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 [email protected] 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

37 The School has met section 5.6 of the FMSiS The School has not met section 5.6 of the FMSiS ERYC FMSiS Guide 37

38 5.7 Section 5 Processes The Governors and staff have evidence that there is effective control over: financial management system income received payroll purchasing the banking system petty cash holdings and payments taxation system voluntary funds the School s assets Does Assessment Criteria Exists not exist Evidence Assessor Comments A The School has either been subject to a review by internal audit or has undertaken a controls selfassessment during the past 12 months. B The evidence supporting any recent controls selfassessments undertaken by the School shows that the process was carried out correctly and the answers provided were reasonable. C The School has implemented a timely action plan to implement any recommendations made by its auditors. D The School has monitored progress of the action plan and there is no evidence to suggest unnecessary delays in its implementation. E The School has taken appropriate steps to ensure effective financial control has been maintained following any significant changes since the last audit or self-assessment, e.g. to staffing arrangements or control systems. The School has met section 5.7 of the FMSiS The School has not met section 5.7 of the FMSiS ERYC FMSiS Guide 38

39 R37 EXAMPLE BEST VALUE STATEMENT April 2009 IPF Web: Web: ERYC FMSiS Guide 39

40 . SCHOOL BEST VALUE STATEMENT 200X Introduction The Governing Body is accountable for the way in which the school s resources are allocated to meet the objectives set out in the school's development plans. Governors need to secure the best possible outcome for pupils, in the most efficient and effective way, at a reasonable cost. This will lead to continuous improvement in the school's achievements and services What Is Best Value? Governors will apply the four principles of best value: Challenge - Is the school s performance high enough? Why and how is a service provided? Do we still need it? Can it be delivered differently? What do parents want? Compare - How does the school s pupil performance and financial performance compare with all schools? How does it compare with LA schools? How does it compare with similar schools? Consult - How does the school seek the views of stakeholders about the services the school provides? Compete - How does the school secure efficient and effective services? Are services of appropriate quality, economic? The Governors Approach The Governors and school managers will apply the principles of best value when making decisions about: the allocation of resources to best promote the aims and values of the school. the targeting of resources to best improve standards and the quality of provision. the use of resources to best support the various educational needs of all pupils. Governors, and the school managers, will: make comparisons with other/similar schools using data provided by the LA and the Government, e.g. RAISE, quality of teaching & learning, levels of expenditure challenge proposals, examining them for effectiveness, efficiency, and cost, e.g. setting of annual pupil achievement targets, expansion to 3-form entry, require suppliers to compete on grounds of cost, and quality/suitability of services/products/backup, e.g. provision of computer suite, redecoration consult individuals and organisations on quality/suitability of service we provide to parents and pupils, and services we receive from providers, e.g. Sex and Relationships Education, pupil reports, assigned inspector, Ofsted, maintenance consultant, Borough Energy Group. This will apply in particular to: staffing use of premises use of resources quality of teaching quality of learning purchasing pupils welfare ERYC FMSiS Guide 40

41 health and safety. Governors and school managers: will not waste time and resources on investigating minor areas where few improvements can be achieved will not waste time and resources to make minor savings in costs will not waste time and resources by seeking tenders for minor supplies and services. The pursuit of minor improvements or savings is not cost effective if the administration involves substantial time or costs. Time wasted on minor improvements or savings can also distract management from more important or valuable areas. Staffing Governors and school managers will deploy staff to provide best value in terms of quality of teaching, quality of learning, adult-pupil ratio, and curriculum management. Use of Premises Governors and school managers will consider the allocation and use of teaching areas, support areas and communal areas, to provide the best environment for teaching & learning, for support services, and for communal access to central resources, e.g. the library. Use of Resources Governors and school managers will deploy equipment, materials and services to provide pupils and staff with resources which support quality of teaching and quality of learning. Teaching Governors and school managers will review the quality of curriculum provision and quality of teaching, to provide parents and pupils with: a curriculum which meets the requirements of the National Curriculum, National Literacy Strategy Primary National Strategy, Key Stage 3 Strategy, the LA Agreed RE Syllabus, and the needs of pupils teaching which builds on previous learning and has high expectations of children s achievement. Learning Governors and school managers will review the quality of children s learning, by cohort, class and group, to provide teaching which enables children to achieve nationally expected progress, e.g. setting of annual pupil achievement targets, 2 national curriculum levels between Years 3 and 6. Purchasing Governors and school managers will develop procedures for assessing need, and obtaining goods and services which provide best value in terms of suitability, efficiency, time, and cost. Measures already in place include: Purchases between 2,000 and 30,000 3 written quotes are obtained Over 30,000 Invitation to Tender procedures for accepting best value quotes, which are not necessarily the cheapest (e.g. suitability for purpose and quality of workmanship) Pupils Welfare ERYC FMSiS Guide 41

42 Governors and school managers will review the quality of the school environment and the school ethos, in order to provide a supportive environment conducive to learning and recreation. Health & Safety Governors and school managers will review the quality of the school environment and equipment, carrying out risk assessments where appropriate, in order to provide a safe working environment for pupils, staff and visitors. Monitoring These areas will be monitored for best value by: 1. In-house monitoring by the Head Teacher and curriculum managers, e.g. classroom practice, work sampling 2. Termly target setting meetings between the Head Teacher and curriculum managers 3. Annual Performance Management 4. Annual Budget Planning 5. Head Teacher s monthly financial review 6. Termly visits by the LA Assigned Inspector 7. Monthly visits by the LA Finance Adviser 8. Analysis of school pupil performance data, e.g. SATs results, standardised test results, 11+ results against all schools, LA schools, similar schools 9. Analysis of LA pupil performance data 10. Analysis of LA financial data, e.g. FMS reports, against bench mark data for all schools, LA schools, similar schools 11. Analysis of DCSF pupil performance data, e.g. RAISE 12. Ofsted Inspection reports 13. Governors termly classroom observations 14. Governors termly committee meetings 15. Governors full termly meetings 16. Governors Annual Finance Review 17. Governors Annual SATs Target Setting Meeting 18. Governors Annual Development Plan Meeting 19. Governors Annual Report to Parents In the next three years the Governing Body will: hold an annual performance plan meeting to set targets for improving pupil achievement. hold an annual development plan meeting. discuss Best Value at each Autumn Term meeting of the Finance Committee. review their Best Value statement at each Spring Term meeting. consider best value when arranging internal and external redecoration contracts. employ a maintenance consultant to advise on maintenance of the schools buildings. obtain tenders and a consultant s advice on the installation of an IT suite, and any large scale refurbishment of the premises. obtain assessment management surveys. Confirmation the Best Value Statement in respect of... School has been discussed by the Governing Body Signed by: ERYC FMSiS Guide 42

43 Chair of Governors:.... Date:.... Head Teacher: Date:.... Agreed at the Governing Body Meeting on:... Minute Reference:... This example policy is based on material provided by Woodcote Infant and Junior School and was made available by NCSL. It was provided by NCSL for illustrative purposes only and may not be endorsed by them. It provides a framework to review, evaluate or write a school s own policy. ERYC FMSiS Guide 43

44 ERYC FMSiS Guide 44

45 GUIDE TO THE STATEMENT OF INTERNAL CONTROL R15 - GUIDE TO THE STATEMENT OF INTERNALCONTROL April 2009 IPF Web: [email protected] Web: [email protected] ERYC FMSiS Guide 45

46 IMPORTANT The statement can be signed at any point during the year. Schools should update the SIC annually. Therefore all schools should have, at any given point in time, a Statement of Internal Control that has been signed within the previous 12 calendar months. 1. Introduction 1.1 Statements of Internal Control (SIC) have been introduced in large sections of both the public and private sectors as part of a move to more effective corporate governance arrangements. Typically, the SIC forms part of a set of documents relating to a financial year's activities that also includes an annual report, financial statements and an external auditor s report. In essence, the annual report and financial statements describe the operational and financial outcomes for a particular financial year. The statement of internal control acknowledges the entity s responsibilities for the system of internal control from which those operational and financial outcomes are derived. It is also used to highlight any known problems with that system so that the reader can take these into account when considering the outcomes. The external auditor's report provides further comfort by confirming whether the financial statements present a true and fair view (or present fairly) those financial outcomes. 1.2 Schools are responsible for significant amounts of public expenditure, form part of local authorities who are required to prepare statements of internal control and receive Dedicated Schools Grant from the DCSF who are also required to prepare statements of internal control. Thus, as part of the chain of accountability for their public funds it is logical that schools should also be required to prepare statements of internal control. As most schools do not have their own formal accounts and external audit reports, the statement of internal control in this context will refer to the financial performance set out in the school s Consistent Financial Reporting (CFR) return and the one page Financial Summary derived from it. 1.3 The statement set out in this guide is similar in concept to those used in both local authorities and in central government but has been simplified for use in schools to reflect the comparatively smaller scale of financial activity and consequently the financial expertise available. The SIC is primarily a factual statement setting out the processes that are in place to ensure effective financial management of the school and its resources. Discussion of the draft SIC by the governing body, and its ultimate signature by the head teacher and key governors, demonstrates that they acknowledge responsibility for financial management of the school and take that responsibility seriously. 1.4 The SIC requires a view to be taken on whether the signatories are satisfied that the internal control systems in operation at the school during the year were adequate and effective. While this may seem onerous, it should not require much additional work at all as the basis upon which it is signed is explained and the assurance to be given is reasonable and not absolute. The first is dealt with by describing processes and reviews which should be part of normal school operations and represent the good practice required by the Financial Management Standard in Schools (FMSiS). The second recognises that statements of this type can never give absolute assurance as internal control systems, no matter how sophisticated, can never prevent or detect all errors or irregularities. For example, if key staff were really determined to collude improperly and engage in fraudulent practice, they could get around most internal control systems. ERYC FMSiS Guide 46

47 2 Transparency 2.1 Taken in conjunction with the CFR Return, the SIC will provide the s151 Officer at the local authority with assurance that the funds managed by a school have been properly controlled and accounted for. 2.2 Furthermore, making this statement available to parents who request it serves to show that the school s financial management is open and transparent. 3 The Format of the Statement 3.1 The SIC is designed to be brief, but informative. The specimen statement is shown at Appendix 1 and contains five paragraphs: Paragraph 1 explains the governing body s responsibilities. To achieve the FMSiS, each school will be expected to use the wording given in the specimen statement (Appendix 1). Paragraph 2 explains the limitations of control systems. This wording is important because it aims to make it clear to the reader that absolute assurance cannot be given and is not expected. To achieve the FMSiS, each school will be expected to use the wording given in the specimen statement (Appendix 1). Paragraph 3 explains how the governing body has satisfied itself that controls are adequate before its representative agrees to sign the statement. To achieve the FMSiS, each school will be expected to use the wording given in the specimen statement (Appendix 1) as a minimum. It may be that the governing body has carried out additional steps and may wish to add those to this paragraph of the SIC. Paragraph 4 states that the governing body is satisfied that internal controls at the school were adequate during the year, assuming this to be the case. If the governors are not satisfied about the adequacy of key internal controls, they should list briefly any serious/high priority control weaknesses Paragraph 5 is where planned action to improve the control system is disclosed. Such disclosure is normally only needed if governors have expressed in paragraph 4, concern about the adequacy of any of the controls 3.2 The specimen statement is available as a Word document to be tailored for school use. Click here to access the Word document. ERYC FMSiS Guide 47

48 4 Deciding Whether to Disclose a Weakness at Paragraph Four 4.1 When deciding whether or not to disclose that a particular control is inadequate, governors should take into account all the relevant information available to them, and also consider: how likely is the risk, i.e. to what extent the inadequacy of the control(s) puts the school at risk the likely impact of the risk on the school if it occurred, for example on the school s financial position, ability to function, reputation etc. the cost of any action needed to reduce the level of risk posed whether this cost is justified and proportionate given the risk perceived 4.2 If you need more information about risk management, summary 3.3 of the DCSF tool kit to support financial management in schools may be of interest to you as it is on risk management. 4.3 Figure 1 illustrates the dynamic relationship between the likelihood of a risk occurring and its potential impact. Internal auditors commonly use such an approach to assess how critical their audit findings are. However, some caution is needed as their terminology varies (some using only three categories of priority or risk, i.e. high, medium and low, while others may use four or five categories), hence the period within which corrective action is to be taken has also been included in the figure below to help ensure consistency. Head teachers and school governors may, therefore, wish to rank the control weaknesses they or an internal auditor have identified, in terms of gravity of the risk they pose to the school. 4.4 A note of caution is necessary. A matrix such as figure 1 cannot substitute for the use of informed judgement, by experienced professionals, about the importance of a particular control weakness. Therefore, if the school is uncertain about the gravity of a particular weakness in the control system, it should first involve the relevant staff at the school in a discussion about the weakness and if uncertainty remains it should contact the internal audit section at its Local Authority for advice. ERYC FMSiS Guide 48

49 Likelihood of risk arising from the weakness Likely Degree of Impact Minimal Moderate Significant Low/Medium Priority 3 High Priority Very High Priority Address within three to six months. Address urgently 2 Address immediately Do not disclose in SIC Normally disclose in SIC Always disclose in SIC Possible Very Low Priority Medium Priority High Priority Address urgently 4 Address within nine months. Do not disclose in SIC Address within three months. Only disclose in SIC if it is thought particularly useful to do so Address urgently 5 Normally disclose in SIC Unlikely Not a Priority Low Priority Medium Priority Address within six months. Address within three months. Ignore Do not disclose in SIC Seldom disclose in SIC Figure 1: An illustration of the qualitative assessment of the priority of control weaknesses 3 Whether it is a medium or low depends on specific details such as the volume of activity affected by the weakness. High volume areas would probably be assessed as medium because of the accumulation effect of many small errors. Low volume areas would probably be considered a low priority. 4 Urgent implies action within weeks rather than months. Please note that all the time periods indicated in figure 1 are purely illustrative and aim to show the relative urgency of different weaknesses. Actual implementation plans will need to be locally determined taking account of all relevant known factors. 5 Urgent implies action within weeks rather than months. Please note that all the time periods indicated in figure 1 are purely illustrative and aim to show the relative urgency of different weaknesses. Actual implementation plans will need to be locally determined taking account of all relevant known factors. ERYC FMSiS Guide 49

50 5 Deciding Whether to Sign the Statement of Internal Control 5.1 The governing body should only sign the SIC when it feels it can do so with confidence, having studied all the available evidence. Governors should be able to derive much of the evidence they need from: meeting, or working towards, the Financial Management Standard in Schools (FMSiS) which incorporates most of the following items; their own monitoring of financial management and regular scrutiny of financial reports; their regular meetings with the head teacher and other staff; the most recent report on the school s finances by the Local Authority appointed internal auditor; and annual self evaluation of the internal control system (for the significant systems not commented on recently by internal audit). 5.2 In addition, members of the governing body should have used the Pre-certification Guidance Checklist for Governors attached at Appendix 2 before they authorise their representative to sign the SIC. If the governors answer Yes to all questions they should be able to sign the statement without the need to tailor paragraph 4 to accommodate their concerns about any of the controls, or to add a fifth paragraph to say how these might be addressed. If they answer No to any question, they should consider the implications of such a response, and these are explained in the checklist. 5.3 The specimen statement is available as a Word document to be tailored for school use. Click here to access the Word document. 6 Possible Sources of Self-Evaluation Checklists for internal control systems 6.1 Three good sources are: Keeping Your Balance by the Audit Commission Revised October 2000, which contains a checklist of internal controls for well-controlled schools Controlling School Finances a self-evaluation tool, available on the Audit Commission s web site at This is closely related to the checklist in Keeping Your Balance referred to above but is interactive and offers some examples of good practice Your Local Authority finance or internal audit team who may be able to provide a checklist tailored to your local context ERYC FMSiS Guide 50

51 A Specimen Statement of Internal Control For Schools Appendix 1 1 This statement relates to the Internal controls for (Insert Name..) school for the 12 months from (date....) to (date signed....). The governing body is responsible for ensuring that the school: keeps proper accounting records during the year which will disclose, with reasonable accuracy and at any time, the financial position of the school, have been drawn up in accordance with the DCSF (CFR) guidelines, and will enable it to prepare an annual income and expenditure statement that complies with DCSF guidelines maintains and operates an effective system of internal control to safeguard all the resources delegated, granted or otherwise entrusted to the school and ensure they are used cost effectively 2 The system of internal control has been developed and is coordinated by the head teacher. It aims to provide as much assurance as is reasonably possible (not absolute assurance) that assets are safeguarded, transactions are properly authorised and recorded and that material errors or irregularities are either prevented or can be detected promptly 3 Our review of the effectiveness of the systems of internal control is informed by: our regular scrutiny of financial and other performance monitoring data regular reports from the head teacher and other managers to the governing body the most recent report of the school s internal auditor dated (insert date of last report) our most recent self-evaluation of the internal controls undertaken (insert date) 4 We are, therefore, satisfied that the internal control systems in operation at the school during the year were adequate and effective (except for: List any notable weaknesses here i.e. those rated as requiring remedial action as a high priority) 5 We propose over the coming year to take the following steps to address the weaknesses noted above. (This paragraph should provide either brief details of the action taken, or proposed, to rectify weaknesses in the system of internal control, or a short explanation of why corrective action has not been considered necessary). By order of the Governing Body of (Name) School (Signed) Dated (Head Teacher) (Signed) Dated (Chair of Governing Body) (Signed) Dated (Chair of Finance Committee of the Governing Body) Note: The sections in brackets and (Bold / italics) need tailoring to reflect the schools particular circumstances ERYC FMSiS Guide 51

52 Appendix 2 Statement of Internal Control - Pre-Certification Checklist for Governors The Statement of Internal Control (SIC) is designed to accompany the DCSF Consistent Financial Reporting (CFR) Return and Financial Summary, and so relates to the same completed financial year. The internal controls it refers to are those required as best practice by the Financial Management Standard in Schools (FMSiS). The issues for governors and the head teacher to consider before authorising their representatives to the sign the SIC fall into two categories:- Specific actions and more general control processes that should have occurred during the financial year in question; and Specific actions needed after the year end when the CFR Return is available. The questions are split into these two categories for ease of consideration. That consideration is probably best achieved as a group, perhaps at the finance committee meeting that approves the CFR Return, and needs to be formally recorded. The questions are structured so that:- A yes answer to every question would allow the SIC to be signed without any amendment; and A no answer to any question will require either further action or explanation in the SIC. Controls that should have operated during the financial year Question Did we set the school budget in line with the priorities detailed in the school development plan either before the beginning of the financial year (1 st April) or as soon as possible thereafter? Did we see regular reports on the school s financial position during the year, did the head teacher and bursar answer all the questions raised with them and were we satisfied that materially accurate records have been maintained throughout the year? (Regular in this context would refer to termly reports as a minimum and possibly more frequent in larger schools.) Did we take appropriate action on all significant matters raised in reports from the internal auditor? Did we review a risk assessment and taken appropriate steps to manage the risks identified including the introduction of internal controls and/or external insurance cover where required? Agree d Yes or No Implication of the Answer If yes, no action. If no, paragraph 4 should disclose this weakness. Paragraph 5 should explain the steps being taken to ensure next year s budget is set on time and reflects the school s priorities. If yes, no action. If no, paragraph 4 should disclose the inadequate base financial records as a weakness. Paragraph 5 should explain the steps being taken to rectify the position. If yes, no action. If no, ensure this decision is justified. If, after reflection, it is considered that some action needs to be taken, describe this briefly in paragraph 5. If yes, no action. If no, the need to conduct a comprehensive risk assessment should be noted in paragraph 4. Paragraph 5 should explain the steps being taken. ERYC FMSiS Guide 52

53 Question Agreed Yes or No Control activities required after the end of the financial year Has the head teacher confirmed that he/she has seen a reconciliation of the school s base financial records with the latest CFR Return (either prepared from the school s own system or by the local authority) and Financial Summary that shows they are: a complete record of the School s transactions for the year and that the two documents are consistent with each other? based on financial records that have met the requirements of the DfES Consistent Financial Reporting (CFR) framework? Have we received a report from the internal auditor giving us assurance that the systems of internal financial control operated satisfactorily during the year? OR Have we undertaken a thorough selfevaluation of the internal control systems in operation during the year and did not find any weaknesses that needed to be addressed as a high priority? Are we confident that there are no significant litigation, liabilities or commitments that have arisen after the year-end, and are not referred to or accounted for in the published financial summaries? Have we been advised that there has been no actual or potential non-compliance with laws, regulations and codes of practice that could reduce the school s ability to meet its objectives or cause the school to incur a financial loss, and is this supported by our own knowledge of the school and its activities? Implication of the Answer If yes, no action. If no, to the first question, make arrangements for the head teacher to complete/review the reconciliation before the SIC is signed and published. If no to the second question, the noncompliance should be noted at paragraph 4 as a weakness. Paragraph 5 should explain the steps being taken to rectify the position. If yes to either question, no action. If no to both questions, either: delay signing the statement until you have received the report or undertaken the self-evaluation OR if the report or the self-evaluation has identified weaknesses that need to be addressed as a high priority, list them at paragraph 4 and briefly explain in paragraph 5, the action planned to rectify them. If yes, no action. If no, consider if the accounts need adjusting in order to be complete, or whether a Contingent Liability or Gain disclosure note should be added and the Local Authority Finance Department informed. If yes, no action. If no, add the appropriate disclosure notes to the income and expenditure account before it is signed and published. Notes: Given the s151 officer has ultimate responsibility for the internal control systems of the whole authority it will be necessary to report the details of any No answers to him or her or more realistically to a representative of the s151 Officer. The completed internal controls self-evaluation should be copied to the Local Authority internal audit section to inform its risk assessment and audit planning processes ERYC FMSiS Guide 53

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55 R11 - A BRIEF GUIDE TO THE FINANCIAL COMPETENCIES OF SCHOOL STAFF April 2009 IPF Web: Introduction [email protected] ERYC FMSiS Guide 55 Web: [email protected]

56 The attached matrix summarises the financial management competencies that best practice determines should be held by staff exercising financial management responsibility within the school. This competencies matrix can be used: by individuals that wish to identify their personal training and development needs by headteachers and senior management teams to find out what financial management competencies are available to the school. It should be stressed that this is seen as a key development tool for both individuals and the Management Team as a whole. How to use the matrix First, identify who within the management team should have key financial competencies and fill in their details at the top of the grid. This allows for the grid to be tailored to the individual school s governing body financial management requirements. The Key Financial Management competency is in bold (eg the first is "provides strategic leadership and management"), and examples of the characteristics that demonstrate this competency are provided beneath it. Examples of who to include when using this tool might be as follows: A large school may include head teacher, deputy head, management team, other main budget holders, bursar, finance assistants, finance administrator. A small school may include head teacher, other main budget holders, office administrator, finance assistant. As schools vary so much in size and are organised in different ways, it is impossible to give precise guidance on who should be included when using this tool. However, main budget holders are likely to include subject leaders or heads of years, but not individual teachers with small budgets for teaching materials or consumables but no wider responsibilities. The latter teachers will be responsible to something more senior for the use of that budget and that more senior person is likely to be part of this review. Typically, even for the largest school, it would be unusual to include more than 12 people in a review of this kind. For a small primary school, a review may not include more than four or six people. Second, for each staff member identified use the ratings (below) to show the level at which the person has the relevant competencies by making reference to the key indicators and the typical examples. ERYC FMSiS Guide 56

57 Third, on completion analyse the results to ensure the skills, knowledge and attitudes are spread across the staff in the most appropriate way i.e. there is not over or under concentration of competencies with one specific staff member. A Key Point is that not all staff need all these skills, but collectively the school senior management team will ideally have these competencies between them. Individuals need only those relevant to their area of responsibility. Click here for the Matrix of staff financial competencies as a Word document that can be downloaded. ERYC FMSiS Guide 57

58 FINANCIAL MANAGEMENT COMPETENCIES PROVIDES STRATEGIC LEADERSHIP & MANAGEMENT Key indicators and typical examples Leads and manages the development of strategic financial plans: Takes a long term view of financial management issues Has knowledge of, and advises governors on the key trends in education and their financial implications Works with governors to develop the school priorities, aims and objectives Knows the role/level that staff should operate Able to translate broad aims and priorities into SMART objectives (See G6 Glossary) Delegates tasks to best placed person providing them with necessary direction, guidance and authority to undertake he task(s) Acts with integrity and set a good example Promotes team working between staff and with governors Able to research and analyse strategic choices and recommends those most likely to achieve the school s goals and objectives: Able to extract and analyse information in a useful way Presents information clearly to others including governors Has an understanding of financial risks and the potential impact Uses own experience, networking and lateral thinking (See G6 Glossary) to identify different options (for option appraisal see S3.2 and G6 Glossary) Assesses the financial implications of strategic choices facing the school Knows how to focus those matters which are most significant (eg. the materiality principle See G6 Glossary) Is open to new ideas, consults/listens to stakeholders (See G6 Glossary) Willing to work in partnership with outside bodies Will take necessary decisions, even if difficult School Staff with Financial Management responsibilities Head Finance Finance teacher Officer/Bursar Administrator ERYC FMSiS Guide 58

59 Has a clear understanding of good financial management practices and the School s performance compared to it: Has knowledge of current financial performance of the school Regularly participates in networking activities and is outward looking rather than internally focused Has knowledge and understanding of internal control processes Understands and participates in the school s self-evaluation activities of financial performance/controls Reviews and undertakes benchmarking activities Co-operates with external inspectors/auditors etc. and initiates appropriate action in response to their findings ERYC FMSiS Guide 59

60 FINANCIAL MANAGEMENT COMPETENCIES ENSURES ACCOUNTABILITY Key indicators and typical examples Understands the LA and statutory financial requirements for the school Understands the financial framework in which the school operates Has knowledge of the school s funding arrangements and funding streams Has knowledge of information that is required by local authority (LA) and Government departments Ensures that information is provided in line with timescales and deadlines Understands and can undertake budget setting activities Understanding of finance and budgeting Has numeric skills Understands that resource allocation can affect outcomes and focuses on this rather than just looking at inputs Pursues income generation opportunities when required Understands links between activities of the school and their associated costs Understands and can undertake budget monitoring activities Has knowledge of the financial information that should be provided for review regularly Able to interpret budget monitoring information in useful way Communicates budget monitoring information to interested parties and the governing body Understands the importance of communicating the School s performance to stakeholders Ascertains and provides information to meet governors needs Anticipates stakeholder questions and gets answers Establishing trusting and inclusive relationships with school staff, the governing body and the LA Provide financial information that contributes to the annual parents meeting Uses diplomacy when answering difficult questions School Staff with Financial Management responsibilities Head Finance Finance Teacher Officer/Bursar Administrator ERYC FMSiS Guide 60

61 FINANCIAL MANAGEMENT COMPETENCIES EFFECTIVELY OPERATES FINANCIAL PROCESSES Key indicators and typical examples Demonstrates the personal commitment and qualities required for financial management Participates in the financial work of the school by preparing for and attending meetings, contributing to discussions and taking agreed actions Takes part in available financial training and other chances to develop knowledge, skills and understanding Seeks appropriate professional support and development Is systematic in the way that tasks are undertaken Takes responsibility for self and work load Gives and receives constructive feedback Understands where to get additional information and advice from Has a clear understanding of the framework of financial control Follows good financial practice within statutory, and national requirements Follows good financial practice in accordance with local requirements, as set out in financial regulations and procedures Has an understanding of own and others roles and contributions in relation to the financial management structure Regularly revise financial planning timetables to take account of changes in deadlines Head teacher School Staff with Financial Management responsibilities Finance Finance officer/bursar Administrator ERYC FMSiS Guide 61

62 FINANCIAL MANAGEMENT COMPETENCIES EFFECTIVELY OPERATES FINANCIAL PROCESSES cont Key indicators and typical examples Controls and monitors financial systems Supervises (controls and monitors) the work of other people Ensures that operational, procedural and regulatory requirements are met Takes action when things are not being done/done properly/done efficiently Supervisory (control and monitoring) activity covers: - Income received - Payroll - Purchasing - The banking system - Petty cash holdings and payments - Taxation system - Voluntary funds - The School s assets - The financial management system e.g. FMS, East Riding Financials Operates the financial systems Follows operational and procedural requirements Meets operational and regulatory deadlines Operates the school systems for: - Income received - Payroll - Purchasing - The banking system - Petty cash holdings and payments - Taxation system - Voluntary funds - The School s assets - Financial systems e.g. SIMS, Sage, Pegasus School Staff with Financial Management responsibilities Head Finance Finance teacher officer/bursar Administrator ERYC FMSiS Guide 62

63 R20 A BRIEF GUIDE TO THE FINANCIAL COMPETENCIES NEEDED BY THE SCHOOL GOVERNING BODY April 2009 Web: [email protected] IPF ERYC FMSiS Guide 63

64 Brief guide to the financial management competencies needed by the Governing Body Introduction The attached matrix summarises the financial management competencies that best practice determines should be available within the Governing Body. This competencies matrix has been designed as a practical document which can be used by schools at different levels: by individuals who wish to identify their personal training and development needs by Governing Bodies or their Finance Committees to ascertain their collective financial management competencies It should be stressed that this is seen as a key development tool for both individuals and the Governing Body as a whole. Experience shows that for most schools only small numbers of governors will initially be at levels 1 and 2. How to use the matrix First, Identify who within the Governing Body should have key financial competencies and fill in their details at the top of the grid. This allows for the grid to be tailored to the individual schools Governing Body financial management requirements. The Key Financial Management competency is in bold (eg the first is "provides strategic leadership and management"), and examples of the characteristics that demonstrate this competency are provided beneath it The aim, in completing the matrix, is to determine the relative Financial Management skills available within the Governing Body. However, this needs to be related to the way that the Governing Body deals with financial management issues and so not all governors will need the highest levels of financial management competence. Typically, for a school with a Finance Committee, the Finance Committee members and the Chair of the Governing Body would be the most appropriate governors to complete the matrix. For schools without a Finance Committee the Chair of Governors, any governor specifically tasked with finance issues and those governors from the Governing Body who possess Financial Management Skills should complete the matrix. Second, for each governor identified use the ratings (which are explained in some detail below) to identify the level at which the person has the relevant competencies by making reference to the key indicators and the typical examples. Third, on completion analyse the results to ensure the skills, knowledge and attitudes are spread across the staff in the most appropriate way i.e. there is not over or under concentration of competencies with one specific staff member. A Key Point is that not all Governors need all these skills, but collectively the Governing Body (& Finance Committee if it exists) will ideally have these competencies between them. Click here for the Matrix of Governor financial competencies as a Word document that can be downloaded. ERYC FMSiS Guide 64

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66 FINANCIAL MANAGEMENT COMPETENCIES PROVIDES STRATEGIC LEADERSHIP Key indicators and typical examples Leads the development of strategic plans: Has knowledge and understanding of school priorities, aims and objectives and takes a long-term view Knows the strategic level that governors should operate at Able to articulate strategic priorities and objectives clearly Can assimilate the financial implications of school priorities Delegates tasks to Head Teacher or Bursar providing them with necessary direction, guidance and authority to undertake the task(s) Acts with integrity and sets a good example Promotes team working between governors and with staff Able to identify viable options and select or recommends those most likely to achieve the School s goals and objectives: Able to use information provided by staff in a useful way Will take necessary decisions, even if difficult Able to develop creative or innovative solutions to problems (eg. uses lateral thinking See G6 Glossary) Knows how to review the results of techniques for assessing different approaches to the same project (eg. option appraisal See S3.2 and G6 Glossary) Knows how to focus those matters which are most significant (eg. the materiality principle See G6 Glossary) Is open to new ideas, consults/listens to stakeholders (See G6 Glossary) Willing to work in partnership with outside bodies Chair of Governing Body* Governors with Financial Management responsibilities Chair of Governor with Finance Finance Role Committee ERYC FMSiS Guide 66

67 Has a clear understanding of best financial management practice and school performance compared to it: Has knowledge of the School s current financial performance Has knowledge of internal control processes (See G6 Glossary) Understands and participates in the school s self-evaluation activities of financial performance/controls Co-operates with external inspectors/auditors etc. and initiates appropriate action in response to their findings Regularly participates in networking activities and is outward looking rather than internally focused ERYC FMSiS Guide 67

68 FINANCIAL MANAGEMENT COMPETENCIES ENSURES ACCOUNTABILITY Key indicators and typical examples Understands the LEA and statutory financial requirements for the school Understands the financial framework in which the School operates Has knowledge of the School s funding arrangements and funding streams Has knowledge of information that can be requested by LEA and Government departments Understands and can undertake budget setting and budget monitoring activities Understanding of finance and budgeting Has numeric and analysis skills Understands that resource allocation can affect outcomes and focuses on this rather than just looking at inputs Has knowledge of the financial information that should be provided for review regularly Able to interpret budget monitoring information in useful way and communicates the interpretation to interested parties Understands the importance of communicating the schools performance to stakeholders Understands the monitoring returns provided to the LEA and DCSF Knows the procedural requirements and timescales for the school and checks they are followed Anticipates stakeholder questions and gets answers Understands and uses a clear framework in any reporting by governors to parents on school finances Is open and diplomatic when communicating with stakeholders Chair of Governing Body Governors with Financial Management responsibilities Chair of Governor with Finance finance role Committee ERYC FMSiS Guide 68

69 FINANCIAL MANAGEMENT COMPETENCIES ACT AS A CRITICAL FRIEND Key indicators and typical examples Has a commitment to the school and the work of the governing body: Participates in the work of the Governing Body by preparing for meetings, attending meetings, contributing to discussions, taking agreed actions Improves knowledge of the school and becomes familiar with it through discussions with head and staff, reading relevant papers, visiting the school etc. Takes part in available financial training and other chances to develop knowledge, skills and understanding Helps new governors to understand their financial management role and to make a full contribution Declares personal or pecuniary interests as appropriate and avoids using his/her position for personal gain Presents information and views clearly and influentially to others: Has credibility with partners and colleagues Able to influence others and build consensus using the power of argument and clear presentation of the case Uses analytical skills to challenge management constructively and ask probing questions Gives and receives constructive feedback Understands where to get additional information and advice from Seeks to resolve misunderstanding and conflict Chair of Governing Body Governors with Financial Management responsibilities Chair of Governor with Finance finance role Committee ERYC FMSiS Guide 69

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71 GOVERNORS DECLARATION OF PECUNIARY/BUSINESS INTERESTS As part of the school s financial audit governors are required to declare any pecuniary/business interests they may have that could conflict with their role as a governor. Details of any such interest should be entered on the form below, which should be returned to the school office. It is necessary to submit a nil return if you have no pecuniary/business interests. You will be asked to review this declaration on an annual basis, however, should your circumstances change between reviews, it is your responsibility to inform the school. What constitutes a pecuniary/business interest? Any governor or member of their immediate family who has a directorship, share holding, partnership or other appointment of influence within a business or other organisation which may have dealings with the school (not just those who have had such dealings). How should immediate family be defined? Spouse/partner Children Parents/parents-in-law Brothers/sisters/brothers and sisters-in-law Grandparents/grandparents-in-law Governing Body. Do you declare any pecuniary/business interest? YES/NO (delete as appropriate) If YES please supply details below: Name (printed) Signature Date... Please return completed form to the school. ERYC FMSiS Guide 71

72 SENIOR SCHOOL STAFF DECLARATION OF PECUNIARY/BUSINESS INTERESTS As part of the Financial Management Standard in Schools (1.5 part 5) senior staff in schools are required to declare any pecuniary/business interests they may have that could conflict with their role. Details of any such interest should be entered on the form below, which should be returned to the school office. It is necessary to submit a nil return if you have no pecuniary/business interests. You will be asked to review this declaration on an annual basis, however, should your circumstances change between reviews, it is your responsibility to inform the school. What constitutes a pecuniary/business interest? Any senior member of staff or member of their immediate family who has a directorship, share holding, partnership or other appointment of influence within a business or other organisation which may have dealings with the school (not just those who have had such dealings). How should immediate family be defined? Spouse/partner Children Parents/parents-in-law Brothers/sisters/brothers and sisters-in-law Grandparents/grandparents-in-law How should a senior member of staff be defined? Any member of staff who deals with finance within the school Do you declare any pecuniary/business interest? YES/NO (delete as appropriate) If YES please supply details below: Name (printed) Signature Date... Position in School Please return completed form to the school. ERYC FMSiS Guide 72

73 Service Level Agreements Accountancy Payroll Payments services Collection service Billing service Human resources Legal services IT Occupational health Museum Swimming instructors Building maintenance Additional swimming programme BMU Sims licence Catering Audit Pest Monitoring EWO contribution Educational welfare Total Annual Contracts Electrical safety checks Hand drier maintenance Photocopier rental admin Computer rental / Leasing office Intruder alarm Data protection Sanitary disposal Northumbrian spring CCL Humberside fire brigade Building surveying and engineering eri Bursar PHS Piano tuning Christian copyrights Telephone rental Kingston Telephone maintenance CCTV Water dispensers Computer maintenance Franking machine (Neopost) Subscriptions Specialist school Internet / Broadband Public video licensing Chubb fire Canon Hygiene Total Previous Year ( ) Previous Year ( ) Current Year ( ) Current Year ( ) ERYC FMSiS Guide 73

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75 limits should be entered where appropriate This is only an example and so you should adapt this for your school Budget Overall responsibility for setting the budget before 31st May Review Budget in Autumn & Spring Terms Prepare 3 year plan/working papers Budget Monitoring Orders Completion & authorisation of internal order form Inputting of internal order forms on to FMS to produce official order form Authorisation of Official Order depending on procurement authorisation limits Invoices Initial invoice checked against delivery Authorising an order invoice for payment Authorising a non-order invoice for payment - agreed contracts, SLA's, agency invoices, rates and energy costs Authorising all other non-order invoices for payment following procurement rules Processing of invoice onto FMS for payment Full Governing Body Finance & General Purposes Committee Chair Of Governors Scheme of Delegation Head Teacher Deputy Head Teacher Business Manager/Finance Office Manager Finance Assts/Office Manager Budget Holders ERYC FMSiS Guide 75

76 Payments BACS & Cheque Runs from FMS Authorisation of Cheques Authorisation of BACS Verification of BACS Transmit BACS Income Collection of school meals income Full Governing Body Finance & General Purposes Committee Chair Of Governors Head Teacher Deputy Head Teacher Business Manager/Finance Office Manager Finance Assts/Office Manager Budget Holders Collection or other budger and school fund income Banking and recording of school meals income Banking and recording of other budger and school fund income Virements Authorisation to vire between budget headings ERYC FMSiS Guide 76

77 Extract from the Finance Manual (Adapted) for Schools Chapter 28 Introduction SCHEME OF DELEGATION (Delegated Financial Powers) To provide guidance to schools on recommended procedures through which delegated financial powers should be both granted and reviewed. Summary of Main Points Delegated financial powers refers to the powers granted to both finance committees and Headteachers in order to allocate budget amounts in a way that was not reflected in the original budget, as agreed and set by the Governing Body. The power is referred to as a power of virement. Each year (prior to 31 May) schools are required to submit to the Authority an agreed budget for the new year. Inevitably throughout the year the assumptions that the original budget was based on may change and new spending priorities emerge. In order to be responsive to change, either the finance committee or the Headteacher (depending on value) can have the Authority vire amounts between budget headings to show the latest budget priorities. To ensure effective financial control the virement powers of the Finance Committee and the Headteacher should be expressed as monetary values. In determining the monetary amounts for virements the following questions should be considered:- Does the monetary value relate to individual or cumulative decisions? Do the virement levels clearly distinguish between the financial management role of the Finance Committee and the Headteacher? Are there clear procedures to ensure adequate communication with other Governing Body committees? E.g. Personnel Committee in relation to budgetary decisions about staffing. Are there clear reporting and review procedures through which the full Governing Body is informed of how virement powers have been used? Given that virement levels are fixed as monetary values, it is beneficial for these to be considered on an annual basis as part of the budget setting process. Recommendations The Governing Body considers its current procedures against the issues highlighted in this report, and in particular the model terms of reference as shown in the example below. As part of the annual budget setting process, the Governing Body reviews delegated financial powers including the level at which these are set. These should include all of the items on the model but they may be delegated to different levels of management. ERYC FMSiS Guide 77

78 APPENDIX 1 Responsibilities of the Full Governing Body: MODEL TERMS OF REFERENCE To approve the annual budget To oversee financial procedures To determine level of expenditure/virement delegated to the Finance Committee and the headteacher. To appoint the school fund auditor To approve the Annual Statement of Best Value To approve the Statement of Internal Control (SIC) Responsibilities of the Finance Committee: To recommend the annual budget to the full governing body To monitor performance against budget through the receipt of regular reports from the schools Finance officer. To ensure consistency and adequate explanation of variances To report to the governing body regularly on budgetary performance as the year progresses. To make expenditure/virement decisions up to an agreed limit, and review expenditure decisions made by the head teacher with regard to virement limits. To undertake a detailed budget monitoring role on behalf of the full governing body including :- o Consideration in detail of prospective budgets/financial plans o Monitoring of school fund o Ensure systems are in place to enable Best Value to be demonstrated, and to prepare the Annual Best Value statement. o Consider the self assessment under the Financial Management Standard In Schools as an annual item. Responsibilities of the Head teacher To dispose or sell assets (subject to limits) To approve purchases from the school fund To prepare the annual budget To make expenditure/virement decisions up to a limit set by the Finance Committee To keep the Finance Committee informed about the schools budgetary position. To produce an annual Income and Expenditure Statement and Report on School s Finances for approval by the Governing Body: these documents to be published in the Annual Report to Parents To ensure that the schools financial practices comply with East Riding of Yorkshire Council s financial regulations and the principles of Best Value. Responsibilities of the Finance Officer The responsibilities of the Finance Officer will vary between schools, depending on the size of school and the number of support staff. The following represent the main financial responsibilities, although this is not an exhaustive list. Monitor accounting procedures. Budget monitoring Operation of the School Fund Preparation of orders and invoices. Collection of income. ERYC FMSiS Guide 78

79 Reconciliation of accounts on a monthly basis Prepare accounts and liase with auditors Prepare financial returns for the Authority, DCSF, and other agencies. Assist in the preparation of the three year plan Maintenance of the Asset Register ERYC FMSiS Guide 79

80 Finance Policy Document The Finance Manual (Adapted) for Schools will cover the policies and procedures that schools should follow. However if you wish to produce your own tailor made to your own school, you may like to consider the following headings. 1) Governance 2) Roles and responsibility 3) Scheme of delegation covering virement limits and ordering and invoices limits and segregation of duties 4) Financial planning 5) Budget setting and monitoring 6) Reconciliation of financial data 7) Consistent Financial reporting (CFR) 8) Purchasing 9) Income 10) Banking 11) Payroll 12) Petty cash 13) Tax/ VAT 14) Insurance 15) School development plan 16) Benchmarking 17) Reports to governors 18) Retention of documents 19) Register of business interests (pecuniary interests) 20) Inventory of assets /asset management 21) Charging policy 22) Whistle blowing policy 23) Best value statement 24) Statement of Internal Control 25) Standing order 60 26) Code of practice for procurement 27) School fund 28) Review of contracts 29) Data backup/security 30) Scheme for financing schools 31) Finance manual (adapted) for schools 32) Governor and staff competencies 33) Performance management reviews for support staff with financial responsibilities 34) Training in Financial 35) Management 36) Travel policy 37) Staffing Structure review ERYC FMSiS Guide 80

81 School Name Date Completed by 5.7 Have you completed the self assessment. This should be completed on the toolkit When the school has completed it, it should be submitted to the LA Have you visited the FMSiS website Statement of roles and responsibilities of Governing Body, Finance committee Headteacher and bursar (see Chapter 28 of Finance Manual (Adapted) for Schools For and example) 1.1 Scheme of delegation, covering the above, with virement limits and spending Limits (approved by full GB) 1.1 Minutes need to show that Governors are made aware of developments within the financial environment i.e. Government level, local formula level and school level (also the Governors should receive governors newsletters etc) Do minutes show the following matters are discussed:- 1.2 Budget monitoring based on East Riding Financial reports / virements / additional funding and income (areas for review) 1.2 Specific areas of the budget i.e. school meals 1.2 Budget outturn position and use of balances / recovery details (including an outturn report on school meals) 1.2 Show participation of Governors in discussions 1.3 Recommendations following an internal audit or OFSTED and when changes where implemented from 1.3 Three year plan 1.4 Statement of Internal Control (SIC) (R15) 1.5 Give opportunity to declare business interests 2.1 and 2.2 Training budget for staff and Governors 2.2 Reviewed staffing structure in the last two years 3.1 School development plan 3.2 Benchmarking finding discussed / areas for improvement 4.2 SLA s continuation / cessation 4.2 Best Value Statement. What activities have been reviewed 5.1 Earmarked funds ERYC FMSiS Guide 81

82 Do the minutes show the following have been adopted / approved? 1.2 Charging policy for activities 1.4 Statements of Internal Control (SIC) (R15) must be signed 3.1 Budget was approved before the start of the financial year and subsequent revisions were approved 4.1 and 5.2 LA Scheme for Financing Schools Jan 07 (on Schools intranet) 4.2 Best Value Statement (must be signed) 5.5 Finance Manual (Adapted) for Schools Jan 07 (on Schools intranet) 1.2 How are decisions taken by Governors communicated to relevant staff? 1.5 Is the register for business (pecuniary) interest for all Governors and senior staff (and close family members) up to date (show list of all who should sign & all those that have signed) 1.5 Has the schools details of the LA Whistle blowing policy? How has it been communicated to staff? 2.1 Have all the Governors on the Finance Committee completed the competencies matrix? (R20) 2.2 Have all the staff with financial management responsibilities completed the staff competencies matrix? (R11) 2.2 Have staff with key financial management responsibilities got a person specification and show how recruitment procedures check these competencies i.e. Head and admin assistant 2.2 Have staff with financial management responsibilities had performance management reviews that include financial targets? 2.2 and 2.1 Is the school over-reliant on any one member of staff / Governor? Do you have a contingency plan for long-term sickness? 3.1 Does the school development plan show financial implications and has it been cross referenced to the 3 year plan? 4.1 Do you have a check list for Governors induction? 5.6 Are accounting records up to date? The assessor will check to see that reconciliations between FMS and East Riding Financials are up to date and signed by the Headteacher ERYC FMSiS Guide 82

83 1.2 Do you have a timetable for Governing body meeting and sub-committees? Hard copies are kept in school (need to be available to all staff and Governors who need to use them) LA Scheme for Financing Schools Jan 07 (on Schools intranet) Finance Manual (Adapted) for schools Jan 09 (on Schools intranet) Please note that this may not be an exhaustive list Look on the DCSF toolkit :- ERYC FMSiS Guide 83

84 Finance Committee Standard Agenda Items Spring Term Summer Term Autumn Term Budget monitoring reports received and discussed Budget monitoring reports received and discussed Budget monitoring reports received and discussed Discuss, approve & sign the Best Value Statement Review the Financial Policies e.g. approve & adopt the Scheme for Financing Schools and the Finance Manual adapted for schools when they have been revised and updated by the LA Review and approval of Charging Policy Consider the SLA s to be continued / ceased (using the template in the FMSiS manual) Review the Governors competencies and update matrix where appropriate. 3 Yr plan to consider & recommend for approval by Full Governing Body for submission to the LA before the 31 st May If applicable gain approval for a deficit budget from LA before 31 st May Discuss financial requirements of the School Improvement Plan Statement of Internal Control Pre-certification checklist discussed with reference to Internal Audit report (if within 2 years) or completed CRSA if not and agree and sign the SIC Revised 3 Yr plan to consider & recommend for approval by Full Governing Body for submission to the LA before the 31 st October If applicable gain approval for a deficit budget from LA before 31 st December Discuss financial requirements of the School Improvement Plan Benchmarking exercise when Key Performance Indicators are available. Additional Items: Approve virements and expenditure exceeding Headteachers limits Discuss Internal Audit results and approve plan if required Additional Funding Staffing structure financial implications Catering Profit & Loss account to review (using the template in the FMSiS manual) Yearly update of declaration of Pecuniary Interest forms Full Governing Body Standard Financial Agenda Items Spring Term Summer Term Autumn Term Budget & 3yr plan to approve Revised budget & 3yr plan to approve Yearly update of declaration of Pecuniary Interest forms Additional Items: Approve virements and expenditure exceeding Finance Committee limit Please note: this may not be an exhaustive list and will vary for each school according to their Scheme of Delegation ERYC FMSiS Guide 84

85 EXAMPLES OF GOVERNING BODY MINUTES It is recommended that governing body meetings and its sub committees are timetabled a year in advance so that they match with important decision making processes ie budget approval. Agendas should be set so that important financial matters are discussed, adopted and approved where necessary. The important areas where decisions need to be made should be at the top of the agenda in case the meeting runs out of time. Examples of Minutes- R117 of the DCSF toolkit is titled taking of minutes below is just an extract from that document:- Agenda item /10 budget A report was circulated by the Head prior to the meeting (attached). The Head presented a summary of the report to the governors. Following the presentation, a number of questions were asked. The questions and responses (by the Head) are summarised below: What pupil number projections is the budget based on? - No change, as per Para. 3.2 of the report. What inflation rate has been assumed? - Two different rates have been applied for employee and non employee costs as per Para Will the School s balances still be within the Local authority guidelines? - Yes they will remain under 5% of the total budget as per Para 5.7. The following governors contributed to the debate: Mr. Neville, Mrs. Wenger, Mr. Ferguson & Mr Howard. DECISION The recommended budget from the Head s report is adopted for 2007/08. ACTIONS The Head should take appropriate actions relating to the schools budgeting system and notification to the Local Authority. Below are some LA suggestions to illustrate the level of detail that is required 1) Finance Policies The ERYC s Scheme for Financing Schools and the Finance Manual (adapted) for Schools can be found on the schools intranet. Governors have previously been advised (as per mins of..) to familiarise themselves with these documents. Both documents were discussed at the meeting and approved and adopted by the GB. JA (Chair) asked a question on Travel policy and this was answered by the Head. 2) Benchmarking. Papers illustrating the 2007/2008 outturn position of all schools is now featured on the DCSF website. Papers showing this schools position compared with a) other ERYC schools and b) other similar sized schools was distributed with the agenda. As the papers show the school is average in all areas except energy costs, and Learning Resources (LR) (E19 & E20). As a result of the Head & Governors queries, these areas therefore have been investigated and it was discovered that energy costs appear high in 2007/2008 as there was a problem with the bills in the previous financial year. This dispute meant that very little was paid in 2008/2009, however the dispute has now been resolved and the bills paid in 2007/2008. (Part of the carry forward from 2007/2008 was earmarked to take ERYC FMSiS Guide 85

86 account of this- 5000). Our LR was high in 2007/2008 because we restocked our library and purchased a large stock of ICT consumables. This should last us through 2008/2009. The Governors agreed that that all other areas were considered average and therefore not considered in any further detail. Or: the Governors commented on the high cost of Grounds Maintenance (GM). The Governors asked the school to investigate and contact another school and the GM unit to see why their costs were high in comparison. The Governors asked for a report to be brought back to the next meeting. 3) Catering Accounts The year-end position for 2008/2009 for catering is attached at appendix 2 -CA4/07. This shows that catering made a net profit of 560 (compared with a net profit of 1,500 for 2007/08). This includes the cost of the meals, catering staff salaries, and the cost of new uniforms purchased. Income includes payment for paid meals, free meals and a block sum from the Local Authority (LA) ( 4k) for providing hot meals. The Governors congratulated the school on its efforts to manage the catering budget and turn it round from a projected net loss position of 300 half way through the year. Or: The year- end position for for catering is attached at appendix 2- CA4/07. This shows that catering made a net loss of 3,054 compared with an outturn position for of net loss 327. The reason for this was due to the change in menu and the subsequent drop in pupil numbers taking a meal. However, after a special invite a parent for dinner day the numbers seem to be on the increase again. The governors asked what else could be done. The Head responded that advice was being sort from the catering section at County Hall and that an update would be given at the next meeting. 4) Budget Monitoring 2008/2009 Outturn A detailed analysis of the 2008/2009 outturn position is attached at appendix 3 BM8/09. This shows that the school was in surplus by 2546 (compared with surplus of 7500 at the end of 2008/09). This will be carried forward to 2009/10. This does not include devolved capital which is mentioned in item 4 of the agenda. The budget report shows that the % of budget utilised, if this is +/- 10% of a 100% this is explained in the following:- Teachers Pay (E01) under spent by 6,000 this is due to AJ going on maternity leave in Feb 09. The LA pay for salaries centrally whilst a teacher is on maternity. Supply (E02) overspent by 4,000 - this is due to an additional supply teacher been bought in to cover maternity leave. ICT Learning Resources. 5,000 overspent this is due to a large order of consumables been made in March 08 to take account of a discount scheme. Purchase of these was approved at the last finance cttee (date ). Etc Or: The outturn position shows a surplus of 67000, which is 9.25% of the budget. This is above the 8% limit as detailed in the Scheme for recycling excessive balances, however as agreed at the last finance committee meeting of 10 December 2008, a request was made to the LA to carry more than the 8% due to the refurbishment of the dining room being delayed due to building works. Approval was granted by the LA to carry an additional forward therefore we are within the limit. ERYC FMSiS Guide 86

87 5) Budget monitoring at month 6 The East Riding Financials Summary report and a condensed version prepared by the school circulated with the agenda Item 3 were considered by the Governors. The governors commented on the following: (E16) Electricity cost overspending by The reason for this is that the bills have been based on estimates. The Governors recommended that all energy and water bills should be on actual meter readings so true comparisons can be made. (E19) Learning resources overspending by This is due to playground equipment purchased from parental contributions. A virement needs to be actioned between I13 parental contributions and E19 for 7,000. The Governors gave their approval for this virement to be actioned. Also visits have been paid out of here but the school reported that the visit income was still in the school fund account. The Governors requested that the visit income be transferred into the school budget and a virement actioned between E19 and I12 for the same amount as the visit income (E12) building repairs and maintenance underspending by This is due to the profile of the budget. Repairs are underway on the boiler and fencing so this budget is expected to be fully spent by the year end. A new Governor asked how he could tell from the monitoring reports what the predicted year end position would be. It was decided that a separate training session would be arranged with the admin officer to go through this with any Governor who required the training. 6) School Development Plan This had been circulated with the Agenda (item 5). The Governors discussed the plan in detail. The Governors questioned why there were no costings on the plan and each point did not have a unique reference. The Head agreed to include references and costing and the amended plan would be presented at the next meeting. However the Governors agreed the plan in principle. The plan will be linked into the schools 3 year budget plan. 7) Budget approval. The Governors studied the 3 year budget plan and had the basis of the income and expenditure explained. The Head went through each worksheet and explained any variances to the previous year. Comments had been entered on the 3 year budget plan and school developments had been highlighted for easy reference. A Governor asked why the broadband charge was so high. The Head explained that the cost in 2008/09 was only for 7 months. As part of this process the Governors agreed the staff and Governors training budget. Particular attention was also paid to the SLA s worksheet and discussion took place around the continuation/cessation of them. Governors agreed to continue with them all but to review the XXXX in the forthcoming year. The Governors agreed the budget for showing a surplus of 15,000 and 2010/11 surplus of 2,000. This will be presented at the next full Governing body meeting for approval. Or : The Governors approved the budget deficit of The Head reported that approval to set a deficit budget had to be sought from the LA and an action plan put in place to recover the deficit position. The Governors agreed to this action and requested a recovery plan be presented at the next meeting. ERYC FMSiS Guide 87

88 8) Pecuniary interest The Governors were asked to complete the pecuniary interest forms to enable the register to be updated. Absent Governors will be sent forms in the post. All completed forms are kept in the school office. All senior staff will also be asked to complete the forms. Update at next meeting. All Governors and senior staff have completed the forms and a register complied which was circulated with the agenda. 9) Statement of Internal Control / Best value statement The Head reported that it is a requirement of the FMSiS to have a Statement of Internal Control (SIC) and a Best Value Statement. Governors were asked to consider the precertification checklist for the SIC. Governors wanted more time to complete this and so it will be brought back to the next meeting. The Governors approved the Best Value Statement and the Head and Chair of Governors signed it. 10) Assessment Form for the FMSiS The assessment form completed by the Head and admin was presented to the Governors- AF1. The Head made the Governors aware of where there were gaps and the work that was required to achieve the Standard. The Governors agreed with the Head and Admin assessment and suggested a timetable be put in place listing the work still required and who would be responsible for completing it. The Governors noted that once the assessment was complete, it needed to be submitted via the DCSF website to the LA. 11) Earmarked Funds The underspend of on devolved capital and 600 on Harnessing Technology was noted. The school has a plan for the devolved capital budget that was circulated at the last meeting. The main item is the refurbishment of school toilets. The remaining e- learning credit money will be spent on new interactive whiteboards, an order has been completed for this. 12) Charging policy for Activities The draft charging policy was circulated with the agenda item 6- draft CP1/07. The Governors approved the policy. This will replace the existing policy on the school website and a copy will be available in the school office. A copy will be sent out to all parents. 13) Staffing Structure (personnel committee) The staffing structure was last reviewed 18 months ago. Although the structure is continuously updated as a member of staff leaves, the Governors felt it was appropriate to do a full review. The Governors asked the Head to prepare a report to be presented to the next committee meeting. ERYC FMSiS Guide 88

89 Catering -profit and loss account Income I09 Income from Catering Standards Fund grant Funding Delegated Total Income budget * actuals from East Riding Financials same as budget same as budget Expenditure E06 Catering Staff E25 Catering Provisions E28 catering SLA E08 Staff meals contractual E08 staff meals non contractual Total Expenditure from East Riding Financials from East Riding Financials from East Riding Financials from East Riding Financials from East Riding Financials profit/loss The Schools Finance Team will be sending out an outturn profit and loss account for to each school. It is recommended that this is presented to your next governing Body meeting The Schools Finance Team are developing an additional East Riding Financial monitoring report that will pull together all the actuals to do with Catering. This will make it easier for you to report on the position throughout the year. *Please be aware there is a profit and loss account on the 3 year budget plan from where you can enter the Budget column figures from (East Riding Financials is the new name for Masterpiece) ERYC FMSiS Guide 89

90 THE SCHOOL DEVELOPMENT / IMPROVEMENT PLAN (SDP) The following documents on the DCSF toolkit refer to SDP s:- S1.5- The School Development Plan- 5 pages R17- The School development Plan 58 pages S4.5 ICT Development Plans-6 pages The SDP is a high level strategic planning document covering all the school s activities over a period of 3 or 4 years. There is no nationally prescribed format for the plan. The development and implementation of the school s development plan should be an integral part of the school s management and governance. To ensure that the SDP is viable and that its implementation is feasible, it should be supported by a financial plan or multi year budget covering the same period. Suggested headings to consider are: Reference Number Objective (improvement target) Priority Action Person responsible Resource implications (monetary value or/and staff time) Monitoring and evaluation Impact (success criteria) Timescale Outcome Section 3.1 of the Standard states the school improvement/ development plan has sufficient scope and depth of the financial implications and it is reflected in the three-year budget. Therefore the three-year budget plan must be clearly referenced back the SDP. There is a column on the CFR worksheet (on the 3 year budget plan) to the right, that is clearly marked for cross-referencing to the SDP. ERYC FMSiS Guide 90

91 S3.6 - BENCHMARKING April 2009 IPF Web: [email protected] Web: [email protected] ERYC FMSiS Guide 91

92 SUMMARY OF GOOD PRACTICE Why Benchmarking is Important Benchmarking is a systematic process for comparing performance or processes in different organisations, or between different parts of the same organisation in order to learn how to do things better. The purpose of benchmarking is to improve performance or service by identifying where changes can be made in either what is done or how things are done. The best public service organisations have long been making comparisons between themselves and others without necessarily labelling the exercise as benchmarking. However, true benchmarking is more than just a ranking yourself against others or creating league tables as explained by the DCSF Value for Money Unit s guide to benchmarking (2003). It explains benchmarking differs from other improvement techniques because it: focuses on excellence; involves detailed comparisons; shares information openly between comparators to look at how performance is achieved; and involves front line managers and staff in seeking out and implementing change. LINKS For more help in understanding how benchmarking works and can help your school click here (R16). This will take you to the DCSF VFM Unit s CFR Framework website which has links to guidance that includes an explanation of: what benchmarking is how benchmarking can benefit schools how to benchmark school finances. For more background information on benchmarking click here (R113). This takes you to the Specialist Schools and Academies Trust publication Benchmarking A guide for schools managing their budgets. While aimed primarily at specialist schools and academies, there is useful guidance on the value of benchmarking and also using comparisons between schools to solve a range of common financial problems. The Benefits of Benchmarking for your School Financial benchmarking can provide schools with the evidence they need to identify significant differences in resource management, which may suggest there is scope to do things better, improving efficiency, reducing costs or identifying potential for savings. Typically, schools will share information about their own financial performance with others that are similar in terms of their location or educational provision. There is, however, sometimes merit in a school comparing itself with a different type of organisation that faces similar challenges. For example, a school that struggles to get parents to participate in its activities may learn some useful tips by comparing its approaches with say, those of a local volunteer organisation or a community sports club. Care is needed, however, in interpreting benchmarking data. Such data may not necessarily furnish schools with the answers to their problems but usually helps them to identify questions that need to be asked, or highlights issues or processes that need to be investigated. Data can give an accurate For more help in understanding how benchmarking links to the compare element of Best Value, including a range of suggested applications for benchmarking, click here (R34). This will take you to the to a DCSF guide on Best Value in Schools (May 2002). It includes: Further guidance on benchmarking including the key components for success in section 4. Case studies of best practice examples of benchmarking For up to date guidance on the application of benchmarking in schools, go to the DCSF VFM ERYC FMSiS Guide 92

93 SUMMARY OF GOOD PRACTICE indication of one school s performance compared with another, but does not necessarily account for it. There may be very good reasons for high or low performance figures, such as the composition of the staff, the abilities of the pupils, or the age or the quality of the premises. What is important is that school management staff and governors review the differences between the school and other institutions, and find out the reasons for them. Questions might include: LINKS Unit website: (R35) are there special circumstances about the way resources are allocated in other schools? did the comparison run counter to expectations? If so, why? Where can you find benchmarking data? There are a number of sources of benchmarking data: often schools will rely on contacts within their own LA for data. Such data is usually valid and easy to interpret. Through personal contact with the LA, it is often possible to focus on data relating to particular areas of concern. Groups of organisations wishing to share data are often referred to as benchmarking clubs the Audit Commission Schools web site has a benchmarking tool called Comparing School finances that has been available for some years. Currently, nearly 6,000 schools have registered with the site and the latest data available is for 2001/2 (some data are also available for the previous two years). The site has helpful menus of comparable schools and can provide informative bar charts. Not all these data, however, has been gathered using Consistent Financial Reporting (CFR) methods, so there are risks that the data may contain inconsistencies and should, therefore, be interpreted with care. This site will be superseded by the one referred to below, but it is expected that there will be links from one site to the other for some time DCSF Value for Money unit has developed a benchmarking web site jointly with the Audit Commission and Ofsted and this makes use of the CFR data now available from most schools nationally. This web site should provide data that has been assembled in a more consistent manner, thereby making comparisons more reliable. The site is available on line through the DCSF Value for Money web site or the link opposite For more help on the way Consistent Financial Reporting (CFR) can help benchmarking click here (R16). This will take you to the DCSF CFR Framework site and: Explains the CFR Framework, its purpose and status Gives detailed definitions of what to include in each part of the CFR Framework Gives guidance on how CFR data can be used for benchmarking Shows how to use the DCSF CFR data collection website The joint DCSF, OfSTED and Audit Commission benchmarking website is available for use at the following address ERYC FMSiS Guide 93

94 BENCHMARKING Section 3.2e of the Standard includes a requirement to discuss benchmarking with the Governors i.e. 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 Assessment Criteria 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. The comparator schools are fair and reasonable Reasonable conclusions and recommendations have been drawn from the comparisons made and these have been made known to the Governing body. Where appropriate, an action plan has been put in place with progress against it monitored. The toolkit has a Summary of good practice for benchmarking. This has links to other benchmarking documents plus a link to the DCSF Value For Money website where a guide to accessing and using the benchmarking website can be found. The East Riding also produces an annual Key Indicators report which can be used in providing evidence that the above criteria have been considered and actioned. The following is an extract taken from the VFM website (Please note that we advise you read the whole document on the website):- School Login Once a school has entered their username and password, the user will go straight to the school data page, displaying the schools CFR information as follows. ERYC FMSiS Guide 94

95 The school data page is split into various sections: About the school shows the number of pupils and teachers in the school. There must be at least one of each. Revenue Income, Revenue Expenditure, Capital Income, Capital Expenditure and Balances these are the Consistent Financial Reporting headings. School Data Summary shows the total revenue income and expenditure and the difference between the two. Guidance box small amount of guidance specific to this section. Custom data and store as custom data. Criteria Selection: This is the most difficult section of the site, it enables you to choose a group of similar schools to your own to compare against. There are over 22,000 schools on the database so it is necessary to select criteria carefully. You are required to find a benchmarking group of between 3 and 80 schools (unless you select schools within your own Local Authority, then the minimum is 7). The lower limit is to protect the anonymity of schools; the upper limit is to make the charts readable. We strongly advise that between 20 and 30 is the optimum number of schools for benchmarking. The top chart allows you to look at the values either as a percentage per pupil or per teacher of income/expenditure. You can change this view by selecting from the Chart Mode drop down box in the top right hand corner. The lower chart displays the actual value. ERYC FMSiS Guide 95

96 Collaboration and context information If you click on a chart on the charts page, a pop-up window appears with an enlarged view of the selected chart. On this view, codes are given at the bottom of each bar that are consistent between charts. This allows you to identify similar schools that are consistently spending less than you on important aspects of expenditure. ERYC FMSiS Guide 96

97 ing schools: For school users only, there is a facility for users to contact schools like this via an anonymous that will invite the receiving school to contact the sender to talk about the benchmarking findings. ERYC FMSiS Guide 97

98 ERYC FMSiS Guide 98

99 Financial Information fir Governors to be included in the Governors Induction pack provided by the Governors Clerking Section FINANCIAL INFORMATION F1 General Information F1.1 Sources of Reference The Allocation Formula for Funding Schools Manual Finance Manual (Adapted) for Schools Guidance Scheme for Financing Schools Bank Account Manual for schools operating their own bank account The Constitution- LEA Financial Regulations and Standing orders Finance Newsletter to Headteachers (monthly) F1.2 Funding Information given out before the start of the financial year In late February or early March, schools will receive a pack of information relating to their budget for the following financial year. This will include: Annex 1 Standards Fund Allocations Guidance Notes Appendix 1 Values per Pupil and Block Sum Allocations Appendix 2 School Budget Share and Standards Fund Initial Allocations Appendix 3 Special Educational Needs Funding Appendix 4a Statement Funding 2009/10 Appendix 4b Statement Funding 2010/11 Appendix 5 Statement Level Matrix Appendix 6 Standards Fund Initial Allocations Appendix 7 Library Devolved (primary schools only) 2009/10 Appendix 8 Data Appendix 9 Minimum Funding Guarantee and Top Up Appendix 10 CFR Apportionment 2009/10 Appendix 11 SDG Please note: School Funding is often referred to as Appendix 2 Funding F1.3 Schools Formula Funding Knowledge of how the funding is calculated for each school is useful in making informed decisions, in formulating the budget and for predicting future years. Although there are several elements of the formula, the main areas to concentrate on are: Age Weighted Pupil Funding (AWPU).- Funding based on the number of pupils on the January PLASC date up to Y11. This will make up 75% plus of your budget total. SEN funding - How much has the school received and how is it used to benefit pupils with SEN? Social deprivation funding - How much has your school received and how will it be used to benefit those pupils? Learning and Skills Council (LSC) funding (only schools with 6 th forms).- How will the number of pupils and the courses they have chosen affect the funding calculated by the LSC? Standards Fund- What is included and how much of it is ring-fenced or capital? Personalised Learning Is this allocation used effectively to improve attainment? ERYC FMSiS Guide 99

100 F1.4 Alternative sources of funding School may wish to investigate external sources of funding to enhance their formula funding. Such as F1.5 Preparing the Budget (3 Year Plan) Once a school has received its funding notification, it needs to decide on its budget, taking into account the priorities identified within its school improvement plan. A budget is a plan of action in monetary terms. It is a forecast of planned income and expenditure. Section 3.1 of the Standard. As part of the Schools Finance Team SLA, schools are provided with a 3-year plan spreadsheet to assist in planning the budget. The SLA also covers 2 free visits a year to aid the school in preparing the plan. The plan can also be used by schools to cost out various scenarios to help in decision-making. The consol sheet in the 3-year plan is the summary of the annual budget by detail (ledger) code. This is used to update the budget for the school s financial ledger (FMS) and, when the plan is sent to the authority, to update the authority s ledger East Riding Financials (formerly known as masterpiece) F1.6 Consistent Financial Reporting (CFR) The Government introduced CFR in The CFR framework summarises school level financial information into consistent headings. This means that each school in each authority is recording the same type of expenditure under the same heading. One of the main reasons for introducing CFR is to allow schools to benchmark at national level. F1.7 Approving the Budget The budget once prepared has to be approved by the full Governing Body or, if delegated, the appropriate Committee, and sent in to the authority by 31 May, as set out in the Scheme for Financing Schools. The minutes of the Committee where the budget has been discussed needs to be. Section 3.1 of the Standard. F1.8 Monitoring the Budget Monitoring the budget is the process of comparing the profiled budget to what has actually happened. Significant variances need to be investigated. Monitoring reports should be presented termly at governing body meetings to allow governors to review the budget and ask questions. Section 1.2, 1.3 and 5.1 of the Standard. Budget monitoring is important because it identifies when things are costing more or less than originally thought and budgeted for. If an item costs more than expected, then savings in other areas may need to be identified and virements actioned to move the budgets. If an item costs less, then additional expenditure may be incurred in other areas. This is an ongoing process. Schools should benchmark against other similar schools to ascertain whether their spending is similar or be able to identify why it is significantly different. The reports presented to governors should be from the authority s ledger. If the school presents its own reports, the governors need to satisfy themselves that they are happy with the content. Capital and revenue budgets should be monitored and reported separately. ERYC FMSiS Guide 100

101 F1.9 Monthly Monitoring Reports The authority sends out monitoring reports to schools on a monthly basis. These consist of a transaction report and a summary report. The summary report shows revenue and capital separately. These should be checked and reconciled by the school to FMS and should be signed off by the Headteacher, preferably within the month of receipt. Reconciliation is comparing (checking) two or more pieces of data and ensuring they match. Queries should be sent to Schools Finance as soon as possible. A monthly letter is also sent out by schools finance at about the same time as the reports. The letter updates schools on current financial issues. F1.10 Revised Budgets Schools are required to send in a revised budget (revised 3 year plan) to the authority by 31 October. This should reflect what has actually happened at this point in the year and project what is going to happen up to the end of the financial year. F1.11 Relationship between East Riding Financial (Masterpiece)/FMS/ 3-year Plan The 3-year plan is the budget planning tool, East Riding Financials is the authority s financial ledger and official record of the schools transactions and budgets and FMS is the schools own record. Each of these should show the same budget and as one is updated so should the others. F1.12 Forward Planning The 3-year plan allows for forward planning. The plan is a work in progress document and as anticipated funding, costs or income change throughout the year, these need to be reflected within the plan. The 3 year plan calculates future funding based on pupil numbers and it is advisable that a school looks at different scenarios based on various changes to pupil numbers in order to be prepared should this be realised. F1.13 Schools Carry forward Budgets. Under/ over spends At the end of the year, the net revenue costs of each school (according to East Riding Financials) are compared to the budget available and an under (surplus) or over (deficit) spend position is calculated. If a school has under spent, this is carried forward to the next year and is added to the next year s funding. If a school has over spent this is taken off the next year s budget. If schools plan to overspend they must seek approval for setting a deficit budget, with a plan as to how they will recover the position. Governors should consider what surplus balances will be used for. If the school is in a deficit position, the governors need to consider how it will recover the position. F1.14 Scheme for Recycling of Excessive School Balances This policy can be found on the intranet or a summary within the Schools Formula Funding Manual Any school with a revenue balance over the set limit (5% secondary, all others 8%) at the year-end will have the excess taken off them. Balances can only be carried forward above these limits if the school submits a request, which is inline with the exceptional circumstances detailed in the guidance, before 31 December prior to the year- end and approval is granted. ERYC FMSiS Guide 101

102 F1.15 Revenue and Capital Expenditure- definitions Revenue- Expenditure incurred for the purpose of the organisations daily activity, or to maintain fixed assets Capital Expenditure on the acquisitions of a tangible asset (e.g. building, large IT equipment) or expenditure which adds to and not merely maintains the value of an existing asset. It should provide a benefit to the school and the services it provides should be for more than one year. F1.16 Ring-fenced and non ring-fenced Funding -definitions Ring fenced is funding given for a specific purpose and must be spent only for that purpose. Specific detail (ledger) codes are allocated for this purpose to enable budgets and expenditure to be monitored separately. I.e. devolved capital, Harnessing Technology, school travel plans etc Non ring-fenced funding. The majority of funding is non ring-fenced and can be spent for any purpose linked to the running of the school. ERYC FMSiS Guide 102

103 F2 Financial Management Standard in Schools Governors should be aware of the Financial Management Standard in Schools (FMSiS) it is a legal requirement. Secondary schools had to achieve the Standard by March 2007, with 40% of primary and special schools to achieve the Standard by March 2008, a further 40% by March 2009 and the remainder by March Schools will then be assessed every three years. F2.1 What is the FMSiS? The Financial Management Standard itself is a simple statement of what a school that is well managed financially would look like. The Standard covers strategic audit and other activities that schools should already be completing. This is assessed under five headings :- Leadership and Governance People Management Policy and Strategy Partnership and Resources Processes - F2.2 The FMSiS Toolkit The DCSF developed a financial toolkit to assist schools in meeting the Standard. The toolkit; Explains the key activities and characteristics that are required to meet the Standard Links features of the Standard to good practice summaries, that are in turn linked to detailed supporting resources. F2.3 Assessment Tool / Submission to the Local Authority A school needs to determine who will carry out (complete) this assessment, (sometimes referred to as the self-assessment) ie Head, bursar, finance committee, all governors, or a combination and then an agreed position needs to be determined and approved by governors (see G5A) Guidance for schools-completing the Assessment Form. Once an agreed position has been reached the school should submit this version to the local authority via the FMSiS website. F2.4 External Assessment Process External assessors can be:- Own Local Authority Finance/Internal Audit staff Local third party assessors accredited by the LA National third party assessors. A school will need to provide a completed assessment along with supporting evidence, clearly bookmarked to the external assessor before the external assessment can be carried out. ERYC FMSiS Guide 103

104 F2.5 Timetable Secondary schools had to achieve the Standard by March 2007, with 40% of primary and special schools to achieve the Standard by March 2008, a further 40% by March 2009 and the remainder by March Schools are then re-assessed every three years. 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) F2.6 Section 151 Report The Local Authority S151 Officer (Head of Finance) will be 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 within 12 months. F2.7 Benchmarking Benchmarking is a systematic process for comparing performance or processes in different organisations, in order to learn how to do things better. Financial benchmarking can provide schools with the evidence they need to identify significant differences in resource management, which may suggest there is scope to do things better, improve efficiency, reduce costs or identify potential for savings. (See S3.6 of the toolkit) Benchmarking is about ensuring that every pound is spent in the most effective way. It encourages schools to question their current and past spending patterns and can give reassurance if similar schools are doing similar things or can raise questions. Section 3.2 of the Standard asks for evidence that the school has used the DCSF benchmarking website to compare its performance with others, which area have been identified for improvement and which targets have been set for their achievement. The findings need to be discussed with the school governors and reported in the minutes. Schools are also provided with local benchmarking information within the authority. F2.8 Statement of Internal Control Section 1.4 of the Standard requires a Statement of Internal Control) (SIC) that sets out the processes that are in place to ensure effective financial management of the school and its resources. Discussion of the draft SIC by the governing body, and its ultimate signature by the head teacher and key governors, demonstrates that they acknowledge responsibility for financial management of the school and take that responsibility seriously. A specimen statement of the SIC comprising of 5 paragraphs can be found on R15a. A full guide can be found on R15 including a model statement at appendix 1 and Pre-certification checklist at appendix 2, and R15b is the pre-certification checklist. This must be completed by Governors before the signing of the SIC. The Model SIC is designed to be brief but informative. F2.9 Whistle Blowing Policy Section 1.5 of the Standard requires evidence that school staff and governors are aware of the Local Authority Whistle-Blowing Policy. The policy is intended to encourage and enable staff ERYC FMSiS Guide 104

105 to raise serious concerns within the School rather than overlooking a problem or blowing the whistle outside. If the school adopts the authority s policy, it can be found on the Intranet. F2.10 Best Value Statement Section 4.2 of the Standard requires the school to produce a signed Best Value Statement. The Principle of Best Value the four C s (Challenge, Compare, Consult and Compete). R34 of the toolkit is a 32 page Guide to Best Value in Schools and R37 is an example of the statement. F2.11 Governing Body Minutes The Governing Body minutes are a vital source for some of the evidence required to meet the Standard. It is important that financial discussions and decisions are minuted in some detail. Minutes are also required as evidence for any sub-committees where discussions on financial issues have taken place. Any financial reports taken to the meetings and discussed need to be cross referenced back to the minutes and either kept with the minutes or in a separate file as evidence. Section 1.2 of the Standard F2.12 Register of Business Interests Section 1.5 of the Standard requires governors and senior staff to have been given the opportunity to declare business interests (including those of close family members) and that the register is regularly reviewed and updated. The minutes of a governing body meeting should record this process. F2.13 Scheme of Delegation A school should have a scheme of delegation that sets out the roles and responsibilities of the Head teacher, bursar (or anyone else with financial responsibility) its full Governing body and its Finance committee. The scheme should cover virement and ordering and spending limits. This could form part of an overall finance policy document see R31 Standards For Financial Management (example of ABC school). The scheme of delegation must be approved by the Governing Body. Section 1.1 of the Standard F2.14 Financial Management Competencies school staff and governors Section 2.2 requires self evaluation of school staff with financial responsibilities. See R11 and R11a. Section 2.1 requires Governing Bodies to self-evaluate competencies. See R20 and R20a. It may highlight training issues that need to be addressed. F2.15 Effective Control Systems Section 5 requires effective control systems to be in place. R52 is a Controls Self Assessment. The Governing Body needs to either formally adopt the authority s financial regulations and policies or approve their own. See S5.2 internal financial controls. If the school adopts the authority s financial regulations this will cover the retention of documents, Section 5.6 of the Standard. F2.16 Charging Policy Section 5.7 of the Standard requires the Governing Body to establish a charging policy and review it annually. See S5.2 Internal Financial Controls ERYC FMSiS Guide 105

106 F2.17 Reserves and virements 1.3 c FMSiS states The schools financial performance has been substantially in line with budget and there is evidence of regular and active monitoring by governors and the head teacher. Please be aware that the reserves figure on East Riding Financials should be the amount that you are expecting to be your year-end balance. Virements (moving budgets) should be actioned as necessary throughout the year. If your carry forward at the end of varies significantly to your reserves amount, you need to investigate if action should have been taken that wasn t. Also does the year-end position vary significantly to what the school had been reporting to Governors. An explanation of variances should be presented to Governors once you have your confirmed carry forward position. F2.18 School Development Plan (SDP) The SDP should be approved by Governors. It should include costings that can be linked to the 3- year budget plan. Governors should be kept up-to-date with progress made in relation to areas identified in the plan. Section 3.1 of the Standard ERYC FMSiS Guide 106

107 F2.19 Further information Further details on the FMSiS can be found in Alternatively look on the DCSF value for money website. The site provides a lot of guidance and useful examples as below:- DCSF Financial Management Standard in Schools and Toolkit Index General Documents G2: FMSiS Purpose, Key Benefits and Summary of the Standard G3B: Guide to further best practice in financial management G4: Financial Management Standard and Assessment Tool 2009/10 You can find additional guidance in G3A and G5A. G3A can be found as an FMSiS related document under Resource documents. G5C: Guidance on the evidence that may be used to support assessment G5B: DCSF Approved FMSiS External Assessors List This replaces the previous G5B document, which is now merged with G5A. G5A: Guidance for Schools and External Assessors on completing the Assessment Form G6: Glossary of Abbreviations and Financial Terms Used In Schools G7: Comments to help users, summary of 2009 amendments, and list of deletions Summary Documents S1: Leadership and Governance S1.1: Role of the Head Teacher S1.2: Role of the Governing Body and its Committees S1.3: Role of the School Business Manager (or equivalent) S1.4: Governance and Accountability S1.5: The School Development Plan S1.6: Whistle blowing S1.7: Culture management S2: People Management S2.1: Staff financial management competencies and qualifications S2.2: Governing Body financial management competencies and qualifications S2.3: Governor and staff recruitment S3: Policy and Strategy S3.1: Setting annual and multi-year budgets S3.2: Option appraisal S3.3: Risk management S3.4: Insurance for schools S3.5: Achieving value for money S3.6: Benchmarking S4: Partnership and Resources S4.1: Procurement and supplier management S4.2: Income sources S4.3: Staff management and deployment S4.4: Managing premises S4.5: ICT Development Plans S4.6: Managing relationships with the local authority and other partners ERYC FMSiS Guide 107

108 S5: Processes S5.1: Budget monitoring and reporting S5.2: Internal financial controls Resource Documents FMSiS related documents G1: How to use the Standard R2: School Standards And Framework Act (1998) For updates on the Scheme for Financing Schools see Useful Links and R119. R3A: Governing body decision planner (2005) You may also find the following to be of particular interest: R4, 10, 15, 20, 21, 32, 73, 92, 121,129, and 130. G3A: Guide to achieving the standard R3: Guidance on the Roles of Governing Bodies and Head Teachers (2000) You may also find the following to be of particular interest: R4, 10, 15, 20, 21, 32, 73, 92, 121,129, and 130. R4: Guide to the Law For School Governors (2008) You may also find the following to be of particular interest: R3, 3A, 10, 15, 20, 21, 32, 73, 92, 121,129, and 130. G5C: Evidence sources for the Assessment Criteria (Bradford) G5C: Evidence sources for the Assessment Criteria (Hertfordshire) G5C: Evidence sources for the Assessment Criteria (Oxfordshire) G5C: Evidence sources for the Assessment Criteria (Staffordshire) R11: A brief guide to the financial competencies of School Staff R12: Sample School Business Manager Job Description and Person Specification You may also find the following to be of particular interest: R13, 126 and 137. R12A: Example Primary School Business Manager Job Description and Person Specification You may also find the following to be of particular interest: R12, 12B, 13, 126 and 137. R12B: Example Secondary School Business Manager Job Description You may also find the following to be of particular interest: R12, 12A, 13, 126 and 137 R13: Discover the benefits of School Business Managers (2008) You may also find the following Resource documents to be of particular interest: R12, 12A, 12B, 126 and 137. R15: Statement of Internal Control Guide, Specimen & Pre-Certification Checklist for Governors Governors may also find the following to be of particular interest: R3, 3A, 4, 10, 20, 21, 32, 73, 92, 121,129, and 130. R16: Consistent Financial Reporting Framework (2007) R17: Example School Development Plan R18B: School Culture Audit Analysis Spreadsheet To be used in conjunction with R18A and C. R18 provides further general guidance. R18C: Unblocking Strategies To be used in conjunction with R18A and B. R18 provides further general guidance. R18A: School Culture Audit Questionnaire To be used in conjuction with R18B & C. R18 provides further general guidance. R19: Guidance on Performance Management in Schools R20: A brief guide to the financial competencies needed by the Governing Body Governors may also find the following to be of particular interest: R3, 3A, 4, 10, 15, 21, 32, 73, 92, 121,129, and 130. R23A: Cash flow pro-forma R30: Brief Guide to the Development and Review of Risk Registers and Response Plans See S3.3 for links to other documents that may be of particular interest. ERYC FMSiS Guide 108

109 R32: Financial Guidance for Governors The following may also be of interest: R3,3A,4,10,15,20,21,73, 92, 121, 129, and 130. R37: Example Best Value Statement R40: A Staff Management and Deployment Self Evaluation Checklist R64 may also be of interest. R41: School companies R43: Area guidelines for schools R44: Asset Management Plans R45: Code of Practice on LA - School Relations (2001) R45A: Code of Practice on LA - School Relations (2001) Annexes R46: The Role of the Local Authority in School Education - the Local Performance Framework R48: A Brief Guide to Fraud Detection and Response R49: Blue Book for VA Schools on capital funding R50: ICT Leadership and Management R51: Charity Commission requirements for schools R52: Primary and Secondary Schools: Financial Risk and Control Checklist R59: Education Act (2002) R60: School funding - the legal framework R64: Reforming and developing the school workforce (2007) R40 may also be of interest. R66: Model pay policy R67: Pay calculator R69: Framework for inspecting schools R71: A New Relationship with Schools - Next Steps (2005) R73: Governing the school of the future (2004) You may also find the following to be of particular interest: R3, 3A, 4, 10, 15, 20, 21, 32, 92, 121,129, and 130. R75: Managing School Resources Self Evaluation Tool R81: General code of conduct and registration of interests for senior staff ( 2005) R84: Extended Services Guidance R109, 129, 130 and 136 relate to Extended Schools, and may also be of interest. R88: Clerk to the governing body - overview You may also find R117 to be of particular interest. R90: School funding settlement R102: Energy efficiency advice available from the Carbon Trust R105: Remodelling the school workforce R107: More than the sum (2006) R109: Extended schools R84, 129, 130 and 136 also relate to Extended Schools, and may be of interest. R117: Taking minutes of meetings You may also find R88 to be of particular interest R119: Schemes for Financing Schools: Directed Revisions DfES guidance ( 2006) R129: Extended Services Toolkit for Governing Bodies You can find more information on Extended Schools in R84, 109, 130 and 136. Governors may also find the following to be of particular interest: R3, 3A, 4, 10, 15, 20, 21, 32, 73, 92, 121, and 130. R130: Governance of Sure Start Children`s Centres and Extended Schools (2007) You can find more information on Extended Schools in R84, 109, 129 and 136. Governors may also find the following to be of particular interest: R3, 3A, 4, 10, 15, 20, 21, 32, 73, 92, 121, and 129. R133: The impact of school leadership on pupil outcomes (2007) R138: Financial Management - responsibility matrix You may also be interested in R146. R142: Budget monitoring, summary level - guide and proforma R142: Budget monitoring, summary level - guide and pro-forma ERYC FMSiS Guide 109

110 R144: Evaluation of the Impact of FMSiS (2008) R145: Financial Planning and Reporting R146: Statement of Roles and Responsibilities You may also be interested in R138 R147: Finance Year Planner for Governors R148: Applying Clawback Mechansms to Surplus Schools Revenue Balances (2008) R148: Applying Clawback Mechanisms to Surplus School Revenue Balances (2008) R149: How to produce an individual school budget share (2008) R150: Thinking ahead: exploring the strategic role that Head Teachers and Governors carry out in partnership (2008) R151: Managing Your School Further general guidance R1: Keeping Your Balance (2000) R10: School Governance Making It Better (2001) You may also find the following to be of interest: R3,3A,4,15,20,21,32,73,92,121,129,and 130 R18: School Effectiveness - The Cultural Imperative: A Guide to Culture Management R21: Help Schools Help Children School Governor Recruitment Toolkit (2003) Governors may also find the following to be of particular interest: R3, 3A, 4, 10, 15, 20, 32, 73, 92, 121,129, and 130. R24: Getting the Best from your Budget (2000) You may also be interested in R75. R25: Finding the Right Solution: A Guide to Option Appraisal (2002) R26: Worth the Risk? (2001) See S3.3 for links to other documents that may be of particular interest. R27: Insurance for Schools See S3.3 for links to other documents that may be of particular interest. R29: Risk Management Policy and Action Plan See S3.3 for links to other documents that may be of particular interest. R34: Best Value in Schools (2002) R35: DCSF Guidance on Benchmarking (2008) R36: Purchasing Guide for Schools (2001) The following Procurement documents may also be of interest: R87, 102, 104, and 139. R39: A Brief Guide to Setting Up and Managing Relationships with Outside Organisations R78: Parents satisfaction with schools (2006) You may also be interested in R96. R87: Educational Procurement Centre (EPC) You may also find the following Procurement documents to be of interest: R36, 102, 104, and 139. R91: Guidance on the Extended Schools Initiative and the provision of pre-school childcare R92: Guide for school governors on improving school performance (2006) Governors may also find the following to be of particular interest: R3, 3A, 4, 10, 15, 20, 21, 32, 73, 121,129, and 130. R93: Tackling falling Primary school rolls R94: Best practice in self-evaluation: a survey of schools, colleges and local authorities (2006) R95: School Self Evaluation and RAISEonline R96: Setting up Parent Councils case studies / research report 2006 R78 may also be of interest. R97: The logical chain: continuing professional development in effective schools (2006) R99: Funding Strategy and Programmes R100: Salary sacrifice option for teachers R103: Investigating the Effective use of Resources in Secondary Schools Research Report (2006) R104: Guidance on Procuring School Meals ERYC FMSiS Guide 110

111 You may also find the following Resource documents that relate to Procurement to be of particular interest: R36, 87, 102 and 139. R112: Analytics to help with efficiency and performance R115: Independent study on school leadership (2007) R120: Schools Private Finance Initiative R121: Information for Prospective Governors You may also find the following to be of particular interest: R3, 3A, 4, 10, 15, 20, 21, 32, 73, 92, 129, and 130. R124: Funding per pupil R126: SBM (formerly Bursar) development programme: impact and evaluation reports You may also find the following Resource documents to be of particular interest: R12, 12A, 12B, 13 and 137. R127: Risk management See S3.3 for links to other documents that may be of particular interest. R128: School Teachers Pay and Conditions (2008) R131: Performance management R135: Capital Investment for Schools R136: How well are they doing? (2008) - Extended Schools and Sure Start Children`s Centres You can find more information on Extended Schools in R84, 109, 129 and 130. R137: Certificate and Diploma of School Business Management You may also find the following to be of particular interest: R12, 12A, 12B, 13 and 126. R139: OGC Procurement webpage You may also find the following Procurement documents to be of particular interest: R36, 87, 102 and 104. R140: Disability Discrimination R141: Education Improvement Partnerships (EIPs) Useful Links Audit Commission Becta DCSF Value for Money unit Governornet CIPFA Commerical Services National Association of School Business Management National College for School Leadership Ofsted Scheme for Financing Schools Schools Financial Benchmarking Teachernet Training and Development Agency for Schools (tda). ERYC FMSiS Guide 111

112 ERYC FMSiS Guide 112

113 Glossary ERYC AWPU PLASC CFR FMS VFM IPF FMSiS SIC SEN SLA Funding Budget Actual Virement Journal transfer East Riding Financials Profiled Budget East Riding of Yorkshire Council Age Weighted Pupil Funding Pupil Level Annual School Census Consistent Financial Reporting Financial Management System (schools own financial record) Value for Money Institute of Public Finance Financial Management Standard in Schools Statement of Internal Control Special Educational Needs Service Level Agreement Amount the school has to spend What the school intends to spend Net spend actually incurred by the school movement of Budget between Budget headings movement of actual expenditure or income from one detail (ledger) code to another. Previously known as Masterpiece. The authority s ledger. The official financial record of the school The budget is spread across the year into the periods in which it is expected to be spent. Ie monthly, quarterly, one off payments ERYC FMSiS Guide 113