4 Steps to an effective Academy budget process

  • 15th March 2022

As the academy audit season has been and gone and the academies accounts returns submitted, attentions will now be turned towards budget planning and monitoring for the remainder of this year and future years. But what steps can you put in place to ensure you have an effective budget process?

Step 1 – Review past results

The budgeting process has always been a fundamental aspect of academy and school finance, therefore academies have years of historical data that can be utilised. As a budget setter the first question you should ask yourselves is “how accurate have our budgets been in the past?”

This should help you determine whether or not discrepancies between the budget and the final figures have arisen through poor planning or unforeseen events which could not be predicted at the time. If it is the former then it may be a little more time is required when setting certain budget lines rather than performing a best guess or slight increase for inflation.

Step 2 – Complete a mid-year review

During the financial year budget monitoring should be occurring on a frequent basis to ensure predicted outcomes are not straying too far away from reality. With this a mid-year review should be completed to take into account any potential over or underspends with resources then being reallocated if possible. This will therefore provide trustees with a more accurate picture of what the final carry forward will look like and also help you identify where predictions may not have been as accurate when preparing future year budgets.

The review will also aid in the completion of the academies budget forecast return which requires actual in year figures to be provided to March and then the expected outturn to August.

It should be noted that any virements made to the budget in year should be approved in line with your scheme of delegation and the updated budget reported to trustees.

Step 3 – Plan for academy requirements

The budget for future years should go hand in hand with academy strategy and the agreed school improvement plan. It is therefore important to review these documents in full and ensure the budget lines reflect the future aims and objectives of the academy.

For instance if emphasis is being placed on improving maths results you should expect to see increased costs within this department. Similarly if staffing requirements change then any increases or decreases should be in line with expectations.

Step 4 – Benchmark

Benchmarking your performance against that of academies of a similar size or within a similar area is also a great way to see how close your spending habits reflect that of other schools.

To do this you can use the governments Schools financial benchmarking. We will also be issuing our client based benchmarking exercise in the near future, so keep an eye on your inbox for that!

Should you wish to speak with one of our education specialists in the meantime, please do not hesitate to contact us.


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