Financial Procedures and Regulations

Reviewed by: Eleanor Fairford, Full Governing Body, 8th December 2022

Next Review: Autumn 2024

AIMS OF THE CODE OF PRACTICE

This code of practice brings together decisions made and systems established by the Resources Committee of Kelvin Grove School in line with the LA’s Financial Regulations, the advice of the Audit Commission, the Office for Standards in Education (OFSTED), and the Borough Auditors.

The aims of this code of practice are to ensure procedures which enable the Governing Body, Headteacher and staff:

To support the School’s Improvement Plan (SIP) by efficient use of resources.
To ensure financial accountability and integrity.

GOVERNANCE

The Governing Body has a strategic role in the financial management in schools; alongside the Headteacher they have direct control over substantial amounts of funding delegated to them and make key decisions about the allocation of financial resources. The Governing Body will be responsible for determining the guiding principles and for ensuring the school meets all its statutory obligations and complies with the School’s Financial Regulations and the Scheme for Financing Schools.

The aim of the Governing Body is to ensure that all resources made available to the school are used in an efficient and effective manner. The requirements of the Schools Financial Value Standard (SFVS) will be met, and the principles of best value will be considered at all times.

FINANCIAL ORGANISATIONAL STRUCTURE

Governing Body

Resources Committee

Headteacher and Leadership Team

ROLES AND RESPONSIBILITIES

Governing Body:

Role:

The School’s Financial Regulations state that the Governing Body are to carry out their functions with the aim of taking a largely strategic role in the running of the school. This includes setting up a strategic framework for the school, setting its aims and objectives, reviewing progress and the strategic framework in light of progress.

Responsibilities:

Ensuring the school meets all its statutory obligations and through the Headteacher complies with the Scheme for Financing Schools and Schools Financial Regulations.
Setting the educational financial priorities through the School Improvement Plan (SIP), ensuring that the SIP provides sufficient financial information to construct the budget plans for the school.
Ensure that a robust medium-term financial plan (3 year budget projection) and annual budget have been set, which reflects the educational priorities in the SIP.
Set up a Resources Committee to consider strategic financial issues on behalf of the Governing Body, including defining the terms of reference, the extent of its delegated authority and ensuring it receives minutes of the committee meetings. Its remit and membership should be reviewed annually.
Establish the financial limits of delegated authority to the Headteacher and/or other members of staff (including virements). The level of delegation of financial powers to the Headteacher must be reviewed annually and recorded in the minutes of the Governing Body.
Agree with the Headteacher the minimum frequency, level of detail and general format of financial reporting to the Governing Body.
Establish a register of business interests of Governors, the Headteacher and any other members of staff that influence financial decisions in accordance with the Schools Financial Regulations, and ensure it is maintained up to date.
Adopt the whistleblowing policy detailed in the School’s Financial Regulations
To approve the school’s annual budget.
To approve the school’s Finance Policy each year.
To prepare, approve and submit the school’s SFVS return and subsequently monitor the progress of any improvement actions.

Resources Committee:

Role:

To undertake finance functions as set out in the terms of reference approved by the Governing Body.

Responsibilities:

Draw up the budget for approval by the Governing Body, ensuring that the budget reflects the school’s priorities educational objectives outlined in the School Improvement Plan (SIP), in consultation with the Headteacher.
To establish and maintain an up to date medium-term financial plan (3 year budget projection), in consultation with the Headteacher, that reflects the SIP. This will include forecasting the likely future pupil rolls and income levels.
To monitor budgeted income and expenditure, to ensure planned expenditure for the year does not exceed the available resources and report any significant variances to the Governing Body.
Formally approve in-year budget revisions to the annual budget set (delegated by the Governing Body).
Consider the school’s policy for balances in accordance with the SFVS, including regularly reviewing the level of the school balance and the spending plan for the balance.
Explore different expenditure options and assess expenditure bids.
Ensure that the school operates within the Schools Financial Regulations and Scheme for Financing Schools, and provide financial information as required to the Local Authority.
Evaluate the effectiveness of financial decisions and refer specific problems to the Governing Body/relevant committee.
To monitor expenditure of all the school’s voluntary/private funds and ensure an annual audit is carried out in accordance with the section 16 of the Schools Financial Regulations.
To approve the spending decisions where there is a balance on the school’s voluntary/private funds.
Review and respond to reports by Internal Audit on the effectiveness of the financial procedures and controls.
To approve the ordering of all goods and services, and the payment of all accounts in excess of the degree of financial delegation given to the Headteacher.
Supervise and agree the purchasing or tendering of any items of expenditure up to £20,000.
Approve budget virements of over £10,000.
To annually review fee policy, including lettings charges, remissions and expenses policies.
To ensure that the school obtains value for money when purchasing goods and services from all suppliers including the Local Authority and outside contractors. This includes considering and approving the Local Authority traded services buy back decisions.
To make decisions on expenditure following recommendations from other committees.
To ensure that the schools financial performance is compared at least annually to similar schools, reasons for differences examined and action taken where necessary (including local financial analysis pack and national benchmarking data).
Evaluate the soundness and effectiveness of the school’s financial management systems against SFVS.
To ensure that accounts are properly finalised at year-end in accordance with the Schools Financial Regulations and other statutory legislation.
To ensure that the financial procedures are documented and regularly reviewed.
Consider and approve the authorised signatories.
Ensure financial records are maintained and that they provide sufficient explanations.
Consider all business plans for Extended Schools activities before taking a decision on each activity.

Headteacher/Leadership Team:

Role:

The Headteacher is responsible for the internal organisation, management and control of the school; and for advising and implementing the Governing Body’s strategic framework. In particular the Headteacher will formulate aims and objectives, policies and targets for the Governing Body to consider adopting; and report to the Governing Body at least once every school year. Where functions have been delegated to the Headteacher the Governing Body is able to give reasonable directions in relation to that function.

Responsibilities:

Leading and managing the creation of a strategic plan, underpinned by sound resource planning and which identifies priorities for targets for ensuring that pupils achieve high standards and make progress, increasing teachers’ effectiveness and securing school improvement.
To prepare the annual budget, based on realistic estimates of expenditure and income, sufficiently in advance of the financial year for consideration and approval by the Governing Body, including assumptions underpinning the budget.
To submit the approved budget to the Local Authority no later than 30 June each year.
To prepare regular reconciled monitoring reports, showing expenditure (including known commitments) and income against the approved budget. The report will include reasons for any significant variances; identify action to be taken/recommendations and progress on actions identified.
To consider budget revisions required and present to the Resources Committee for approval.
To submit any approved budget revisions to the Local Authority at least on a quarterly basis.
To ensure that the financial information provided to the Governing Body and Resources Committee meets their requirements; they are timely, accurate, understandable etc.
To report to the Governing Body/Resources Committee any policy changes where the budget will be significantly affected.
Identifying, evaluating and managing all significant operational risks to the school in accordance with the Local Authority’s risk management policy.
Ensuring that the relevant Local Authority regulations or DfE requirements are implemented.
Establishing sound internal financial controls, which are managed on a daily basis by the Headteacher and Finance Officer.
Ensuring effective implementation of the financial systems and procedures described in the financial procedure manual (even in the absence of staff), and that they are followed.
To ensure that arrangements are in place to monitor the effectiveness of internal/financial controls.
Checking that the funds delegated are correct.
To ensure that all expenditure from sources of earmarked funding is accounted for separately and that funding is used for its intended purpose.

Business Manager:

Responsibilities:

To assist the Headteacher to prepare the annual budget based on realistic estimates of expenditure and income, including assumptions underpinning the budget. Maintain appropriate working papers.
To assist the Headteacher in preparing regular reconciled monitoring reports, showing expenditure (including known commitments) and income against the approved budget. The report will include reasons for any significant variances; identify action to be taken/recommendations and progress on actions identified.
To provide monthly budget monitoring information to the Headteacher and cost centre budget holders.
To ensure that there are sound internal financial controls for the reliability and accuracy of schools’ financial transactions.
To ensure that there are written descriptions of financial systems and procedures which are kept up to date; and all appropriate members of staff are trained in their use.
To provide financial advice.
To generate and monitor income for the school.
To monitor expenditure charged to the school and correct any errors.
To submit the required FMS reports or equivalent to the Local Authority on a quarterly basis: fund review report, CFR report (showing the balances) and fund allocation audit trail.

Departmental Budget Holders:

Responsibilities:

To manage the budget delegated.
To ensure that all goods and services are procured in accordance with the Schools Financial Regulations.
To ensure that goods and services purchased are in line with the School’s Policy.

REGISTER OF BUSINESS INTERESTS

A register is maintained to record Governors and staff (and their immediate family) business interests, details of any other educational establishments that they govern, and any relationships between school staff and members of the Governing Body. The register is accessible to all, including members of the public via the school’s website: https://kelvingrove.lewisham.sch.uk/about-us/governors/

PROCEDURES

All documentation for accounts and finances will be kept in accordance with the Schools Financial Regulations. A procedure manual has been prepared for all financial systems and is regularly reviewed in accordance with the Schools Financial Regulations. It is available to staff and stored in the school office.

MINUTES

Minutes are taken at all Governing Body and Committee meetings, duly circulated and agreed. The minutes are accurate and include all the necessary information; clearly documenting issues discussed, items agreed and action to be taken.

Committee minutes are presented to the next Governing Body meeting, where they will be agreed as a true record and provide an update to the full Governing Body.

FINANCIAL SYSTEMS AND PROCESSES

FINANCIAL PLANNING

The school’s budget plan is central to the achievement of the school’s educational objectives. These objectives are contained within the SIP and are under constant review by the Governing Body (GB). The objectives are agreed annually providing sufficient time to allow the school’s budget to be prepared before the commencement of the financial year. A final budget plan will be agreed by the GB when notification of the school’s budget has been received.
Responsibilities devolved to the Resources committee, the Headteacher and School Business Manager, will enable them to make decisions and manage the school’s finances to achieve the overall aims and priorities established by the whole school and agreed by the GB.
By receiving regular reports from the Resources committee, the GB will be able to evaluate the extent to which financial decisions have promoted the prioritised educational objectives of the school and monitor the effective use of resources.

BUDGET MONITORING

Monitoring will secure value for money and financial probity whilst ensuring expenditure stays within budget. It will be achieved by adherence to agreed financial systems and procedures and particularly those relating to purchasing.
The Headteacher and School Business Manager will regularly monitor expenditure to ensure accuracy, especially payroll charges, and report to the Resources committee once a term.
Monthly financial reports to the LA, providing a reconciliation of the school’s bank and budget accounts and a VAT return, will provide the focus for monthly monitoring by the Headteacher and School Business Manager.
The November budget plan report to the LA will provide the focus for a review of the school’s spending against it’s original budget plan and spending profile and lead to an action report for the Resources committee. This process will also enable the school to address potential overspend and under spend.

Efficiency and Value for Money

The Governing Body has regard to the principles of best value when making decisions about how the available resources to the school are to be utilised.

PURCHASING

When placing an order value for money will be ensured by comparing prices/quality and obtaining discounts where possible.

Orders may only be authorised by the Headteacher or Deputy Headteacher.
All orders will be made on official pre-numbered requisition/order forms or electronically using SIMS.
When placing an order, the budget holder/designated person (Appendix 1) will ensure value for money by comparing prices/quality and obtaining discounts where possible
Where an order is made verbally or by telephone, it will be confirmed in a written requisition within 48 hours.
A copy of all orders will be passed to the School Business Manager and agreed to ensure the appropriate budget is available.
Where goods and/or services are regularly purchased from individual contractors, there will be regular checks to ensure the school is receiving value for money.
Limits of expenditure
- (All purchases less than £10,000 will be agreed and authorised by the Headteacher or Deputy Head.
- Over £10,000, 3 quotations will be obtained and over £25,000 and up to £50,000, 4 quotations will be obtained – the procedure supervised by the business management committee. If the number of quotes received is fewer than required, a decision will be taken by the Resources committee as to how to proceed.
- Expenditure above £50,000 will be put out to tender. 4 tenders must be sought.
- For capital expenditure in excess of over £100,000, approval must be sought from the LA.
Payment will be made by the Finance Officer when the following checks/procedures have been carried out:

Goods/services which were ordered have been received and are satisfactory in both quantity and quality.
The price is as agreed at the time of ordering, correctly calculated and with appropriate discounts.
Inventories have been updated where applicable.
Expenditure has been coded.
Appropriate VAT and taxation regulations have been applied.
Payments of expenses to the headteacher of £25 and above must be authorised by the chair of the resources committee

All invoices will be signed by a minimum of two signatories, BACs payments cannot be uploaded and authorised by the same person
An annual stock check will be carried out by the Head or Deputy and the designated person.

BUDGET VIREMENTS

The Headteacher will agree and approve all Budget virements up to £10,000. All Virements over £10,000 must be approved and agreed by the Resources Committee.

FINANCIAL CONTROLS

All financial transactions will be traceable from original documentation to accounting records, and vice versa.
All financial transactions will be recorded on the SIMS FMS Finance system. All accounting records will be securely retained when not in use and only authorised staff will be permitted access.
The school will maintain proper accounting records and retain all documents relating to financial transactions for at Least the period recommended by the LA. ref: Information Management Toolkit for School (01/02/2016)
The Headteacher will ensure that financial control is maintained in the absence of key personnel through staff training or by arranging job shadowing.
The Headteacher will ensure that all expenditure from sources of earmarked funding is accounted for separately and that the funding is used for its intended purpose.
Monthly reports to the LA will be completed by the School Business Manager and signed as authorised by the Headteacher.

INCOME

Proper records should be kept of all income due.
Collections should be paid into the appropriate bank account promptly and in full. Bank paying-in slips must show clearly the split between cash and cheque individually.

BANKING

The school will have its own individual bank account as part of the LA’s umbrella arrangement with National Westminster Bank, Lewisham.
The school will obtain bank statements at least monthly and these will be reconciled with their accounting records. Any discrepancies will be investigated.
Signatories (keep locally) to cheques will be two from three names confirmed by the GB, which is currently:
- Headteacher
- Deputy Head
- School Business Manager

If using BACS, the person who uploads the payments must be separate from the person who authorises the payment.

The school’s Bank Account signatories may sign cheques or authorise BACs as identified in the Signatories document. Cheques/BACs payments over £10,000 may only be signed with the approval of the Resources Committee.

PAYROLL

The Resources Committee will conduct the annual review of staffing, turn-over and recruitment.
The Headteacher will maintain a list of staff employed, and obtain regular reports on payroll transactions and check them against the school’s documentation on staffing and pay to ensure they match.
Where the payroll is administered by the LA, the school will send in the names and specimen signatures of certifying officers.
Payroll transactions will be processed only through the payroll system.

PETTY CASH

Petty cash will be collected from the bank when required.
All claims for petty cash will be supported by official petty cash vouchers.
Claims against petty cash will not exceed £20.
Repayment will be made by cash.
The Premises Officer and the Assistant Premises Officer are the only people authorised to cash school cheques which must be signed by two of the three designated signatories.
The amount in the petty cash fund will be checked monthly against the accounting records and reviewed by the head/deputy head.

SCHOOL CHARGE CARD

The school has a charge card that is registered to the headteacher. There are two additional cards, one registered to the premises manager and the other the children’s centre lead. This is so that emergency purchases can be made during the school holidays to an agreed level. If a payment is made the receipt is submitted to the finance officer along with the goods that are signed off as received. Purchase orders are placed for all such purchases and go through the same process as detailed above. The school is issued with a monthly bill, each item is verified by the school business manager and a BACs payment is made for the full amount. Monthly records for the school charge card are stored in the administration office.

TAX

The Headteacher will ensure that all relevant finance and administrative staff are aware of VAT and Income Tax regulations.

VOLUNTARY FUNDS

Voluntary funds are now an integral part of the ISB, and exclude funds held by the Parents Association. The fund is audited annually by an independent auditor who is not a member of staff or a governor.

ASSETS

The Headteacher will ensure that stocks are maintained at reasonable levels and will conduct a stock check once a year.
An asset register will be maintained listing all resources/equipment with an expected life span of more than one year.
New purchases will be recorded in the asset register when payment has been authorised.
The asset register will be available for inspection at any time.
Sale of equipment for more than £100 must have Governor’s approval.
Items for write off/disposal should be noted on the asset register, detailing model and serial number, a brief description of the item, and the reason for write off/disposal.
The asset register should be signed and dated by the member of staff requesting write off/disposal, and then passed to the Headteacher for authorisation. The Headteacher should be satisfied that the items are to be written off/disposed of and should then enter on the asset register, the method of disposal (e.g. scrapped, sold/offered via the weekly newsletter, sold by tender (if usable computers for example)).
The Headteacher should then inform Governors of the items written off/disposed of and this should be recorded in the minutes of the Governor’s meeting, stating that Governors have ratified the decision. Details of the items should also be minuted. A copy of the authorised write off/disposal items attached to the minutes should suffice for this purpose. The use, maintenance and Improvement of the school’s buildings are incorporated in the SIP.

The use, maintenance and Improvement of the school’s buildings are incorporated in the SIP.

INSURANCE

The school will review all risks annually, in conjunction with the LA where appropriate to ensure the sums insured are commensurate with the risks.
The school will notify its insurers, the LA or other agent as appropriate of all new risks, property, equipment which require insurance or of any other alteration affection existing insurance.
The school will immediately inform its insurers, the LA or their agent of all accidents, losses and other incidents that may give rise to an insurance claim.

DATA SECURITY

The school will adhere to GDPR standards to protect sensitive data in the school. The computer systems used in school management will be password protected to ensure that only authorised staff have access. Passwords will be changed regularly and updated for staff changes.
The Headteacher and Deputy Headteacher will establish a recovery plan to ensure continuity of financial administration in the case of emergency.
The Headteacher will ensure that systems are in place to safeguard school software and data against computer viruses. Only authorised software will be used.

SECURITY

Access to the school safe shall be limited to Headteacher, Deputy Headteacher, Senior Administration Officer and Administration Officer.
School money and cheque books are kept securely in the school safe.
The Headteacher and SAO keep the keys to the safe on their person at all times.

SUSPECTED FRAUD

In case of suspected fraud, the school should contact Education Finance, Internal Audit and the Anti-Fraud & Corruption Team Manager, who will decide whether or not the police should be contacted. Where the suspected fraud concerns a member of staff, the school should also contact Education Personnel for advice on the procedures and obligations regarding suspension of the suspected party, should that be deemed necessary.

WRITE OFF PROCEDURES

Who can authorise a Disposal or Write Off

The Head teacher can authorise the writing off of a debt and the writing off, sale or part exchange of an item of stock, provided that the debt or item is valued (in his/her reasonable estimation) at £250.00 or less. In the event that the debt or item identified for disposal has a value in excess of £250.00 the authority of the Resources Committee must be obtained.

Writing Off Debt

A debt may be written off when two demands for payment have been made, in writing to the debtor by the Headteacher or Chair of Governors and it is believed by the Head teacher that there is no reasonable prospect of payment without recourse to law. As a general principle the governors will take legal action to recover debts in excess of £500.00 unless there are exceptional circumstances.

Writing Off of Stock

An item of stock can be written off (that is disposed of without income) where the item is considered to be beyond repair or has no saleable value. A record of the disposal must be kept in the Inventory/Asset File and on the database.

Sale of Stock

If an item of stock is surplus to requirements or is obsolete but is considered to have a saleable value it should be sold if possible. Small items under the value of £100.00 can be sold at the Head teacher’s discretion. Large items (those estimated to have a value over £100.00) will need to seek an estimated value from someone with more specialised knowledge related to the item e.g. IT. Stock can be purchased by members of staff or by members of the governing body provided that they have had no involvement in fixing the sale price of the item. A receipt should be signed on sale by the purchaser and on behalf of the Head teacher.

What Happens To the Proceeds of Sale?

Wherever possible the proceeds of the sale of stock shall be returned to the account that originally funded the purchase of the item e.g. equipment, books and furniture code in school delegated budget.

The Paperwork on Writing off or Sale

Amendment of School Inventory file / Assets file and appropriate databases.

An item that is disposed of should be removed from the School’s Inventory/Asset databases immediately upon disposal so that the Inventory/Asset databases remain an accurate record of stock.

Disposals Record

When an item is disposed of by sale or is written off without income a record of the disposal should be recorded in a separate document for signing and on the appropriate database. The record shall include a description of the item and the method of disposal. The record will be signed by the Chair of the Resources Committee. Once the item has been disposed of, it shall be removed from the asset register.

Kelvin Grove School