How to set up your bank accounts for a MAT

Converting your school to a MAT (multi academy trust) can be frustrating, time consuming and often uncovers lessons “for next time” (except there rarely is a next time). A good recent example where we have been helping a school converting to a MAT, and setting up their school bank account for a MAT.

You have probably been used to having used just one bank account. That bank account receives funding and pays out expenses including staff salaries. If you convert and become part of a Trust with more than one school, you will have a complicated decision to make on how you will want to set up your bank accounts in the Trust.

Options for bank accounts in a MAT (multi academy trust)

The options include, but are not limited to: –

Having one Trust bank account receiving all funding and paying out all expenses. This will need to be monitored closely and accurately to ensure that reporting at school level is maintained for local governing body’s and for cash flow purposes.
Having multiple accounts where all funding is paid to individual schools and all expenditure is paid out of these accounts. This will include a Trust bank account which centrally paid services are funded by contributions by schools in the Trust. This is preferable by Trusts with separate payrolls for each school, which in itself presents issues such as TPS audits, and where schools have joined after the Trust is initially setup. This requires significant cash flow monitoring across all schools and requires the finance function to ensure enough funds are transferred to the central bank account to pay for centrally paid services.
Having multiple accounts where GAG funding is paid into the central Trust bank account and payroll is paid out. The amounts required to pay for central services are then deducted at Trust level and amounts remaining are then paid to the schools to cover supplies and local services. This allows for optimum control as the major cost of any school or Trust is covered from the GAG funding and schools are then delegated funds to pay their own suppliers. Payroll coming out of one place means you only require one payroll scheme for the Trust cutting down on auditing time and while you will need to transfer funds to schools they will receive other funding directly to ensure good cash flow.

We help Schools and Academies with their financial management, see the results of good practices (and hear about less good practices). If you would like to discuss how to improve financial management in your school, please call. In the last few weeks we have been able to give good schools ideas simply by talking, visiting, or as part of a paid project.