A number of Kindergarten associations have a lot of money in the bank whilst increasing fees, making staff redundant and crying poor because of government funding cuts, according to an article yesterday in the NZ Herald newspaper.

In reply Clare Wells from NZKI was reported as saying that "large bank balances might well reflect the fact that money was given by the Ministry of Education in three large sums throughout the year and was in the bank to pay wages for the following quarter".  "The large surpluses were often used for things such as building new centres or expanding existing ones".

It is possible for community organisations that are run not-for-profit to have lots of money in the bank or in other types of investments such as rental property and yet find balancing the books between daily income and expenditure difficult.  There can be legitimate reasons for this. 

Early childhood services need to check that their reasons for keeping financial reserves whilst increasing fees or reducing expenditure on children and staff are legitimate.  Parents and the general public have a right to question when community services have money in the bank but are increasing charges or crying poor.   

* READ MORE:  When building up reserves and not using money for other purposes is necessary   

* READ MORE:  Help with financial management and being ready for Ministry of Education audits