Financial Due Diligence

Whether you’re a Multi Academy Trust deciding if a new school (or smaller MAT) should join your trust, or a standalone school (or smaller MAT) deciding whether to a join a trust, it’s a big decision which requires careful consideration. It is important to consider longer term financial stability, along with all other factors.

Financial due diligence provides an in depth look at the financial position and performance of an academy trust. This requires more than just checking the most recent set of management accounts.

Financial considerations for schools joining your MAT

  • Most recent management accounts and current reserve position

  • Financial forecasts for the next 3 years

  • Forecasted pupil numbers and the impact on future funding

  • Building condition and the impact this could have on potential significant capital or repair expenditure in the future

  • Benchmarking current financial ratios against schools already in the MAT

  • Sense checking budgets and forecasted future performance to check any assumptions made are reasonable

  • The internal control environment

Financial considerations for schools considering joining a MAT

All of the above points will form part of the due diligence if you are looking to join a larger multi academy trust, but there are also a number of further considerations:

  • The contribution you would need to make to central services and what services you would receive for this

  • If the MAT has more than 3,000 pupils, they will qualify for School Condition Allowance (SCA), rather than applying for CIF funding for capital projects. It is important to know the trust’s policy for allocating these funds to ensure capital needs are addressed

  • The economies of scale which can be obtained from being part of a larger entity with more purchasing power