The Academies Budget Forecast Return (BFR) may not go live until 4 June 2024, but recent updates are a timely reminder of the 29 August 2024 submission deadline and the importance of getting ahead of the game when it comes to financial forecasting.
Updates to the BFR include:
- Additional details on in-year transfers. The BFR must reflect any academies transferring in or out of your trust – the re-brokerage of academies section in the main guidance contacts tables with details of what you need to include based on the month of transfer.
- New fields have been added to capture information around trusts’ forecast ICT spent. These costs should be reported within the revenue and capital sections of the BFR.
The BFR provides the ESFA with an assurance that academy trusts are undertaking strategic budget planning and following best practices. It is expected that academy trusts will submit their latest and most accurate forecasts, this involves making some assumptions about future patterns of income and expenditure.
Many academy trusts find the budget process time-consuming, and it is therefore important to ensure you can fully optimise the benefits of forecasting income and expenditure – helping to make informed decisions and respond to future challenges.
Accurate forecasting delivers several benefits for both an academy trust and its leadership team. Here are some valuable takeaways from the budgeting process:
Regular forecasting
Forecasts are not just there to satisfy the requirements of the BFR. Monthly forecasting ensures you stay up-to-date throughout the year, providing reliable financial data for informed decision-making.
Income
Income is drawn from several different sources, including grants (primarily the General Annual Grant or GAG), but also perhaps through fundraising, school capital funding, grants for specific projects, letting out school premises, or even the introduction of wrap-around care. An important part of the forecasting process is to analyse projected income and consider any additional income streams or non-recurrent income that will impact the budget.
Identifying errors
Part of the budget process comprises detailed checks on anticipated expenditure compared to actuals. This can be a helpful exercise in mitigating fraud, providing an opportunity to identify any false invoices or misallocated payments.
Rigorous examinations of spending offers the chance to recognise any accounting or keying errors, keeping information accurate and preventing any unwelcome disclosures later on in the budget cycle.
Accurate data
All assumptions should be carefully considered and reviewed, as variations in estimates and actuals can have a significant impact on how far your funding goes.
Take a close look at each of the assumptions that help to construct your forecast, including pupil numbers, estimated National Funding Formula per pupil, changes in pupil premium funding, commercial income, investment income, pay awards, review of all contracts, review of banking arrangements including cash handling, investments and security, staff turnover estimates and utilities and building running costs.
Should you have any queries on the budget forecast return, please get in touch with your M+A Partners contact or email enquiries@mapartners.co.uk
