In line with the decision of the government to instill accountability at every school type and level, financial self-assessment checks are now mandatory for academy trusts.
The annual finance check-up is a self-assessment software to verify how much reliance the trusts can have on their financial and resource management systems. It is expected to be made officially compulsory at the end of the current academic year. According to the government, this development will mean that “there is no area in which they are requiring weaker accountability of academics than of maintained schools.”
The announcement came during the launch of the organized consultation on accountability in maintained schools, a program organized and sponsored by the Department for Education. You will recall that earlier this week, there was a serious critique of the self-evaluation of academic trusts from Ofsted.
It is now mandatory for maintained schools to complete the financial value standard of their school for every academic year. This includes about 29 questions on subjects like governance and finances and resource management. It is expected that the process will allay the fears of local authorities about how reliable their financial management is.
The adoption of the self-assessment software will also allow schools to be compared with their counterparts based on certain parameters through a special dashboard.
In September this year, the government launched a similar tool for academy trusts, although this is not compulsory. Likewise, in August, the DfE’s school resource management strategy announced the readiness of the government to make consultations on whether (or not) to adopt the tool as a prerequisite for academic trust. This, according to them, will champion the drive to subject all schools to the same or similar standards.
Talking about the challenges, functions, and benefits of academic trusts, Ofsted, in his recent publication, described the current self-assessment at trusts as “weak” and “limited” to properly measure performances.
The report also came with a complimentary company, where Chief Inspector Amanda Spielman explained that the only alternative the DfE could proffer to the inspection of academy trusts is a comprehensive framework that allows excellent self-assessment of trusts’ performances, especially on how they affect education.
Among other things, the self-assessment software requires trusts to answer questions on budget setting, value for money, staffing, public money protection, governance, and the financial strategy of the trust.
Information contained on the DfE website suggests that the self-assessment software will keep trusts on their toes while pointing out the areas that require improvement. This will ensure the judicious use of resources to support teaching. Before now, the form existed as a self-help tool and was never mandatory. But the status is about to change.
It is common for financial teams to feel more pressured during the Autumn term, especially with the annual external audit and financial accounts preparation, alongside the continuous monthly management information for the trustees. Hence, adding the self-assessment responsibility may just be demanding for the already-stretched financial team.
People who are conversant with the integrated curriculum financial planning (ICFP) can relate to most of the metrics and data involved. In the self-assessment, however, the ICFP is combined with additional details and topics of financial governance.
Trusts will be required just the most important information, especially those already involved in self-evaluation. This indicates that trusts are only meeting the minimum standards required to achieve stable financial health and resource management.
The Chair of the Trust Board is expected to sign a declaration, which officially announces the outcomes of the exercise, agreed processes, and a schedule for reporting back.
How does the tool work?
There are two parts of the self assessment software:
The first part comprises a comprehensive checklist on governance, staffing, public money protection, budget setting, action plan, and financial strategy. The checklist, which is mandatory for every trust level, cannot be completed separately. This is necessary to properly answer the question of whether the results of the self-assessment have undergone proper assessment, the follow-up actions identified, and the dashboard completed 100%. However, the first part is the only section that must be mandatorily submitted.
The biggest component of the second part of the self-assessment software is the dashboard. On the dashboard, the details to be completed are more comprehensive and are on a school level. This is to ensure the proper representation of all the schools in any Multi-Academy Trust (MAT). At the moment, the dashboard does not have to be submitted. Other areas covered under the dashboard include;
- School-based metrics like average class size, pupil-to-teacher ratio, average teacher cost, and others,
- Financial information on expenses as a percentage of total expenditure,
- Balances/reserves as a percentage of overall income,
- Results (progress cores, Ofsted rating, and others) as well as an open text opportunity where participants can submit personal comments.
The data received is pushed through to RAG assessment, so that schools can point out the areas for focus. Based on the current arrangements, especially for 2019 audits, the process is not a part of the current audit requirement. However, new developments could come up any time soon. While the penalties for not meeting the deadline are not clearly spelled out, all hands are expected to be on deck to ensure compliance.
Despite this coming at the busiest time in the schedule of finance teams, the extra submission is still very relevant.