Montessori warns of dire finances and debts, replaces leadership

The country’s largest Montessori organisation has replaced its leadership and overhauled its financial reporting after reaching a confidential settlement with the tax office as it battles serious debt issues.

Montessori Australia, which administers the alternative teaching method developed by Italian educator Maria Montessori, confirmed in a confidential letter to schools that two of its operating entities had to be restructured so directors would not be liable for the loans.

The number of schools and preschools using the Montessori method has been growing, including Canberra's first Montessori early childhood service, which opened in 2017.
The number of schools and preschools using the Montessori method has been growing, including Canberra’s first Montessori early childhood service, which opened in 2017.CREDIT:KARLEEN MINNEY

The confidential letter also revealed that “significant concerns about financial processes and debts” meant the organisation had to be placed in a special structure last July to prevent the board of its subsidiaries – the Montessori Australia Foundation – from being personally liable for the loans.

While those issues were resolved, Montessori Australia in January found “further legacy debt” in another part of the organisation – the Australian Centre for Montessori Studies – and placed that company in a similar structure to allow it to continue operating.

The letter, signed by Montessori Australia acting chairman Tony Grasso and obtained by The Sydney Morning Herald and The Age, confirmed financial issues had first pushed the organisation to make emergency changes to its corporate structure in July last year.

Montessori Australia does not run the country’s 38 Montessori schools, but does provide resources, support for parents, curriculum assistance and student record-keeping services.

In a statement, Montessori Australia said the organisation was “taking responsible measures to ensure all debts are properly managed and that none of these administrative issues or transformational work impacts individual schools”.

“The organisation is also engaging actively with key partners and stakeholders who may be able to offer philanthropic support to remove some of the legacy debts being resolved,” the statement reads.

“This means we cannot determine the exact timeframe for moving out of our present corporate structure as many variables will inform this important decision in coming months.”

However, Mr Grasso’s letter to the Montessori schools revealed a business turnaround strategy agreed with the Australian Taxation Office included the removal of the organisation’s chairman and the recruitment of a new chief executive and a payment plan for outstanding debts.

“This is important as we are receiving feedback regarding payment concerns and are hoping to resolve all matters amicably and clearly as we develop our new budgets,” Mr Grasso wrote.

“Some of our specific commitments in this regard centre around payment of all liabilities through a mutually agreed repayment plan, including all employee entitlements, super and tax.

The Montessori method, which the organisation claims is used in more than 22,000 schools around the world, including in kindergartens and preschools in Australia, encourages more free activity in classrooms compared to mainstream education.

The ATO declined to comment, citing confidentiality requirements.

Adam Scotney, the principal of the Northside Montessori School in Pymble, said it had been “disappointing to hear in the past week of the difficult financial situation that (Montessori Australia) have found themselves in”.

“While the difficulty of this national body is unfortunate, it does not directly affect the operation of Montessori Schools across the country,” Mr Scotney said.