Let’s face it, finances are hard.
As a principal, it’s too easy to take on too much and where the Board of Trustees is concerned, nailing down a budget can feel like a tug o’ war. Yep, when it comes to the administration side of running a school, there’s no shortage of jobs.
Educators don’t like to think of schools as businesses but they certainly are bound by budgets. School leaders often want to focus on education and creating a rich culture within their schools, not stress about money. There is something to be said for separating bookkeeping and school books. Worrying about the finances can keep principals and school leaders from investing in the passions of their learners and learning facilitators. This is where the benefits of outsourcing come in.
First things first, School News always recommends schools carry out an audit to open a discussion with the school board or other decision-makers about financial efficiency. It can be a tricky subject to broach, particularly if you are new to the school and worried about rocking the boat. However, audits exist to break the ice and get the ball rolling. If there’s an issue with quality or consistency in the financial reports, or the budgets don’t seem to add up – an audit will give you an opening to discuss solutions.
Making sure you have a system that provides clear, easy-to-understand reports and transparent budget management is critical. At the very least, outsourcing will minimise your internal administration tasks, freeing up school staff to focus on other things. Like learning.
Finance isn’t everyone’s forte and with something as important as money, it’s critical that schools have the right system in place.
There are many internal systems that work incredibly well but the problem is that upgrading from one to another or switching system entirely can be a massive headache. The initial benefit of outsourcing is that your new accounting provider will deal with the changeover for you and school leaders can be as involved (or not!) in the process as they like.
To explore what outsourcing school accounting is and find out what schools can benefit from, we interviewed two industry specialists.
Accounting insights from the industry:
How can outsourcing help schools calculate their budgets?
Peter McBreen from Education services said: “Most accounting service providers assist their clients in preparing their budgets by sending easy-to-use tools and spreadsheets with historical information to assist in setting budgets. They are also available to help prepare the budget and discuss how this fits in with a school’s financial position. In the current environment, schools are required to set an income and expenditure budget, a balance sheet budget and a cashflow budget. It can be quite complex.”
Accounting for Schools’ Ben Duflou said: “An external service provider can provide valuable insight around how to stretch those funding dollars as far as possible. An external service provider will provide a comprehensive budget template, that will contain detailed calculators for key items, such as staffing entitlements and detailed teacher aide costs. External service providers are also more than prepared to meet face to face with Principals and Boards to talk through the budget and process in detail.
How can external providers support a school with monthly and annual reporting?
Outsourcing accounting takes the pressure off already busy schools and their staff. Ben explained: “While different external service providers operate different models, a school should be able to access a solution that suits their individual needs. The external service provider should be able to articulate the key financial issues a school is facing and provide accurate guidance around financial position to assist with making sound decisions around new spending initiatives.”
“The annual reporting requirements for schools have become particularly complex; there are also statutory deadlines that must be met. External service providers have greater experience preparing annual reports, given they generally assist a number of schools, and can manage the audit to ensure a stress-free process. Collaborative tools such as google drive can assist with this process, as documents and workpapers can be uploaded for auditors to access.
Peter noted that schools may not realise how ineffective their budgeting has been. “Credible school accounting providers can provide specialist reports as well as monthly and annual reports that meet all the requirements of the Financial Information School Handbook (FISH). But more importantly, they will make sure it is correct and reconciled. There have been many instances where a school thinks their internal reporting is of good quality – and it is not.”
Is training and support offered to school staff?
Schools can receive more support when outsourcing than when accounting in-house, according to Peter. “Accounting providers can provide training seminars, as do the Ministry and STA for school finances. Additionally, if there are principal or admin staff changes, most accounting service providers will assist the new personnel so they understand the school’s finances. If a school does their own accounting, there is limited outside help to upskill school personnel on their financial performance and position.”
Ben said that external providers can offer a wealth of support to school staff. “Group training sessions are provided by some external service providers for school support staff, principals and Boards of Trustees. These free-of-charge training sessions focus on areas that significantly impact the school.”