Getting on the FM frequency

With the deadline looming for meeting the new financial management standard, schools should be realistic about what they need to achieve between now and 31 March, says Lindsey Wharmby.

The chief finance officer in a local authority has to be satisfied that, by March 31, all the secondary schools in the authority meet the Financial Management Standard for Schools (FMSiS). If a school has chosen to be assessed by an external assessor accredited by the local authority or the DfES and has passed this assessment, the local authority must accept that judgement.

The local authority could choose to offer a full assessment to all schools or it could choose to work with the schools on their self-assessment and assure themselves that the school is well on the way to meeting the standard, leaving a formal assessment until a bit later if the timescale is unrealistic.

Focus on the principles

The important part is that the chief finance officer is sure that the school is meeting the principles of the standard.

In future, local authorities will be able to make an external assessment a requirement in their local scheme of delegation, but at this stage schools should be primarily concerned with the process of ensuring that financial practices and processes meet the standard. It is the principles of the standard that are important - there is no requirement to provide detailed evidence.

As the DfES wrote in a recent email to ASCL: "There is clearly an issue where accountants and auditors are trying to assess the evidence to the letter rather than assessing the standard and the principles behind it based on appropriate evidence."

There is nothing in the principles behind the standard that we would disagree with - it is all sensible good practice. Once you are sure that your practice is complete, then you can set about bringing together the evidence - and it is appropriate evidence that counts, not a particular piece of paper in a specific format.

The first time round it is a lot of work to collect appropriate evidence - then it becomes a matter of keeping it up-to-date. It should also be noted that not all the evidence is on paper as much of the information is held electronically.

There have been instances where local authorities have been over prescriptive in their requirements instead of assessing against the principles.

One example is on the status of the bursar (or finance manager, business manager or any other appropriate title). The toolkit supporting the standard recommends that the bursar is a member of the senior leadership team.

This is a recommendation that ASCL would support; the financial/business/support management in schools is a key area of management and leadership. However it is a recommendation only and is not statutory; the school decides on the roles for all its managers and the links to the senior leadership team.

It would be good in-service training for a member of the senior leadership team to be responsible for working with the bursar each year to check that the evidence for the standard is up-to-date. This would help to develop the understanding of the financial management of schools that is often missing from the professional development of senior leaders.

Timescale issues

As is so often the case with good new initiatives, the timescale for implementation in schools has been squeezed into a ludicrously short timescale after the DfES and the local authorities argued for a long time over the role of the chief finance officer.

If you cannot make the deadline for every last bit of evidence, do not worry. The worst the authority can do is to indicate a need to improve and provide the support you need to make the required changes. After all, if they took over your delegated finances, they would need to meet the standard!

Realistic plans

The important part is to undertake the self-assessment thoroughly and identify if there are any areas where you could improve your practice, then put realistic plans in place to make these improvements.

There is no requirement for the assessment to be carried out by the local authority, although it is good practice for the FMSiS to be assessed as part of the local authority audit process. This approach may well also reduce the cost of the process.

A school can use an outside firm to carry out the assessment against FMSiS but this may well be at a greater cost to the school. There is an excellent article in the November Leader by one of our members, Maxine Adams, on how her school met the standard using an external assessor.

One positive consequence of the standard will be regular, lighter touch audits of school finances. Audits may not be regarded as fun - but they are our protection and demonstrate that we are using public money properly; we should do well to use them constructively.

If there are still problems with your local authority asking for over-prescriptive lists of 'evidence', then please contact me directly at lindsey.wharmby@ascl.org.uk