When you’re in the throws of setting up an academy there seems so much to think about, that ascertaining what’s essential, what’s priority and what can wait can seem like a real challenge. It’s for this reason that we’ve put together this part of our website to help you decipher where your focus needs to lie in the early days.
Your value for money statement
Thanks to a BBC television programme that highlighted a large scale leasing scam that resulted in schools being hoodwinked, head teachers losing their jobs and one of the High Street banks writing off millions of pounds of debt, the EFA have increased the pressure on schools to prove that they are financially diligent and more conscious than ever of the need to represent value for money.
A new addition to the requirements for academies, the EFA has called for an Accounting Officer’s declaration for the year 2012/2013 explaining how the academy has secured value for money. This statement will take the shape of a signed annex to the Accounting Officer’s statement and will form part of the annual accounts that are submitted to the EFA. What’s more, this value for money statement should appear on the academy’s website.
Joining a community of schools
As the notion and reality of academies grows and develops, trends are starting to develop and one trend is that that Commission is indicating their belief that the ideal academy system is best represented as a community of schools. This community of schools will of course encourage freedom and innovation within each individual school, but the concept is that they share ideas and efforts to maximise the growth and improvement of teaching, learning and pupil achievement in particular.
While the whole academy movement is to encourage independence, it has been made clear by local authorities and the Secretary of State that interdependence is the way ahead. The theory is that struggling schools have much to gain from the experience of successful schools, and by working interdependently, everyone stands to benefit.
When you’re planning your academy’s early days it’s without a doubt a good idea to consider how you will network with other schools in your area. Such is the strength of this interdependence belief that the Commission has even suggested that Ofsted shouldn’t judge a school to be ‘outstanding’ for leadership unless it has evidence that it has collaborated in the improvement of other schools.
Expectations of your Governors
Once again as the academy system develops, so does the role of the governors and more than ever before the role of your governors needs to be placed extremely high on your agenda. Traditionally viewed as school leaders, the expectations of the governors is constantly developing and academies are demanding governors that are even more knowledgeable and even more switched on to their legal responsibilities than ever before. Again, at the core of these expectations is the need for improvement and collaboration.
Developing your KPI’s
Like any business, your academy’s Key Performance Indicators (KPIs) are, in many ways, what the academy will stand or fall by. If you’re new to developing KPIs, their development can be a particularly challenging task, so in order to help; we’ve put together some suggested KPIs:
Staffing costs as a percentage of main grant income
Income per pupil
Staffing costs to General Annual Grant (GAG) income
Staff costs as a percentage of total expenditure
Capital expenditure per pupil
Unit cost per pupil
Net revenue compared to budget
Ofsted inspection results
Year 7 pupil numbers
These are just some of the indicators you might consider for your academy, and hopefully they will give you inspiration to create more of your own.
Your Financial Manual
One of the very early tasks in your academy journey is to create your own Finance Manual that gives specific details of systems, controls and procedures. In order to assist with this process you’ll find proformas and information in the Academies Financial Handbook.
Your Governors Register of Business Interests
In line with the increased importance of the role of the governors, there is now even more need for your governors to declare their business interests. It is best to create a register of individual declarations for your governors. What’s more, it’s important that the declarations which mention their business interests include all related persons who might exert influence over their role as governor.
Your Risk Register
Risk Management is an integral part of the successful running of any business, but in the case of academies, it is of particular importance to trustees when it comes to making sure that their goals are met. It is essential, from the outset that you create a Risk Register. Once again, the Academies Financial Handbook gives a full outline of what is required.
Registering for Gift Aid
In order to maximise the value of any donations, it’s essential that your academy is registered to claim Gift Aid. To be able to claim Gift Aid, you need to register your academy with HMRC by completing form CHA1. This will mean that you will be able to reclaim the basic rate of tax from HMRC, making your donation worth 20% more than it would otherwise be.
Being aware of changes to the Responsible Officer role
Recent changes mean that the role of Responsible Officer (RO) is no longer obligatory, but academies will still be required to demonstrate that their internal control procedures are being regularly reviewed. What this means is that the options are now:
- To create a full internal audit function
- To engage external auditors to carry out the task
- To carry out a ‘peer’ review with another academy’s RO
- To voluntarily select to retain the RO role
In practice, what this means is that your academy has more freedom on how to demonstrate that your obligations are being met, but you nevertheless need to have a clear and agreed strategy in place right from the start.
Need for good governance
Governance is at the core of any academy’s success and efficiency and it is the role of the trustees to ensure that best governance is achieved at all times. Good governance relies on shared goals and visions, efficient decision-making processes and constant focus on improvement. The Department of Education (DoE) gives a detailed description of what they believe makes for best governance, but here are six of the key elements you should consider:
- Make sure your team isn’t too big, isn’t too small and has a broad skills set as well as a clear and shared vision.
- Take time to ensure that every member of the team fully understands their role and is committed to working towards the common goals of the academy.
- Make sure your goals, from high to low level, are clear, understood and embraced by every member of your team.
- Seek commitment that your team will work objectively and with integrity at all times, ignoring any personal goal or pursuit.
- Encourage open communication and transparency in all acts.
- Concentrate your team’s efforts on financial planning and financial performance monitoring.
By sticking to these broad principles and by adopting the DoE guidelines on governance, you shouldn’t go far wrong.
Some important dates
As with any business activity, there are several, very specific dates that you need to fix in your academy diary. Here are some of the most important:
- If you are a new academy or a school converting to academy status, you will benefit from a longer period than existing academies to file your accounts. The actual date that accounts are due to be filed depends on the date of incorporation of your charitable company, but newly registered academy trusts have up to 18 months to prepare and file their first set of accounts at Companies House.
- If your academy is already up and running and you have traded throughout a normal year, the dates for filing accounts and returns are as follows:
- The 31st December following the 31st August year-end for the Department for Education.
- 31st May following the August year-end for the Registrar of Companies.
- If the academy is required to make a Corporation Tax Return, this needs to be made by 31st August in the year following the year-end.
Of course there are several other important accounting dates in the academy year, but these are some of the most significant, and it is essential to make sure from the outset that you have procedures in place to meet these deadlines.
Understanding your Corporation Tax position
Classified as exempt charities, academies are under no obligation to pay corporation tax on central government income. Because of this, academies will only ever have to pay corporation tax if their trading activities give rise to significant additional income. If your academy is in a situation where it is not required to pay corporation tax, it’s important that you achieve exempt status by completing form CHA1.
If you’re in the early stages of setting up or running an academy and feel as if you could do with some external support, why not get in touch? We’re fully up to date with the issues being faced by academies and are perfectly pitched to help ease the way forward.