Regular, high-quality management accounts are a core governance and assurance tool for academy trusts. They enable trustees to understand the trust’s financial position, monitor financial performance against budget, identify risks and address them promptly.
Statutory and regulatory requirements: summary
The Academy Trust Handbook requires that trusts must prepare management accounts monthly. These must include an income and expenditure account comparing actuals to budget, a balance sheet and a cashflow forecast.
The accounts must show the trust’s financial performance and position and highlight variances against budget.
Management accounts must be shared with the Chair of Trustees every month, and must be considered by the board when it meets. Trustees must be assured that appropriate and timely action is being taken to address variances and maintain financial sustainability.
Failure to meet these requirements can result in regulatory action or a modified regularity opinion.
Who prepares and who reviews
The Chief Financial Officer (CFO) or equivalent normally leads preparation, supported by robust financial systems and controls. Accounts should be prepared promptly after month-end to ensure relevance.
Trustees retain collective responsibility for financial oversight. While detailed scrutiny may sit with a finance or audit & risk committee, the full board should receive sufficient information to understand risks and decisions.
What management accounts should contain
The income and expenditure report should include:
- Actual income and expenditure for the month and year-to-date
- Comparison to the approved budget
- An updated full-year forecast
- Clear identification of material variances
On the balance sheet, trustees should be able to see:
- Cash at bank and in hand
- Debtors and creditors
- Net current assets/liabilities
- Key long-term liabilities (including pension position, where relevant)
This helps trustees assess financial resilience, not just in-year performance.
The cashflow forecast should include:
- A rolling cashflow covering at least the next 12 months
- Identification of pinch points or funding gaps
- Links to reserves and investment policies
Effective cashflow monitoring is critical in a publicly funded environment.
Numbers alone are not sufficient. Good management accounts include clear written commentary explaining:
- Why variances have arisen
- Whether they are one-off or recurring
- The impact on the year-end forecast
- Management actions being taken or proposed
This ensures trustees can understand, challenge and act, rather than simply receive information.
Forecasting and reforecasting
Forecasts should be actively updated as new information emerges – reflecting known pressures (e.g. pay awards, energy costs, falling rolls). This enables trustees to see the forward looking impact of current decisions, while maintaining financial sustainability and avoiding late intervention.
Presentation and accessibility
There is no prescribed format for management accounts: the DfE (Department for Education) provides a template which trusts may adapt. Reports should be consistent month-to-month.
For your non-financial trustees, the management accounts: should use plain language over unnecessary technical complexity, and should highlight key risks and decisions upfront.
The CFO has a responsibility to ensure trustees understand the information presented, not just receive it.
Use in meetings and evidence of scrutiny
Trustees should ensure that management accounts are a standing agenda item. Challenges and discussion should be clearly minuted, with decisions and follow-up actions recorded. This evidence of active financial oversight is critical for audit and regulatory assurance.
Link to wider governance and assurance
Effective management accounts support:
- Regularity, propriety and value for money in how public funds are managed
- Risk management and internal scrutiny
- Early identification of issues that may require DfE engagement
They are therefore a cornerstone of the trust’s overall control framework.
