FINANCIAL MANAGEMENT STANDARD IN SCHOOLS (FMSiS)

Transcription

1 FINANCIAL MANAGEMENT STANDARD IN SCHOOLS (FMSiS) East Riding of Yorkshire Council Updated by Schools Finance May 2009 ERYC FMSiS Guide 1

2 ERYC FMSiS Guide 2

3 CONTENTS PAGE 1) Introduction 2) Background 3) Frequently Asked Questions 4) G5A- Guidance for schools completing the assessment form 5) G4 - FMSiS Assessment Tool this needs to be completed on line and submitted to the LA. 6) R37 - Example Best Value Statement 7) R15 - Statement of Internal Control 8) R11- A brief guide to the financial competencies of school staff (including matrix) 9) R20 - A brief guide to the financial competencies needed by the school governing body (including matrix) 10) Declaration of Pecuniary/ Business interests-governors (produced by LA) 11) Declaration of Pecuniary/ Business interests-senior members of staff (produced by LA) 12) List of Service level Agreements (produced by LA) 13) Example Matrix for scheme of delegation (produced by LA) 14) Example of roles and responsibilities (produced by LA) 15) Finance Policy Document- suggested items covered (produced by LA) 16) List of Questions for Schools on FMSiS (checklist) (produced by LA) 17) Example of Agenda Schedule (produced by LA) 18) Example of Governing Body minutes (produced by LA) 19) Catering profit and loss account-example (produced by LA) 20) School Development Plan 21) S3.6 Benchmarking and extract from DCSF website 22) Financial information for Governors (produced by LA) Includes FMSiS Toolkit index (at May 2009) If you require any further information or assistance please contact Schools Finance via schools.finance@eastriding.gov.uk There is a copy of this manual on the Schools Intranet. ERYC FMSiS Guide 3

4 FINANCIAL MANAGEMENT STANDARD IN SCHOOLS (FMSiS) INTRODUCTION This manual has been complied by The Schools Finance Team to assist schools in achieving the Standard. It contains a mixture of documents and forms taken directly from the DCSF website and also some that we have produced ourselves. However it is essential that schools do visit the website as the toolkit has many other documents that the school may find useful. A list is provided further on in this manual. Legal Requirement From January 2007, the Standard became a legal requirement for schools, subject to the phasing in of the external assessments. Purpose The purpose of the Standard is to make the best use of resources in the education system, to achieve the best possible outcomes for children. First step- completing the assessment form The first step in the process for schools is to decide who will complete the assessment form (G4). Guidance for schools on completing the assessment is document (G5). This initially can be completed as a hard copy or web based form. Once the assessment has been completed this needs to be taken to governors for approval. Once approval is given, the assessment needs to be submitted to the LA via the web-based form. All the evidence gathered by the school to carry out their assessment is necessary to inform the external assessment process. Second Step Ensure the minutes have sufficient detail contained within them. An example is given in this document and you can also refer to R117 of the toolkit. Keep all the evidence together and cross-reference it to the relevant part of the Standard. DCSF website toolkit address You need to visit this website. This was updated April Start the Process now Before each governing body meeting, think what needs to be discussed, adopted and approved. Schools should produce a timetable for all Governing Body meeting and its sub committees so the dates match deadlines for financial decisions i.e budget approval. It is recommended that agendas are set so that important items are discussed and minuted. Assessments Although the assessments are by March 2010, it does not mean the assessments take place in March. Assessments will be carried out when the school thinks it is ready during their allocated year. As we have limited resources it would be impossible for all schools to be assessed in March, so please do not leave it until last minute, start planning and preparing now. If your school requires a pre-assessment the deadline for these is December 2009 (there won t be any pre-assessments in the Spring term 2010) Support from the Local Authority The Accountancy and Internal Audit teams of the LA are currently working together to provide schools with as much assistance as possible to complete the Standard. ERYC FMSiS Guide 4

5 FINANCIAL MANAGEMENT STANDARD IN SCHOOLS (FMSiS) BACKGROUND The Financial Management Standard & Toolkit (FMS&T) was developed and released to schools as a selfmanagement package in June The Standard itself is a simple statement of what a school that is financially well managed would look like. It provides a clear and consistent benchmark that schools can use to encourage self-improvement. The Standard is intended to help schools in evaluating the quality of their financial management and to aid in training staff to become better financial managers. Effective financial management in schools is essential so that they can make the most of their resources, demonstrating value for money; exercise proper controls over the significant amounts of public money delegated to them; and allocate resources effectively to meet school priorities for development and improvement. A website Contains the FMSiS Toolkit. This is kept up to date and contains a number of resources for schools to use. The website also has the assessment documents on that schools need to complete. What is the FMSiS? The Financial Management Standard itself is a simple statement of what a school that is managed well financially would look like. The Standard covers strategic audit and other activities that schools should already be completing. This can be be analysed under five headings :- Leadership and Governance People Managements Policy and Strategy Partnership and Resources Processes The FMSiS Toolkit The DCSF developed a financial toolkit to assist schools in meeting the Standard. The toolkit shows:- Essential and desirable items Explains the key activities and characteristics that are requires to meet the Standards Links the essential and desirable features of the Standard to good practice summaries, that are in turn linked to detailed supporting resources. Assessment Tool Each element of the Standard shows the evidence that Governors and Managers in schools should expect to see to confirm compliance. Timetable Secondary schools timetable by March Secondary Schools are now on their second phase and are preparing for re-assessments by March 2010 Primary and Special Schools timetable:- 40% by March 2008 another 40% by March Remaining 20% by March 2010 The Local Authority S151 Office (usually Director/Head of Finance) is required to sign a declaration attached to the S52 outturn statement that relevant schools either meet the FMSiS, or are subject to appropriate action to ensure they meet the FMSiS. ERYC FMSiS Guide 5

6 Questions Asked by other Schools in the East Riding of Yorkshire Is the Clerk to Governing body going to set the agenda re; Minute requirements and full Governor Body meetings, or do we have to set the agenda? The full Governing body agenda is initially prepared by the Governors Clerking Section with standard items and reoccurring items that schools have requested. This is sent to the school for additional items to be put on and returned to the Governors Clerking Section to prepare the final version. Should the finance officer attend governor meetings to be actively involved in FMSIS? It is not a necessity that the finance officer attends Governing Body meetings (either full or subcommittees) however if the Head requires the finance officer to pull the evidence together then they will need access to the minutes and reports. Need to know whether finance committee minutes are sufficient or does it have to be full governing body? A lot of the evidence will be obtained from the sub-committee meetings. However where schools have not delegated responsibility to the sub-committee i.e. approval of the budget then the minute from the full governing body is required. Do the Full Governing Body / Committee minutes need copying for each section as evidence? No, the minutes can be kept in a separate file and cross-referenced to on the G4 Assessment form, and should be made available to the assessor on the day. Do photographs need to be provided as evidence? No, a written statement can be used as evidence, and items should be made available for the assessor to see if necessary. ERYC FMSiS Guide 6

7 A Guide to the Financial Summaries to be G5A GUIDANCE FOR SCHOOLS AND EXTERNAL ASSESSORS COMPLETING THE ASSESSMENT FORM April Web: IPF Web: ERYC FMSiS Guide 7

8 Financial Management Standard in Schools G5A - Guidance for Schools and External Assessors - Completing the Assessment Form Introduction It is recommended that Schools and External Assessors read all of this guide, rather than just their specific guidance, to ensure a clear understanding of both perspectives. The Assessment tool allows a school to determine where it stands in comparison with the Financial Management Standard, which in turn helps it to achieve longer term improvements in financial management through targeted action planning. The evidence gathered when the assessment is initially completed by the school is necessary to inform the External Assessment process. There is a single assessment tool that is used by both schools and External Assessors 1. How is it structured? The Assessment tool is split into the following parts PART A Outcome of the Assessment To be completed by the External Assessor. PART B How to use the Assessment Tool provides useful links for users to this and other guidance notes. PARTS C & D Background Details & Supporting information - For schools to complete, requiring the entry of background details and any additional supporting information. PART E The Assessment against the Standard The Assessment part of the tool is split in the same way as the Financial Management Standard, i.e. 5 sections - Leadership and Governance, People Management, Policy and Strategy, Partnership and Resources, and Processes, and covers the 18 areas. The assessment form has one header with six columns, and summary boxes at the bottom of each page. The purpose of these is as follows: The Header - Repeats the Financial Management Standard. Each of the 18 areas of the Standard begins on a new page. Columns: 1) Criteria Reference, i.e. A, B, C etc 2) Assessment Criteria sets out the criteria to meet each area of the Standard 3) Exists To be ticked if the individual criteria are being met 4) Does not exist To be ticked is if the individual criteria are not being met. 5) Evidence Evidence that backs up the judgement (from Column 3 or 4) should be included here. 6) Assessor Comments Comments from the Assessor regarding the position of the school against each of the criteria should be entered here. Summary boxes Indicate whether the school has met or not met the Standard in each of the 18 sections (To be completed by the External Assessor). 1 Prior to the 2007 update, there were separate assessment tools for schools and External Assessors. Following feedback from users of the respective tools a decision was made to create a single Assessment tool. ERYC FMSiS Guide 8

9 A school s completed Assessment form should provide External Assessors with information regarding perceived areas of strength and weakness across the criteria. Whilst Assessors need to compare a schools position against each of the criteria, the completed Assessment form from the school should allow a risk based approach to the assessment itself that will enable more time to be focused on perceived weaker areas. How Schools and External Assessors should complete the Assessment form. For each area of the Financial Management Standard, a number of individual criteria are presented. User(s) should form a view as to whether these are reflected in the particular school, e.g. for section 1.1 of the Standard. The staff and Governors have a shared understanding of their own financial management roles, responsibilities and accountabilities, and those of others A judgement needs to be made as to whether a school meets the following criteria: Assessment Criteria Exists Does not exist A B C D E F There is a written statement of roles and responsibilities and it is clear, with no gaps or overlaps in responsibilities. The allocation of responsibilities to the Finance Committee, Head Teacher and School Business Manager (or equivalent) are reasonable given their roles. The Head Teacher and Governors can demonstrate an understanding of their responsibilities and the scheme of delegation. The Governing Body has approved the scheme of delegation covering the Head Teacher, School Business Manager (or equivalent) and the Finance Committee. Responsibilities are brought to the attention of new Governors. Appropriate information concerning developments within the financial environment in which the School operates is provided to Governors in a timely manner. Guidance regarding the type of evidence that might be used for the individual criteria is available in Document G5C Possible evidence sources for the Assessment Criteria. ERYC has developed a more detailed version of this which is available on the schools intranet. Guidance for schools. The most important aspect of completing the assessment for schools is the evidence column, where the user(s) should enter the evidence behind each judgement. Without documentary evidence there is little point in schools making a judgement as to exists or does not exist. ERYC FMSiS Guide 9

10 Guidance for External Assessors The assessor may need to alter the judgement by the schools, i.e. change Exists to Does not exist. If this is the case the Assessor should make reference to the change in the Comments box. The main purpose of the Comments box for each of the criteria is to allow the Assessor to provide feedback, where appropriate, to the school regarding the evidence submitted and the relative position of the school against the criteria. This will result in a single document that has both the school s and Assessor s evidence and Assessor s comments and decision as to the position against the Standard. Whilst the evidence required is designed to be objective, it is important that the Assessors look beyond the hard evidence, particularly in relation to areas where evidence relates to documents being in place. The Assessor should be looking to determine if what is on paper is being employed in practice. Evidence sources such as the inspection of minutes, interviews and the school s completed Assessment form itself should prove useful in relation to this area. In effect Assessors should look to employ the accounting principle of substance over form. As noted above, the ERYC Schools Finance team has issued a more detailed local version of document 5C. This saves time with schools knowing what type and detail of evidence the Authority requires. Schools can complete the assessment form on line and are now able to attach evidence to the submission. Local Authorities can access this information through the following link The Assessment Process for Schools Deadlines have now been set for all schools to meet the Financial Management Standard see document G1 for the timetable. Before an External Assessment is undertaken schools need to determine how they compare with the Standard in the most efficient manner. Issues schools need to consider are therefore: (i) (ii) (iii) (iv) Which stakeholders should complete the assessment form i.e. the Head Teacher, the School Business Manager (or equivalent), the Finance Committee, all Governors etc. If more than one person or group completed the form - how should the responses be amalgamated, i.e. by one individual or through a group discussion. Should those completing the form use the web based tool or hard copies. Once a consensus position is reached, how is the completed form taken forward to all the Governors for approval. Aside from workload related issues the following factors should also be considered by schools when determining the answers to the issues above: (i) The expertise and knowledge of individuals within the school (ii) Accessibility to the internet (iii) The eventual need for Governors to understand and agree the position of their school against the FMSiS. A possible method for a school could be for the Finance Committee to manage the process, allocating each of the 18 areas to the staff member of Governor with specific responsibility or knowledge the area. The completed assessment form should then be taken forward to a full Governor s meeting where the school s response should be discussed and agreed upon, prior to its submission to the External Assessment body. Where the school is required to submit an assessment form to comply with its Local Authority timetable, it would be appropriate for the Finance Committee (if applicable) to approve the assessment. However, at the next full Governors meeting, all Governors should have the opportunity to review the school s assessment. ERYC FMSiS Guide 10

11 Schools can complete the assessment form on line through the following link If a school is submitting its completed assessment via the FMSiS website it is now able to attach evidence to the submission. Previously schools had to either send hard copies in or send them electronically via . Schools can submit forms to ERYC via the FMSiS website, or as a word document which we will collect when we do the assessment. Submission to the Local Authority In order to inform the External Assessment process each school should complete the assessment form. This version should be agreed by Governors. It should include evidence that demonstrates why judgements (i.e. exists or does not exist) for each area of the criteria has been entered. Meeting the Standard In order to determine if a School has met the Financial Management Standard Assessors need to do the following: Tasks Determine the position of a school against all of the criteria in the Assessment Tool. For each of the 18 areas of the Standard make a judgement as to whether the Standard has been met, using the evidence collated regarding the criteria to inform this judgement. Indicate whether the School has met the FMSiS or not. A school can only be awarded the FMSiS if all 18 areas of the Standard have been met Action Once Completed Complete the Exist or Does not Exist for each of the Criteria Complete the Met or Not Met boxes at the bottom of each page of the Assessment Tool. Complete Section A of the Assessment Form. It is important to note that for each of the 18 areas of the Standard a school does not have to have met all of the criteria in order to have met the individual area of the Standard. There is no prescriptive methodology from the DCSF as to the number of criteria that have to be met. Instead assessors need to use judgement to determine if the evidence shows that the school is meeting the overall Standard e.g. for 1.1, whether The staff and Governors have a shared understanding of their own financial management roles, responsibilities and accountabilities, and those of others. The element of discretion regarding compliance with the criteria is thought to be particularly necessary, given the diversity of the schools to be inspected. This is not to say that there is a variable Standard that applies, but rather that Assessors need to take into account risk and materiality when determining whether changes are needed by a school. The External Assessment Process The External Assessment will either be arranged via the Local Authority or through a third party provider. Once arranged, the school will need to provide a completed assessment, ERYC FMSiS Guide 11

12 along with supporting evidence, ideally clearly bookmarked. When submitting the documentation, the school will need to provide full contact details for all key contacts. The External Assessor will then perform the assessment on the basis of this evidence. Once the assessment has been completed, the Assessor will inform the school and the LA of the outcome. If the school is successful, the Assessor will also inform the DCSF via the following link to the DCSF Website, DCSF Value for Money Unit, entering the School on the School Certificate List and ing back to the DCSF using the following address Successful schools meeting the Standard will then receive a certificate from the Department bearing the FMSiS logo. The Financial Management Standard is awarded to the school for good financial management practices, rather than to any individual, and will require renewal every three years. The renewal date of the Standard will commence from the financial year of the assessment that the school has met the requirements of the Standard. Please note that the certificate and logo will only be awarded to those schools meeting the Standard through External Assessment. If a school narrowly fails to meet the Standard, the school will have a total of 20 working days grace in order to provide the additional evidence required to meet that criterion before a final decision is made, without additional charge. This category is known as a conditional pass 2. This category is at the discretion of the Assessor. In making the decision regarding whether to give it, Assessors need to be mindful as to what is realistic to change within 20 days i.e. if there is a fundamental problem within the school it would be inappropriate. If a school is unable to provide sufficient evidence within the 20 days it will be deemed to have failed to meet the Standard. There will be no right of appeal beyond this process. In most cases an External Assessor will provide a list of recommended actions by the school. It is likely that all schools will receive recommendations, irrespective of whether they have met the Standard or not. Schools not meeting the Standard will need to liaise with the Local Authority to agree an action plan that will result in meeting the Standard at an appropriate future date. Details of the wider External Assessment process, including the role of the S151 officer for local authorities can be found on the DCSF website at tentid=80 Schools will need to be assessed once every three years The renewal date of the Standard is determined by the financial year in which a school has met the requirements of the Standard. However, this is not to say that the Standard should be ignored during the intervening period. In order to ensure that they continue to follow good practice with regard to financial management, schools should be mindful of any updates to the Standard (currently on an annual basis) and any changes to their own arrangements that may have financial management implications. For example, a staff restructure, changes to key posts such as the Head Teacher / School Business Manager, or the expansion of a school. Keeping up to date with changes, both to the Standard and being mindful of internal changes, should mean that schools will meet the Standard during future External Assessments. The Standard can be withdrawn from a school it its financial management arrangements are considered to have fallen below the required standards. There is not a set process for this scenario. Local Authorities will need to establish their own local procedures. 2 This category was previously known as a narrow fail. ERYC FMSiS Guide 12

13 During the first round of assessments schools sometimes found it difficult to provide evidence that demonstrated the assessment criteria were being met. Three of the main factors that contributed to this were: (i) (ii) (iii) It was sometimes difficult to find appropriate evidence sources for criteria within the Assessment tool. Existing processes did not always provide documentary evidence of good financial management (despite it being embedded). Schools that were required to alter existing arrangements in order to meet the criteria did not have the revised arrangements embedded within the school. These factors led to Assessors providing greater latitude with regard to the meeting of the assessment criteria, in order not to over burden schools with providing evidence and/ or delaying the assessment process. The second round of assessments, beginning with secondary schools in 2009/10, should not encounter such problems. In relation to (i), due to ongoing feedback from stakeholders the assessment criteria have been refined and updated each year in order to remove subjective and hard to evidence areas. The ERYC has provided clearer guidance to schools regarding what evidence is required through our local versions of document G5C (schools Intranet). Schools have also been able to refine existing processes to ensure evidence is available thereby reducing issues regarding (ii). For (iii), schools that amended arrangements in order to meet the Standard should have up to 3 years worth of evidence that the new arrangements are embedded within the school. Schools therefore should be aware that for the second round of assessments (beginning with the Secondary schools in 2009/10) Assessors will no longer be providing latitude regarding the evidence presented by schools. In addition, where recommendations were made during the initial assessment, Assessors will be expecting these to have been applied and in good time to provide evidence that the changes made are embedded within the school. Additional Guidance The following have been suggested for consideration, based on feedback from schools and Local Authorities: It may be beneficial to schools to keep an up to date folder that continues to demonstrate how it meets the Financial Management Standard. For the majority of the criteria this should only mean altering references to reflect updated versions of documents, e.g. the SIC. The previous version of the Assessment tool (that was designed specifically for schools) had additional columns for action planning purposes i.e. action needed, by when and by whom. Schools within certain Local Authorities have been making use of these columns in preparation for the External Assessment process. Whilst these columns no longer exist, schools are free to adapt the Assessment tool, in terms of its format in order to suit local needs. Training for schools and External Assessors Since 2005 IPF has delivered training to over 150 local authorities and private sector bodies explaining the background to FMSiS and how to approach the assessment process. The training should provide an element of consistency and is tailored to suit school staff and governors, local authority finance and audit staff and third party Assessors. It is still available, ERYC FMSiS Guide 13

14 and interested parties should contact James Rooney by at or his colleague Richard Whiter by telephone on or External Assessment Training, Review and Quality Assurance In 2006, it was intended, that all of those performing external assessments, either local authority staff or third party, should undergo initial and refresher training on the FMSiS and the external assessment process every 2 years. However, a decision has been made to extend this to three years, pending a review of FMSiS DCSF Approved External Assessors. ERYC FMSiS Guide 14

15 G4 FINANCIAL MANAGEMENT STANDARD IN SCHOOLS ASSESSMENT TOOL 2009/10 April 2009 IPF Web: Web:

16 DCSF Financial Management Standard in Schools Assessment Tool 2009/10 PART A - OUTCOME OF THE ASSESSMENT (to be completed by the Accredited Assessor) Signed and dated by the Accredited Assessor The evidence gathered in support of this external assessment has been reviewed. The School: EITHER: Has met the Financial Management Standard and will require a further review within 3 years of the end of the current financial year. OR: Has not met the Financial Management Standard and will require a further review at an appropriate time. The School has been informed of the result of this assessment and is aware of the recommendations made. All recommendations that have been made (whether the School has met the Standard or not), should be inserted or referred to below. Recommendations (Where a separate action plan has been drafted reference should be made to the document within this box.) ERYC FMSiS Guide 16

17 PART B HOW TO USE THE ASSESSMENT TOOL For guidance on the completion of the Assessment tool, please refer to the relevant document from section G5 of the Toolkit or, if on line, click on the link(s) below to open this document. G5A Guidance for Schools and External Assessors - Completing the Assessment Form G5C Evidence sources for the Assessment Criteria In areas where assistance is required in order to meet the Standard, the following link will direct users to the appropriate supporting information in the Toolkit. The document below is structured as per the assessment tool, with links to the Toolkit documents on the FMSiS website. G3A Guide to achieving the Standard ERYC FMSiS Guide 17

18 PART C BACKGROUND DETAILS (to be completed by the School) Name of the School Address of the School Type of School Number of pupils Head Teacher School Business Manager/Finance Officer Chair of Governors Chair of Finance Committee Financial arrangements (cheque book etc.) Financial system Date of last internal audit report Date of last Ofsted Report Date of previous Financial Management Standard Assessment Who was involved in completing the assessment Dates of the meeting(s) at which the assessment was approved by the Governors. Signed by: Chair of the Governing Body Head Teacher ERYC FMSiS Guide 18

19 PART D SUPPORTING INFORMATION (to be completed by the School) Information regarding a School that is relevant to the assessment can be inserted in the box below. This opportunity to add supporting information is to avoid schools repeating relevant background information within a number of the comments fields. Schools should avoid adding lengthy or non-relevant information. Information added should be cross-referenced to the relevant section & criteria of the Assessment Tool. Supporting Information Reference ERYC FMSiS Guide 19

20 PART E THE ASSESSMENT AGAINST THE STANDARD (to be completed by the School and by the Accredited Assessor) 1.1 A B C D Section 1 Leadership and Governance The staff and Governors have a shared understanding of their own financial management roles, responsibilities and accountabilities, and those of others. Does Assessment Criteria Exists not Evidence Assessor Comments exist There is a written statement of roles and responsibilities and it is clear, with no gaps or overlaps in responsibilities. The allocation of responsibilities to the Finance Committee, Head Teacher and School Business Manager (or equivalent) are reasonable given their roles. The Governing Body has approved the scheme of delegation covering the Head Teacher, School Business Manager (or equivalent) and the Finance Committee. The Head Teacher and Governors can demonstrate an understanding and application of their responsibilities and the scheme of delegation. E Responsibilities are brought to the attention of new Governors. F Appropriate information concerning developments within the financial environment in which the School operates is provided to Governors in a timely manner. The School has met section 1.1 of the FMSiS The School has not met section 1.1 of the FMSiS ERYC FMSiS Guide 20

21 1.2 A B C D E F Section 1 Leadership and Governance School governance arrangements ensure that Governors are able to fulfil their financial management roles, responsibilities and accountabilities properly Does Assessment Criteria Exists not Evidence Assessor Comments exist The Governing Body & Finance Committee agendas, supporting reports & minutes show that appropriate financial matters are considered, such as budgets (original and revised), budget monitoring, financial responsibilities and regulations, contracts and income & charges. The timing of meetings is consistent with the deadlines for important financial decisions (e.g. budget approval). The financial decisions by the Governing Body and Finance Committee, over the past 12 months, are set out clearly and communicated to relevant staff and monitored, where appropriate. The number of Governors attending meetings over the past 12 months is sufficient to allow necessary decisions to be made. Meetings are conducted in an open manner and there has been an adequate level of participation by Governors to ensure the critical friend role is provided. Where evidence is not available to demonstrate that criteria D & E (above) are being met, the external assessor may wish to attend a meeting if they have concerns regarding the effectiveness of meetings. Schools should provide details of forthcoming meetings within the comments field. The School has met section 1.2 of the FMSiS The School has not met section 1.2 of the FMSiS ERYC FMSiS Guide 21

22 1.3 A B C D E F G H Section 1 Leadership and Governance The Head Teacher and School Business Manager (if in post) operate with financial integrity setting an example to Governors and staff alike Does Assessment Criteria Exists not Evidence Assessor Comments exist The current budget is based on the best and most complete information available (e.g. actual and projected pupil numbers and notifications of funding levels). The current budget is either balanced, aimed at recovering a previous deficit in the agreed manner, or intended to achieve only a prudent planned level of unspent balances. The School s financial performance has been substantially in line with budget and there is evidence of regular and active monitoring by Governors and the Head Teacher. There have been no subsequent significant changes to the budget that should have been included in the original budget. There are no serious adverse issues raised in internal audit or Ofsted reports on financial management matters that remain outstanding. The person responsible for the day to day financial management of the School should be a member of the Senior Management Team or equivalent, as appropriate. There is an effective process in place to communicate decisions made by the Senior Management Team or equivalent, which have financial management implications, to relevant Governors and staff. The Head Teacher and School Business Manager adhere to the financial rules of the school and Local Authority and encourage others to do so. The School has met section 1.3 of the FMSiS The School has not met section 1.3 of the FMSiS ERYC FMSiS Guide 22

23 1.4 A B C D E Section 1 Leadership and Governance The Governing Body has considered and signed a Statement of Internal Control (SIC) confirming that resources have been properly managed Does Assessment Criteria Exists not Evidence Assessor Comments exist There is a process in place to ensure relevant issues are considered by stakeholders prior to the preparation of the SIC. The School has a signed SIC that was discussed and approved by the Governing Body in the past 12 months. The wording of the SIC is either as per the pro forma within the Toolkit or has changes to the text that can be justified. Where the School has identified issues within the SIC, these are considered in the other relevant areas of the assessment against the Standard. Any significant issues highlighted by internal audit or Ofsted, that are relevant, have been included in the School s SIC and, where appropriate elsewhere, within this assessment, F Any issues included in the SIC have been reported to the Local Authority s S151 officer. The School has met section 1.4 of the FMSiS The School has not met section 1.4 of the FMSiS ERYC FMSiS Guide 23

24 Section 1 Leadership and Governance 1.5 The School has effective governance arrangements covering issues which include conflicts of interest and whistle blowing Assessment Criteria Exists Does not exist Evidence Assessor Comments A There is an up to date register of business interests that is compliant with best practice guidance. B There is a process to ensure regular review and updating of the register. C It is evident from the minutes of meetings that there is an opportunity to declare interests. D There is no subsequent evidence that interests that should have been disclosed were not declared at the right time. E F G The School has details of the Local Authority whistle blowing policy & staff are aware of it. There are effective clerking arrangements for the Governing Body and Finance Committee. (Where the evidence of effectiveness is not clear, a view on the arrangements in place should be obtained from the LA Co-ordinator of Governor Services). Where evidence is not available to demonstrate that criterion F (above) is being met, the External Assessor may wish to attend a meeting to observe the effectiveness of the clerking arrangements. The School has met section 1.5 of the FMSiS The School has not met section 1.5 of the FMSiS ERYC FMSiS Guide 24

25 2.1 A B C Section 2 People Management The Governing Body includes individuals who are able to: (i) be an effective critical friend on financial management issues, (ii) provide strategic leadership on financial management issues & (iii) ensure financial management accountability Does Assessment Criteria Exists not Evidence Assessor Comments exist Relevant Governors are aware of the financial management competencies as recommended by the Standard and there is an up to date completed selfevaluation of Governing Body competencies. The completed self-evaluation competency matrices indicate that the Finance Committee or equivalent has the full range of Governor financial management competencies. The School is not over-reliant on any one individual in meeting the competency requirements. D E Governors induction arrangements provide appropriate details regarding financial management activity within the School. Governors have been given the opportunity to attend financial management training courses over the past 12 months, particularly to address any gaps in their competencies. The School has met section 2.1 of the FMSiS The School has not met section 2.1 of the FMSiS ERYC FMSiS Guide 25

26 2.2 A B C D E F G H Section 2 People Management The staff with financial management responsibilities include individuals who are organised in a way that enables them to: (i) provide a strategic view, (ii) ensure accountability requirements & (iii) facilitate the effective operation of financial processes Does Assessment Criteria Exists not Evidence Assessor Comments exist The staffing structure of the School has been reviewed in the last two years and the conclusions reached on the number of posts and structure are reasonable, given the size and nature of the School. The recommendations of the most recent review have either already been adopted or there is an appropriate action plan in place. There is an up to date completed self-evaluation of staff financial management competencies. The completed self-evaluation competency matrices indicate that the school has the full range of staff financial management competencies. Reasonable efforts have been made to ensure the School is not over-reliant on any one individual member of staff. Key financial management responsibilities are included in the person specifications for posts, where appropriate, and current recruitment procedures test these competencies. The process for determining Performance Management targets for staff ensures targets include financial management issues, where appropriate. Relevant staff have been given the opportunity to attend financial management training courses over the past 12 months, particularly to address any gaps in their competencies. The School has met section 2.2 of the FMSiS The School has not met section 2.2 of the FMSiS ERYC FMSiS Guide 26

27 3.1 A B C D E F G Section 3 Policy & Strategy The School has an annual budget that ( i) is realistic and affordable in relation to available resources and cash flows, (ii) is approved by Governors on a timely basis, (iii) reflects the School development plan, and (iv) is consistent with longer term financial plans (including recovery of deficits or saving up for future developments) Does Assessment Criteria Exists not Evidence Assessor Comments exist The School improvement / development plan has sufficient scope and depth of the financial implications and it is reflected in the school s three year budget plans. The original budget is consistent with the longer term financial plans of the school, which include a threeyear budget forecast. The three-year budget forecast of the school takes into account future years funding allocations that are made available by the DCSF. The Head Teacher s/school Business Manager s report to Governors on the original budget: i) explain the basis for the planned level of unspent balances (or recovery of deficits), and is in line with School/Local Authority policy ii) explains the basis of income and expenditure estimates iii) and the assumptions made are reasonable The Governing Body agreed the budgeted level of balances or licensed deficit recovery plan. The Governing Body approved, on a timely basis, the budget and any subsequent revisions to it. Profiled budgets are in place to assist with monitoring arrangements and cash flow (where necessary). The School has met section 3.1 of the FMSiS The School has not met section 3.1 of the FMSiS ERYC FMSiS Guide 27

28 3.2 A Section 3 Policy & Strategy The Governors and the staff have compared the School's financial performance with that of similar schools, examined reasons for differences and taken action where necessary Does Assessment Criteria Exists not Evidence Assessor Comments exist Where the School has not used the DCSF benchmarking website (DCSF Benchmarking website), there are valid reasons, which have been reported to the Governing Body along with a suitable alternative. B The comparator schools are fair and reasonable C Reasonable conclusions and recommendations have been drawn from the comparisons made and these have been made known to the Governing Body. D Where appropriate, an action plan has been put in place with progress against it monitored. The School has met section 3.2 of the FMSiS The School has not met section 3.2 of the FMSiS ERYC FMSiS Guide 28

29 Section 4 Partnerships & Resources 4.1 The Local Authority and the School have agreed their respective financial management roles and responsibilities Assessment Criteria Exists Does not exist Evidence Assessor Comments A The Scheme for Financing Schools is available within the School. B C The Scheme for Financing Schools is covered in Governor induction training. The Local Authority has no significant concerns regarding the School s stakeholders understanding of their respective financial management roles and responsibilities. The School has met section 4.1 of the FMSiS The School has not met section 4.1 of the FMSiS ERYC FMSiS Guide 29

30 4.2 A Section 4 Partnerships & Resources The School has procurement arrangements in place to secure value for money from all suppliers, including the LA and outside contractors Does Assessment Criteria Exists not Evidence Assessor Comments exist The School s financial regulations and procedures require quotations and tenders at appropriate levels. B C D E In considering quotations the School takes into account both the quantitative and qualitative merits of bids. The School can demonstrate that it has processes in place to deliver Value for Money when procuring goods and services (e.g. through the application of best value principles). The Governing Body or delegated Committee discuss the options available to the School prior to the approval of continuation/cessation of contracts, including Local Authority sourced services. The Local Authority has received a signed Best Value statement from the school. F The School recognises that contracting is a complex area and has arrangements in place to seek expert advice when necessary. The School has met section 4.2 of the FMSiS The School has not met section 4.2 of the FMSiS ERYC FMSiS Guide 30

31 5.1 A B C Section 5 Processes The financial management information provided to Governors and staff meets their needs by being relevant, accurate, timely & user friendly Does Assessment Criteria Exists not Evidence Assessor Comments exist The reports provided to staff for each level of financial management contain information that is: i) relevant to their financial management; responsibilities (i.e. covering budgets that they are responsible for); ii) clearly presented so that information is easy to understand; iii) produced regularly and promptly; and iv) understood by recipients. The monitoring reports provided to Governors contain information that is: i) relevant to their role; ii) clearly presented so that information is easy to understand; iii) produced regularly and promptly; and iv) understood by recipients. The information contained within the monitoring reports is accurately derived from the underlying financial records. D Earmarked and similar funds are clearly stated. E Earmarked funding has been dealt with in accordance with the relevant terms and conditions. The School has met section 5.1 of the FMSiS The School has not met section 5.1 of the FMSiS ERYC FMSiS Guide 31

32 Section 5 Processes 5.2 The School provides the LA with accurate and up to date information in accordance with the LA s needs A Assessment Criteria The School is aware of what information is required by the Local Authority and the deadlines for its submission. Exists Does not exist Evidence Assessor Comments B C D The School can demonstrate it has complied with Local Authority deadlines. The information provided by the School to the Local Authority is consistent with underlying financial records, and information provided to / approved by the Governing Body. The Local Authority has no significant concerns regarding the quality and timeliness of the information provided by the School. The School has met section 5.2 of the FMSiS The School has not met section 5.2 of the FMSiS ERYC FMSiS Guide 32

33 Section 5 Processes 5.3 The School complies with Consistent Financial Reporting requirements on a timely basis Assessment Criteria Exists Does not exist Evidence Assessor Comments A The School has met the deadlines required for Consistent Financial Reporting returns. B The School s Consistent Financial Reporting return can be reconciled with its underlying financial records, C The School has used categories consistent with the CFR guidance when completing its CFR return D The School s balances agree with the published data in the section 52 Part B Outturn Statement. The School has met section 5.3 of the FMSiS The School has not met section 5.3 of the FMSiS ERYC FMSiS Guide 33

34 Section 5 Processes 5.4 The School has up to date, documented and approved financial regulations that are implemented consistently. A B Assessment Criteria The School s Financial Regulations are either the model set provided by the Local Authority or are based on and consistent with the Local Authority s requirements (set out in the Scheme for Financing Schools or other specific guidance). The School s Financial Regulations have been formally adopted or approved. Exists Does not exist Evidence Assessor Comments C The School s Financial Regulations have been reviewed in the last two years. D E The School s Financial Regulations match the structure and requirements of the School (e.g. if the School has appointed a School Business Manager, that the post is reflected in the regulations and the responsibilities assigned to the post are appropriate). The School s Financial Regulations are available to all staff and Governors who need to use them (e.g. copies have been given to staff with financial responsibilities or are available on the School intranet). The School has met section 5.4 of the FMSiS The School has not met section 5.4 of the FMSiS ERYC FMSiS Guide 34

35 5.5 A Section 5 Processes The School has up-to-date, documented and approved detailed financial procedures that are tailored to the School s needs and implemented consistently in practice. Does Assessment Criteria Exists not Evidence Assessor Comments exist The School s local financial procedures have been approved by the Governing Body. B The School s financial procedures are appropriate for the systems in use at the School. C The School s financial procedures are available to all the relevant staff. D The School s financial procedures are comprehensive and relevant. E The School s financial procedures are regularly reviewed and are updated as necessary. The School has met section 5.5 of the FMSiS The School has not met section 5.5 of the FMSiS ERYC FMSiS Guide 35

36 Section 5 Processes 5.6 The School maintains proper accounting records throughout the year Does Assessment Criteria Exists not exist The School s accounting records, whether manual or computerised, are capable of providing up to date A information on the School s financial position (i.e. position against budget and cash and bank balances as appropriate). There is an appropriate process in the School to B ensure accounting records are kept up to date and there is no evidence to suggest any significant deviations from this process. The School s bank reconciliation is: C (i) prepared promptly & regularly, (ii) accurate (with all issues resolved) & (iii) independently reviewed (with written confirmation of that review). D E F G H The School s control accounts (where used) are cleared on a prompt and regular basis. The School has no other similar holding or below-theline accounts that could distort financial performance. Primary accounting documents show that they have all been properly authorised, processed correctly and have not been amended. The School s records are stored securely in accordance with the Local Authority s requirements. For cheque-book schools: the bank balance has not been overdrawn (or not exceeded the agreed overdraft limit) in the last year, cash-flow is monitored and variances to the plan are investigated, the Local Authority has no significant concerns regarding the School s competence in dealing with VAT returns and other records. Evidence Assessor Comments ERYC FMSiS Guide 36