All over the country, multi-academy trusts are preparing applications for the government’s Trust Capacity Fund (TCaF) – or awaiting the result of one they’ve already submitted.
It is the latest element in the jigsaw of funding that MATs must put together to ensure they are as well-resourced as possible.
TCaF 2023-2025 offers grants of between £50,000 and £750,000 to form and grow trusts. Its existence is confirmation that larger MATs are the way the government is expecting education to go.
But TCaF and other forms of funding will require the highest standards of project management if the money is to be used as intended – and if every pound is to be spent as effectively as possible.
That means tracking spending, reporting to all the relevant stakeholders and keeping a rigorous control of costs. All those things can place a significant strain on the finance team – and may reveal that your accounting system is not really up to the job.
Key funds for MATs and the challenges of managing them
TCaF is the latest of several funding streams provided in addition to core Department for Education funding and the pupil premium for disadvantaged students.
The funding available for MATs now includes:
- School Condition Allocations (SCA) for larger MATs to maintain and improve school buildings and grounds, while smaller ones can bid for the Condition Improvement Fund (CIF).
- Funds for any refurbishment and rebuilding required in the wake of the reinforced autoclaved aerated concrete (RAAC) crisis. The DfE is also funding emergency mitigation after the concerns about concrete forced schools to close classrooms at the start of the autumn 2023 term.
- TCaF, which is focused on supporting high quality trusts that are building capacity and taking on underperforming schools, especially in Education Investment Areas; and
- Trust Establishment and Growth Fund (TEG) for starting new MATs or expanding them into new areas.
Applying for this funding can be complicated enough – but the process is not over when the application succeeds.
There are 37 pages of terms and conditions to which academies sign up when they receive funding. These include rules on what expenditure is eligible, when payments can be made with the department’s money and what happens if the project goes off-track, as well as controls against fraud and theft.
The terms and conditions include some 10 paragraphs about the arrangements for progress reporting, with the department requiring regular updates and potentially meetings.
On top of the legal requirements, trusts will want to keep a close eye on projects in order to ensure they are providing value for money and not eating into resources that should be available for teaching.
Overseeing all this can add a lot of pressure to hard-pressed finance teams. Without the right checks in place, staff can spend many hours tracking data manually and manipulating it in spreadsheets to produce the information required by academy leaders, trustees, auditors and Whitehall.
What MATs need from their finance system
When one-off DfE grants are added to core funding and money from other sources, you get a complex financial picture. That can lead to confusion and stress for the finance team – as well as for the senior leadership who need a clear view of the situation.
To be equal to the challenge of tracking all this funding, a finance system needs to offer the following:
- Visibility over projects. It should be possible to see all a trust’s projects clearly, with sub-projects nested beneath parents if required, and project managers allocated to each.
- Many accounting dimensions. You should be able to attach data to as many accounting dimensions – such as projects, funds, resources and allocations of time – as you need. This will enable you to see clearly how funding is being used and the impact it is having. The more dimensions, the easier it is to bring context and meaning to the data.
- Easy analysis. It should be readily apparent how a project is going and what controls are in place to stop it veering off-course. Committed costs, budgets and forecasts should be easily viewable, and it ought to be possible to track them without having to extract figures for calculations in spreadsheets. Hours spent keying data into Excel or performing calculations there are a sign of a creaking system.
- Simple approval workflows. It should be possible for budget holders to see, scrutinise and approve payments and expenses easily online, without excessive paperwork.
- Flexible and powerful reporting. With so much scrutiny over spending required, it is important to be able to produce reports on demand, without lengthy processes for preparing them. There is no need for education to lag behind the business world here. The technology exists to get full and accurate data in front of all stakeholders, without the need for lengthy month-end close processes and other preparation.
When the system doesn’t work
Many of the systems and processes which are in widespread use in schools are not up to the task of handling modern education finance. There are many MATs still held back by outdated accounting systems, with data held in servers on the premises, or staff logging in and out of different software to extract data as they labour to create consolidated accounts.
As the presence of TCaF reminds us, the government expects academy trusts to grow. MATs will need systems that can not only manage funding and reporting now but will also scale with them as they expand.
Find out more about iplicit
iplicit offers powerful cloud accounting software tailored for MATs, with an unlimited number of accounting dimensions and an array of project management features. Adding new academies to the system can be done in minutes at no extra cost. Find out more about iplicit for MATs, take a quick tour of the software, or get in touch for demonstration.