SchemeofDelegationofFinancialPowers
DateSeptember2016
WrittenbyR4
Adopted byTrustBoardSeptember2016
Adopted byLGBSeptember2016
ReviewDateSeptember2017
Consultedwith NJCCNotrequired
TermsofReference
The TrustBoard
TheTrustBoardhaswidediscretionoveritsuseoftheAcademyTrusts(AT's)funds.Itisultimatelyresponsiblefortheproperstewardshipofthosefunds and for ensuringeconomy,efficiencyandeffectiveness intheir use–thethreekeyelements ofvaluefor money. It mustalsoensurethatituses its discretion reasonably, andtakes intoaccountanyand allrelevantguidanceon accountabilityandpropriety.
Itis specificallyresponsibleforensuringthattheAT’s funds areused inaccordancewith:thelaw;theTrustBoard’s powers under theFunding Agreement (includingthearticlesof associationwhichset outthepowersof theATandits governancearrangements; andtheAcademies Financial Handbook.
Thetrusteesshould alsobeawareofthestatutoryduties ofcompanydirectors,which aresetoutintheCompanies Actand includethedutiesto:
•exercisetheir powersonly for a properpurpose;
•promotetheacademy’ssuccess;
•exerciseindependentjudgement;
•exercisecareandskill;and
•avoidconflictsofinterest.
The FinanceCommittee
TheFinanceCommitteeisa committeeoftheTrustBoard. TheFinanceCommitteemeets atleastoncea termbut morefrequentmeetings can bearranged if necessary.Themainresponsibilitiesof theFinanceCommitteeinclude:
•theinitial reviewand authorisationof theannualbudget;
•theregularmonitoring andscrutinyoftheacademymanagementaccounts;
•ensuringtheannualaccounts areproduced inaccordancewiththerequirements oftheCompanies Act1985andtheEFA guidanceissuedto academies;
•reviewing andchecking details ofcontractsandpurchases;
•authorisingtheawardofcontracts andpurchases;
•reviewing thereportsof theResponsibleOfficerontheeffectivenessofthefinancial procedures andcontrols. Thesereportsmustalsobereported tothefull governingbody.
AccountingOfficer
TheChiefExecutiveOfficeristheAccountingOfficerandhasoverallresponsibilityfortheacademy’sactivitiesincludingfinancialactivities.TheAT accountingofficerispersonallyresponsibletoParliamentandtotheaccountingofficeroftheEFAfortheresourcesundertheircontrol.Theessenceofthe roleis apersonal responsibilityfortheproprietyandregularity of thepublicfinancesforwhichtheyareanswerable;forthekeepingof proper accounts;for prudentandeconomicaladministration;fortheavoidanceofwasteandextravagance;forensuringvalueformoney;andfortheefficientandeffectiveuse ofalltheresourcesintheircharge.EssentiallyaccountingofficersmustbeabletoassureParliamentandthepublicofhighstandardsofprobityinthe managementofpublic funds.
MuchofthefinancialresponsibilityhasbeendelegatedtothePrincipalandBusinessManagerbuttheChiefExecutiveOfficer,throughtheExecutiveTeam, still retainsresponsibilityfor:
•making newseniorstaff appointmentswithin an Academy, drawingontheLocalGoverning Bodyasappropriate;
•ensuringtheannual accounts areproduced inaccordancewiththerequirements oftheCompanies Act1985andtheEFA guidanceissuedto academies;
•completionof theaccountingofficer’s statementongovernance, regularity, propriety andcomplianceforinclusion intheAT’sannualreport;
•authorisingcontracts;
•advisingtheFinanceCommitteeon purchasesand;
•signingcheques and authorising BACs payments inconjunctionwiththebankmandate.
TheResponsible Officer
TheResponsibleOfficer(RO)isappointedbytheTrustBoardandprovidesgovernorswithanindependentoversightofanacademy’sfinancialaffairs.The main dutiesoftheRO aretoprovidetheTrustBoardwith independentassurancethat:
•thefinancial responsibilities oftheTrustBoard arebeing properlydischarged;
•resources arebeingmanaged in anefficient,economical andeffectivemanner;
•soundsystemsof internal financial control arebeingmaintainedand
•financial considerationsarefullytaken intoaccountinreachingdecisions.
TheResponsibleOfficerwillundertakeatermlyprogrammeofreviewstoensurethatfinancialtransactionshavebeenproperlyprocessedandthatcontrols are operating aslaid downbytheTrustBoard. A report ofthefindings fromeachvisitwill bepresentedtotheFinanceCommittee.
OtherReferences
•Regularitymeans therequirementfor all items of incomeandexpendituretobedealt with in accordancewiththelegislation authorisingthem, and any applicabledelegatedauthority.
•ProprietymeanstherequirementthatexpenditureandreceiptsshouldbedealtwithinaccordancewithParliament’sintentionsandtheprinciplesof Parliamentarycontrol.Thisincludes standardsofconduct, behaviour andcorporategovernance.
•Valueformoneymeanstheeducationalandwidersocietaloutcomesachievedinreturnforthetaxpayerresourcesreceived.Educationaloutcomesin returnforthemoneyspentarethekeyfocusbutasthesemaybelagged,othermoreimmediateoutcomesmaybeusedtodemonstratevfmandcost effectiveness.
BudgetingandReporting
RoleValueDelegatedAuthorityMethodReviewPeriod
ExecutiveDirector andPrincipalAgreeacademyimprovementprioritiesAnnual
AcademyPrincipal andManagement
teamDraftbudgetplanAnnual
ExecutiveDirector andPrincipalAgreebudgetplanAnnual
Governing BodyApprovebudgetplanfor submissiontotheRegional FinanceCommittee
Budgetsetting process
Regional and/orTrustBoard
Approveorrejectbudgetafter applyingthe2Golden Rules Tests
If theTrustor Regional Board requiretheGoverning Body toreconsider thebudgetthen itmustprovidea full explanationtotheGoverning Bodyofthereasonsandthe timescalesbywhich an alternativebudgetshouldbe provided.
If theTrustor Regional Board has lostconfidenceinthe abilityof theGoverningBodytoseta budgetthat meets the2 GoldenRulesTests’, itwill providea fullwritten explanationtotheGoverning Bodyfor its judgement. Under thesewhollyexceptional circumstances,the ExecutiveDirector willtakeresponsibilityfor recommendinga budgetplantotheboard
Annual
Budgetholders responsibilities
As per the individual budgets set
Principal, SLTandother budget holders
Budgetmonitoring is theresponsibilityofthebudget holder andthebudgetmustnotbeoverspentatanytime duringtheyearunlessthrough prior agreementfromthe appropriateauthorisationlevel.
Monthly
RoleValueDelegatedAuthorityMethodReviewPeriod
MonthlyManagement Accounts
School businessmanager andPrincipal inconjunctionwithExecutiveFinance team/Financial consultants
All transactions tobeprocessed and reconciled bythe academies financestaffforthetimelychecking and productionofthe monthlymanagementaccounts and governorsreports asper theFinancial Timetable
Monthly
Virements
Upto£10,000Principal/ExecutiveDirectorMustbedisclosedtotheFinanceCommitteeAs necessary Over £10,001FinanceCommittee MustbeapprovedbytheFinancecommittee As necessary
EFA Reporting
Principal, Executive Director/AccountingOfficer in conjunctionwithReach4Auditors and Financial Consultants
An annual Financial ReportingTimetablewill bereleased bytheEFA dates and requirementswill beincludedon this timetable
As necessaryto ensure compliance
Income
RoleValueDelegatedAuthorityMethodReviewPeriod
Collection andreceipt ofcash
andchequesAny
School businessmanager or delegated administration assistant
Cashmustbereceipted bythepersonwith delegated authorityandrecorded inthe appropriateledger. Allonsitecashand chequesmustbelocked inthesafeuntil banking
Daily
Sales invoices
Upto£15,000Business Manager
£15,001to
All sales invoicesmustbeprocessedthrough thefinancialmanagementsystem,and issued ina timelymanner.
Principal toauthorisetheissuingof sales
As required
£100,000As aboveplusPrincipal
invoices above£15,001,andthen as above.As required
RoleValueDelegatedAuthorityMethodReviewPeriod
Over £100,001FinanceCommittee
Financecommitteeto approvetheissuingof sales invoices above£100,001, andthen as above
As required
Bankingof cash andchequesAnySchool businessmanager or delegated
administration assistant
Cash andchequesshouldbebankedona regular basis andshould notbeallowedto accumulateabove£1,000.Bankingshould be checkedand agreed byanothermemberof staff beforebeing bankedandshould relate backtoreceiptsissued.
As required
Reconciliationofbank accounts
School businessmanager or delegated administration assistantorfinance consultant
Bankaccounts should bereconciledatleast ona monthlybasisbysomeoneother than theperson doingthebanking. Bank reconciliationsshouldthen besigned dated and filed.
Monthly
Petty CashSchool businessmanager of delegated administration assistant
Pettycashshould bekeptina lockedtinand stored intheschool safe.Pettycash payments should bekeptbelow £25. Receiptsmustbeprovidedfor anyclaim. Preapprovalfromtheappropriatebudget holdermustbe obtainedbeforeany purchases takeplace. Periodchecksshould takeplaceby financeconsultant or responsibleofficer
Weekly
PurchasesandPayments
RoleValueDelegatedAuthorityMethodReviewPeriod
Purchaseorders
Upto£1,000School businessmanager and budget
holders
Orders should beplacedwith approved suppliers unless agreeotherwisewith school businessmanager.Orders should be writtenon approved purchaseorder pro forma and authorised beforebeing processed inthefinancialmanagement system,and beforeorderisplacedwith supplier. Approvedpaper basedorders should beentered intothefinancial managementsystembysomeoneother thenthepersonwhoapprovedtheorder.
Monthly
£1,001to
£5,000
Principal,DeputyPrincipalandschool business manager
As aboveandthreequotesmustbe
obtained. Thesecan includebothwritten andverbal.
Monthly
£5,001to
£10,000Principal andDeputyPrincipal
As abovehoweverminimumthreequotes
mustbewrittenMonthly
£10,001to
£25,000
Principal andDeputyPrincipal with notificationtotheExecutiveDirector
As abovehoweverminimumthreequotes
mustbewrittenMonthly
Over £25,000ExecutiveDirectorFormaltendering process, including advertising inOJEU if appropriate
Paymentbychequeor BACsUpto£20,000
Twosignatories required fromeitherof the Principal, DeputyPrincipal or business manager
Individual paymentsto anysupplier tothe valueof£20,000 needto besigned bytwo individual inthedelegatedauthority column.Chequesor paymentnotifications mustbeaccompanied byauthorised
As necessary
RoleValueDelegatedAuthorityMethodReviewPeriod
supporting documentation
£20,001to
£100,000
Above
Twosignatories includingonefromthe abovelistplustheExecutiveDirector
Cheques or paymentnotificationmustbe accompaniedbyauthorisedsupporting documentation
Cheques or paymentnotificationmustbe
As necessary
£100,000ExecutiveDirector and Chief Executive
accompaniedbyauthorised supporting
documentation
As necessary
ChargeCardLimitedto£5kPrincipal, businessmanager and finance consultant
Mustbekeptinthesafe when notin use. All transactionsmustbesupported bya receipt.Orders should beplacedonlyby card holder.Reconciliationshould be checkedbysomeoneotherthantheperson whoplaces theorders.
Monthly
Standingorders and direct debits
as per limits for cheque of BACs
payments
as per limits forchequeofBACs
paymentsas per limits forchequeofBACs paymentsAs necessary
Liabilities andWrite-Offs
1%oftotal annual income or£45,000 (whichever is smaller) per single transaction.
Cumulatively, 2.5%of total annual income
Principal/ExecutiveDirector
Anything abovetheselimits mustbe approvedbySecretaryofStatethroughthe EFA
Annual
Role / Value / DelegatedAuthority / Method / ReviewPeriodin any one
financial year per category of transaction for any ATs thathavenot submitted timely, unqualified financial returns for the previoustwo financial years. This includes new academies thathavenot hadthe opportunityto producetow yearsof financial statements
Cumulatively, 5%oftotal annual income in any one financial year per category of transaction for any ATs
RoleValueDelegatedAuthorityMethodReviewPeriod
thathave submitted timely, unqualified financial returns for the previoustwo financial years.
Purchaseorsaleof any
freehold propertyAnyEFA approvalrequiredAnnual
Granting anyleaseholdor
tenancy agreementAnyEFA approvalrequiredAnnual
Taking up anyleaseholdor tenancy agreementformore thanthreeyears
AnyEFA approvalrequiredAnnual
WagesandSalaries
RoleValueDelegatedAuthorityMethodReviewPeriod
Appointmentof Staff
Uptosenior leadership team
Deputy
PrincipalAnnual
PrincipalExecutiveDirectorAnnual
PrincipalExecutiveDirectorAnnual
PayrollProcessingSchool businessmanager andPrincipal
School businessmanager tocheck monthly payroll andmakeanynecessarychangesor adjustments. Monthlypayroll and any changes mustbeauthorised andsignedoff on bythePrincipal.Payrollreportsand paymentsmadewill bechecked and agreed bythefinanceconsultant ona monthlybasis.
Monthly
Contractsof employmentSchool businessmanager or delegated administration assistant
All employeecontracts needtobekeptup to-date.Anycontractchanges needto be authorisedbytheappropriateauthority levelas per(Appointmentof staff) authorityand filed inthestaff members file. Thesecontracts willbeperiodically checkedbytheresponsibleofficer andthe auditors.
As required
Assets
Role / Value / DelegatedAuthority / Method / ReviewPeriodFixed assetregister / £2,000 / Businessmanageroron-siteICTstaff member / Allassetstothevalueof£2,000either individuallyorasagroupwillneedtobe recorded intheassetregister. / Monthlyand annually