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  • Ian Buss

Making your MAT banking structure work for you (reduced mandates and less risk)

With all eyes focused on leading schools through the impact of a global pandemic, it's not surprising that on-going reviews of your banking structure to ensure it is optimal for your school(s) have taken a back seat for some. Whether you are considering setting up a MAT, growing a MAT or have an established and stable MAT, the banking model that you started with should probably be reviewed. Here you will find the information needed for you to decide if your banking structure needs revising.


Ultimately there are 3 main banking models a MAT can choose from:

  1. Individual accounts with complete control (operational mandates) at school level.

  2. Individual accounts with operational control at a central point (allowing schools to operate payment mandates if required)

  3. Fully centralised (single account for the whole MAT)

A good number of MATs I see still fall into the first model. Whilst this is understandable (especially where the MAT hasn't got a large central function or has a desire to ensure autonomy at school level) this brings quite significant risks.


As you'll be aware, a MAT is a single legal entity and, as such, needs to have oversight and control across all of its schools.

Giving each school an operational mandate (irrelevant of whether there are central staff also on the mandate) leaves the MAT at risk. The school has the autonomy to remove all central signatories from their mandate and then apply for products and services from the bank that the MAT has not authorised.


At best, this is a risk due to lack of control. It has the potential though, to be an FNTI (financial notice to improve) and lead to prosecution under company law.


The solution, for many, is to look at models 2 or 3.


Model 3 is very often a 'step too far' for some MATs (although we are seeing more adopt this model as central finance functions grow).

Model 2 is a good 'half way house' as you can still allow each school their own bank account and also (if required) each school to manage their own payments. The benefit this model has is that the 'operational mandate' is separated from the 'payment mandate'.


Model 2 can be operated by small or large MATs and has the additional benefit that the paper based bank 'operational mandate' only needs updating very occasionally with the MAT being able to create and manage the 'payment mandate' electronically.


Assuming your bank relationship manager has a strong understanding of the Academy sector, they should be able to support you moving between models and cover all of the impacts of each model.


If you would like any further information or support for your specific circumstances, please let me know.

ianbuss@educationbanking.co.uk

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