How can the process for meeting the government’s Financial Management Standard be made more manageable for school governors? Lindsey Wharmby offers some tips

By the end of the financial year in April 2007 over 76% of secondary schools had successfully achieved the Financial Management Standard; most of these had undergone an external assessment, either through their local authority or using an independent assessor.

Schools which were assessed in the autumn of 2006 will be beginning to think about their second assessment and all schools should be thinking about how to make the Financial Standard work for them in school. So how can you make the assessment less bureaucratic and more worthwhile for governors and staff and use the Standard to improve the financial management of the school?
There are three useful steps every school can take:

1. Use every naturally occurring opportunity in the school year to keep everyone up to date and provide catch-up for new governors and staff.  The preparation for the second assessment should be to ensure that all your good practice is well embedded in the school procedures.
2. Use the toolkit that lies behind the Financial Management Standard – it is an incredibly detailed and valuable resource.
3. Think carefully about who should do your second assessment and how you can use assessors and auditors.

At the core of good financial management is an understanding by everyone involved of the various roles and responsibilities held by different team members. There are plenty of opportunities to rehearse these but the obvious ones are:

  • appointing a new senior person to the support team and the opportunity this provides to consider the structure;
  • new governors joining the governing body or the finance committee;
  • new middle managers joining the staff.

Appointing a senior member of the support staff
In the toolkit you will find a summary of the role of the bursar. Follow these instructions to download it as a Word file.

Go to
Now select Toolkit index
Go to S1: Leadership and Governance
Select S1.3: Role of the Bursar

Bursar is the somewhat old-fashioned term used for the senior manager with responsibility for finance and probably other areas as well. You do not need to use this title or indeed this allocation of management responsibilities. Your school does not need to have one person managing all these areas but someone has to cover them and a senior manager needs to be responsible for them.
When someone leaves the team it is an opportunity to ensure that all the areas are covered properly and everyone is clear as to the roles and responsibilities. There is also a very useful link on the right hand side to the list of financial competencies of staff who have senior responsibilities in the areas of financial management.

The activities of the finance officer/ school bursar, or other senior manager, will involve finance, human resources, premises, marketing, ICT and pupil services.

Induction of a new governor to the finance committee
The following is a simple and non-threatening activity that can be used as an easy induction into the financial management of the school and a quick way of monitoring that the finance committee is clear about the roles and responsibilities in the school.

You prepare a set of cards with tasks related to financial management (see panel on facing page). The finance committee members work in small groups to decide who does what in your school – and then you pool the answers and argue about the differences!

Choosing the items you put on the cards provides a simple way of introducing governors to the various terms – PLASC (Pupil Led Annual School Census) and other terms that are familiar to those who work in schools and a strange language to the rest of the world.

A similar activity can be used with the finance committee at the beginning of the school year to establish the range of financial capabilities and experience in the governors’ finance committee. You prepare the cards with the set of financial capabilities and work as a group or in pairs and identify the capabilities held by members of the group. You should then be in a position where you can either show that you have all the areas covered and are not dependent on one person – or you cannot show this, so you can do something about it!

For a list of financial competencies:
Go to
Select Toolkit index
Go to Resource Documents
Select R20: A brief guide to the financial competencies needed by the school governing body

Induction of a new middle manager – for example, a curriculum leader When a new senior or middle manager joins the school, the senior finance manager will want to ensure that the new member of staff is aware of school procedures and the overall financial health of the school and this will be an important part of the induction programme, if not

in the first week, certainly within the first term.

If you have a system of governors linked to curriculum areas, this would be a good focus for a discussion with the new curriculum leader. How is the department managing its resources? How does it bid for development opportunities? What immediate resource issues are there? What are the medium and long-term plans?

The link governor might like to join the meeting with the new middle manager and the school finance officer so that they share this part of the induction programme, get to know the new member of staff and refresh their own understanding of both the strategic planning in the school and the day-to-day important financial processes.

Monitoring financial processes
In the toolkit you will find a whole bank of resources and checklists to use to help you monitor the various financial processes. Ensuring that the school procedures for day-to-day financial management are robust is an important part of the finance committee’s job – after all the budget is delegated to the governing body.

It can also be quite a daunting task but is one of the many areas where the outside experience of governors can be of particular value. Set aside one or two finance meetings a year with monitoring as a major item or choose one checklist for each meeting.

Go to
Select Toolkit index
Go to Resource Documents
Select R1: Keeping Your Balance and follow the links to the Audit Commission interactive site – you may need your school’s seven-figure DCSF number (local authority followed by school number) to access the site. Once in the site you can access a range of checklists.

All you need to do is to ask the school to explain their processes to you; with the help of the checklists you can ask the sensible questions to ensure that the processes in the school are robust and sensible. There will be governors who in their outside lives have experience of managing accounts, payrolls, and other financial processes and this is their opportunity to provide valuable practical advice. As an added bonus, everyone will be very clear about the roles and responsibilities in the financial management of the school!

There is also an excellent checklist for the finance committee to use so that they can monitor their own processes. A robust discussion around this checklist will ensure that the finance committee is well aware of its role. Perhaps it could be used at the first meeting in the autumn term to review the work of the previous year and plan the meetings for the coming year.

Go to
Select Toolkit index
Go to Resource Documents
Select R15B: Governors Checklist

Choosing an assessor
Most of the schools that went for an external assessment in the first round chose to be assessed by their local authority. You may be very happy with the service provided by whoever did the first assessment or you may welcome another independent external view.

The school can choose to use its local authority, a local third party external assessor accredited by the LA or a national third party external assessor approved by the DCSF. Whoever you choose you should think carefully about your choice of assessor.

  • Do they have experience and understanding of school finance?
  • How will they perform the assessment? Will there be school visits?
  • What else does the contractor do to assist you?
  • How much will it cost?

Most schools found that, when the assessors made school visits, the burden of bureaucracy was reduced! The assessors were happy with the school cross-referencing material or providing it in the original context (files of governors’ minutes etc). Some contractors provide software tools that can help cross-reference sources of evidence or accept information electronically (thereby saving several forests). Most importantly, some contractors (including local authorities, of course) provide support and advice to school and governors.

Traditionally schools have seen auditors (or assessors) as a necessary but irritating diversion from the normal work of the school. We need to learn to use them far more constructively, not just to identify weaknesses but to provide robust and external advice on improving procedures and processes. In the end, the auditors and assessors are our protection, both for governors and school staff.  Schools spend about 35% of the total local authority budget – it is public money and we have to show that we are using it wisely and appropriately. Any advice on the best way to manage the school’s finances should be welcomed.

There are many courses available for staff and governors on financial awareness. Many future school leaders feel this is a neglected area of their own experience and welcome an opportunity to improve it.

The best courses have participants from various backgrounds and roles and ensure robust discussion of the particular issues around school financial management. However, many governors are not able to attend day courses. So why not arrange a bespoke evening on financial awareness for staff and governors? You can then determine the content to meet the needs of the group or areas of the Standard where you are uncertain.

A joint training evening is a good opportunity for staff and governors to work together and, once more, an excellent opportunity to be clear about your roles and responsibilities – in all, several birds with one stone and excellent value for money.

Some suggested finance committee roles and responsibilities
Approves the budget plan Decides the number of admin staff
Monitors monthly expenditure Vires money from staffing to repairs
Enters into contract for photocopier Manages and operates financial systems
Ensures accurate records are kept Prepares estimates of income and expenditure
Attends meetings of the governors’ finance committee Sets limits of expenditure
Monitors value for money from contracts and services Produces financial reports
Manages a budget Knows the school’s financial position
Analyses the cost of different curriculum models Audits the school’s private accounts
Understands good financial management practices Completes the annual PLASC return

Lindsey Wharmby was a headteacher in Leeds. She is now the Association of School and College Lecturers’ Funding Consultant, working on national and local funding issues and supporting schools in financial planning