THE majority of the huge debt facing the Anglican diocese of Bathurst is due to the operation of the three schools in the diocese.
Bathurst school All Saints’ was the first to be set up and has been operating for more than 100 years. Dubbo Anglican Grammar followed more than 10 years ago with Orange Anglican Grammar School the third school to be set up in the Diocese starting in the hall at Holy Trinity Anglican Church five years ago.
Bishop Richard Hurford in an open letter to the diocese earlier this year said prior to 2008 the diocesan debt was relatively modest but expanded rapidly since the three schools needed to borrow money to meet debt servicing costs that could not be covered by trading surpluses - in other words borrowing to pay the cost of previous borrowing.
The bishop also said the $38 million debt is held mainly by the schools, it cannot be attributed entirely to the schools and in hindsight some aspects of management of the schools could have been done better.
A 2 per cent interest rate premium charged to the schools by the Anglican Development Fund (the diocesan banker) has contributed significantly to the expanding debt.
Bishop Hurford said efforts in 2010 and 2011 to find a solution to the debt problem by integrating with other school systems were not successful resulting in a decision to sell off and divert other assets.
Sale of some of the schools would aggravate the financial position according to the bishop with a requirement to repay government grants used to build infrastructure.
Bishop Hurford could not be contacted yesterday about the financial situation of the three schools.