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Measure your School’s Culture… now part of FSS participation

My PhD research Predicting financial sustainability in independent schools [1], indicates workforce culture is a lead indicator of financial sustainability.

Somerset Education and PeopleBench are therefore excited to announce our alliance to give schools the ability to assess and track their school’s workforce culture: the shared values, beliefs, and expectations for how people act in the workplace – “how we do things around here” or put another way “what people do when nobody is watching”.

Why is it important to measure your School’s Culture?
My research is to predict financial sustainability of independent schools. The Financial Survey for Schools (FSS) represents over 70% of enrolments in independent schools, so we already have robust financial information to assess financial health. But how do we go the next step to predict financial health and therefore prevent financial stress in schools?

The first step is to participate annually in the FSS to assess trends in key measures, identify changing circumstances and risk, plus the best areas to improve performance if required. A common factor in financially sustainable schools is their ability to adapt to changing circumstances, which requires a positive and supportive culture throughout the school, as well as at board and management levels.

Enrolments are obviously a key attribute of a financially sustainable school. Research indicates important factors influencing families’ choice of school include educational excellence, good teachers, teacher/student relations, good facilities (which requires financial health), supportive and caring environment to foster strong character, confidence and self-esteem. And this is assessed mainly through word of mouth from family, friends and work colleagues, school tours and interacting with teachers and staff.

Therefore, for a number of reasons, I believe a healthy workplace culture is at the heart of financial sustainability.

Somerset Education is dedicated to the financial viability and sustainability of non-government schools and has developed cost effective, self-service tools including the annual Financial Survey for Schools (FSS). The Somerset Education + PeopleBench alliance is consistent with our strategy of identifying crucial, cost effective, trusted tools to help schools govern with confidence.

What is the new product for Financial Survey for School’s (FSS) participants?
As an FSS participant you gain access to the PeopleBench unique Culture Tracker™ tool to help you rate and benchmark your school’s culture.

PeopleBench have been providing school workforce technology, research, and data analytics since 2017 and have worked with hundreds of non-government schools in Australia to help build better school workforces. The Culture Tracker™ (Bronze) accessed via the Somerset Education Financial Survey for Schools portal provides Somerset Education clients with complimentary workforce culture tracking resources and the ability to subscribe to the PeopleBench Culture Tracker™ (Silver or Gold) to access a more detailed analysis of their workforce culture.
🎥 Watch video: 15 Minutes on school workforce culture
👩‍💻 Upcoming Webinar—Last one for 2022!
Breakfast Seminar Series: Webinar — Thursday 24 November 2022

Why measuring culture counts in the financial sustainability of schools 
Time: 8.00am to 9.00am (AEST) via Zoom
Recommended for: Principals, Governors, and Business Managers… but all welcome!

The webinar will include:

  • Attributes of a financially sustainable independent school
  • Key ratios to assess financial sustainability and industry trends
  • Special guest—Mike Hennessy, Chief Research and Insights Officer, PeopleBench, to demonstrate the School workforce Culture Tracker.

👉🏻 Register here
Registration fee: A$99 (inc GST) per Registrant*
Register hereZoom
*Note: Please register even if you’re unable to attend the ‘live’ webinar as the recording is available to all Registrants up to thirty days after the webinar.

Any questions?
For more information about the FSS, Culture Tracker, Webinar, or our budgeting and reporting tools, please do not hesitate to contact us at info@somerseteducation.net or call on 1300 781 968 (from outside Australia +61 7 3263 5300).

If I can help in any way with the financial governance of your school, please contact me directly at john@somerseteducation.net or mobile 0417 618 899.

Kindest regards

John Somerset 

John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Australia.

References: 

[1] PhD research, John Somerset

Disclaimer: We publish this article only for non-government schools in Australia. All material should be regarded as information only and individuals should rely on their own enquiries when formulating decisions for themselves or their clients. In no way do we warrant or guarantee any changed circumstances for a school from use or non-use of this material. As a member of the Institute of Chartered Accountants Australia and New Zealand, the firm participates in a national liability capping scheme. Accordingly, our liability is limited by a scheme approved under professional standards.

® Somerset Education is a registered trade mark.

Trim Your Sails Before the Storm

Independent Schools’ sector has strengthened
Early indications from the 2022 (2021 school-year) Somerset Education Financial Survey for Schools (FSS) indicates sound operating surpluses with a five-year average (2017 to 2021) Net Operating Margin of 13.8%, although this will be influenced by changes in accounting treatment of right of use assets, an increasing trend in the Working Capital Ratio to 1.39 in 2021 up from 1.16 in 2017, and with an average $7,800 Debt per student (excluding right of use) in 2021, relative debt is about the same as five years ago but down from a high of $8,600 in 2019. How does your school compare?

With sound operating surpluses, more cash, and less relative debt this indicates the average independent school is “trimming their sails” for what might be challenging economic and financial storms ahead. What is your school doing?

Participate in the FSS by September to receive early bird* subscription
So far this year about 460 schools have completed the 2022 (2021 school-year) FSS with a further 120 schools having started but not yet finalized. So, the averages discussed above may change slightly as more surveys are completed – we expect 600 to 700 schools will eventually complete the FSS.

Schools can enter or change data to produce and re-produce Financial Performance Reports at any time until April next year. However, we strongly encourage survey completion by September to inform the coming strategic planning and budgeting season which is usually completed before announcing school fees for next year.

Participation in the FSS provides school owners, governors, principals and business managers access to simple, factual trend and comparative financial information to identify changing circumstances plus areas that will have the greatest impact on improved financial performance. This helps to govern with confidence and reduce financial worries.
*Early Bird price if completed by 30 September 2022 — from A$680 (plus GST) per school (half price if < 200 enrolments). Else from A$780 (plus GST).

Breakfast Seminar Series: Webinar — 13 October 2022
Participate in the FSS and have your reports available while I run through the Somerset School Portal explaining how to analyse your past, current and future financial performance to help the school board and senior management assess financial strengths, weaknesses, risks and where best to change course if required.

Date: Thursday 13 October 2022
Time: 7.00am to 8.00am (AEST) via Zoom
Topic: Chart a course for success using the FSS
Registration fee: A$99 (inc GST) per Registrant*
Register hereZoom 
*Note: Please register even if you’re unable to attend the ‘live’ webinar as the recording is available to all Registrants up to thirty days after the webinar.

Any questions?
For more information about the FSS or our budgeting and reporting tools; or the upcoming Breakfast Seminar Series webinar, please do not hesitate to contact us at info@somerseteducation.net or call on 1300 781 968 (from outside Australia +61 7 3263 5300).

If I can help in any way with the financial governance of your school, please contact me directly at john@somerseteducation.net or mobile 0417 618 899.

Kindest regards


  John Somerset 

John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Australia.

UPCOMING EVENTS 2022:
ABSA NSWWebinarHow to use the school budget to influence people, Tuesday 04 October.
CEBA 2022 ConferenceTrade stand, Melbourne & Olympic Parks precinct, Melbourne, Victoria, 05-07 October,.
Somerset Education Breakfast Seminar SeriesWebinarChart a course for success using the FSS, Thursday 13 October (7am-8am).
CSA National Business ConferenceWorkshop Presentation, Mantra on Salt Beach, Kingscliff, NSW, 26-28 October

Disclaimer: We publish this article only for non-government schools in Australia. All material should be regarded as information only and individuals should rely on their own enquiries when formulating decisions for themselves or their clients. In no way do we warrant or guarantee any changed circumstances for a school from use or non-use of this material. As a member of the Institute of Chartered Accountants Australia and New Zealand, the firm participates in a national liability capping scheme. Accordingly, our liability is limited by a scheme approved under professional standards.

® Somerset Education is a registered trade mark.

2022 (2021 school-year) Financial Survey for Schools Reports…Now available!

We sincerely thank schools for participating in the Financial Survey for Schools (FSS) which — with about 700 schools — is the largest in Australia and New Zealand, and trust that the reports help schools with their financial sustainability.

The FSS provides school owners, governors, principals, and business managers with simple, factual trend and comparative financial information to identify changing circumstances plus areas that will have the greatest impact on improved financial performance. This helps to adapt to changing circumstances, govern with confidence, and reduce financial worries.

Continuous improvement
There are some exciting improvements to the reports this year including additional boarding ratios, enrolment churn (students leaving / total enrolments) which appears to average about 7%, and extra guidance concerning the importance of school culture and board training. I enjoy continually improving the reports as I learn more about school financial sustainability from my research.

Access to FSS Reports 
Please log into the Somerset Portal and then:

  1. Accept updated Terms and Conditions (if required)
  2. Select a sample of similar schools
  3. Generate your reports.

20-minute ‘crash course’ video to help you read and analyse FSS reports 
I have prepared a short video to help you analyse of your school’s FSS reports. The great thing about this video is that you can ‘pause’ or ‘replay’ as you view your reports. Hope you find this useful. Here’s the video link.

We welcome your participation
To date almost 500 schools have logged in to populate the survey. So if you haven’t yet completed it we encourage you to do so as soon as possible. And don’t forget you can enter/change data and re-generate reports at any time until April 2023.
Special Early Bird participation offer! 
Early Bird* participation starts from A$680 (plus GST) per school (half price for schools < 200 enrolments)
*Early Bird price—Survey completed and invoice requested prior to 30 September 2022.

Any questions?
If you have any questions in relation to the survey please contact Cathryn, our survey administrator at survey@somerseteducation.net or telephone 1300 781 968 (from outside Australia +61 7 3263 5300). To assist you with accessing the Portal, here are the step-by-step instructions: Navigating the Somerset Education Portal.

If I can help in any way with the financial governance of your school, please contact me at john@somerseteducation.net or mobile 0417 618 899.

We look forward to your ongoing support, or if new to the survey, we warmly welcome you joining in.
Kindest regards


  John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Australia.

UPCOMING EVENTS 2022:
ABSA NSWWebinarHow to use the school budget to influence people, Tuesday 04 October.
CEBA 2022 ConferenceTrade stand, 05-07 October, Melbourne & Olympic Parks precinct, Melbourne, Victoria.
Somerset Education Breakfast Seminar SeriesWebinarUnleash the power of the FSS, Wednesday 12 October (7am-8am).
CSA National Business ConferenceWorkshop Presenter, 26-28 October, Mantra on Salt Beach, Kingscliff, NSW.

Disclaimer: We publish this article only for non-government schools in Australia. All material should be regarded as information only and individuals should rely on their own enquiries when formulating decisions for themselves or their clients. In no way do we warrant or guarantee any changed circumstances for a school from use or non-use of this material. As a member of the Institute of Chartered Accountants Australia and New Zealand, the firm participates in a national liability capping scheme. Accordingly, our liability is limited by a scheme approved under professional standards.

® Somerset Education is a registered trade mark.

2020 School-year reports closing to make way for 2021 reports!

Many thanks for your support of the Financial Survey for Schools (FSS).

2020 School-year reports close this Friday!
At 5pm Friday 15 July 2022, we will close Options 2 to 8 on the FSS portal to make way for the 2021 school-year reports. So please make sure you have downloaded and saved last year’s survey reports (2020 school-year) by Friday this week.

During this time, you can still enter your 2021 school-year data (Option 1).

Target release of 2021 school-year reports on 1 August 2022
We are aiming to release 2021 school-year FSS reports on Monday, 1 August 2022, which is why we need to close last year’s reporting so we can prepare and test the system.

Complete the Somerset Education Financial Survey for Schools by 31 July 2022 and receive a Free Gift! 
Here’s a hint: Free Gift!^ 
^ limited offer—for first 400 surveys completed.

Any questions?
If you have any questions in relation to the survey please contact Cathryn, our survey administrator at survey@somerseteducation.net or telephone 1300 781 968 (from outside Australia +61 7 3263 5300).

To assist you with accessing the Portal, here are the step-by-step instructions: Navigating the Somerset Education Portal.

Kindest regards

John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Australia.

Disclaimer: We publish this article only for non-government schools in Australia. All material should be regarded as information only and individuals should rely on their own enquiries when formulating decisions for themselves or their clients. In no way do we warrant or guarantee any changed circumstances for a school from use or non-use of this material. As a member of the Institute of Chartered Accountants Australia and New Zealand, the firm participates in a national liability capping scheme. Accordingly, our liability is limited by a scheme approved under professional standards.

® Somerset Education is a registered trade mark.

It’s been ‘up and down’ the last few years, so time to have some fun…

It’s been a difficult couple of years for all business managers and all schools, so we thought “let’s have some fun” whilst encouraging your school to complete the survey.

Complete the Somerset Education Financial Survey for Schools by 31 July 2022 and receive a Free Gift! 
Here’s a hint: Free Gift!^ 
^ limited offer—for first 400 surveys completed.

Start the survey today!
Here’s the link: Financial Survey for Schools

Reminder! Finalise last year’s (2020 school-year) reports before Friday, 15 July 2022
We aim to release 2021 school-year FSS reports on Monday, 1 August 2022. Therefore, last year’s reporting (2020 school-year) will cease from 5pm Friday, 15 July 2022Note: Please make sure you have saved any 2020 school-year reports before 15 July 2022During this time, you can still enter your 2021 school-year data.

Any questions?
If you have any questions in relation to the survey please contact Cathryn, our survey administrator at survey@somerseteducation.net or telephone 1300 781 968 (from outside Australia +61 7 3263 5300). To assist you with accessing the Portal, here are the step-by-step instructions: Navigating the Somerset Education Portal.

If I can help in any way with the financial governance of your school—or even YoYo lessons—please contact me at john@somerseteducation.net or mobile 0417 618 899.

We look forward to working with you in 2022.

Kindest regards


  
John Somerset and the Survey Team

John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Australia.

Disclaimer: We publish this article only for non-government schools in Australia. All material should be regarded as information only and individuals should rely on their own enquiries when formulating decisions for themselves or their clients. In no way do we warrant or guarantee any changed circumstances for a school from use or non-use of this material. As a member of the Institute of Chartered Accountants Australia and New Zealand, the firm participates in a national liability capping scheme. Accordingly, our liability is limited by a scheme approved under professional standards.

® Somerset Education is a registered trade mark.

Three Levers of School Financial Sustainability

What is School Financial Sustainability?
My research [1] indicates a financially sustainable non-government school is one that generates annual net cash from operations (operating surplus) sufficient to fund both depreciation and debt servicing (in most cases associated with prior reinvestment). Using a dam analogy, the annual operating surplus (rainfall) should be sufficient to fund the cash (water) flowing out via the floodgates for asset reinvestment (depreciation as partial proxy) and debt servicing, whilst maintaining an adequate reservoir to cover uncertainty (periods of drought). See Figure 1 below.

Figure 1: Schools must sustainably fund reinvestment (depreciation and debt servicing) and maintain an adequate reservoir.

Depreciation alone is not a sufficient proxy for asset reinvestment
Based on a sample of 340 schools over six years, average capital expenditure was double the depreciation, but it was close to the sum of depreciation plus loan repayments. This supports my sustainability theory that annual operating surplus must fund both depreciation and loan repayments. I welcome readers feedback as this is central to my PhD research.

Three key questions
School governors, principals and business managers should ask three key questions:

  1. What operating surplus do we need and how do we best influence it?
  2. What cash reserves should we maintain?
  3. What is our sustainable reinvestment, debt, and debt servicing? [2]
    [2] Seven in 10 parents (70%) said their choice of school was totally or highly influenced by the look of the school and facilities on offer. 

How to answer these questions
By participating in the Somerset Education Financial Survey for Schools (FSS) you can compare your school’s relative operating surplus, cash reserves, reinvestment, debt, and debt serviceability over time and against similar schools, informing your decision on the three key questions. My research indicates most schools that consistently participate in the FSS have sound or improved financial health.

The FSS provides school owners, governors, principals, and business managers with simple, factual trend and comparative analyses to identify changing circumstances plus areas that will have the greatest impact on improved financial performance. This helps to govern with confidence and reduce financial worries.

Step 1 is to complete data for the 2021 school-year here which takes about one hour. We encourage completion of the survey now because this helps with the sample sizes when schools start generating reports from August 2022.

Special Early Bird participation offer!
Early Bird* participation starts from A$680 (plus GST) per school (half price for schools < 200 enrolments)
*Early Bird price—Survey completed and invoice requested prior to 30 September 2022.

Any questions?
For more information about the FSS or our budgeting and reporting tools, please do not hesitate to contact us at info@somerseteducation.net or call on 1300 781 968 (from outside Australia +61 7 3263 5300).

If I can help in any way with the financial governance of your school, please contact me directly at john@somerseteducation.net or mobile 0417 618 899.

Kindest regards


  
John Somerset 

John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Australia.

References: 

[1] PhD research, John Somerset

[2] What Parents Want: Independent Schools Queensland survey report (April 2022)

Disclaimer: We publish this article only for non-government schools in Australia. All material should be regarded as information only and individuals should rely on their own enquiries when formulating decisions for themselves or their clients. In no way do we warrant or guarantee any changed circumstances for a school from use or non-use of this material. As a member of the Institute of Chartered Accountants Australia and New Zealand, the firm participates in a national liability capping scheme. Accordingly, our liability is limited by a scheme approved under professional standards.

® Somerset Education is a registered trade mark.

Language of money: How to read your audited accounts

Part of the Somerset Education Breakfast Summit Series 2022 

Webinar on Friday, 27 May 2022, 7:00am—8:00am (AEST)
Presented by:  John Somerset, FCA, Director, Somerset Education, Australia

Best suited to School Principals and Board Members (but all welcome) 
Our obligation— School principals and many Board Members are not formally trained in finance and accounting, yet you need to understand the money to make an informed contribution to what seems to be constant financial decisions required for your school.

I totally understand people with ‘non-financial’ backgrounds
I did not study accounting at school, so in the first year of my Bachelor of Commerce I could not understand the strange language people were talking. A secret between you and me, the only subject I failed in my academic career was Accounting 101. Thankfully my repeat was led by a wonderful teacher, and I never looked back. So, for the non-financial people, I totally understand.

What I’ll cover in this Webinar
Now that you have the 2021 audited accounts, I thought training on how to read them would be timely.

In this 60-minute session we will cover:

  • Legal obligations concerning finances
  • Attributes of a financially sustainable school
  • Common reports  Financial Position, Financial Performance, Cash Flows
  • Cash verse accrual accounting
  • Turn information into knowledge using ratio analysis
  • How to confidently challenge financial information presented.

A recent presentation on this topic received a satisfaction rating of 4.6 out or 5 stars!
We covered these topics as part of a full-day financial literacy workshop conducted with Association of Heads of Independent Schools Australia (AHISA) in April receiving an average satisfaction rating of 4.6 out of 5 stars.

“I thoroughly recommend this course to aspirant and current principals. As a principal I am very protective of my time, this course was well worth the investment”.

About the Presenter:
John Somerset FCADirector, Somerset Education
John’s passion is financial viability and sustainability of non-government schools. He has 36 years Chartered Accounting experience, with 27 years specialising in schools including past President of Independent Schools Queensland and a past board member of the Independent Schools Australia. John runs the annual Financial Survey for Schools (FSS) which, with between 600 to 700 participants, is the largest in Australia and New Zealand.

About the Breakfast Summit Series:
The Somerset Education Breakfast Seminar Series was created in 2021 by John Somerset FCA, Director, Somerset Education. The aim of the ‘live’ webinars is to introduce school governors, principals, and business managers to the latest thinking, innovative concepts, and new ideas to ensure their organisations are making well-informed decisions about financial risk to ensure the financial viability and sustainability of their school. Post-webinar, all registrants receive 30-day access to the webinar recording and speaker slides.

Register here: Somerset Education Webinar 
Registration fee:
$99.00 AUD (inc gst) per Registrant*
*Note: Please register even if you’re unable to attend the ‘live’ webinar as the recording is available to all Registrants up to thirty days after webinar.

For more information about our Breakfast Summit Series, please do not hesitate to contact us via email or call on 1300 781 968.

Kindest regards


  
John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Australia.

The Financial Survey for Schools is Now Open

FSS has over 27 years of school data
We are proud of our 27 year history of operating the Financial Survey for Schools (FSS) which is now ready to receive your 2021 school-year data. Thank you to the almost 700 schools that participate each year.

Here’s a link to the survey: https://somersetedu.com/isfps/survey.asp

FSS continues to help business managers and finance committees to govern with confidence
Annual participation in the FSS helps business managers and finance committees simply and factually present their school’s trend and comparative financial health to the board and principal by using ratio analysis to identify changes in past and future performance/risks (Historical Report and SKI Report) plus identifying possible improvements in financial sustainability if required (Comparative Survey Report).

Although we cannot promise changes in performance, schools that participate annually in the FSS and use the reports in the financial governance of their schools often show improved and/or maintain sound operating surpluses, working capital (cash reserves) and debt servicing.

Many schools complete the Financial Survey for Schools at the same time as completing the Commonwealth Financial Questionnaire (FQ) which became available last week. The FSS data entry is in line with the FQ so it is easy to complete and a great double check of your FQ submission including a Myschool estimator.

Your data entry deadlines and participation packages
Please aim to complete data entry by 31 July 2022 so that you and others can generate reports from 1 August 2022 to inform strategic discussion and the 2023 school budgeting process in a timely way.

The discounted package price for the Survey Report (compare with peers), Historical Report (your trends 2016 to 2021) and SKI Report (your future trends to 2026) is $1,650 including GST ($825 for schools with less than 200 enrolments). Otherwise single report participation starts from $748 including GST ($374 for schools with less than 200 enrolments).

We ensure your school data is confidential
FSS participant names and data are held in confidence by Somerset Education which we know is important to you. Reports are generated in a format which respects that confidentiality.

Ongoing support
Also annual participation means I am only a phone call away to discuss your school’s performance with you, in an informed and efficient way.

Any questions?
If you have any questions in relation to the survey please contact Cathryn, our survey administrator at survey@somerseteducation.net or telephone 1300 781 968 (from outside Australia +61 7 3263 5300). To assist you with accessing the Portal, here are the step-by-step instructions: Navigating the Somerset Education Portal.

If I can help in any way with the financial governance of your school, please contact me at john@somerseteducation.net or mobile 0417 618 899.

We look forward to your ongoing support, or if new to the survey, we warmly welcome you joining in.

Kindest regards


  
John Somerset and the Survey Team

John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Australia.

Breakfast Summit Series: Unleash the Power of the Financial Survey for Schools

Presented by: John Somerset, FCA, Director, Somerset Education, Australia

Webinar on Wednesday, 30 March 2022, 7:00am—8:00am (AEST)

Our challenge – how can we clearly and simply present financial information to the Board and Principal so that everyone understands the school’s past, present and proposed future financial health to better inform decisions being made now?

I received several calls in the past month seeking information like: “How many staff, by category, should I have for the size of my school?”, I could answer this in 30 seconds using the Staff Estimator on the Somerset Education Financial Survey for Schools Portal. Another question was: “How can I increase my operating surplus to adequately fund the extra debt taken on this year due to reinvestment in buildings?” Again, the FSS could answer this in about 1 minute. You can easily do this yourself. I realised we needed a training session to demonstrate how to unleash the power in the FSS.

In this workshop, you will learn how to maximise use of the Somerset Education Financial Survey for Schools (FSS) to clearly present the school’s financial and operational strengths and weaknesses, so the Board and Principal understand the financial risks and can take appropriate action to manage the risks.

In this 60-minute session we will cover:

  • Attributes of a financially sustainable school including a simple explanation for the Board and Principal
  • Navigating the Somerset FSS portal including an overview of the tools
  • Selecting an appropriate sample of schools with which to compare your school’s performance
  • Using the Historical Report to highlight important trends in your school’s performance
  • Using the Comparative Report to identify and quantify strengths and weaknesses
  • Using the Vertical Analysis to graph sample distributions for all 60 + ratios
  • Using the Staff Estimator to indicate number of staff, by category, for the average school of your size
  • Use the Somerset Key Indicator (SKI) Report to assess future financial health
  • New tools under development (Scenario SKI Report) – we welcome your feedback.

About the Presenter:
John Somerset FCADirector, Somerset Education
John’s passion is financial viability and sustainability of non-government schools. He has 36 years Chartered Accounting experience, with 26 years specialising in schools including past President of Independent Schools Queensland and a past board member of the Independent Schools Australia. John runs the annual Financial Survey for Schools (FSS) which, with between 600 to 700 participants, is the largest in Australia and New Zealand.

About the Breakfast Summit Series:
The Somerset Education Breakfast Seminar Series was created in 2021 by John Somerset FCA, Director, Somerset Education. The aim of the ‘live’ webinars is to introduce school governors, principals, and business managers to the latest thinking, innovative concepts, and new ideas to ensure their organisations are making well-informed decisions about financial risk to ensure the financial viability and sustainability of their school. Post-webinar, all registrants receive 30-day access to the webinar recording and speaker slides.

Register via Somerset Education Events
Registration fee:
$99.00 AUD (inc gst) per Registrant*
*Note: Please register even if you’re unable to attend the ‘live’ webinar as the recording is available to all Registrants up to thirty days after webinar.

“We are thinking of children and communities adversely affected by natural disasters and world events.”
John Somerset

For more information about our Breakfast Summit Series, please do not hesitate to contact us via email or call on 1300 781 968.

Kindest regards


  
John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Australia.

School Fees Increase to Ensure Long-Term Sustainability

 

As we start the school year in 2022, it’s shaping up to be another challenging year and I congratulate the sector for its continual adaption to these changing circumstances.

Based on a survey of 538 schools, the recently released, Edstart School Fees Report 2022 indicates schools are returning to a national average fee increase of 2.9% for 2022. The temporary lower increases in 2021 were unsustainable.

School revenue must change with expenses to ensure long-term sustainability
Somerset Education’s Financial Survey for Schools (FSS) captures and benchmarks financial data from about 650 non-government schools each year. The FSS indicates wages comprise 79% of costs in schools – which we must not forget contributes significantly to tax revenue/public purse. Wages and other costs continue to rise at or above CPI, so school revenue must similarly rise to ensure long-term sustainability.

Operating surpluses are crucial to sustainably reinvest in facilities and equipment 
Schools need adequate operating surpluses to ensure they can sustainably reinvest in crucial facilities and equipment and also to service loans used to fund buildings and equipment that the students enjoy. Using a personal analogy, after paying living costs, our wages/net income needs to be sufficient to ensure we can repay the home loan and periodically replace the TV, dishwasher, car etc.

Schools will have to catch up in 2022
The 2021 FSS, which is based on 2020 school-year data, indicated minimal increase and even some decreases in the average cost per student from 2019 to 2020. It seems schools temporarily cut operating expenses in response to very uncertain times as the COVID-19 pandemic evolved. This allowed the sector to do their very best to accommodate financial pressure on parents/care givers during the uncertain times. Using our personal analogy again, this temporary cost reduction in schools is like not maintaining the house or servicing the car while financial conditions are uncertain. But this is not sustainable and schools will have to catch up with what they held back on in 2020.

There may be a larger increase in cost per student in 2021 and 2022 
I look forward to receiving the 2021 school-year data which will arrive from April as the 2021 school audits are completed. I would not be surprised to see a rather large increase in cost per student from 2020 to 2021 due to this catch up in deferred expenses. As you know, costs have increased considerably during 2021 and 2022 due to labour shortages, transport disruptions, extra COVID-related costs eg, cleaning.

Now more than ever schools should participate in the FSS so that governors, principals, and business managers can analyse trends in their school’s financial performance, benchmark with peers to identify strengths and weaknesses, to ensure adequate operating surpluses which fund reinvestment, debt servicing, and strategic goals.

With 27 years’ experience and over 1,000 school clients, I sincerely hope Somerset Education can continue to help your school to govern with confidence in the year ahead.

If you have any queries about Somerset Education’s Financial Survey for Schools or Edstart School Fees Report 2022please don’t hesitate to email or call us on 1300 781 968.

Best wishes for a successful 2022!

Kindest regards


  
John and the Team

John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Australia.

UPCOMING EVENTS:
Somerset Education Breakfast Seminar Series 2022Webinar, 2022 dates to be advised (7am-9am).
Australian Conference of Lutheran Education—Conference, 6-8 July 2022, Melbourne, Victoria.