The National Audit Office has identified key management practices that it recommends to those further education colleges in poor financial health.In its latest report, NAO says that financial management in FE colleges is improving, but that 13 per cent of colleges are still in a poor state.
Much of the poor finances of colleges is historical, and stems from the debts many took on when made self-managing in the early 90’s.
The government sees the colleges as crucial to its overall strategy to combat social exclusion, unemployment and skill shortages.
The checklist for running sound financial management includes: production of detailed management accounts quickly, consistent costing policies and processes, accurate forecasting of likely funding, and exploration of benchmarking so that colleges can compare their performance against each other.
The Further Education Funding Council has said that it will be actively promoting groups of colleges as ‘benchmarking families’ in the future.