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 here: Zoom
*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.
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 email@example.com 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 firstname.lastname@example.org or mobile 0417 618 899.
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 NSW—Webinar, How to use the school budget to influence people, Tuesday 04 October.
CEBA 2022 Conference—Trade stand, Melbourne & Olympic Parks precinct, Melbourne, Victoria, 05-07 October,.
Somerset Education Breakfast Seminar Series—Webinar, Chart a course for success using the FSS, Thursday 13 October (7am-8am).
CSA National Business Conference—Workshop 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.
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