The importance of auditing in schools and how to improve – Top tips
Education finance professionals will need no reminding of the Education & Skills Funding Agency (ESFA) deadline of 31 December for audited financial statements to be submitted. The countdown to the end of the year means many MATs and academies are in the middle of their annual audits, with some of the more eager finance teams completing the documents already!
Producing such complex financial records ahead of a strict deadline can cause headaches for business support staff in MATs. But with the right systems in place, time spent on compiling key documents can be reduced, leading to a more positive experience for staff, as well as making reporting and submitting much quicker.
While these stresses are fresh in the mind, it might be time to start to consider how implementing new processes or systems could help to make the task of financial reporting and audits more efficient and easier to complete next time.
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All academy trusts are required to produce an annual report and accounts, which have been independently audited, and submit them with the auditor’s report to ESFA and Companies House. As well as providing assurances to the public, parents, and Parliament that funds are being used for the purposes provided, the audit is an important in providing transparent evidence about the quality of a trusts’ accounting and financial reporting systems.
Learn from past experiences
An audit provides trusts with an excellent method of benchmarking successes, as well as identifying areas for improvement over the course of the year. This provides invaluable hard data for academies and MATs to share with staff, helping to learn from mistakes and encourage different perspectives to improve on key focuses.
An audit takes place just once a year, but it is worthwhile considering scheduling regular internal audits. With consistent and objective internal scrutiny, finance teams can clearly demonstrate stringent financial controls and oversight to the external auditors, without having to scramble for information at the last minute.
Conducting a post-audit review can highlight where technology has helped to automate manual tasks and ease the mountain of paperwork, as well as communicate the value of the information generated by the audit process.
Improve the reconciliation process
Reconciliation is still regarded by many as a time-consuming and resource intensive activity, especially for teams reliant on paper-based processes or multiple, disconnected spreadsheets. But a robust reconciliation process at each month-end with diligent note-taking and record-keeping can also play a vital role in helping prepare for the audit.
Without good reconciliation, schools can find their financial position in a very different place to what was expected, which can create a mountain of additional work during an already busy period. Also with cloud-based school finance software it’s easier to manage the reconciliation process on a month by month basis, meaning that the majority of information is already stored on the system when it comes to compiling the final audit.
Effective school budgeting
Maintaining an effective budgeting planning process throughout the year is essential to deliver on short, medium and long-term targets, limiting the risk of future deficits, supporting the curriculum, delivering on development plans and upholding the school’s reputation.
Auditors carry out a series of tests to see if a school’s financial statements are correct and the books are balanced. They’ll also be looking at the finance team’s understanding of financial processes and making sure that cash-flow and risk registers are up to date. With school budgeting software all relevant information will be up-to-date, accurate, and on hand to ensure the auditor spends their time in the school most effectively.
Curriculum planning software, such as Access Education Curriculum can help assess the affordability of your curriculum in the short and long-term so decisions can be made that will improve the efficiency of a budget.
The approach to auditors
With so much variety in each external auditor’s approach it’s important to find an auditor that suits each school’s particular requirements as this pays dividends in the long run. Before committing, spend time doing research, reach out to professional networks for referrals and when writing the tender, think about how the school can learn from the auditing experience.
Treating your audit as an opportunity to learn is one of the best ways to maximise the value you get out of it. Giving your auditors everything they need to do their job digitally will help avoid roadblocks or additional scrutiny, making the school audit process far less stressful.
There’s no doubt that the end of year auditing process is stressful and time consuming for many finance professionals in MATs. However, by utilising innovative software solutions, fully compliant with DfE and ESFA requirements, school finance managers can ensure that the process is more streamlined and efficient, giving them the freedom to spend more time on school improvement tasks that can improve educational attainment.
For more information about year end accounts, download our free checklist.
For more information about the year-end processes, download our school audit guide here, or visit our webiste to see how Access Education Finance could help ease your auditing headaches.
