This editorial welcomes Chris James, from Alan Patient & Co, to talk us through some of the financial difficulties schools may face and how they - with a little help - can find stability during turbulent times. Chris is a Chartered Certified Accountant and has been fortunate enough to support many schools and governors over the last 5 years.
School leaders and governors are not necessarily trained finance professionals.
While a diverse skillset is certainly advantageous to ensure that all viewpoints are heard and explored, it is just as important to have a strong grasp of the financial information as well.
80% of businesses that fail do so because of poor financial management. Schools are simply not in a position where failure is an option. The consequences are too great for the hundreds of lives that would be affected.
The average primary school budget is over £1m with the average secondary school budget in excess of £4.5m, understanding and managing a budget of this level cannot be left to chance.
When dealing with business leaders you are quite often helping them to save tax or maximise profits and earnings.
When it comes to schools however, the incentives are drastically different.
Schools are challenged to deliver ever-higher standards with increasingly lower budgets.
Getting it right offers a far greater sense of accomplishment, from the number of people that your work affects the fact that you are directly helping children get the best possible education.
One of the great challenges of any school leader is juggling curriculum goals with budgetary constraints.
This is only possible by having the correct financial information, and the understanding of that financial information to achieve those goals while keeping to the budget.
Accountants can help to design a financial model that works for your school, however, they are not specialist in delivering a broad and balanced curriculum, so building the best finance team possible with the right mixture of skills and expertise in your school is the only way to rise to the challenge.
Strong financial controls are where it starts and by working with and empowering finance officers and school business managers, it allows them to become an important part of the school and its financial processes and systems. Helping the staff fulfilling the finance function of the school to understand that the quality of their work will impact the decision of school leaders is key and having the systems in place to allow for high-quality work ensures this.
Local Authorities are handing over more and more control and decision making to schools with every passing year. “With great power comes great responsibility”. The reporting responsibilities of schools are increasing all of the time.
Aside from the abundance of reporting regarding pupils including the termly census, schools are finding their financial reporting requirements balloon especially those who have converted to Academies in recent years. The ESFA and DfE are asking for more and more information in a number of different formats. On top of this, school leaders and governors find themselves under the scrutiny of auditors as well.
Auditors are just people even though some may think otherwise. They are very specialised and highly trained so they know what they are talking about but for those who haven’t had training as an auditor, they can seem to speak their own language which can be hard for school leaders and governors to understand.
Don’t be afraid to ask them questions if you don’t understand what it is they are saying, all good auditors will take the time to explain any queries you may have.
Helping schools and school leaders understand their finances is the passion of any accountant worth one’s salt. This can involve acting 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.
The ultimate goal of any school leader is to provide the best education for the children in their charge, to prepare them for the world they are to face.
This is only possible in this fast-paced technological world through a clear understanding of the financial plan combined with outstanding teaching and learning.
Whilst the two are not mutually exclusive, School Leaders will always be best placed to run a school however a little support from a finance professional can go a long way to helping a school achieve their goals.