In Budget 2016, the Government confirmed its plans for every school in the UK to convert to academy or free school status by 2020 – or to be actively planning to make that change.
If you are the head or management team of a school that’s yet to make this change, this presents a big challenge. There is a multitude of considerations to start planning for, not least of which is the impact of academisation on your financial management and accounting processes.
Whether your school is starting out with its plans for this change process or has already made the switch and needs assistance with its financial systems, there are some key elements you need to start planning for to ensure you are delivering the best financial performance for your educational establishment.
Completing your academy’s year-end
The financial year for academies runs from 1 September to 31 August, with the final accounts for your school having to be with the Educations Funding Agency (EFA) by 31 December each year.
Your schools or academy may have a finance team in place already – especially if your school is part of a multi-academy trust that’s made up of several academy schools, or if your school’s income exceeds £10million.
Having a team who are totally focused on managing the school’s income and spending will make running, collating and producing your statutory accounts far easier – and by partnering with an accountant there is also potential for reviewing and streamlining your profit and loss to maximise the available funds.
If your school is part of a multi-academy trust, their central finance team will bring together the separate accounts for each school and will combine them into a full set of accounts that covers the entire trust network. This keeps things consistent and means there are agreed processes in place for all your financial processes.
The real challenges of managing academy accounts can occur when your academy is smaller and not part of a bigger trust.
As a single academy, with limited technical accounting experience and training, you’ll only be able to take your accounts so far. Depending on the size of your school, this is where the Academies team at Saint & Co can help you to progress your accounts to the point needed for that all-important 31 December year-end deadline.
We specialise in supporting academies with their financial management. If you’re concerned about managing the change process, we can help to process and audit your accounts as well as providing a friendly team who give you the support and guidance needed to meet your regulatory requirements.
Your Academies Accounts Return
The EFA requires the school to submit an Academies Accounts Return (AAR) each year. This is used to incorporate your academy’s accounts into the wider accounts and financial reporting for the EFA and the Department for Education (DofE).
Each summer, the EFA will release an Excel template that must be used for your AAR. If your academy has an August year-end, your academy trust accounting officer will need to fill out this template with all the required financial information relating to your academy school. You then have until 31 January the following year to complete your AAR, get it independently audited and then submitted to the EFA by 31 March that same year.
Again, this is something that our Academies team can assist with – providing the independent audit of your AAR that’s required and helping you to get the financial statement submitted on time.
Having the right financial controls in place
As an academy, your funding is no longer supplied through the local education authority – your income comes directly from the government through the EFA.
As such, there are some highly robust controls that need to be in place to regulate what this income is spent on and to ensure that your school has the right financial governance in place to manage this money.
The EFA provides an Academies Financial Handbook each year that lists the controls and processes that must be in place and gives your accounting officer the guidance needed to meet your obligations. If you are a smaller academy, meeting these control requirements can be challenging. Partnering with an accounting professional will certainly help you to get your finances in order and ticking the right boxes – ensuring that you’re fulfilling the controls that are needed by the EFA.
One option is to bring in an outside person, such as a member of the Saint & Co team, to be your ‘responsible officer’. By outsourcing this responsibility you get a full assurance that the right financial controls are in place and that your accounts are being managed as per the EFA’s specific guidelines.
Getting the support you need for your academy
As you can see, the transition from local authority-run school to an EFA-funded academy is not a simple one. There are several substantial changes to your financial procedures, controls, and accounting responsibilities, and managing those change processes can add to what’s an already heavy workload for any school management team to cope with and plan for.
Our experienced Academies team can help you and your management team to understand the cultural, financial and administrative changes that come into play when transitioning over to become an academy school.
And we can use our financial expertise and academies specialism to help you restructure your accounting, meet your regulatory requirements and ease the stress and workload of your academy finances.
Contact Saint & Co to arrange an informal chat with a specialist from our Academies team.