Enrolments and Staffing: A Crucial Relationship

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JANUARY — Time to check enrolments and staff numbers
From 23 years’ experience working with schools, the first thing I do in January as a governor, is check actual enrolments and staff to budget. If they are close, then with prudent management, the budget is likely to be met, otherwise, we must consider the financial effect of variations.

I recently worked with a school that had a major negative enrolment variation at the beginning of the year. By July when I was asked to assist, the extent of financial damage risked the viability of the school. Using the Somerset Education Financial Survey for Schools (FSS), specifically the Staff Estimator tool, adjustments were made and the school saved from financial distress and possible closure.

The Staff Estimator is an initiative that Somerset Education developed in 2020 and has proven to be very effective in assisting schools manage the crucial relationship between enrolments and staffing. As with all FSS tools, the Staff Estimator allows schools to select a sample of similar schools, adjust for various enrolment scenarios, and then estimate the average number of staff, by teaching and non-teaching categories, to match enrolments.

Average staff for a school of 500 enrolments
Over 600 schools have so far completed the 2022 (2021 school-year) FSS. Schools can participate any time until April 2023 when we role the system to start receiving 2022 school-year data.

The 2022 FSS indicates that 66% of a school’s income is invested in staffing. Or from a different perspective, 79% of expenses are attributed to staff and 21% to other costs. So, variations in staff have a material effect on financial outcomes. But the number of staff varies depending on a school’s characteristics, in particular total income. That is why it is so important to select a sample of schools with similar characteristics to your school before making staffing decisions.

The 2022 FSS also indicates that a school of 500 enrolments (150 primary + 350 secondary) would have about 61 staff. Or lower income schools about 57 staff and higher income schools about 69 staff. Please use this as a general guide only because it very much depends on your school’s individual characteristics and strategy.

Participate in the FSS 
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.

Participation starts from $780 plus GST (half price for schools with less than 200 enrolments) so it is an inexpensive, must-have governance tool. The FSS represents about 70% of enrolments in independent schools so the data is reliable.

Schools can participate at any time however we will close 2021 school-year data entry on Friday 14th April 2023 to start collecting 2022 school-year data with the 2022 school-year reports being available from 1 August 2023.

Any questions?
For more information about the FSS or our budgeting and reporting tools, please do not hesitate to contact Cathy or Jessica at info@somerseteducation.net or call 1300 781 968 (from outside Australia +61 7 3263 5300). I am currently on professional renewal leave including spending time with independent schools in the USA, so it may be a little difficult to contact me personally until I return to the office in April 2023.

Kindest regards

John Somerset FCA, Director

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.

Conference: NBOA Annual Meeting — 19-22 Feb 2023, Los Angeles USA.
Webinars: 2023 Breakfast Seminar Series — coming soon.

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.

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