Forest View Primary School

Forest View Primary School

Finance Policy

INTRODUCTION

The School is an academy trust charitable company limited by guarantee (registered number 8322915) and the Governors/Directors agree that they are bound by all the mandatory rules, procedures and regulations set out in the following three documents.

1) Academies Financial Handbook published by EFA in 2015

2) Company’s Funding Agreement dated 1st February 2013

3) Company’s Articles of Association dated 1st February 2013

This Finance Policy must be read in conjunction with and in support of the above mentioned three documents.

The Finance Policy will be reviewed by the governors at least annually.

The governing body has overall responsibility for the administration of the School’s finances. The main responsibilities are prescribed in the Funding Agreement .

The main responsibilities include:

· ensuring that grant income received from the Education Funding Agency (EFA) on behalf of the DfE is used only for the purpose intended;

· approval of the annual budget;

· appointment of the Headteacher and

· appointments of the Business Manager in conjunction with the Headteacher

· creation of the Finance and Human Resources Committee (FC) which should meet at least 3 time per year. The FC will be bound by Terms of Reference which must be reviewed annually.

BUDGETS

Budget construction

The Headteacher as the School’s Accounting Officer, with the assistance of the Business Manager as the School’s Principal Finance Officer is responsible for the detailed preparation of the Company’s annual budget. In undertaking this role he/she should consult with all Governors and other members of staff to ascertain detailed requirements.

The FC will determine the overall sum within which the budget must be set and the amount of any surplus balance to be carried forward into the following year, or the use of any ‘reserves’ to balance the budget.

In constructing the budget the Headteacher must take account of priorities identified in the School Development Plan and by the Governing Body and incorporate the costs of these in the budget. Priorities identified in the Development Plan should always be costed.

The budget expenditure total must not exceed the amount of the DfE grant allocation issued by the EFA and other estimated income, plus or minus any balance brought forward from the previous year. Contracted payments and full staff salary costs must be met from “known” income e.g. General Annual Grant (GAG). If it appears that this cannot be achieved, the Headteacher and Chairman of Governors must inform the EFA Financial Monitoring Team.

The FC must then meet in June to consider and approve the final budget to apply from the 1st September. The Full Governing Body will need to approve, ratify and minute the final budget before 31st July each year and prior to submission to the EFA. This will need to be minuted in the committee and full governing body minutes. The Business Manager will upload this to the EFA via the Information Exchange and a confirmation email will be sent to the Head Teacher in his role as Accounting Officer.

In constructing the detailed budget, factors the Headteacher and Governors must take account of and include:-

· any anticipated changes in pupil numbers

· specific departmental head requirements to fulfil changing curriculum needs

· current and previous year’s expenditure levels on individual budget headings

· Development Plan priorities

· staff pay awards and increments

· anticipated price inflation

· changes in the staffing complement

· Changes in the supply of services (gas, electricity, oil, water, etc.)

Budgetary control and monitoring

The Headteacher as Accounting Officer is responsible for regular, detailed control of the school budget. To achieve this the Business Manager, will prepare regular reports from the school’s SIMS accounting system. Such reports (copies of which will be made available to both the Headteacher and the FC Committee) shall show a summary income and expenditure report which confirms the up to date financial position of the school.

The Headteacher is empowered to take remedial action to address variances, by effecting virement between individual budget headings. Individual virements may be authorised. Please see Annex 1 for the present limits and reporting requirements.

Virements, once approved, must be promptly recorded in the school’s SIMS accounting system to keep the approved budget up to date.

The Head, with the assistance of the Business Manager, will present detailed budget monitoring statements to the FC ahead of each meeting, such statements shall show for each budget heading:-

· total budget for year

· total commitment and expenditure to date

· Variances

· Business Manager report to include any suggested budget amendments and details of any corrective action taken.

The FC shall consider such statements; the Headteacher/Business Manager will provide explanations for any significant variances identified. The Chairman of the FC shall report at the meetings of the full Governing Body, identifying any significant budgetary issues and any remedial action taken or needed, and any policy decisions needed.

The Headteacher may assign budgetary control of individual budget headings to other members of staff. Such members of staff must receive termly budget statements as detailed above. The Headteacher remains ultimately accountable to the Governing Body for these budget headings.

The Headteacher can authorise any items of expenditure within the agreed budget and can delegate authority to the Business Manager.

The Headteacher can also authorise items of non-budgeted expenditure subject to authorised limits. Please see Annex 1 for the present limits and reporting requirements.

PAYROLL

Starters/variations/leavers

All forms for:-

· setting up new employees on the payroll (starters)

· effecting variations to pay

· taking existing employees off the payroll (leavers)

must be made out by the Business Manager and authorised (signed) by the Headteacher, or in his absence by a Deputy Headteacher. Such forms must then be transmitted electronically via eforms to Gloucestershire CC, who are responsible for processing the School’s monthly payroll on the governors’ behalf.

Time Sheets

All time sheets submitted by a member of staff must be checked initially by the Business Manager and then authorised (signed) by the Headteacher, or a Deputy Headteacher. Authorised time sheets must be entered via eforms to GCC and never handed back to the employee. Originals copies are to be kept in the Finance Office to assist with reconciliation of monthly payroll printouts by the Business Manager.

Checking of Payroll data

Payroll data printouts received monthly from Shire Hall Payroll Services must be scrutinised by the Business Manager to ensure all employees are recognised, and pay has been accurately calculated.

The Headteacher and the RO should make occasional random checks of the Payroll printouts to check that staff members are being correctly paid.

Pay-related expenses

All pay-related expenses must be processed through the payroll system. Pay-related expenses must never be paid via petty cash, or by the creditor payment system.

Supply Teachers

The Governing Body will decide, on the basis of advice from the Headteacher, whether supply insurance cover shall be taken out, the extent of the cover and which provider the policy shall be with. All claims submitted by supply teachers will be authorised by a Deputy Headteacher, or the Headteacher. Reimbursement claims must be submitted on a monthly basis by the Business Manager. Copies of authorised claims will be retained by the Business Manager for audit purposes and to assist with subsequent reconciliation.

ACCOUNTING RECORDS

Accounts

The School’s accounts are to be maintained on a day-to-day basis by the Business Manager and the actions described below in Sections 3.2 and 3.3 undertaken.

All income and expenditure will be entered promptly in the accounts using the SIMS FMS academy accounting system. Bank statement reconciliation will be performed monthly by the Business Manager when statements are received.

Final Accounts and Audit

Following the end of each financial year as at 31st August the School’s annual accounts must also be audited by a firm of chartered accountants appointed by the governors. See Annex 2(1).

As a charitable trust company the School must comply with company law as set out in the Companies Act 1985 (and subsequent Acts) and with charity law. This includes a requirement to prepare a governors’ report and financial statements or annual accounts. A copy of the audited accounts and reports must be uploaded through the information Exchange to the EFA by 31st December following the end of the financial year.

As soon as possible after the deadline of 31st December, but no later than 31st May the annual accounts must be sent to Companies House for registration. Details must also be published on the School’s website by 31st January.

Bank Accounts

A Bank accounts for the School will be held with a Clearing Bank approved by the full Governing Body. See Annex 2(2) for details.

The Headteacher and Business Manager should regularly review the Bank’s account terms (including the rate of interest earned on surplus balances) to ensure best value is obtained. If a change of bankers or a change in banking facilities is recommended, any change must be considered by the FC and subsequently agreed and minuted by the Full Governing Body.

In order to maximise the credit interest obtained on the Schools’ funds the Governing Body give the Headteacher discretion to arrange the transfer of any surplus balances held on the Schools’ current accounts into suitable short term notice, or fixed period investment accounts. Such accounts must be held with the Schools’ banker’s corporate markets department, or another UK clearing bank’s investment department, or a UK based financial institution regulated and governed by the Financial Services authority. All funds will remain in the schools name and be readily available to meet both revenue and capital expenditure requirements. Full details of any investments made must be reported to the Full Governing Body via the Finance and Human Resources Committee at the earliest opportunity.

Bank Account Signatories

The Governing Body will authorise members of the School Leadership Team to sign Bankers Automated Clearing System (BACS) transfers, cheques, direct debits, standing orders and other transfers from the School’s bank account. See Annex 2(3) for details.

Any two authorised staff must sign each cheque and whenever possible the Headteacher will endeavour to be one of the required signatories. A Copy of the relevant bank account mandate is to be held by the Business Manager in the Finance Office.

To aid efficiency the Business Manager may authorise the release of BACS payments in order to settle invoices from suppliers/contractors, but only if they have prior written authority from two authorised bank account signatories.

ASSETS

Inventory/Asset register and disposal of items

The portable, desirable, attractive assets of the school, (purchase price £a or more), as well as any assets of intrinsic value (value £b or more) will be recorded in the school’s inventory. Full details (make, model, serial number, approximate value) shall be recorded. See Annex 3 for amounts.

The Business Manager is responsible for keeping the Asset register up to date by adding new capital items when they are purchased and received into school. All items purchased with a value over the School’s capitalisation limit must be entered into the asset register. An appropriate depreciation rate must also be recorded after reference in case of need to the auditors.

Items up to a current value of £c may be sold or written out of the inventory or asset register on the authority of the Business Manager and reported to the Headteacher. Over this limit, the Governing Body must authorise and record details in the minutes. Reasons must be recorded in the inventory, together with the Headteacher’s signature (up to £d) or the Governors’ minute reference (over £e). Items (over £e) will be sold by competitive tender. The School must seek approval of the EFA in writing if it proposes to dispose of an asset for which the capital grant in excess of £20,000 was paid. An official receipt for sales income must be issued to the purchaser. Disposals to staff members will not normally be encouraged unless occasions are infrequent and any asset sold has a residual value under £100.

See Annex 3 for details

Inventories shall cover all areas of the school, and be arranged on a room-by-room basis. A separate inventory will be maintained to include items which are not allocated to a specific room.

The inventory will be checked against the actual assets by the Headteacher/Business Manager on an annual basis. Any discrepancies shall be investigated immediately, and if necessary the Governors, Police and the EFA shall be informed. The check shall be evidenced by the checker signing and dating the inventory.

All inventory items should be smart water security marked:

Asset Capitalisation Limit

The capitalisation limit for assets agreed by the governing body is over £a .

Irrespective of the normal capitalisation limit most ICT hardware equipment (to include all new computers, servers, interactive whiteboards, screens and projectors) purchased will be treated as assets and capitalised with their value depreciated over a 5 year period.

Off site register

Any inventory items taken off-site by members of staff for official purposes (other than individually assigned school owned lap tops) must be agreed by the Business Manager and recorded in a register, which is retained in the Finance Office. The date borrowed, and the signature of the borrower, must be recorded. On the return of the item the date of return will be recorded.

INCOME

Credit income (not school meals or residential trip income)

Where payment for goods/services provided by the school is made after the provision takes place.

An official invoice must be raised by the Business Manager sent to the debtor as soon as possible after the provision of the goods/service, and no later than one month after the provision.

A file of copy invoices will be maintained. Payment of all invoices sent will normally be due within 30 days.

Reminders will be sent after the following periods if the debt remains outstanding:-

1st reminder - 30 days after the due date

2nd reminder - 42 days after the due date

If after 60 days the debt remains unpaid, consideration will be given by the Headteacher and/or Governors to take legal action to recover the debt. No debts will be written off unless they are considered irrecoverable. 30 days notice must be given to the EFA with regard to any debts owed to the School which are to be written off. Permission from the EFA must be sought if any debts to be written off are above the value set out in the Academies Financial Handbook (latest version).

No further goods or services must be provided by the School until the outstanding overdue debt is settled.