Simon Oxenham is the Director of Resources for Southend High School for Boys in Essex and the ISBL national lead on school finance and efficiency. As a qualified Accountant and Project Manager, he spent a number of years working in the charity sector and a lot of his career working on finance system-related projects, including a period working for one of the UK’s largest software consultancy firms.
Simon also worked in one of the largest FE colleges in the country so has knowledge of both charity and education accounting. Simon is well known across the sector having delivered numerous training sessions and presentations with the Education & Skills Funding Authority (ESFA), and, on behalf of ISBL. He is also a member of one of the ESFA’s Financial Assurance working groups and the ISBL Funding Special Interest Group.
Education and business thinking
When I moved into the sector over 6 years ago, I suggested to my SLT colleagues that we needed to think more as a business. My approach was ‘we are an education provider but we are in the business of running a school, and we need to think like a business’. The push back I got was ‘it is immoral that we need to be efficient like a business’ and my response is that it is immoral for us not to be efficient like a business, because in doing so we put maximum resources to the front line, which raises pupil outcomes. That is the key message that I have delivered in many workshops around the country and I have never yet met an institution that can’t be more efficient, my own included. I have however met lots that chose not to prioritise it.
Lord Agnew’s letter to auditors 15 June 2018 gives an indication of the expectation for MATs to have a centralised finance function and a recent white paper has discussed the merits of such an approach. But what practical steps can we all consider at this point regardless of our setting?
Staff and systems investment
Back in 2005, I was working for a large national charity with a centralised finance function that had accounting software that was well beyond its useful life. At the time, the government were pushing their ecommerce agenda and suggesting that it cost £75 to process an invoice manually versus £25 if it was an eProcurement invoice. We invested in a new solution including eProcurement and invoice scanning. It is now generally accepted that eProcurement is needed and, in my school, it has helped reduce the flow of paper around the organisation, invoices getting buried in staff in-trays, as well as stopping any surprise invoices coming in.
If we are honest, we need to invest in both our systems and our staff. As well as introducing eProcurement we have invested in a system that emails out invoices, statements, remittance advices and purchase orders automatically. I recall watching a member of the finance department spending a couple of hours a week printing, folding and stuffing remittance advices from the BACS run into envelopes before taking them to the franking machine.
Another investment we have made is online budget holder reporting. The Finance Manager used to spend some hours extracting individual budgets, print them out, put them in pigeon holes for the budget holders. Budget holders used to go the Finance Manager to see how much budget they had left periodically. Now they physically can’t spend more than their budget and they have a portal so they can look at the budget and spend on line at any time without need to disturb the Finance Manager.
Many schools like us have moved to cashless solutions for catering. We use the same system to not only pay for, but to book places on trips, concerts and music lessons. With trips it also deals with the trip information for parents and the consent forms electronically. This comes out of investing in time working with the supplier, training our staff as well as creating an efficiency culture where staff come up with the ideas.
Accounts and changes in thinking
Other areas worthy of mention are the statutory accounts and the Academies Annual Return and the corporation tax return. My view here has changed. I used to think that I needed to prepare them myself because I was a qualified accountant. The reality is that the auditors are much more familiar with producing them than we are and have dedicated systems for doing so. When we did the last cyclical auditor appointment it turned out that the cost of them doing them was not significantly more expensive so it has freed up my time to do other things such as generate additional income which more than offsets the cost and saves a few more grey hairs.
Similarly, I would encourage a review of the chart of accounts. Deloitte in ‘Unlock the Power of your Chart of Accounts’ suggest it needs reviewing every 3 to 5 years. I often see schools that have enormous versions, and on many occasions have used account codes for what should be cost centres. The more code you have, the more likelihood of miscoding, the more reconciliations and checks that have to be done.
When it comes to month end we have a robust check list, which mirrors the year end processes. The check list is supported by a number of schedules and both require completing and reviewing. This means we pick up any issues straight away while things are fresh in our minds rather than storing up issues for the year end and helps with cross skilling.
Our savings have not been seen by reducing staff, but by not increasing staffing whilst increasing the pupil capacity by over 20% and ensuring interaction between finance and our budget holders is as seamless as possible.
Looking at the future, my thinking is that we still have some catching up to do. When I started advocating long range forecasts 4 years ago, the sector and some officials, said it was too difficult. The DfE reported in 2018 that 82% of academy trusts say they have long range forecasts. When I have suggested web-based budgeting and forecasting involving and empowering your budget holders it has been met with a similar reaction, but having reached a point where I could do a bottom up budget or forecast across 80 locations with 300 budget holders in 10 working days in the charity more than 10 years ago, I know it can be done and the benefits it brings.
Another development coming is to have the management accounts with checks built in and present them live with drill down capabilities. The checks avoid embarrassing questions such as why the top and bottom of the balance sheet don’t add up, but also when presenting them it allows questions to be answered confidently and immediately rather than taking away a load of action points.
Introduction from Stephen Morales, CEO of ISBL
In this series of case studies and school business leadership experience we’ll represent a flavour of the various iterations of our profession and the responses to a variety of contextual challenges. ISBL is not endorsing or rejecting any version of SBL practice described in this article.
The idea is indeed to avoid prescribing a one size fits all solution to school business leadership and thus celebrate diverse and innovative practice with the caveat of any approach being legally compliant, rigorous and sustainable.
You will see from the various examples that there some very interesting, new and creative solutions being deployed alongside some traditional tried and tested approaches.
By sharing experiences and different versions of school business leadership we hope that we can learn and grow as a community. This is true system leadership in action all working together to support a self-improving system.