Rolling Cashflow Forecasts: A vital indicator of financial health in academy trusts

7th Nov 2025

In the realm of academy trust governance, financial oversight is not just about balancing budgets—it’s about ensuring long-term sustainability. One of the most critical tools in this effort is the rolling 12-month cashflow forecast, a requirement that is often overlooked but essential for demonstrating a trust’s ability to remain a going concern.

Cashflow Forecasting: A Common Oversight

In many academy trusts, cashflow forecasts included in management accounts often extend only to the end of the academic or financial year. While this may align with internal reporting cycles or budgeting frameworks, it falls short of best practice and regulatory expectations.

One contributing factor is the limitation of some financial software platforms, which may not support rolling forecasts beyond a fixed period. As a result, trusts may unintentionally omit the forward-looking view needed to assess financial sustainability over a full 12-month horizon.

This practice can pose challenges when demonstrating the trust’s ability to operate as a going concern—an assessment that external auditors will rigorously test. Without a rolling 12-month forecast, trustees may lack the visibility needed to anticipate future cash pressures or plan strategically across financial years.

DfE Guidance: A Clear Expectation

The DfE’s Academy Trust Management Accounting Good Practice Guide reinforces this requirement. It states that monthly management accounts must include rolling cashflow forecasts that span 12 months and may cross financial years. These forecasts should incorporate reasonable estimates of receipts and payments, especially toward the end of the forecast period.

You can access the full guide at https://www.gov.uk/government/publications/academy-trust-management-accounting/academy-trust-management-accounting-good-practice-guide.

Why It Matters

A rolling cashflow forecast is more than a spreadsheet—it’s a strategic tool. It enables trustees to:

Anticipate financial pressures before they become critical.
Plan for investment or cost-saving measures with confidence.
Demonstrate financial stewardship to regulators, auditors, and stakeholders.

Without it, decision making is reactive rather than proactive, and the Trust’s ability to navigate uncertainty is compromised.

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