School leaders and governors are not often not trained finance professionals. School leadership is far more than “just” finances (in fact that applies to leadership in general and maybe we’d be better off if we had more leaders in the country). A good leader needs to be able to inspire, move her school towards a successful future, deal with a wide range of views and have a strong grasp of the financial information as well.
In about 80% of failing businesses there is poor financial management. That’s about cash flow, budgeting, planning, dealing with external bodies (ESFAS and HMRC anybody?) and ensuring that finances are up to date and in the right place.
Schools are not in a position where failure is an option as the consequences are too great for the hundreds of lives that would be affected. The average primary school budget is over £1m and for secondary schools that’s in excess of £4.5m. Understanding and managing a budget of this size is not something that can be left to chance.
The challenges in schools and businesses
Most business leaders that we deal with are interested in saving tax, maximising profits, earnings and keeping the books well enough to keep the VAT man at bay.
In schools the incentives are drastically different. Your school is challenged to deliver ever-higher standards with increasingly lower budgets. When you get it right there’s a far greater sense of accomplishment, ranging from the number of people your work affects to the fact that you are directly helping children get the best possible education.
Financial management in schools
Juggling budgetary constraints with curriculum goals is one of the great challenges of every school leader.
This is only possible by having the correct financial information and understanding that financial information; allowing you to achieve your curriculum goals and keeping to budget.
As Accountants that specialise in working in the Schools and Academies we help our clients by creating a financial model that works for their school, ensuring that they can get the most out of their limited budgets and releasing as much of your time for curriculum needs rather than financial management. We also help them to manage their finances to the standards required by their authorities.
No Accountants are specialists in delivering a broad and balanced curriculum, which is why we help you build the best finance team possible with the right mixture of skills and expertise for your school.
Financial controls in schools and Academies
It starts with strong financial controls, but financial management is more than that. Finance officers and school business managers are a key part of the school’s financial processes and systems. Helping the school’s finance staff understand how their work affects decisions taken by school leaders is critical. Helping Governors with a basic understanding of finances so they can support you as a school leader is also key.
Local Authorities are handing over more and more control and decision making to schools each year, so reporting responsibilities of schools keep increasing. The ESFA and DfE are asking for more and more information in a number of different formats. A strong finance function is essential to deliver this and an external perspective can really help.
Then there’s the complexity of understanding audit reports. Auditors are specialised and highly trained, but without the right training it’s hard to understand what they are talking about. You might not be surprised to hear that many school leaders and governors don’t fully understand their audit reports. Don’t be afraid to ask them questions if you don’t understand, good auditors will take the time to explain any queries you may have.
The problems of being a school leader
Technology, the world and school requirements are changing rapidly. As a school leader you can only meet your ultimate goal with a clear understanding of your financial plan and good management of your finance function combined with outstanding teaching and learning.
It is possible for you to achieve these seemingly divergent requirements. School Leaders will always be best placed to run their schools, although it often needs more financial knowledge than most school leaders have.
How Alan Patient and Co help Academies and Schools
Helping schools and school leaders understand their finances and make the right decisions based on those finances is key. We often:
- act as a go between for schools and auditors, making sure the auditors have the financial information in a format they expect and their requests and audit issues raised make sense to school leaders.
- help schools prepare their budgets and manage those budgets
- ensure the relevant financial controls are in place
Most importantly we don’t deliver numbers, we help you to make decisions about the future of your schools, based on your numbers.