In an educational management world filled with assessment, the FMSiS may seem at first to be yet another drain on the school business manager’s time – but this ebulletin shows the vital supportive role it can play for all of those involved in leading the school

The Financial Management Standard in Schools (FMSiS) can at times be very demanding of business managers and we have all had different experiences of how it is handled by assessors. I have successfully gained the standard twice and I can confirm that it is frustrating but it is also an ideal opportunity for business managers and governors to evaluate financial procedures. I found that the process of the second audit was far easier than the first, because I knew by then what was required, from completing the first round of the standard. Basically, there are five components:

  • Leadership and governance
  • People management
  • Policy and strategy
  • Partnerships and resources
  • Processes.

The standard appears to concentrate more on the leadership and governance than it does on the other components, but do we really need this standard and what is its purpose? FMSiS documentation states that ‘FMSiS is a mandatory requirement to provide assurance to the Department, HM Treasury, National Audit Office and Local Authorities that schools have adequate arrangements in place to manage their resources effectively’. All schools were legally required to meet the Standard by March 2010. As there is a legal requirement under S48 of the Schools Standards and Framework Act (1998) schools have no option but to complete the assessment.

The FMSiS website provides you with all the information and resources that you need to assist you in completing the standard and within this information is Form G2 (go to ‘General documentation’ on the FMSiS website) which provides the purpose, key benefits and summary of completing the assessment process. What I found most interesting were the following paragraphs:

Paragraph 2. ‘FMSiS provides a clear and consistent benchmark which schools can use to encourage self improvement. It helps school leaders and Governing Bodies to better understand their roles and responsibilities in relation to effective financial management, and how decisions on expenditure are linked to educational priorities. By making best use of resources children’s outcomes can be maximized.’

Paragraph 3.‘The Standard has been designed to help key groups and individuals, such as Senior Management Teams, Head Teachers and Governors, to reflect and ask questions about processes in a systematic way, widening out overall knowledge of school financial management.’

Paragraph 9. ‘The Standard can help to define a clearer role for Governors and greater focus on strategic management and challenge, with Governors being more confident in asking questions and acting as a critical friend.’

You will note that I have highlighted the words ‘school leaders’, ‘governing bodies’ and ‘senior management teams’, as I feel that this doesn’t always happen in schools. The majority of SBMs who I have spoken to have expressed their frustration at having to complete the standard without any support from the SLT or governors! When this happens I feel that it makes a mockery of the process as they haven’t gained any understanding of the financial intricacies that SBMs come up against. Governors, I know, can sometimes find the involvement difficult as the majority of them work full time and are not available in the day, but their input into the process is essential to enable them to understand and challenge the financial strategic management of the school. Finance Committee meetings are planned well in advance and the standard should be an agenda item at least six months before it is due; personally I like everything to be planned and put in place at the beginning of the year when the committee meetings are being arranged. All this extra work does beg the question ‘What does the school gain in having this standard?’

What is the benefit to the school?

The FMSiS is not another audit but an assessment of the processes schools use to manage their finances. Completing the assessment will help schools achieve long term improvements in financial management. If successful the school will receive the FMSiS kite mark so that parents, the LA and the wider community can see the school has reached the required standard. On a personal basis it helped me to strategically rethink how the finances and resources are managed in my school.

Responsibility for completion

For those of you who are new to FMSiS, what schools should be doing is asking themselves who will be completing the assessment form because, as previously stated, it shouldn’t be the sole responsibility of the SBM. Responsibility is between governors, the school business manager and the headteacher.

The G4 form is to be completed before the actual assessment, and you can find the a copy of my completed G4 in the Special Reports section of the School Financial Management website so that those who are going through the process for the first time will be able to see the information that I included.

The G4 Form confirms that: ‘the assessment will normally be completed by a senior manager, but could also be completed by other staff and/or governors (separately at first, but ultimately together) so a group consensus view can be arrived at later’.

The FMSiS website also gives advice on how to complete the form: ‘A possible method for a school could be for the Finance Committee to manage the process, allocating each of the 18 areas to the Governor with specific responsibility or knowledge in a specific area. The completed assessment form should then be taken forward to a full Governor’s meeting where the school’s response should be discussed and agreed upon, prior to its submission to the External Assessment body. Where the school is required to submit an assessment form to comply with its Local Authority timetable, it would be appropriate for the Finance Committee (if applicable) to approve the assessment. However, at the next full Governors meeting, all Governors should have the opportunity to review the school’s assessment’.

Did this happen in your school or was it automatically presumed that you, as SBM, would be completing the form? Were you asked, were you told or did you just get on with it without any discussion with senior leaders? Was there an option to complete the assessment form as a team?

Another document to be completed is the ‘Matrix of Financial Management Competencies’ which contains numerous headings against which individual governors assess their professional competence. Is this really fair when governors are unpaid volunteers? I believe it is – governors have a collective responsibility for the financial decisions that are made and it is important that they understand their responsibilities and be aware that the financial decisions they make are answerable to the wider community as well as the school. Governors should have a good understanding of high standards of financial management and control, and by completing the matrix they will be able to identify how confident and experienced they are in this area and if necessary arrange any relevant training. A problem that SBMs may encounter will be to actually get the governors to complete the form and return it in time for any deadlines set by assessors. In the first round of our assessment not all governors returned this form and this was picked up and mentioned in our final report. The actual statutory responsibilities of the governing body are detailed in section 21 of the Education Act 2002.

External assessors

For my second round of assessment I chose to have an external assessor instead of opting for ‘the light touch’ with the local authority. The difference being that with an external assessment you gain the Kitemark, whereas with the ‘light touch’ you do not. Check with your LA as to whether you can apply to have the ‘light touch’ or whether you should have an external assessor. External assessors are listed on the FMSiS website and the companies on this list have at least four years’ audit or accounting experience in the public or private sector. They will also accept any evidence from the school by your preference, ie hard copy, electronic or verbal. Contact your local schools and compare prices and the differing ways that assessors complete the assessment. I used HCSS and found them to be extremely informative and helpful. They did come into school and initially were going to be here for two days, but they increased their number of staff and stayed for one day. All the information and evidence that they required was requested well in advance of their assessment day and where possible I electronically provided evidence to them. Be aware, assessors who come into school for re-assessment will expect recommendations made during the first round of assessments to be in place and embedded within the school.

One of the things that the assessors went through with a fine-tooth comb were the governor minutes, governor training records and records of governor visits to the school. I am lucky that I have a superb foundation governor who keeps excellent records and monitors all the training and visits of our governors. We also have an external clerk to the governors who keeps all the minutes of governors’ meetings up to date and in my office.

For those of you who have completed the assessment I hope you have not found it too demanding and for those who are new to a school and will be going through a re-assessment in the future, good luck.

This e-bulletin issue was first published in May 2010

About the author: Lindsey Lester is School Business Manager at St Martins Catholic School, Leicester