By Kerry Ace, Finance and Policy Manager, CIPFA
The Academies Financial Handbook issued by the Education Funding Agency (EFA) highlights the need for a chief financial officer (CFO) to ensure resources are properly accounted for and managed in an academy. The Handbook notes that the EFA requires academies to appoint a ‘chief financial officer’ to lead on financial matters. At the same time, an academy must have an accounting officer – the principal or chief executive – who is designated as accountable for value for money, regularity and propriety. It makes sense, therefore, to have effective arrangements in place to ensure the success of the chief financial officer role both in terms of the person carrying out the role and the governance structures in place that enable the person to perform well.
There are different structures in place across academy trusts reflecting the diverse nature and size of the trusts making up the sector. Many academies have business managers as well as accountants. But who is, or should be, the person in the CFO role in an academy, and where should the role fit within the overall governance structure?
Clearly designated CFO
In the first instance it is essential that academies have someone clearly designated in the chief financial officer role, whether this is termed a school business manager or finance director or other title. The chief financial officer must be able to intervene in spending plans to maintain the balance of resources so that the academy remains a going concern, therefore he or she must have access to the accounting officer, including a direct reporting line.
A senior manager
In order to perform his or her duties effectively, the CFO should be a member of the senior management team and attend meetings of the major resource committees. This will enable the CFO to provide the objective, professional advice required to help the accounting officer undertake his or her duties. The CFO also has an important role in supporting and advising the governing body/board of trustees on all financial matters. He or she must therefore have access to all governors – individually and collectively – and vice versa, and establish a good professional working relationship.
A persuasive and confident communicator
The CFO must be a persuasive and confident communicator, able to challenge others and influence material business decisions. The CFO also has an important role in ensuring necessary financial information and advice is provided to decision-makers at all levels across the trust.
Good financial management is fundamental to establishing confidence in the public services. The trust 'leadership' collectively needs to set the tone that financial management is core to achieving strategic aims, and to demonstrate that public money is used well. It is the CFO who must take the lead in establishing a strong framework for implementing and maintaining good financial management across the trust.
'The Role of the CFO in Academies' can be downloaded at Role of CFO in Academies.