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Financial Governance

Risks 

A strong, transparent finance function is a key element in ensuring your school can comply with its statutory duties as well as mobilising its wish list. 

Finance underpins everything that the board or senior leadership team need or want to do. As a governor/trustee, you need to ensure the school is meeting its statutory requirements to educate our young people and to allocate funds appropriately to our students that attract specific funding. It is also important that schools have funds left over to do the ‘nice things’ or to tick off the wish list. 

If the school finance structure is inexperienced or under resourced the school will quickly lose sight of its ability to trade or function to meets its statutory duties, let alone anything else. 

Without coherent policies and procedures in place, and a board of trustees monitoring these it is easy to de-fraud or lose site of the aims and vision of the school. 

Tight financial controls and segregation of duties for finance staff is of great importance. Compliance with statutory bodies and requirements is key. Understanding what the Governance role is, is imperative. 

 

What does good practice look like? 

A strategic view of financial position needs to take place on a monthly basis, in the form of management accounts, to ensure best practice is being adhered too. Monitoring of schools’ funds and benchmarking exercises should form the basis of monthly reporting to be scrutinised by the governors/trustees. As a governor you are the school’s critical friend. 

Your role as a governor/trustee is to understand the financial roles and responsibilities of school staff, the senior leadership team and where your role fits into this. There are many statutory financial requirements that you must ensure that the school is adhering too. You need to have an underpinning understanding of compliance in relation to HMRC, Companies Act, Charity Commission and DFE requirements. 

As a governor/trustee you need to understand how a school is funded. There are many elements that make up school funding, with varying funding streams, some of which have statutory or specific conditions attached which must be monitored and documented for public scrutiny. 

You will need to understand and interpret financial reports to ensure you can provide appropriate challenge to the school finance staff or senior leadership team. Not all governors/trustees will have the knowledge or experience to do this, but it is important that at least one of your governors/trustees does have the ability to do this type of analysis. 

 

Annual requirement – The Financial basics 

Whether you are a governor/trustee of a maintained school or academy, you need to ensure that these annual statutory requirements are in place: 

The role of a governor/trustee can be very rewarding and if financial governance is good at school and governor/trustee level, then the role will help to support the school to achieve its core outcomes.

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