Home' Independence : Independence Vol 36 No 2 Oct 2011 Contents 78 Independence Vol 36 No 2 Oct 11
CIRCLE is The Centre for Innovation,
Research, Creativity and Leadership in
Education, an executive agency that helps
schools improve their performance.
We customise our services into four main
product streams: Consult + Solve, Track +
Perform, Train + Develop and Research +
Publish. These sub-brands target different
key areas in order to help schools and
organisations develop strategies to
improve achievement, relationships with
the community, communication and
reputation. CIRCLE is passionate about
enabling our customers to achieve cultures
of excellence in leadership and learning.
The unique appeal of CIRCLE lies in
our expertise, passion, experience and
desire to see schools and organisations
relate, connect and achieve. We work
to develop tailored solutions, we offer
personalised service and we highly value
meaningful and effective relationships.
We engage with communities, we focus
on building positive cultures and we strive
to empower and equip school leaders in
order to promote the best possible results.
CIRCLE also provides reviews and plans
for schools, offering research-driven
results presented effectively and efficiently.
Ultimately, CIRCLE is an ally for leaders
in education, working hard to transform
and guide schools to successfully see
We pride ourselves in catering to the
needs of our customers, because we
understand the very different and unique
needs that each school deals with. The
numerous benefits of working with
CIRCLE stem from the fact that we
strongly value partnerships, team-work
and close working relationships. CIRCLE
functions as an executive agency that
values and celebrates sound results and
transformational improvement in schools.
For further information about CIRCLE,
its services and publications, visit
John Somerset, founder of Somerset
Education, reveals the keys to financial
sustainability in independent schools.
Financial viability and sustainability are
on everyone’s mind as the global financial
crisis continues. All schools that I talk
to are experiencing increased amounts
of outstanding fees. Questions include:
What are the strategies to keep our
school financially sustainable? How can
we restrain fee increases when costs are
increasing at seven per cent per annum?
I believe the secret to financial viability
is simple: solvency (ability to pay our
bills when due); sustainability (ability
to replace assets and service debt); and
profitability (annual operating surplus).
Profitability is the key driver of solvency
Based on the ASBA/Somerset Non-
Government Schools Financial
Performance Survey that I have conducted
each year for the past 17 years, the
average independent school in Australia
produces a cash surplus of about 11 cents
for every dollar of gross income. For $10
million in fees, grants and other income, a
reasonable operating surplus is therefore
$1.1 million, which is then used to service
debt and replace assets. For at least the
past 10 years schools have, on average,
spent more than 100 per cent of their
operating surplus, thus increasing debt.
On average, a school of 500 students has
$4 million of debt. The higher the debt,
the higher the required profitability.
It is up to the school board to determine
their appetite for debt and commensurate
profitability. Using our survey report,
participants compare their performance
in income, expenditure and staffing ratios
to identify strengths and weaknesses,
and prepare a performance improvement
strategy. Based on a group of schools
that I have worked with over the past
three years to implement ratio analysis
in their reporting processes, the average
improvement in financial viability was 55
Our new SKI ReportTM allows schools to
learn from the past and look forward to
2016, helping to prevent future financial
distress – which is much preferred to
John Somerset is a Chartered Accountant.
He has extensive knowledge of the
independent schools sector and is
currently President of Independent
For further information about Somerset
Education’s services, visit www.
To contact John Somerset email
telephone 1300 781 968.
Improve school performance with cultures of excellence
Strategies for school financial sustainability
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