I clearly remember my first audit as the school business manager of a single-academy trust.
I’d been in post for two months, with no previous experience of academy finance, when a team of junior auditors descended on my office with relentless requests for what felt like unnecessary data and information.
If that wasn’t bad enough, both the senior audit manager and partner then left during the process, seemingly leaving no-one to actually lead the audit. To say I learned from the experience would be an understatement.
Now, as the CFO of a growing MAT, I’d like to think I’ve established a thorough, yet practical and fit for purpose audit process with the support of my trustees and colleagues.
Lay the groundwork
The first step is to appoint the right external auditors through a clear tender specification and selection process. If you’re writing a specification from scratch, use your SBM network to obtain examples that you can tailor to your needs.
It’s worth investing time at this stage, since getting the specification right from the outset makes the rest of the process run much more smoothly. Good auditing requires a thorough understanding of the audited entity; once they’re appointed, then providing they demonstrate quality service and good value for money, stick with them for, say, three to five years. Any longer, and there’s the risk of complacency setting in.
A thorough audit process will look into the nooks and crannies of your processes, so it has to be one you can trust. That’s often down to the skills and reliability of those conducting the process, or at the very least, the audit leader. Where possible, ensure that sufficiently skilled, accessible and committed auditors are deployed throughout the process, and establish professional relationships from the start. Plenty of tea and coffee usually helps!
The purpose of an audit is to examine, verify and issue an opinion on financial statements and the accuracy and probity of accounting transactions. You need to be confident that the process will highlight any misdoings that have fallen through your internal control processes, be it accidentally or intentionally.
However, you also need to know that they’ll concentrate on what matters most, and not necessarily look under every rock hoping to find something somewhere. There’s a careful balance to be struck between an effective and supportive audit, and an intrusive, punitive investigation.
A joint effort
Careful, transparent communication is key, and this cuts both ways. Keep your auditors informed of your business activities, main risks and any potential accounting challenges. In return, they should inform you of the latest regulations or standards to help you prepare for the audit, and have correct processes in place day-to-day. You should be jointly working towards a successful audit.
The final step is the written report of the findings. What this looks like will take shape over the course of the process, so engaging in positive professional discussions throughout should help you avoid any nasty surprises at the end. All parties should be prepared to discuss any queries or issues, acknowledge ‘real’ concerns as they arise and confirm the best corrective action to take.
Robust audits play a crucial role in providing independent financial assurance to stakeholders. Those of us responsible for the control and management of school funding should feel tested and challenged, and ultimately confident that the public money we’re entrusted with is in safe hands. Consider it this way – engaging successfully with good auditors enables you to share ideas for improvement, and can actually make your life easier!
Catherine Dottridge is the CFO of Tenax Schools Trust and chair of governors at Sir Henry Fermor Primary School.
