided by the school. A building is ‘used as a school’ as a matter of everyday language where its use for school purposes is substantial. However, a simple mathematical examination of the time the building is ‘used as a school’ is not conclusive.

The following factors must be considered in determining whether a building is ‘used as a school’:

• the overall purpose (or purposes) for which the building has been established and maintained
• the importance of each of the activities carried out to that purpose
• any connection that the non-school use has towards the school use
• the extent the school use and non-school use have contributed to that purpose.

If there is non-school use, whether the building is a school building will depend on how much it limits, detracts from or is incompatible with the instruction provided by the school.

The following factors are not determinative, but may indicate that a building is ‘used as a school’:

• amount of time the building is put to school use relative to time put to non-school use
• number of people involved in the school use relative to number of people involved in its non-school use
• physical area of the building put to school use relative to physical area put to non-school use
• extent to which the building has been adapted or modified to accommodate its school or non-school use.

Where a building’s uses are incidental or ancillary to the provision of instruction in a school building, it may also be considered to be ‘used as a school’.

Incidental or ancillary buildings include:

• school tuck-shops
• toilet blocks
• school assembly halls
• school administration office
• residential accommodation of a boarding school
• residential accommodation for teachers.

Any other use of the building must be either integral to its use as a school or be so minor or occasional that it does not interfere with its use as a school.

A multipurpose building is designed to be put to a variety of different uses. To be a school building, a multipurpose building must satisfy the same requirements to be characterised as a building ‘used as a school’.

If it’s characterised as a school building, the school building fund can use its funds to contribute towards the cost of any common area. For example, areas put to both school and non-school use such as a hallway or toilet blocks are considered a common area. However, if the common area has been adapted or designed specifically for non-school use, the school building fund cannot provide the money to pay the cost of the adaption or design.

A school building fund is solely for providing money to acquire, construct or maintain a building used, or to be used, as a school by a qualifying body. It cannot be used for any other purpose.

To determine the purpose of the fund, objective circumstances are considered, including the constituent documents of the fund and what the money is provided for. Expenditure on capital improvements and maintenance, as well as installing and maintaining fixtures, are accepted outlays of a school building fund.

Costs payable from a school building fund include:

• purchase of land to the extent that it reasonably relates to the area of land occupied by the school building
• building purchase and construction expenses
• incidental costs relating to planning, negotiating, financing and obtaining approvals for acquisition or construction
• fixtures including security related features such as security alarms and lighting and window and door security such as grilles
• initial repairs
• additions or extensions to the existing building such as an additional floor, room or permanent structure within the building and the replacement, removal or addition of walls, doors or windows
• lease payments that relate to the building or land occupied by the building
• conditions on construction imposed by a local governing body or public authority, to the extent they relate to the ability to construct the school building
• repairs, painting, plumbing and general maintenance of the school building, including costs of purchasing associated equipment
• cleaning expenses including cleaning the building’s floor coverings, fixtures and windows
• building insurance, to the extent it relates to the building
• security monitoring costs that directly relate to the preservation or protection of a school building
• administration costs of establishing or promoting the fund, including bank fees, accounting and audit costs, fundraising expenses and reasonable remuneration for the fund’s administrator and staff.

A school building fund cannot provide funds for:

• a non-school building
• the non-school use of a school building
• other facilities that are not buildings.

Costs that cannot be paid include:

• construction of non-school building like a wing of a building designed to be used as a church
• maintenance costs that relate to the non-school use of a building, like the costs of hiring a cleaner to clean school buildings following weddings unless the fund is fully and promptly reimbursed
• running expenses of the school that don’t relate to buildings such as water, gas, electricity, sewerage, contents insurance, teaching staff salaries or the general upkeep of furnishings
• costs of maintaining facilities which are not buildings including sports fields, sports equipment, playgrounds, landscaping and open-air carparks.

A school building fund may invest or lend its money if this is a bona fide and temporary arrangement and will assist the fund to achieve its objects within a reasonable period. To be a bona fide arrangement, the investment or loan must be designed to make efficient use of the money until such time as it is required for the acquisition, construction or maintenance of the building.

Use our checklist to work out if your fund has the characteristics of a school building fund.