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Governor Live Review: Understanding cash flows for governance

Governor Live Review: Understanding cash flows for governance

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The fourth Governor Live event of 2017 – Understanding cash flows for governance, part of our mini-series on finance – took place last Thursday evening, the 30th of March. Karen Rae – chair of finance at a secondary Academy and Audit & Assurance Director for Armstrong Watson – spent about thirty-five minutes covering cash flows and why they’re important in a school or academy setting, including:

  • What is a cash flow?
  • Cash flow methods;
  • Cash Management;
  • Consequences of a negative cash flow;
  • Next steps.

This was then followed by our usual time of questions and discussion – the recording of which and slides from are further down the page

Presentation slides

Here are the slides from Karen’s presentation, reproduced and shared with permission:

Questions asked by participants

Karen answered all of these questions – view the recordings further down the page to see the answers.

  • How much Finance experience should the Chair of Finance committee have? Should we have an accountant on the board?
  • In a maintained school should I ask for a cash flow statement?
  • What type of questions would Ofsted ask of governors re: finances?
  • How often should a school be financially audited? Are all academies in a MAT audited individually?
  • We’re in the process of joining a MAT – would cash flow be managed at trust level or school level? Finance Director or School Business Manager?
  • What is a reasonable time for cash/cheques taken by the school be banked and brought into account?
  • Should governors see returns before submission?
  • We’ve planned our budget for next three years. There are still lots of unanswered questions for the plan for year 2 and year 3 because of uncertainties in education finance generally. How do we deal with these uncertainties in the plan?
  • Can governors approve works with one quote only due to urgency?

Resources shared during the discussion

Karen shared two PDF versions giving examples of two different methods of managing and documenting cash flows, plus the original simple Excel spreadsheet from which the PDFs were generated:

  1. Examples of cash flow statements – Direct method (PDF);
  2. Examples of cash flow statements – Indirect method (PDF);
  3. Source spreadsheet for these two documents (.xlsx Excel file).

Participants’ evaluations

Here are some of the comments made by those who took part:

“Thank you for another very useful session which I approached with the same trepidation as I do my tax return, but I feel very reassured.”
“Very informative and pitched at a good level.”
“Some useful information to enable me to ask some questions of my SBM.”
“As a qualified accountant I still found this helpful and informative.”

Watch the recording

There are two options for viewing the record. The first is on the Modern Governor Adobe Connect server, and allows you to search the text of the slides and discussion between participants during the event. This requires the Adobe Flash Player and therefore won’t work on a smartphone or tablet.

A more accessible but less interactive version of the recording is available on the Modern Governor YouTube channel:

The next Governor Live session: Interpreting monthly management accounts and KPIs

On Thursday the 6th of April at 8pm Karen will be presenting the next Governor Live session entitled Interpreting monthly management accounts and KPIs. Here’s her introduction to this session:

Karen Rae

Informative management accounts will allow those in governance to challenge and make informed decisions to drive the strategic direction of the school forward in the future. In this event we will discuss interpreting the results of management accounts, the use of key performance indicators (KPIs), benchmarking your school against others – all of which will naturally drive improvements in your own performance and helps to unearth what fund balances actually mean in the assessment of going concern.”

and don’t forget to browse the extensive list of upcoming Governor Live events – all free to sign up for and take part in, and open to governors, trustees and senior leadership teams.

Image credit: based on an image by Kaique RochaCC0 from

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