Financial reporting isn’t something multi-academy (MATs) can avoid, but it can become a painfully drawn-out process, involving extended hours, with too much room for error.
Traditionally, for many schools, their tool of choice for financial administration is the spreadsheet. But while this might be sufficient for a single small business to do its accounts, it has severe limitations for widescale financial reporting.
There is, of course, well-established, dedicated accounting software too, but even this is not best-suited to the particular demands of MATs.
Financial compliance for MATs
The funding agreements that set up MATs in the first place mean that they must submit financial returns to the Education and Skills Funding Agency (ESFA). This is an important aspect of compliance.
The legal status of a trust means that it’s different from other forms of school collaboratives, such as federations.
The MAT itself is the legal entity, rather than the individual academies. The trust has responsibility for governance of its schools. It’s accountable for the performance of each one.
Therefore, the trust’s financial reporting must reflect information at both a trust level, and at an academy level, when it comes to disclosing certain details.
In other words, what’s required is both the big picture and the individual detail. The challenge for trusts is finding the financial tools that can deliver these requirements.
And this challenge has two key aspects: coordination and compatibility.
MATs vary in size, but some will contain multiple academies. In this instance, the trust will need to gather information from individual academies, and put this together coherently to provide comprehensive financial reporting.
This requires a good degree of consistency on the part of academies, but also expert organisational skills on the part of those people compiling all this information.
This can be further complicated by the fact that different MATs will have varying approaches to centralisation, or to what degree they pursue it. For example, few MATs standardise the curriculum, according to Ofsted, in its 2019 report, Multi-academy trusts: benefits, challenges and functions.
But to be compliant, all MATs must ensure that they get the information they need from academies for sound financial governance, which should include vital financial data.
MATs should be able to benefit from economies of scale, but again, according to Ofsted, many schools see the main drawbacks of being part of a trust as financial. Ofsted has reported issues arising from pooling resources and how MATs manage the proportion of school budgets they receive directly.
This may further complicate the issue of building a reliable financial reporting infrastructure.
It’s difficult for MATs to lay down the law when it comes to processes, while maintaining the right kind of balance between autonomy and authority.
For administrative functions, including financial reporting, this issue can be more acute simply because it is largely hidden, compared to more prominent concerns such as the curriculum and school activities.
So, what happens if individual academies are using various approaches to their financial record-keeping?
The issue comes back to centralisation. MATs need to treat financial admin, and especially technical applications related to it, differently to other aspects of how independent academies run.
The curse of the spreadsheet
Financial reporting for MATs is complex and can feel daunting.
So much depends on working out, and building into future budgets, the funding cost, and its effectiveness, per individual pupil. And this requires an accurate understanding of pupil numbers, results and financial data throughout an entire trust.
No trust can afford to budget blindly, but if financial administrators are having to reconcile data from multiple systems, then gaining true clarity and visibility is going to be challenging.
One major area of concern in completing complex financial returns for trusts is the widespread use of spreadsheets.
Why? Because this form of manual entry is both time-consuming and prone to human error.
Basically, to meet the complex demands of financial reporting for MATs, traditional spreadsheet software simply isn’t up to the job.
It isn’t tailored to fit trusts’ needs, and where individual academies submit spreadsheet data to centralised admin, there are issues with how to integrate and update this essentially static data.
Manual entry means more error in centrally submitted spreadsheets, and error tracing is itself time-consuming for trusts. And if errors only come to light at the auditing stage, this will have knock-on cost implications.
Trusts need a system that is comprehensive but also adaptable across individual academies. Their accounting systems must also work at academy level, and be able to extract individual transactions and balances for each academy. Trusts need a clear audit trail they can follow.
What is the answer to easier financial reporting?
Imagine a system that gives your trust the essential oversight it requires to make financial management and financial reporting reliable, efficient and easy.
Imagine a platform that will work at trust level, but also at individual academy level, enabling schools to monitor their income and expenditure.
Imagine a fully integrated system that is automated but highly adaptable for specific needs.
That platform, and system, exists, and its name is Tali.
With Tali, trusts, and the schools they administer, can manage and monitor income, eliminate human error and carry out essential financial reporting tasks, including:
The Tali platform also incorporates Pebble’s transaction integration platform, Trac.
Trac can enable MATs to create integrated financial management systems, transferring data smoothly between multiple sites.
It offers various options for practical integrations, including fees billing, invoicing, banking, Gift Aid and catering.
Pebble’s innovative financial management software for schools provides trusts with easier financial reporting, while giving them advanced capabilities for more efficient, centralised financial management. At the same time, it offers major financial management benefits to individual academies.
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