June 3, 2025
Subject-Matter Experts
Regulation

Why ECE Centres Need to be Audit-Ready

Currently I am observing what seems to be an increasing focus on funding audits by the Ministry of Education. Even small errors, like a missing parent signature or a tick box, can result in funding being claimed back, which is why having good systems in place makes such a big difference.

Over the last few years, the early childhood education (ECE) sector has seen a series of funding shifts — from temporary rule changes, to pay parity scales, to technology updates and changing enrolment requirements. For many centres, particularly those with new ownership or leadership, staying on top of these changes has been challenging.

What’s Changing Now?

What funding auditors are looking for has changed over time. Where they once took six hours on site, there was a period when auditors were requesting up to three full days. More recently, this has reduced to two days. The key factors to be aware of are how easily auditors can access the documentation they need and how confident they are in your processes.

What I find when I travel around the country to ECE services, doing my pre-funding audit checks, is that we still struggle to get our heads around pay parity. The funding auditors still take an educational approach when auditing pay parity; this means that if documentation is missing or unclear, or it is determined that backpay is owing, there’s often a chance to resolve it during the audit.

Other Common Audit Issues

From my work supporting centres, I have found that some of the most common issues that can affect funding include:

·       20 Hours ECE attestations

·       Applying frequent absences rules

·       Falsified documentation

Even small errors, like a missing parent signature or a tick box, can result in funding being claimed back, which is why having good systems in place makes such a big difference.

Good Practice: What Works Well

I recommend focusing on the following core areas to strengthen administration systems:

·       Enrolment forms are signed and dated by the parent, checked by the administrator and then by the service provider as part of the enrolment process.

·       Any changes to a child’s enrolled days or times must be signed by parents first, before the change happens in your student management system.

·       A service does not claim 20 hours ECE funding until the date the parent has signed the 20 hours ECE attestation form.

·       A service keeps an attendance record, and a parent confirms or verifies their child’s weekly attendance.

·       Staff sign to attest to their hours worked as they go, while they are there, on that day; print the plan and mark changes to that plan so that the plan becomes a record of actual hours worked.

·       All visitors, staff and children should be clearly accounted for in regard to safety and evacuation.

Most of the issues are avoidable with the right processes in place – it’s about building habits that support accurate record-keeping.

Audit Outcomes: Realistic Expectations

In my experience, an auditor will usually find something, and funding claimed back may be minimal – maybe up to a few hundred dollars. In other cases, funding claimed back could be more significant.

One extreme case I recall is a centre that contacted me for support just days before their audit, only to realise their records were incomplete. The provider had to go into the audit knowing there would be errors found and acknowledged this. As a result, they were required to repay nearly $30,000.

Supporting Best Practice

My approach is grounded in building confidence for ECE leaders. I combine deep knowledge of Ministry requirements with practical,tailored advice for each centre’s context. My goal is to help services be financially sound, compliant, and well-run — without overcomplicating things. A centre of best practice is one where tamariki thrive, teachers feel supported, and owners can make informed decisions with confidence.

Join me for my ECC workshop on June 17 to learn how to expertly meet the administrative requirements for funding and minimise risk from a funding audit. Register on the ECE Learning Unlimited platform today to secure your spot.

About the Author

As an experienced ECE centre owner and consultant, Todd Painter from Advance ECE offers mentoring services to providers across Aotearoa. He understands many of the operational, financial, and compliance challenges facing ECE leaders, and is driven by his philosophy to ensure ECEs remain viable and sustainable. Todd is available for nationwide in-person and virtual support when your centre needs it most or register for his workshop on 17 June.

Subject-Matter Experts
Regulation
Subject-Matter Experts
Regulation