Inadequate financial systems are holding academies back and are becoming a barrier to conversion, new research has found.
A study by HCSS Education, a leading education finance specialist, found that one of the biggest challenges academies faced when converting came from using existing finance management systems that were not fit for purpose. 49% of academies cited this as the biggest conversion challenge, over dealing with cash flow issues (10%), managing expectations and worries of employees (21%) and the recruitment of new staff, such as a chief financial officer (10%).
When academy leaders were asked what they disliked about their current financial accounting system, 52% said it was difficult to get the data and reports that they need, 30% said it was overly complex and difficult to use and 25% said it was not designed with an education establishment in mind.
The report found that 65% of academies decided to convert to gain greater control over finances. However, the autonomy presented to academies carries an increased responsibility, making it no surprise that the same research also found that actually having complete control over finances was a main concern facing academy leaders in their role (34%).
The survey was conducted as part of HCSS Education’s Academy Futures report, which takes an insightful look into how the education landscape is changing and the impact the rise of academies is having on both teachers and parents. It explores the barriers to conversion, the challenges schools may face when they first convert, and how these issues can be addressed.
Howard Jackson, head of education and founder of HCSS Education, said: “Despite the benefits often associated with academy conversion, such as more freedom over finances and greater autonomy over the day-to-day running of the school, making the change and becoming an academy does not come without its challenges.
“When a school becomes an academy it is suddenly expected to manage all its own finances and meet Government requirements, so having a competent financial accounting system in place is key. However, our research highlights that many academies do not have the right support in place and, as such, are struggling with their new financial responsibilities.
“With an abundance of financial management systems on the market, it is wise for academy leaders to invest in a robust system that has been specifically built for the education sector. This is because they have been purposely designed to help simplify operations, keep a track of budget and assets, and provide evidence that the academy’s budget is being handled in the most effective way possible.”