CSBM activities template: Managing school finances

This template provides the details of each of the activities within this module to enable you to work through them and record your progress.

Module activities are provided to support you in building your understanding of each area. They are not submitted to your tutor and do not contribute towards your assessment result, however they are designed to assist you in meeting the assessment requirements.

Activity 1.1: Financial regulations and procedures review

Obtain a copy of your school's financial regulations and procedures. Carry out a review of them using the following questions as a checklist:
  1. Are the roles of the governors, headteacher, finance staff and budget holders defined?
  2. Is the delegation of responsibility to the headteacher regularly reviewed?
  3. Are authorisation limits included?
  4. Do you think that the school business manager’s authority level is too high, too low or just right? Explain your answer.
  5. What is the authority level of the school business manager in your school?
  6. How are the financial regulations and procedures communicated to budget holders?
  7. Could this section of the manual be improved? Explain your answer.

Activity 1.2 – Preventing and detecting impropriety

Consider the Governors' responsibilities to prevent and detect impropriety, and in particular that they should establish 'arrangements designed to deter financial irregularities or fraudulent conduct and detect any that occurs'.
  1. What are the arrangements in place in your school?
  2. Do they follow the recommendations made by the DfE or the Academies Financial Handbook?
  3. How would you ensure the arrangements are made known to staff to ensure compliance?

Activity 1.3 – Segregation of duties

Track one recent transaction made by your school from the initial order to the reconciliation of the payment.
  1. Identify where segregation of duties did or did not take place.
  2. Compare the process with your school's financial procedures and consider if the procedures are appropriate and complied with.
  3. Suggest recommendations for improvements to procedures where necessary.

Activity 1.4: Review of management controls

Refer to your school’s financial regulations and procedures and review the management controls that are in place to ensure that computerised financial systems maintain the integrity and confidentiality of the financial data.
  1. Identify the controls which should be in place.
  2. Compare this list with your financial procedures and consider if the procedures are appropriate and complied with.
  3. Provide any recommendations for improvements to the procedures.

Activity 2.1: Analysis of school funding

Obtain a copy of your school's budget for the last financial year. Investigate the types of funding your school receives:
  1. What proportion of the funding is delegated to the school?
  2. What proportion of the funding is devolved to the school?
  3. How much capital funding does the school receive?
  4. How much revenue funding does the school receive?
  5. Produce appropriate graphs to compare these different types of funding and comment on the impact they have on budget planning.

Activity 2.2: Funding streams

  1. Identify the funding streams which are relevant to your school - this will be different for local authority schools, academies, faith schools, free schools etc
  2. Refer to your budget allocation based on your funding agency's formula and identify how the funding is allocated to your school
  3. Identify any other significant sources of income for the school
  4. Consider which sources of income are determined by pupil numbers and which are based on different formulas. Analyse what would happen to your school's funding if pupil numbers (a) rose by 10%, (b) fell by 10%

Activity 2.3: Multi-year budget planning

Reflect on the positive aspects of multi-year budget planning, linked to the School Improvement Plan.
Identify any restraining factors that may cause the process not to work smoothly in practice.
Share your reflection on multi-year budget planning with colleagues from other schools on My Learning

Activity 2.4: Planning expenditure

  1. Does your school use historic costs or the zero-based approach when making expenditure plans?
  2. Is there a different approach for each budget heading? If so, why might this be?
  3. Are there any areas in which its expenditure calculations or forecasts are inaccurate? What suggestions would you make for improvements?

Activity 2.5 – Providing information for decision-makers

  1. What data do you provide to the governors and senior leadership team for budgeting purposes?
  2. Review how the data is presented and describe how presentation could be improved to assist the understanding of those who do not have a financial background.

Activity 3.1: Financial monitoring and reporting

Consider the various different forms of financial monitoring and reporting that your school undertakes.
  1. Make a list, identifying if they are:
Internal monitoring, not requiring a formal reporting process
Formal monitoring and reporting
  1. Once you have identified these different monitoring processes describe:
When they happen; is it on a regular basis or ad hoc?
Who is the report presented to?
Who can agree any corrective action?

Activity 3.2: Identifying variances

Consider the monitoring reports that have been presented to your school’s Finance Committee over the last year.
  1. Can you identify any significant variances?
  2. Using the three stages described in Fig 3.3 above, consider what the causes of these variances were and how they were managed.
  3. Describe the procedures and processes you would put in place to try to ensure that the size of any variance is minimised.

Activity 3.3 – Budget benchmarking

Identify three areas of your school budget in which you are particularly interested because you think it might be possible to achieve savings in expenditure.
Contact colleagues through My Learning and compare your expenditure levels with their expenditure levels. If you discover there are significant differences, discuss why this is the case and consider any economies you might make in your own school.

Activity 3.4 – Analysing bank statements

Analyse the bank statements for your school for a three months period:
1.What do they tell you about your daily cash flow, that is the flow of cash in and out of the bank?
2.Is there a period in the month when the bank balance is particularly high or low?
3.What is the main reason for this? Does this fluctuate throughout the year?

Activity 3.5: Credit control

Describe your school's credit control policy.
  1. If there is not one in place, what steps need to be taken to rectify this?
  2. What should it contain and how would you develop it?
  3. How is it monitored?
You might wish to consider:
whether debtors pay their invoices within agreed times
how you follow up if payment is not made within the set time
whether payments are correctly processed and the effect this has on the school’s reporting system

Activity 4.1 – Probity and purchasing

Using your school's Financial Procedures Manual and other best practice guides regarding internal controls, evaluate your school’s current arrangements for ensuring probity with regard to its procurement activities.
Use the table below to respond to each question and then make recommendations for any necessary corrective actions.
In column two indicate your response to each question using the following descriptions:
a.Excellent – the school is a model of good practice
b.Good – in general adequate procedures are in place and these are followed the vast majority of the time
c.Average – the school has procedures in place, but these are not always followed or monitored
d.Poor – the school’s procedures are weak; individuals often fail to follow procedures and these failures are not acted upon
In column 3 describe the corrective action you would recommend for any to which you were unable to answer ‘excellent’.
Question for consideration / Current level of performance / Corrective action needed
Does everyone always follow the school’s procurement procedures?
Are delivery control procedures in place and followed?
Is there a payments policy that is followed by everyone?
Can the school provide clear audit trails for all transactions?
Does the school deal effectively with any non-adherence to its procurement policy?

Activity 4.2 – Value for money and best value

This exercise requires you and your colleagues to be very honest with yourselves!
Reflect on what you have just read about value for money then answer discuss with some of your work colleagues these two questions:
  1. What is one of the best things your school has purchased in the last 2 years (this could be a physical or human resource)?
  2. What is one of the worst things your school has purchased in the last 2 years (this could be a physical or human resource)?
Note down the reasons for these judgements.

Activity 4.3 – Purchasing strategies

For each of the purchasing strategies identified in column one, comment upon your experience of each method from the perspective of efficiency, cost-effectiveness, and security.
Purchasing strategy / Efficiency / Cost-effectiveness / Security
Collaborative procurement with other local schools
Using local authority purchasing consortia / PSBOs
Using e-procurement
Ad-hoc purchasing processes

Activity 4.4 – Leasing

Describe a lease arrangement that is in place in your school.
Explain the procedures you followed before you signed the leasing agreement.
Evaluate these procedures using these questions to prompt your thinking:
  1. Did you use the 4 'C's before coming to a decision?
  2. Were three quotes obtained and compared against outright purchase?
  3. What happens to the equipment at the end of the contract?
  4. Who is responsible for insurance?

Activity 4.5 – Tendering for goods and services

Review a tendering process that has taken place in your school against the following prompts:
compliance with your school's financial procedures in
whether the tender was open, restricted or negotiated
whether each tender was compared against the others, and whether you were comparing like with like
whether the financial status of the supplier was checked
whether there was any misunderstanding arising subsequently from the specifications within the tender such as after-sales service or delivery dates or times
whether the supplier had met financial or other targets
Do you think that, overall, the tendering process was carried out appropriately and that the school has achieved value for money from this process?