School-funded Capital Projects

Policy last updated

15 December 2023

Scope

Schools
School councils

Date:: January 2020

Policy

This policy sets out requirements for schools contributing or raising money to build or upgrade facilities. This includes new facilities, upgrades of existing facilities, maintenance projects and school contributions to buildings projects led by the Victorian School Building Authority (VSBA).

Summary

Schools may, without VSBA consultation or approval, construct or carry out improvements to any building structure on school grounds, or improvements to school grounds, where the value of the works does not exceed $100,000 (including GST). However, they must comply with the Project Development and Construction Management Act, which has been translated into the Procuring Low-value Construction Works or Services policy and the Repurposing and Renaming School Spaces policy.
Schools must receive VSBA approval before commencing works or entering contracts for school-funded projects estimated to exceed $100,000 (including GST). VSBA approval must be sought via the online project proposal approval form (school login required).
Regardless of value, all projects involving ramps must be VSBA-led.
For projects deemed to be high-risk with a construction value of between $100,000 and $500,000 (including GST), schools may be required by the VSBA to engage a contractor from the Construction Supplier Register (CSR).
Schools are also permitted to contribute funds to VSBA-led building projects. Regardless of value, all school-funded contributions to VSBA-led building projects must receive VSBA approval either via the online project proposal approval form or through an existing grants process.
Schools must not fund capital projects with equity funding or Student Resource Package (SRP) maintenance, annual contracts, or grounds allowance funding. However, SRP funding can be used to fund maintenance works.
School-funded projects valued at or above $500,000 (including GST) will be delivered by the VSBA, due to the risk associated with high-value building projects, as will any other projects assessed by the VSBA to be high-risk. Schools are required to pay a Portfolio and Management Allowance fee for school-funded projects led by the VSBA.
When changes to school facilities occur as a result of school-funded-and-led projects, schools must complete the School Asset Drawing Changes Checklist (PDF).
For information on capital projects that are not funded by schools, refer to the department’s policy on Capital Building Projects in Schools.

Details

Schools may raise money to build or upgrade facilities or contribute funds to building projects led by the Victorian School Building Authority (VSBA).

This policy supports the department and school councils to fulfil their obligations under the Project Development and Construction Management Act 1994 (Vic) and Ministerial Order No 1280 – Constitution of Government School Councils 2020 (DOCX).

This policy also ensures that school contributions to facilities align with the Government’s education provision, asset management and financial management objectives.

Planning school-funded capital or maintenance projects

When planning a school-funded project, schools are encouraged to speak to their regional provision and planning manager as early as possible. This will help to avoid issues later, such as having to resubmit an approval request if a project’s cost exceeds the VSBA approved amount.

Schools wishing to contribute school-raised funds to a VSBA-led building project should speak to the VSBA Delivery project officer assigned to their project.

Guidance materials have been developed to assist schools plan school-funded projects and school-funded contributions to VSBA-led building projects, on the Guidance tab.

Approval requirements

Schools do not require VSBA approval for school-funded projects valued at less than or equal to $100,000 (including GST). However, they must comply with the Project Development and Construction Management Act, which has been translated into the Procuring Low-Value Construction Works and Services policy and the Repurposing and Renaming School Spaces policy.

Regardless of value, all projects involving a ramp must be VSBA-led. For more information regarding projects involving ramps, refer to the section on works involving ramps on this page.

Schools must receive VSBA approval before commencing works or entering contracts for school-funded projects estimated to exceed $100,000 (including GST). VSBA approval must be sought via the online project proposal approval form (school login required).

Regardless of value, all school-funded contributions to VSBA-led projects (excluding VSBA-led grants programs) must receive VSBA approval via the online project proposal approval form.

Schools seeking to contribute funds to VSBA-led grants programs (for example, School Shade Sails Fund, Inclusive Schools Fund, Minor Capital Works Fund) are not required to use the online project proposal approval form unless the school-funded contributions exceeds the maximum amount that can be approved as part of the grant application process. Schools that are not required to use the online project proposal approval form must still receive VSBA approval through an existing grants process before contributing funds to a VSBA-led grants program. Refer to individual grant program guidelines on the VSBA website for further information on co-contributions.

Schools seeking to contribute funds to the Greener Government School Buildings (GGSB) program are not required to use the online project proposal approval form as school-funded contributions are approved as part of the GGSB program application process. For information about the GGSB program, refer to the Sustainable Facilities Policy Resources tab, or email greener.schools@education.vic.gov.au

Schools must receive approval from their school council before seeking VSBA approval for a school-funded capital project, or for a school-funded contribution to a VSBA-led capital project or grants program.

Works involving ramps

Regardless of value, all projects involving a ramp must be VSBA-led. This includes all construction or improvements to any building structure on school grounds, or improvements to school grounds.

Approval form

The online project proposal approval form (school login required, for example: Edu001\S123456) is tailored to the type and estimated value of the proposed project.

Schools must complete each section of the form and attach all required documents.

The VSBA cannot approve a school’s project proposal unless all required documents are submitted. There may be instances where the VSBA ask schools to provide further evidence of compliance with this policy before their proposal is approved.

Refer to Step 2: Submitting an online project proposal approval form in the Guidance tab for more information on how to complete the approval form, including required documentation.

Approval criteria

The VSBA will consider the following when assessing a school’s project approval request.

Funding sources

Schools must provide details of their proposal’s funding source/s.
Schools must provide details of their maintenance funding source/s.
Schools must not fund new capital building projects with equity funding or Student Resource Package (SRP) maintenance, annual contracts or grounds allowance funding. However, SRP funding can be used to fund maintenance projects, including maintenance projects that exceed $50,000 (including GST).
Schools must demonstrate sustainable ongoing funding for any proposed facilities outside the schools’ designated facility area. Facilities built outside a school’s designated facility area are ineligible for SRP funding. Schools may demonstrate ongoing funding through a Community Joint Use Agreement or hire and license fees. For more information, refer to the Community Use of Schools – Hiring, Licensing and Community Joint Use Agreements Policy.

Condition and Maintenance of existing facilities

Schools must demonstrate that existing facilities are in good condition before new facilities are proposed.
Schools must demonstrate good asset management practices either through an endorsed and implemented School Maintenance Plan (SMP), if a Rolling Facilities Evaluation (RFE) has been conducted, or by the school’s maintenance activities history, if a RFE has not been conducted. For this purpose, schools must code revenue and expenditure in CASES21 as outlined in the Finance Manual.
Where applicable, the approval process will assess if the school’s SMP is up-to-date.
Schools are encouraged to invest in capital or maintenance projects in line with their existing SMP, if applicable.
Where the proposed project is not consistent with the school’s SMP, schools need to provide reasoning behind deprioritising maintenance priorities.

Facility area

Schools are encouraged to ensure projects are in line with their designated facility area schedule and, if applicable, with any existing asset management plan (AMP). Schools proposing departures from their designated facility area schedule or an existing AMP are required to provide reasoning behind the proposed project.
Projects should not reduce the enrolment capacity of the school unless the school has excess space and the reduction in enrolment capacity is endorsed by VSBA. For more information refer to the Capacity and Area Allocation Advice.
All demolition projects must comply with the Demolition Policy.

Approval decisions and timelines

All proposed projects submitted via the online project proposal approval form are first reviewed by the relevant Regional Office provision and planning team, before progressing to the VSBA for assessment and approval.

Approval timelines are dependent on the value and complexity of the project.

Schools should note the following indicative timelines when planning their proposal.

Regional Office review – 2 to 4 weeks after proposal submission via the online project proposal approval form.
VSBA approval – 2 to 8 weeks once the Regional Office review has been completed.

VSBA Delivery Division will notify the school when the Regional Office review has been completed and their proposal has been progressed to the VSBA for approval.

Further information on the approval process is available on the Guidance tab.

Approval to proceed to tender and contract

If the proposal is approved by the VSBA, approval is provided either as a school-led or VSBA-led project.

Should the project be approved as VSBA-led, the VSBA will oversee all stages of the project including procurement, design, construction and defects liability period.

Should the project be approved as a school-led project, schools will need to seek formal approval from the VSBA for the following project stages:

Proceed to consultant tender (for fees exceeding $100,000 including GST)
Consultant engagement (for fees exceeding $100,000 including GST)
Proceed to construction tender:
- For projects up to $500,000 (including GST) it is preferred that schools seek tender prices from pre-qualified building contractors on the CSR. For projects in this value range deemed to be high-risk, schools may be required by the VSBA to engage a contractor from the CSR
- For projects exceeding $500,000 (including GST) the VSBA must issue an Advanced Tender Notice on behalf of the school prior to calling of formal construction tenders by the school. Tender prices must be sort from pre-qualified building contractors on the CSR
Enter into construction contract with preferred contractor

Refer to the Resources tab for relevant templates to be submitted to the VSBA.

Further information on proceeding to tender, entering a contract and the Construction Supplier Register is available on the Guidance tab.

Exemptions from planning permit requirements

The Planning and Environment Act 1987 (Vic) establishes a planning system that sets out how land may be used and developed. Under these schemes, planning permits provide legal permission for using or developing a piece of land.

The Minister for Education is exempt from obtaining planning permits for government schools under section 16 of the Act. As such, the VSBA and schools do not require local planning permits to undertake capital projects.

However, schools must consult with relevant municipal councils during the key planning phases of high value school-led capital projects that may impact the local community. For example, a new auditorium or sports field and where possible, design buildings that comply with the intent of local planning schemes.

Building permits

All construction and capital works projects on school sites must comply with the National Construction Code (NCC), the Victorian and Australian building standards, the Building Quality Standards Handbook, and all relevant departmental infrastructure related policies. For more information, refer to the Building Quality Standards Handbook (BQSH) — School Construction and Design Standards Policy.

Certain building projects may require a building permit. Building permits are documents certifying that a proposed building complies with the relevant building regulations.

When planning a school-funded project, schools should speak to their regional provision and planning manager about building permit requirements.

Good neighbour guide

The department has developed the Good neighbour guide (PDF) to support schools in informing and preparing their school and local communities for any change or disruption that capital works may cause.

The good neighbour guide includes templates and examples of letters that can assist schools engaging with their local community. These are also extracted as downloadable Word documents in the Resources tab.

School-funded facilities on non-school land

Schools seeking to fund capital projects on non-school land may do so via a Community Joint Use Agreement. For more information, refer to the Community Use of Schools Policy.

Recording of school-funded contributions

To ensure transparency, all funding from ‘third-party’ contributors (such as schools) is captured in the Victorian Government’s annual Budget Paper 4.

Definitions

Construction Supplier Register (CSR)
The CSR is the pre-qualification scheme for building contractors and consultants interested in obtaining work from Victorian Government departments and agencies.

Designated facility area
To ensure equity across schools, the department has developed the facility area schedules which indicate the spaces required for a school to deliver the curriculum for a certain number of enrolments.

The facility area schedules are tables that set out the number and type of learning spaces and/or square metres of space that are required for a school of a certain size and type – for example primary, secondary, special and special developmental. This space is known as a school's designated facility area. A school’s designated facility area allocation is key to calculating resource allocations and determining the size of new facilities in capital projects.

Ramp
A ramp is defined as an 'inclined surface on a continuous accessible path of travel between 2 landings with a gradient steeper than 1 in 20 but not steeper than 1 in 14'. Ramps will be designed in accordance with the Australian Standards.

Relevant legislation

Guidance

Guidance for School Funded Capital Projects

This Guidance contains the following chapters, which can be accessed using the right-hand side menu bar:

Overview
Step 1: Planning for investment in capital or maintenance projects
Step 2: Submitting an online project proposal approval form
Step 3: Proceeding to tender and contract for project delivery
Step 4: Completion of the project

Overview

Schools may fund and lead capital or maintenance projects in their entirety or contribute funds to building projects led by the Victorian School Building Authority (VSBA).

An online process streamlines the approval process and enables tracking of school project proposals to ensure their timely consideration by the VSBA.

There are 4 key steps to the process:

Step 1: Planning for investment in capital or maintenance projects
Step 2: Submitting an online project proposal approval form
Step 3: Proceeding to tender and contract for project delivery
- Projects delivered by the school
- Projects delivered by the VSBA
Step 4: Completion of the project

Step 1: Planning for investment in capital or maintenance projects

Schools can contribute to existing VSBA-led building projects or invest in school-funded capital or maintenance projects.

Planning for investment in capital or maintenance projects should be proportionate to the type of project being pursued, for example, a maintenance project of existing facilities is simpler than building a new facility.

For school-funded projects that require VSBA approval (projects exceeding $100,000 including GST), schools are encouraged to speak to their regional provision planning manager. If a school wishes to contribute school-raised funds to a VSBA-led building project, they should speak to the VSBA Delivery project officer assigned to their project.

Regardless of value, all projects involving a ramp must be VSBA-led.

When schools submit their project proposal to the regional provision and planning team (Step 2), the proposal is reviewed and endorsed based on the information provided (refer to the list of required documents for assessment in Step 2).

Once the regional provision and planning manager has endorsed the project proposal it is submitted to the VSBA for assessment and approval. Once the project proposal is approved, any variations to scope or additional funding requires reassessment and reapproval.

Finally, schools must obtain school council approval of the proposal before submitting a project proposal approval form to the VSBA. Schools must upload a completed school council declaration form (using the School Council Declaration template (DOCX)) to the online project proposal approval form.

Engaging a consultant for support with project proposal development

Schools are allowed to engage a consultant to assist with preparation of the project proposal (preliminary scope of works and preliminary cost estimate only). However, schools should limit the engagement of consultants to the project proposal stage. Should the consultant contract value exceed $50,000 (including GST), schools must seek a minimum of 3 written quotes through a limited tender process, in line with the Procuring Low-Value Construction Works or Services policy.

Prior to engaging a consultant, schools are strongly encouraged to seek advice from their regional provision planning manager or the VSBA, and refer to the section on engaging a consultant under Step 2. Additionally, where a consultant is required, the VSBA recommends the selection of pre-qualified consultants from the Construction Supplier Register. The VSBA Project Delivery Officer can provide advice to schools regarding consultant fees, consultant selection and recommend an appropriate VSBA Consultancy Agreement (contract).

Step 2: Submitting an online project proposal approval form

Schools are required to seek approval from the VSBA for any proposed investment in capital or maintenance projects valued over $100,000 (including GST), using the online project proposal approval form (school login required).

The online project proposal approval form asks schools to specify the proposal type by selecting if the project is a school contribution to an existing VSBA-led building project, a stand-alone school-funded capital project (where there are no active VSBA projects on school site) or a maintenance project.

Schools should provide as much information as available to facilitate the assessment and approval process, including detail on funding sources, equity funding expenditure and other relevant detail to demonstrate compliance with the School-funded Capital Projects Policy and other relevant policies.

Information required for approval process

The information required for the online approvals process is tailored to the different types and sizes of projects.

When submitting a project proposal, schools should use the school login account. Schools are encouraged to consult with the applicable checklist outlined below to understand the form requirements.

Schools can save the project proposal as a draft and access it later using the same link: online project proposal approval form (school login required). Project proposals should only be submitted when finalised (including all required attachments) and when ready for review.

The VSBA cannot assess and make a recommendation for approval of a school’s project proposal unless all required documents are submitted.

Information required for the online project proposal approval form – school-funded capital project

For school-funded capital or maintenance projects with an estimated value of less than or equal to $100,000 (including GST)

VSBA approval is not required, refer to Procuring Low-Value Construction Works or Services Policy.

For school-funded maintenance projects estimated to exceed $100,000 (including GST)

You will need to provide the following information:

details of the scope of the proposed project, and where applicable, alignment to the School Maintenance Plan (SMP) (note: the SMP must be endorsed by the VSBA)
preliminary project proposal cost
maximum amount of school funds available to invest in the delivery of the project
information on the source of funding
school council declaration: attach minutes from a school council meeting, approving the investment in the proposed project.

Required documents for assessment under this category (as relevant):

marked up School Plan (formerly SAMS Plan) – indicating the location of the proposed project works
drawings or specifications – if applicable at this early stage to communicate the project
site investigation reports, including:
- asbestos/hazardous materials audit required for all internal upgrade/maintenance projects.
- geotechnical report required for all project proposals requiring excavation works
- soil contamination assessment (geochemical investigation) required for all project proposals requiring excavation works
cost estimate – high level costs in the form of a cost plan from a quantity surveyor or order of probable costs from an architect
any other documentation that may help the VSBA to assess your project proposal.

If you require assistance with the required documents, contact your regional provision planning manager in the first instance.

For school-funded upgrade projects estimated to exceed $100,000 (including GST)

Project scope

Schools must provide details of the scope of the proposed project, including:

marked up School Plan (formerly SAMS Plan) – indicating the location of the proposed project works
Asset Management Plan Stage 2 (AMP2) – no older than 5 years/deemed current (if applicable)
drawings or specifications – if applicable at this early stage to communicate the project
site investigation reports, including:
- asbestos/hazardous materials audit required for all internal upgrade/maintenance projects, internal construction etc.
- geotechnical report required for all project proposals requiring excavation works
- soil contamination assessment (geochemical investigation) required for all project proposals requiring excavation works
- details on flood overlay (if applicable)
cost estimate – high level costs in the form of a cost plan from a quantity surveyor or order of probable costs from an architect:
- may include construction costs, consultant fees, 10% construction contingency, cost escalation
- note: 5% Portfolio Asset Management Allowance (PAMA) fee is applicable for all school-funded projects delivered by the VSBA in accordance with the School-Funded Capital Projects Policy
any other documentation that may help the VSBA to assess the project proposal.

Maintenance and condition of existing facilities

Schools are required to provide several documents related to the maintenance and condition of existing facilities.

Schools that have had their Rolling Facilities Evaluation (RFE) must provide their VSBA-endorsed School Maintenance Plan (SMP) (refer to School Maintenance Plans and Rolling Facilities Evaluations Policy). Schools that have not had their RFE must provide a relevant maintenance schedule. All schools must provide confirmation that the school has addressed all outstanding priority maintenance either identified in the school's SMP or relevant maintenance schedule.

Where applicable, schools must provide information on whether the project aligns with the school’s SMP or maintenance schedule, and attaching an overview of maintenance priorities.

Schools must also provide information about any Emergency Maintenance Program or Make Safe Program funding received in the last 24 months.

Facility area

Schools must provide information on how the new or upgraded facility will be used, including:

whether changes to school facilities will occur as a result of the project
whether the facility will be used for curriculum purposes (in accordance with the Capacity and Area Allocation Advice)
information on how the school will fund ongoing maintenance costs of the facility, where applicable
how the project proposal aligns with the Asset Management Plan and/or the school’s educational direction, where applicable
how the proposed project will affect the student capacity of the school (for example, whether the project aligns to the school’s excess space strategy and whether it reduces or increases the capacity of the school).

Funding source

Schools must provide information about how the project will be funded, including:

preliminary project proposal cost
maximum amount of school funds available to invest in the delivery of the project
information on the source of funding

Risk assessment of the project

Schools must provide information about risks associated with the project, including:

information on any risks for delivering the project that the VSBA should be aware of such as hazardous material removal or uneven/rocky terrain
information on bushfire status of the school, including:
- whether the school is in a Bushfire Management Zone
- whether the school has budgeted for additional bushfire standards compliance work
a marked-up School Plan (formerly SAMS Plan) with the location of the proposed project
school council declaration: attach minutes from a school council meeting, approving the investment.

Information required for the online project proposal approval form – Contribution to existing VSBA-led building projects

Contribution to an existing VSBA-led building project estimated to be less than or equal to $100,000 (including GST)

Schools must provide the following information:

details of the scope of the proposed contribution
school council declaration: attach minutes from a school council meeting, approving the investment
completed and signed Form 35 School Contribution facilitated by the VSBA project officer responsible for the project.

Contribution to an existing VSBA-led building project estimated to exceed $100,000 (including GST): within VSBA documented design and scope

Schools must provide the following information:

details of the scope of the proposed contribution
information on any prior contributions to this project
preliminary project proposal cost
maximum amount of school funds available to invest in the delivery of the project
information on the source of funding
school council declaration: attach minutes from a school council meeting, approving the investment
Completed and signed Form 35 School Contribution facilitated by the VSBA Project Officer responsible for the VSBA-led building project
note: 5% Portfolio Asset Management Allowance (PAMA) fee is applicable for all school-funded contributions to VSBA-led building projects in accordance with the School Funded Capital Projects Policy.

Contribution to an existing VSBA-led building project estimated to exceed $100,000 (including GST): outside VSBA documented design and scope (requiring design documentation)

Project scope

Schools must provide details about the scope of the proposed project.

Maintenance and condition of existing facilities

Schools must provide the following documents related to the maintenance and condition of existing facilities:

confirmation that the school has addressed all outstanding priority maintenance either identified in the school’s School Maintenance Plan (SMP), Maintenance schedule or otherwise (note: SMP must be endorsed by the VSBA)
information on whether the project aligns with the school’s SMP, where applicable
information on any Emergency Maintenance Program or Make Safe Program funding received in the last 24 months.

Facility area

Schools must provide information on how the new or upgraded facility will be used, including:

whether changes to school facilities will occur as a result of the project
whether the facility will be used for curriculum purposes, in accordance with the Capacity and Area Allocation Advice
information on how the school will fund ongoing maintenance costs of the facility, where applicable (for example, through hiring the facility for community use)
whether the project proposal aligns with the Asset Management Plan and/or the school’s educational direction, where applicable
how the proposed project will affect the student capacity of the school (for example, whether it aligns to the school’s excess space strategy and whether it will reduce or increase the capacity of the school).

Funding source

Schools must provide information about how the project will be funded, including:

preliminary project proposal cost
maximum amount of school funds available to invest in the delivery of the project
information on the source of funding.

Risk assessment of the project

Schools must provide information about risks associated with the project, including:

information on any risks for delivering the project that the VSBA should be aware of such as hazardous material removal or uneven/rocky terrain
information on bushfire status of the school, including:
- whether the school in a Bushfire Management Zone
- whether the school has budgeted for additional bushfire standards compliance work
a marked-up School Plan (formerly SAMS plan) with location of the proposed project
school council declaration: attach minutes from a school council meeting, approving the investment.

Step 3: Proceeding to tender and contract for project delivery

Once the project proposal is approved, the VSBA will also communicate the decision regarding the delivery model of the project (i.e. school-led or VSBA-led).

School-funded projects estimated to be between $100,000 (including GST) and $500,000 (including GST), and considered to be low-risk, will be led by the school.

School-funded projects estimated at or above $500,000 (including GST) or projects assessed to be high risk regardless of value, will be VSBA-led and attract a 5% Portfolio Asset Management Allowance fee.

Projects delivered by the school

Similar to the project proposal approval process, the tender and contract process varies depending on the project. There are different tender and contract processes for:

school-funded projects estimated to be $100,001 to $200,000 including GST
school-funded projects estimated to be $200,001 to $500,000 including GST.

Information required for the tender and contract process for consultants and contractors

In accordance with the revised Ministerial Directions, all procurement activities must now follow the following rules for works undertaken by a single supplier (builder):

up to $50,000 (including GST in value) – at least one quote is required
between $50,001 to $200,000 (including GST in value) – at least 3 quotes are required
between $200,001 to $500,000 (including GST in value) – formal tenders must be sought from a minimum of 3 builders
over $500,000 (including GST in value) – VSBA must issue a Forward Notice/Expression of Interest (EOI) to all pre-qualified builders on the Construction Suppliers Register (CSR) prior to calling of formal construction tenders.

For projects up to $500,000 (including GST) it is preferred that schools seek tender prices from pre-qualified building contractors on the CSR. For projects in this value range deemed to be high-risk, schools may be required by the VSBA to engage a contractor from the CSR.

For school-funded projects estimated to be $50,001 to $200,000 (including GST)

Stage 1: Consultant engagement

It is unlikely that consultants engaged for works in this project cost category will require VSBA approval as fees will not exceed $100,000 (including GST).

If the quote is under $50,000 (including GST) this is within the school’s financial delegation, the school can accept the quote and proceed with the works without needing to seek formal written approval from the VSBA.
If the quote is between $50,000 and $100,000 (including GST) this is within the school’s financial delegation. However, schools must ensure they have sought at least 3 written quotes, and comply with the Procuring Low-Value Construction Works or Services policy.
If the quote is over $100,000 (including GST) and is therefore outside of the school’s financial delegation, the school will need to seek VSBA approval.