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Credible Reporting of School Financials

Schools face many types of risk and challenges. In this article series on ‘Keeping Your School’s Plates Spinning in Uncertain Times’, we are considering the operational and financial vulnerability of schools and this part focusses on the importance of effective financial reporting.

There are many elements of financial reporting. The top 3 main areas that require our priority consideration are

1.Timing – when to present relevant data?

2.Content – what information to include at an appropriate level of detail?

3.Stakeholders – who is the audience requiring information to make decisions?

If you have been following this series of articles, you will notice echoes of these 3 elements in other things we have already considered. In all 3 of these reporting elements, the absolute key ingredient is data! Not just my thoughts… “Without data you’re just another person with an opinion.” – W. Edwards Deming “Data is like garbage. You’d better know what you are going to do with it before you collect it.” – Mark Twain Whether you are in a Management Meeting, discussing results with a colleague, or a parent stakeholder in a Committee Meeting, what you have to say is just an opinion unless you are able to validate the presentation with hard facts and effective reporting data. If you are providing reports to another stakeholder it is the accurate, relevant data that underpins your report that enables that stakeholder to make big impact decisions for the school. So if data is absolutely vital in creating credible financial reports, what about data garbage? Before we even get to having to prepare reports, we must ask how are we gathering the data and is what we are collecting relevant? Suitable consideration of this and relevant planning of data collection within our systems is very important well in advance of when that data needs to be used. When a crisis hits, it is too late. There is neither time, resources or the priority to address data collection during crisis and at a time when the reporting of relevant data is more important than ever. It can be the difference to being financially sustainable or not! Let us now consider the types of reporting we prepare and present to enable the most effective decision making in our schools.  One thing is very clear and that is that Financial Reporting is not sufficient on its own, especially just the historical Financial Statements. This may seem obvious, but there are plenty of schools that are preparing little more and it is always good practice to review what we are reporting and why. It doesn’t matter how quickly we prepare & release historical Financial Statements, because we should never make a decision from them. These types of reports are often a statutory requirement only. Schools need timely and accurate information that looks forward and helps make decisions. Schools need to include Management Reporting not just financial, reporting that includes other data not just historical financial figures. Reporting that tells stories with dollar figures. Reporting that looks forward and can be used to respond to a crisis. Ask questions of your reports, like:

Context and the backdrop to what we are reporting against is so important. Even then, strategic objectives change and do over-night in a crisis. Does our reporting change accordingly? Context and the backdrop to what we are reporting against is so important. Even then, strategic objectives change and do over-night in a crisis. Does our reporting change accordingly? Accountants in schools should be including non-financial data in reports to add meat to the bones or to provide a storyline to the final chapter e.g. student stats, economic and environmental commentary, performance of other areas of the school. To assist with the type of relevant report to produce, consider the objectives of effective reporting:


Much has been said about effective reporting, here are some pointers to get us thinking of how we can achieve this:

It is very important for schools to develop an effective reporting process for all areas of reporting. Business managers are encouraged to use technology as much as possible to produce reports. This will save time, improve the availability of information and enhance the interaction of the user. Create interactive dashboards with relevant widgets that are available online to provide relevant information. Give different dashboards to different stakeholders that are always available with real-time data. Make sure your online reports are dynamic and the format can easily be changed. Enable the stakeholder to drill down into data for more information and even be able to create their own scenario analysis. Much of this can be achieved by collaborating with software providers or partners. When situations in the school do environment do ‘hit the fan’, Business Managers can be very effective in helping to guide leadership through to the other side. We have all been reminded in recent times too how real these crisis situations are too! So, here some things to consider when reporting in a crisis:

In the final part of this article series we will be next looking at increasing cashflow, reducing debtors and wowing parents!