Q&A: Transforming Academy Finance

We sat down with Peter Wilson, CFO of Academy Transformation Trust (ATT), a large MAT based across the Midlands, the East and South-East of England, to take a deep dive into the complex world of MAT finance.

 

Q: ATT has had some big structural changes recently; how did you identify what improvements needed to be made?

A: On acceptance of the role as CFO; my overriding view on what finance should focus upon is split across three high level principles:

  1. Strategic finance (i.e. being income generation, centralised procurement, ICFP etc).
  2. Financial controls, processes and reporting.
  3. Finance team – structure and development.

Strategic finance cannot however operate effectively without the fundamentals of financial control and team being in the correct order.

Having previously been the Audit Committee Chairman, reading the numerous internal and external audit reports I was fully aware that the financial controls and processes were not strong.

This first part of the journey of improvement was therefore to appoint immediately an experienced financial controller. The new FC then rightfully identified a lack of investment in our accounting system and documented processes. This subsequently led to change in accounting system and a complete overhaul of our Financial Regulations and Scheme of Delegation.

Reporting; in terms of forecasts was a shocker, with no ability other than to manually consolidate 24 individual forecasts. This therefore prevented the ability to provide reliably any level of detail to the Exec/Trustees – and so an overhaul on reporting was required.

Changes to the finance team structure and development requirements came about from the initiation of the monthly management accounts meetings. These meetings highlighted to me firstly, that there was a lack of understanding of what a full year forecast should be; as over a period of a few months individual academy results would swing massively. We therefore had to train both the finance staff and Principals to nail down a target figure.

Secondly, from discussions with Principals it became apparent that when we got down to the operational budget headings (estates, ICT etc) there was a sense of uninterest. This was coupled with in many places an overall lack of Trust wide strategic oversight of such costs. It was from this that we decided that the operational budgets for the Trust should be centralised as one.

 

Q: How has reform of the finance team’s structure leading to improvements?

A: The new finance structure only became operational from 1 September 2019; with the aim to make the following improvements:

Creation of three specialist finance groups:

  1. The operational and commercial finance team – to drive income generation through additional commercial opportunities and to identify savings in the operational costs through Trust-wide procurement contracts.
  2. The educational finance team – to create a team that becomes the experts in education finance. The team focusing on all funding streams, implementing fully ICFP and identifying procurement savings across the education supplies.
  3. Purchase ledger team – to significantly improve our controls over the procure to pay process; to rationalise the number of employees involved in the process, and to centralise the team as one.

Q: What can other large trusts learn from your experience?

A: There are a number of things to consider:

  • If you are in financial difficulty; why not try and change things for the better…what do you have to lose!
  • You need to involve the Principals in discussions and ideas in order to get their backing.
  • In an ideal world, I wouldn’t do a finance restructure, budget model change and accounting system upgrade all in one year!
  • Don’t overthink the impact of GAG pooling – if its fair across the Trust then in reality there’s little ability to challenge the implementation. You may find Principals are fully supportive.

 

This Q&A originally featured on the Schools and Academies Show website.

 

Interested in exploring academy finance further? The National Academies Finance Conference 2020 will offer the latest policy updates and leading professional development in assessing the next steps in enhancing financial management across the academies sector, in both single and multi-academy trusts.

Click below to find out more.

National Academies Finance Conference

 

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