1. Ensure opening balances correctly stated at 1 September 2013 in nominal ledger. The brought forward balances at 1 September 2013 per the audited financial statements at 31 August 2013 were 28,698,597. The brought forward balances in the nominal ledger amounted to 28,701,329. The difference of 2,732 relates to a journal entry entered on the financial management system (FMS) at 31 August 2013 after the final trial balance on which the financial statements were based had been extracted. Entries should not be made on the FMS system after the final trial balance on which the financial statements are based has been extracted. We will take account of this adjustment in preparing the 31 August 2014 financial statements. We will ensure entries are not entered between the final audit and the close down of FMS in the future. 2. Check bank reconciliation statements have been prepared at least once a month on all bank accounts. Ensure the bank balances agree to bank statements and the nominal ledger. Enquire into long outstanding items on the bank reconciliations. Reviewed bank reconciliations at 4 February 2014. Reconciliation statements had been prepared and authorised by the Head Teacher and Business Manager. Several long outstanding lodgements and cheques were noted on the listing of un-reconciled items. We understand that the long outstanding lodgements relate to duplicated income entries. These should be corrected. Long outstanding cheques should be investigated, and, if necessary, have payment stopped, or be reversed in the FMS system. The outstanding lodgements have been corrected. The long outstanding cheques have been cancelled on FMS. There was no bank reconciliation prepared at 31 January 2014 or, indeed, The FMS system should be closed at each period end and a bank We are now closing each period on 1 st of the following month Page 1 of 5
at any month end. The FMS system is not closed for each monthly accounting period. reconciliation statement, aged creditor report, aged debtor report and VAT claim printed at that stage. In this way control account balances on the monthend trial balance will be seen to agree with detailed reports. after printing the bank reconciliation statement, aged creditor report, aged debtor report and VAT claim and checking against the month end trial balance report. 3. Review aged creditor and debtor reports for long outstanding balances. Ensure that balances per the aged reports agree with control account balances on the nominal ledger. The balance per the aged creditor and debtor reports at 26 February 2014 agreed with the balances on the nominal ledger control accounts. 36,730 of the total debtor control account balance of 45,082 was shown as aged at 90+ days. We understand that the bulk of this amount relates to lettings that have been invoiced in advance. See 2 above. The academy should review the aged debtor report to confirm that action has been taken to ensure that there are no bad or doubtful debts included in the listing. We are continuing to monitor our debtors balances. We are confident that there are no bad debts included in our aged debtor listings and the reason for the high debtor control balance is due to debtors requesting early invoicing. 4. Check EFA grants to which the academy is entitled are credited to the bank account each month and that these have been correctly analysed between relevant ledger codes in the nominal system. Verified all EFA income for the period to 31 January 2014 with EFA remittance advices. Income had been correctly allocated to relevant accounts in the nominal ledger. Page 2 of 5
Ensure that the academy is aware of the need to claim rates and insurance grants from the EFA and that these claims have been made. Claims have been made and funding received. 5. Review capital grants due from the EFA (Academies Capital Maintenance Fund and Devolved Formula Capital) by reference to grant award documentation. Windows project documentation reviewed (total project: 457,438) and payments due in November 2013 ( 114,360) and December 2013 ( 228,719) received and checked to bank statements. 6. Review capital expenditure, ensure that tender procedures have been followed and that payments have been authorised in terms of the academy financial procedures manual. Tender procedures followed and payment made on architect/consultant certificate and valid supplier invoice. Capital expenditure has not been included in capital expenditure ledger codes, but will be transferred at the year end. 7. Review the catering revenue system and trace the cash takings for one day from the point of sale system reports to bank statement and nominal ledger. A cashless catering system is in operation with payments received via ParentPay and PayPoint. Catering income should all be credited to the catering income ledger code (8213-01 or 8214-01). The academy should periodically verify that catering income per the cashless catering system Correction journals have been posted so that all catering income is shown correctly against either 8213-01 or 8214-01 and no longer against Sales Income. We were unable to verify catering income in the nominal ledger with the cashless catering report for the period 1 September 2013 to 31 January 2014 as catering income had not all been Page 3 of 5
credited to the catering income ledger code in the period (it appears that the bulk of catering income had been credited to a sales income ledger code 8212-01). report agrees with, or is reconciled to, the nominal ledger. In this way it can be confirmed that all the catering income has been correctly accounted for. The academy should identify all catering income for the period and make a correcting entry to post it to the correct ledger account(s). 8. Review lettings income system ensuring that there is separation of responsibility for booking lettings, invoicing of the lettings charges and collection of revenue. The lettings tariff was last reviewed in April 2012. The academy should review the lettings tariff to establish that it reflects market conditions and covers the direct costs related to providing the service. This is currently in progress. 9. Review lettings receipting system. Trace income from receipts to nominal ledger and bank pay-in slips and statements. Reviewed lettings diary for period to 31 January 2014. Traced 2 lettings to invoices and bank pay-in records. 10. Obtain payroll reports for one month and check that the monthly costs have been analysed for posting to the nominal ledger system. The monthly payroll costs for November 2013 have been analysed for posting to the nominal ledger system. Ensure that payroll reports from the payroll agency have been checked and that changes to pay during the month are as authorised by the A salaries master list, approved by the Head Teacher, confirms employment and pay scale for each member of staff. Page 4 of 5
school. 11. Ensure that the payroll control account is reconciled each month, the balance comprising identifiable payments made or due in the following month. The payroll creditor payments and net pay for November 2013 agreed with the amounts due to be paid per the payroll reports and were checked to bank statements. Differences were noted on all payroll control accounts at 31 January 2014 other than PY50 (other deductions control). A schedule of the differences each month on each account was left with the Finance Officer. The balance on each payroll control account should be agreed each month with outstanding liabilities. The differences identified should be resolved and correcting entries made. Correcting entries have been made and all Payroll Control accounts now balance with outstanding liabilities. 12. Ensure that purchase orders are generated for all purchases made, where an order would be expected and that payment is only made after proper authorisation of the invoice, and that invoices are checked internally before being processed on the FMS system. Three purchase orders reviewed in the period to 31 January 2014 and purchase procedures found to be operating correctly. Page 5 of 5