School operations

Finance Manual – Financial Management for Schools

Section 3 Risk Management

3.1 Overview

Risk management maximises the ability to deliver on departmental objectives, promotes sound decision-making for resource allocation and investment, and works to safeguard student and employee wellbeing. It also contributes towards meeting the Victorian community and government expectations for accountable and responsible use of public finances and resources.

3.2 Risk management framework

3.2.1 Mandatory policy (Must do)

Comply with the Risk Management — Schools Policy.

3.3 Fraud and corruption

Fraud is dishonest activity causing actual or potential financial loss to the Department (including theft of money or other property) and where deception is used at the time, immediately before or immediately following the activity. This also includes deliberate falsification, concealment, destruction or use of (or intention to use) falsified documentation and the improper use of information or position for personal financial benefit.

Corruption is a dishonest activity in which an executive, manager, employee or contractor acts contrary to the interests of the Department and abuses his or her position of trust to achieve some personal gain or advantage for themselves or for another person or entity.

The Department has a zero tolerance to fraud and corruption.

3.3.1 Mandatory policy (Must do)

Implement the Fraud and Corruption Control Policy.

Report fraud or corruption or suspected fraud or corruption by notifying one of the following:

3.4 Conflict of interest/declaration of private interest

A conflict of interest arises in circumstances where an employee’s public duty is influenced, or can be seen to be influenced, by a private interest. Private interests can be financial or non-financial and include the interests of family members and close friends.


All employees, including members of the teaching service and school council employees, have a responsibility to avoid conflict of interest that may affect their public duty.

All employees are bound by the Department’s Conflict of Interest Policy, which requires staff to identify, declare and manage conflicts of interest that arise in their work.

Employees must use the Declaration of Conflict of Interest form in eduPay to declare conflicts of interest.

School Council Members

School council members are bound by the Code of Conduct for Directors of Victorian Public Entities and have a responsibility to avoid conflicts of interest.

School council members must also follow the requirements in regulation 31 of the Education and Training Reform Regulations 2017 to manage conflicts of interest. Regulation 31 prohibits a school council member from being present for the discussion of a subject which raises a direct conflict for the member or their immediate family, unless invited to do so by the person presiding at the meeting. The school council member must not be present when a vote is taken on the member.

Where a conflict is identified, reasonable steps must be taken to address it in order to protect the public interest.

3.4.1 Mandatory policy (Must do)

Implement the Department’s Conflict of Interest Policy at school level.

All employees must comply with the Conflict of Interest Policy and declare and avoid conflicts of interest. All employees must use the eduPay Conflict of Interest Declaration Form to declare any conflicts of interests.

The principal must make a Declaration of Private Interest (DPI) on appointment and annually thereafter. It must be updated whenever required.

If any private interest in the DPI raises a conflict of interest, the principal must complete a Conflict of Interest Declaration in eduPay.

School council members must follow the requirements of the Code of Conduct for Directors of Victorian Public Entities, Education and Training Reform Regulations 2017, Part 4, r.31 for identifying, avoiding and managing conflicts of interest.


Conflict of Interest (COI)
Conflict of Interest arises in circumstances where an employee’s public duty is influenced, or can be seen to be influenced, by a private interest.

Declaration of private interest (DPI)
Declaration made via Edupay of potential conflicts of interest including, but not limited to, other sources of income, any positions of office held in public or private companies, shareholdings and other business interests, relationships with trusts, holdings of real estate, agreements and contracts, other financial interests and any probity issues.

Section 3 of the Finance Manual, which sets out all mandatory and prohibited policy for schools and school councils with respect to managing financial risk

Reviewed 19 November 2020

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