It’s back to school for accountants advising on Academies
Just over a year ago, the Coalition Government set out its plans to reform the education system. Whilst its predecessors had launched its Academy programme in order to address the issue of underperforming schools, the Coalition has, as part of the process of reform, now broadened the scope for all schools to convert to Academy status, including those that are classed as outstanding by Ofsted.
In essence, the process of converting to an academy decouples a school from its funding ties and links with its local education authority. Going forward a school on becoming an Academy receives its funding, including the previous ‘top slice’ paid to its local education authority, directly from the Department for Education, DFE. In simplistic terms a school converting to Academy status, has much greater freedom, whilst at the same time increased responsibility for the management of the school not least for the school governors, school head and or the school business manager or equivalent.
Whilst it is not the role of the accountants to advise on the merits or otherwise of conversion, or to the approach to be taken by any particular school, they do have a key role to play in supporting governors and in providing a hand holding role for school heads and the management team. The need to use external accountants primarily stems from the need for an academy to become a Limited Liability Company and to produce audited accounts to be filed with DFE and Companies House. The accountants’ role though is often more wide ranging than just producing the statutory accounts.
A school looking to convert should ideally involve an accountant at the early stage providing support and assistance with the steps towards conversion, especially in terms of the financial implications, reporting and procedures to be adopted. This process will most likely include advice and support on the use and choice of accounting software to be used.
On conversion the accountants should be on hand to provide guidance on maintaining financial records and general financial advice. This is a role which may include a mix of governor, business manager and responsible officer support and reassurance. Support is also likely around aspects of budgeting, funding, business projects, best practice and capital expenditure
As the financial year-end approaches, in the case of schools with academy status this is the 31st August each year, then the accountants’ role is to look at pre-year end planning.
Experience shows that for those involved in converting a school to Academy status, the process can be somewhat challenging and even daunting. The burden and anxiety though can be eased through the support and guidance received from the professional advisers experienced in such matters. As part of this process Streets’ dedicated Academies team has been providing complimentary briefing sessions and meetings for those schools looking to or involved in the process of conversion.
For further information please visit www.accountants4academies.co.uk or call 0845 880 0320 or email academies@streetsweb.co.uk.
