A scheme of financial delegation can help ensure good governance and financial control, says Tracey Young

A scheme of delegation is important within any organisation, providing a framework for overall governance. It defines who has the authority to make decisions and ensures accountability. It also provides clarity to those within the organisation and supports efficient and timely decision-making.

A scheme of financial delegation, typically a separate document, focuses on financial decision-making and approval limits and helps to ensure proper financial control.

Trustees (and directors if the school is a charitable company) are legally responsible for running a school, or school group, under charity law (and company law). Although the board of trustees delegate day-to-day management to the head and the senior leadership team (SLT) or similar, and may also delegate certain responsibilities and decisions to subcommittees of the board, they remain ultimately responsible. The head (and the SLT) often provide delegated authority to other staff within the school.

It is therefore essential that everyone is clear of their delegated authority and decision-making powers. Unfortunately, I have seen situations where a lack of clarity has led to awkwardness and frustration between management and trustees, and between trustees, where decisions were made where trustees consider they should have been consulted. In some cases, it has also resulted in poor decision-making because the implications were not fully considered and debated at the appropriate level.

Equally, I have seen situations where too much involvement in day-to-day decisions by trustees can lead to frustrated management and slow, inefficient decision-making.

The current challenging environment for independent schools, with pressure on pupil numbers, rising costs, and a highly competitive and evolving market is placing strain on the finances of schools. There is a need for many schools to make strategic changes, be flexible and agile, while also carefully managing costs. It may be a good time to revisit the various schemes of delegation to ensure they remain appropriate and effective.

It is often the case that financial delegation is reduced within an organisation when finances are under pressure. This supports cost control, however it can lead to busy senior leaders/trustees being involved in low level decisions causing inefficiency and distraction from the bigger picture. The right balance needs to be reached.

Many schools are having to react quickly to changes in their operating environment. It feels that for many, doing nothing may mean your school will be left behind. However, these can be big strategic decisions affecting the future direction of your school. It is common to set up working groups, perhaps from a subset of the board, with the relevant skills to consider specific issues/areas. It is essential any delegated authority to these working groups is clear from the outset. Overall, although changes to schemes of delegation may be appropriate for some schools, it is likely that the significance of the decisions to be made means that more full board meetings are needed.

Currently, there are a number of mergers in the sector and this is expected to continue. Navigating a successful merger can be challenging, with the need to support a smooth transition with differing school cultures, uncertainty and the need to manage costs. Management and staff at the merging school may have had greater autonomy than will be the case going forward. Establishing agreed schemes of delegation and ensuring this is disseminated throughout the school is essential to provide clarity and to ensure appropriate operational and financial control.

The governance structures of school groups vary significantly. In cases where there is a local governing body, or perhaps a subcommittee dedicated to a school, it is important that the terms of reference and delegated authority (if any) is very clear and understood by school management and the committee members.

It is recommended that the scheme of delegation alongside the scheme of financial delegation is reviewed and approved by the full board on an annual basis. At least annual circulation to committees, management and affected staff ensures they are also aware of their roles and responsibilities. They should be included as part of trustee/staff induction to ensure new joiners understand their own role and the authority delegated to others.

Appropriate schemes of delegation help support good governance ensuring accountability, transparency, effective and efficient decisions-making and strong financial control. If your school hasn’t reviewed yours in a while, now is a good time to revisit and ensure it is fit for purpose.

Tracey Young is a senior education partner at accountancy firm HaysMac

Tracey Young