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Finance

The Trust Office will be funded by a ‘top slice’ contribution from the academies, with the level of contribution determined based on the resources required above and beyond administration and management costs. It is expected that this contribution will not exceed 5% of school budget shares. The range of functions to be provided by the ‘top slice’ is detailed in our Financial Considerations section.

Accountability

The Chief Finance Office (CFO) is held to account by the Trust’s Accounting Officer (CEO) and the Board of Trustees through the challenge and scrutiny of the Finance, Audit and Risk Committee.

Finance, Audit and Risk Committee

The Finance, Audit and Risk Committee is comprised of a sub-group of Trustees (including the CEO and CFO as invited guests). The Committee ensures robust internal scrutiny, effective financial controls and compliance with all relevant legislation and guidance (including the proper use of public funds). By reporting to the Board of Trustees, the Finance, Audit and Risk Committee are able to provide the Board with assurance that risks are being effectively identified and managed.

The governance structure and financial controls framework of the MAT are designed to meet all the requirements set out by the EFA through the Academies Financial Handbook.

Financial controls, processes and reporting

Monthly management accounts are produced and shared with Trustees, and the CFO attends Board meetings and presents the management accounts to the Trustees. These management accounts represent the consolidated financial position of the MAT’s academies, each of which are supported in the production of monthly monitoring reports. Budgets are produced for each academy, and the consolidated position for the MAT is presented to the Board for approval and adoption as the Trust’s budget.  There will continue to be particular and enhanced scrutiny of these monthly accounts as schools join and as the Trust expands quite rapidly.

A scheme of delegation is in operation to ensure appropriate authorisation of expenditure, in order that the Trustees can be assured that monies are being properly used. Additionally, a procurement framework will be used to ensure economy, efficiency and value for money, which will be compliant with the public procurement framework.

We operate through sound financial controls and processes to identify any weaknesses and risks to the financial sustainability of the model. Extensive and broad due diligence work will be conducted before schools are admitted to the Trust, to identify any financial risks. Plans will be put in place to mitigate any risks identified during due diligence work, and schools will need to adhere to those plans following admission to the MAT.

A set of financial KPIs, monitored at school-level on a monthly basis, provides an early indication of schools where the financial position indicates vulnerability. On admission to the HfL MAT, schools will accept that, where KPIs are not met, the Trust’s central team will intervene and provide additional decision-making capacity and financial support to the appropriate academies.

Academy-level 3-year financial forecasts (consolidated at the MAT level) enable the Trustees to plan for the financial future of the HfL MAT. Three-year plans will be presented annually to the Finance, Audit and Risk Committee and to the Board of Trustees, as part of the budget approval process.

With regards to income streams, both pupil numbers and deprivation funding are beyond the control of the HfL MAT or the individual academies. This lack of control is exacerbated in the context of the expected new National Funding Formula, which will change the per pupil funding allocated to each academy, at a date to be confirmed.

However, these uncertainties will be mitigated by HfL’s close working relationship with the RSC’s office and DfE colleagues which will provide insight around any changes in the funding formula.

The Trust takes a strong strategic approach to analysis of demographic and pupil data enabling it to proactively plan for changes in the forecasts of the numbers of pupils on each school’s roll.

Experience

Over the last 11 months, HfL Ltd has been commissioned to provide packages of support to schools causing significant financial concern. HfL Ltd has provided education advisory support, financial support, HR support, curriculum planning expertise and governance support to a range of schools across the county in order to develop financially sustainable plans for this group of schools. The wide impact of this work has been well received by the school community and the individual schools involved, and HfL Ltd is currently commissioned to undertake an extension of this work, across additional schools. HfL Ltd’s experience in supporting these schools will be utilised to support the HfL MAT in developing sustainable financial plans for its academies.

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