The Crime of Mr John Brodie?
January 29, 2012
Friday 27th January and a trip to The Wellington Academy for the biennial Independent Schools Seminar from solicitors Wilsons.
The unusual format combined lawyers, actors (from the Salisbury Playhouse) and the audience to great effect and facilitated an excellent mix of information dissemination, audience participation and the sharing of best practice.
The actors played the parts of Headmaster, Chair of Governors, Teacher, Parent and Bursar with a pupil from the Wellington Academy playing the (fictitious) part of the Pupil. Whilst the parts were, naturally, played as rather larger than life (if any school I knew had a Chair of Governors like the one in the production I’d advise a swift intervention) it served the purpose well of raising various legal issues.
Some of the legal considerations raised includes:
- Disciplinary investigations
- Child protection concerns
- Police investigations
- Compromise agreements
- ‘Heat of the moment’ resignations
- Teachers’ use of social networking sites
- Property issues in respect of school accommodation
- ISI inspections
- CRB checks
- Parent/school contracts
- The roles of Governors and the school Senior Management Team
- Commercial considerations
Academies Accounting 101
January 22, 2012
I attended a fabulous ’round table discussion’ session last week at the Basingstoke offices of Baker Tilly accountants. A leading provider of accounting services to the academy sector (150+schools to date) Baker Tilly have a deep understanding of the sector and the challenges school business managers are facing. However, not wishing to rest on their laurels they took the opportunity to bring together 17 of their clients from the Reading and Surrey areas for a round table discussion on various issues including accounting, payroll, local authority services and procurement.
Introducing the session was Kevin Barwick, Audit Partner at Baker Tilly, who opened proceedings with a straw poll of what accounting software the academies had opted for. The bulk having opted for Corero an interesting discussion ensued about the training and support having been offered (or not, in some cases)! The points of note which are worth repeating here are:
- Sage and Corero have alot of similarities
- When reporting on funds the view is you can’t have too much detail i.e. have a fund account allocated for each type of SEN funding. You can always group them back together at year end for reporting purposes.
- It was agreed that it would helpful if fund accounts were a mandatory field on Corero. Apparently, this had not happen due to cost. In addition it would be useful to be able to produce a trial balance by fund. Stuart Parkinson from Baker Tilly is going to feed this back to them.
- You can add new fund coded but going into journal enquiry
- There will always be times where things are hard to allocate and require an allocation at year end e.g. exam payments come from GAG whereas re-sits go to ‘other income’.
The next discussion topic was around various aspects of Statutory Reporting for 31 August 2012 and the following interesting points were raised:
- The YPLA four month window to produce your accounts and provide your report to them.
- All the accountancy firms dealing with academies will have a significant amount of work to get done in a short window of opportunity. As such it’s best practice to schedule in as many of the meetings as possible. You should leave a two week gap between the finance committee meeting and the Governors sign off meeting. It’s recommended you timetable in as close to the end of December as possible and plan NOW.
- The finance committee will be presented with draft accounts and the audit findings. It’s worth pointing out that the audit plan can be presented to the finance committee in advance of year end and, again, this is recommended so it’s fully understood and helps to show who is responsible for what.
- It’s well worth having a year end checklist of things that your accountant will need. If you can take it a step further and use that checklist at month end too then you’ll make year end just like a month end.
- Accounting direction for year end August 2012 will be issued around Easter time.
- There is talk of possible slippage of the 31st December deadline to 31st January 2013 but this is still rumour rather than fact.
- Another area where you can help make the year end process smoother is with regard to the Governors report which has to be included in the academies accounts. This report includes the schools achievements, future plans, strategies etc. It was generally agreed, by those in attendance, that this report should NOT be written by the school business manager and that it should be prepared well in advance of year end – there’s no real need to wait for the numbers to be finalised. It was also recommended that the report and accounts are published on the school website. The accounts are available to the public anyway and so it will build trust and encourage communication between the academy, its parents, pupils and staff.
- Land and buildings should be included on your balance sheet. Even if you don’t own them a 125 year leasehold is effectively the same as a freehold.
- It was strongly recommended, by those who have already been through a year end process in August 2011, that you set up your Fixed Asset Register as soon as possible after your training on it.
- With regard to the valuation of assets it’s worth getting an independent valuation on a Depreciation Replacement Cost (DRC) basis.
- For ‘other’ assets there was a great deal of debate on a realistic starting valuation. Some schools had a minimum asset value of £1000, some £2000 and others £5000.
- Go back to invoices and have a look at the prices paid and, another good tip, speak to all your heads of department and ask them to give you a list of assets within their department which they believe to be over the minimum threshold you are working to.
- With regard to a depreciation policy this is usually set by the board of Governors but should be based on the determined value of the asset at the end of its lifetime i.e. computers are usually a nil value after 2 years, vehicles after 5 years and so on.
- Mid-April – funding for next academic year advised
- 30/6 – budget approved
- 31/8 – year end
- 31/12 – filing of accounts due
- There have been issues with VAT only invoices being produced for catering and it’s worth remembering in respect of catering that you need to specify the % of spend which relates to staff and that which relates to pupils.
- A reminder that if you are now an academy you will need to get a new P11D dispensation if you’re running your own payroll. Apply now, before the end of the tax year, and you’ll have it backdated to when you converted.
- HMRC are really hot on staff accommodation at the moment so make sure you’re completely happy that those in accommodation warrant being there i.e. caretakers.
- Peripatetic teachers who fall below the NI threshold could be classed as employed so watch out for that.
- If you have trading income >£50k (that’s turnover) you need to set up a trading subsidiary to receive this. The profit from the trading company is then gift aided up to the academy.
- Finally, a reminder that you have an allowance of £150 per person for Christmas parties but only if everyone on that site has the option to attend.
- A lack of time to complete a full review of suppliers
- A lack of support – not enough colleagues with procurement or negotiation expertise
- The difficulty in comparing apples with apples – it’s very rare that tenders come in that are identical and easy to compare
- A lack of proactivity regarding contract renewals (again down to lack of time)
- Complacency of suppliers who have been incumbent for many years
- Thinking it’s all about price when quality of product and service are as important
- Teachers being a law unto themselves! Government Procurement Cards offer an excellent means of keeping a good control over where and how much cardholders can spend and an audit trail card by card too
- The Responsible Officer role can be outsourced either to somewhere like the Local Authority Audit Department or to someone like Baker Tilly. Ideally though best practice dictates it should be one of the Governors.
- There is discussion around Responsible Officer visits being quarterly as opposed to termly.
- There is the possibility of a “Governance Audit” being introduced to review everything you do and how you do it which effectively moves back to the level of control in place before.
- An interim “regulatory audit” has been touted as being introduced by 31st March 2012 by this is very close so watch this space. The National Audit Office is really pushing for this – at any opportunity push back!
- School benchmarking is being discussed and reviewed as is the Financial Handbook (the latter got an ironic laugh as someone pointed out it has been under review for the last two years)!
- Overall, Baker Tilly believe there is likely to be increased regulations from the YPLA.
- Best practice for now is that Pupil Premium funding should be treated as a restricted fund. There might be further guidance in the next set of directions issued but it’s best practice for now.
Some amusement for a Friday!
November 4, 2011
Had a little ironic chuckle about this cartoon today.
Enough said I think!
Diligently run, well planned, financially sound SME businesses failing to get bank funding.
November 1, 2011
Whatever! No, of course that headline isn’t true. The usual headline we see (like this one from The Guardian yesterday “Small businesses failing to get loans as banks blamed for credit squeeze”) is deliberately written to make us all believe that the evil banks out there are failing to support the lifeblood of this country, small and medium sized businesses, and that there are hundreds of viable companies out there being refused funding vital to their growth. Rubbish!
Now I ought to declare something here. I’m an ex-bank manager. Don’t hold it against me; I’m actually quite normal and quite nice (honest)! I did 20 years service with a major high street bank, culminating in 7 years in the corporate banking division. I’m now on the other side of the fence and am running my own business. Why do I mention this? Because I want you to understand that in writing this blog I see both sides of the argument.
As Lord Sugar has recently ranted – most business propositions he sees he wouldn’t lend money to either! The businesses are badly run, over-stretched, have no business or financial planning and have high risk elements to them. Harsh? Yes. True? Also yes.
Banks need to lend money – it is how they make money – I know from my banking days that Business Managers, in whichever bank they are employed, will be targeted to lend money. So, if that’s the case, why do we keep seeing these headlines in the media? Because they give rise to some great excuses that SME’s can use as to why their business isn’t as successful as it might be.
Excuse one – banks aren’t meeting their lending targets because they’re being too cautious. WRONG! The reason banks aren’t meeting lending targets is because the appetite isn’t there at the moment. Many good businesses just simply aren’t borrowing money. In fact they are retrenching and building up surpluses of cash to get them through the recession. So when you see stats telling you that net lending has reduced that’s one of the reasons, it’s not because banks don’t want to lend. And anyway, whilst we’re on the subject, didn’t we all get our knickers in a twist a few years ago with banks and their ‘irresponsible lending’. We can hardly complain when they start lending responsibly – can we?
Excuse two – the bank is telling me to use my own money first. CORRECT! Why wouldn’t you do this? It’s YOUR business, YOUR responsibility so why shouldn’t you use YOUR money first. Not only is it the responsible thing to do it’s also the cheapest! In his autobiography “Anyone Can Do It” Duncan Bannatyne admits that anyone who comes to him for investment who hasn’t invested every single penny of their own cash first doesn’t believe in their business and therefore neither does he – they won’t be seeing a penny of his hard earned cash as a result.
Excuse three – the bank won’t lend to me without some security i.e. a personal guarantee. PARTIALLY CORRECT! All the business plans I have seen, in connection with lending, talk with absolute certainty about the amazing proposition and guaranteed success (profits) the business will deliver. The bank would be ludicrous not to lend to this company. If that’s the case why would you have a problem offering some security then? I mean, if this loan is guaranteed to be repaid then it is also guaranteed that your security will never ever be called upon………. And, ssshhh, don’t tell anyone, but banks do lend on an unsecured basis from time to time IF the proposal is good enough.
Excuse four – the interest rates and fees payable are extortionate. WRONG! Let’s be honest here, I admit that some of the rates and fees quoted for bank lending do cause a sharp intake of breath. However, don’t look at the cost of the funding look at the revenue you could be generating once you’ve invested those funds to grow your business. If the reason you want to borrow the funds won’t ultimately be generating you significantly more income than the amount the loan is costing you what the hell are you borrowing money for in the first place! You are destined to fail.
“But I’ll bet you’ve not had to apply for a loan” I hear you cry. Well that’s where you’re wrong. I applied for a loan this week. It was the quickest, simplest process and I had my ‘yes’ decision within minutes. Did I have to give security – you betcha. Did I wince at the interest rate – ‘fraid so. But did it put me off – not likely. I’ve got big plans to generate big revenue so the interest rate was sort of irrelevant (although don’t tell the bank that)!
“Well you got it agreed with inside information or contacts because you’re an ex-bank manager then”. Wrong again. The person I dealt with had no idea I was an ex-bank manager and the information I supplied was no different to what any good business person, who knows their business well, would be able to produce.
No, the reason I was successful in securing my bank loan is because my business is diligently run, well planned and financially sound and therefore the bank was very happy to lend to me. But that won’t make many headlines will it?
IP Telephony Systems – Really Worth The Switch?
November 1, 2011
In the last twelve months, increasing numbers of independent schools are switching from their traditional telephone systems to more future-proof and innovative solutions, such as IP telephony systems. But is it really worth the switch?
Thankfully, the days of consumer-grade IP telephony and associations with ‘Skype’ are in the past, having paved the way for business-grade quality to operate at the professional level. IP telephony today does everything a traditional system will do while bringing a wealth of features and benefits without compromising on the quality of calls.
For example, schools with multiple sites and a receptionist at each are freeing up staff to be more productive elsewhere by enabling all calls to arrive at one location, regardless of the geographical code that’s dialled. Systems like this enable calls to be transferred all over the country, at no cost, by using a simple extension number. And the caller has no idea their call is being delivered initially to a central location.
Furthermore, staff can ‘log in’ to any phone within the school and even work from home with ease by leaving a handset there for those days when you can’t come into school.
And this turns dead time into work time, still allowing your extension number to be used so it’s just like you’re in the school.
Dave Parker, IT Manager at Newland House School is using an IP telephony system. He explained why this is beneficial to him. “When the bad weather hits and I’m stuck at home, it’s good to know the school can still contact me. Just because the children aren’t in it doesn’t mean my work stops. It’s very important for me to stay in contact with those I work with.”
While the world of IP telephony may seem daunting to some independent schools, others are seeing it as a huge opportunity to demonstrate innovation.


