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Non-government schools educate 418,000 school children each year, representing 35 per cent of all students in NSW. The NSW Department of Education administers several grant schemes to support these schools, with the aim of improving student learning outcomes and supporting parent choice. To be eligible for NSW government funding, non-government schools must be registered with the NSW Education Standards Authority (NESA) and not operate 'for profit' as per section 83C of the NSW Education Act 1990 (the Act). Non-government schools can either be registered as independent or part of a System Authority.

In 2017–18, non-government schools in NSW will receive over $1.2 billion from the NSW government, as well as $3.4 billion from the Australian government. Recently, the Australian government has changed the way it funds schools. The NSW government is assessing how these changes will impact state funding for non-government schools.

This audit assessed how effectively and efficiently NSW government grants to non-government schools are allocated and managed. This audit did not assess the use of NSW government grants by individual non-government schools or System Authorities because the Auditor-General of New South Wales does not have the mandate to assess how government funds are spent by non-government entities.

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