As School Boards focus on ensuring strong corporate governance, many Boards are seeking comfort from management of a sound internal control framework. Generally, some Schools have lagged behind in the use of technology in the traditional back-office functions which has resulted in more manual processes being in place and more thought needed around ensuring effective controls. Often greater use of technology is the answer in providing a robust internal control framework with the upside being to create a sustainable process reducing the use of paper, minimise risk from manual errors, and free staff to use their time and skills for higher order work.
One area I’ve spotlighted and addressed over the years, is the procure-to-pay cycle were educators have often commented on there being “too much admin”. In the “corporate world”, the purchase order is the norm, with system set delegation limits and a paperless workflow. These systems allow for automated matching and swift progression to the payment stage were further system checks such as ABN and bank detail verification take place.
In the School environment, implementing a successful procure to pay process is often dependent on the student information system and the ability to build in the nuances of how each school manages their payment workflow. Often, the automation and streamlining of the workflow is driven by the perceived value versus effort. But with invoice and payment fraud of increasing concern this is an area where risks can and should be minimised.
As well as strengthening controls, automation gives back time to teachers, Finance staff and budget holders, freeing valuable time to utilise their skills for higher value work. The challenge I’ve found is getting the software that can tick all the internal control boxes plus a few more! Of course, integrating this with the accounting software is essential to allow technology to be the enabler. My view is best practice systems are cloud based, allow OCR invoice processing, prevent duplicate invoice processing, validate ABNs, ensure multi-level authorisation is possible, restrict access rights by department, has bank level security, runs audit trail reporting, as well as being able to easily see spend to budget comparisons in real time. These systems are common in for profit organisations, where there is a sharp focus on cost and efficiency, but yet in many schools there is still a gap. By minimising risk and having a strong internal control framework these systems give Board’s a necessary level of assurance around a key component of corporate governance.
Please feel free to reach out to me and chat if this is a gap in your School.
