LMS FINANCE TEAM
Schools Financial Value Standard (SFVS)
June 2015
Financial Management Standard in Schools
Dear School Governing Body, Headteacher and School Business Manager
School Financial Value Standard (SFVS) Guidance Manual
We hope that you will find this guidance manual useful in helping and assisting you with understanding the requirements of the Schools Financial Value Standard
The purpose of the guidance manual is:
To help and support schools by providing practical guidance to assist with compiling the self assessment form
To provide schools with a central point of reference to source documents, templates and useful guidelines
To assist the school with planning and setting timescales to ensure all essential elements of the standard are met by a given date.
Future updates and additions to the guidance manual will be circulated to all schools accordingly.
The guidance manual comprises the following sections:
1. Contacts List and Useful Telephone Numbers
2. Brief Background Information on the Standard
3. What schools need to do
4. Evidence sources for the Assessment Criteria
5. Section A – The Governing Body and School Staff
6. Section B – Setting the Budget
7. Section C – Value for Money
8. Section D – Protecting Public Money
Section 1
Contacts List and Useful Telephone Numbers
LMS Finance Team
Jan Powley, Group Accountant Schools
( / 01582 548070* /
School Financial Advisers
School Financial Adviser / ( / *Kim George / 01582 548076 /
Sabia Begum / 01582 548075 /
Vacant / 01582 548071 /
Lynne Knapton / 01582 548074 /
Sabrina Williams / 01582 548073 /
Internal Audit
Bev Gibbings, Audit Manager
( 01582 547042
*
Governor Services
Alison Culman, Governor Services Manager
( 01582 548017
Section 2
Background to the SFVS
The SFVS was introduced by the DfE in July 2011 and replaces the Financial Management Standard in Schools.
The Standard is a requirement of all local authority maintained schools. Governing bodies have formal responsibility for the financial management of their schools and so the standard is primarily aimed at Governors.
The SFVS has been designed in conjunction with schools to assist them in managing their finances and to give assurance that they have secure financial management in place..
Maintained schools are required to complete the SFVS once a year. Those schools which never attained FMSiS will be expected to complete and submit the SFVS to their local authority by 31 March 2012. For all other maintained schools, the first run through is required by March 2013.An annual review is required thereafter. SFVS will not be externally assessed like FMSiS.
The Chief Finance/Section 151 Officer is responsible for confirming that the schools in the LA are complying, or taking steps to comply with the Standard. The Local Authority’s Internal Audit Team will use school’s SFVS to inform their programme of financial assessment and audit of schools.
The Schools Financial Value Standard and supporting toolkit are designed to allow schools to take better informed decisions about the allocation of resources at school level, supported by better information, planning and management. It is intended to cover standards and processes that should already be in place in schools, rather than introduce a new, higher standard. Consequently, schools will be able to manage their resources more efficiently, leading to an increase in value for money.
The SFVS has been developed by the DfE and is available at http://www.education.gov.uk/schools/adminandfinance/financialmanagement/Schools%20Financial%20Value%20Standard/a00192114/schools-financial-value-standard-sfvs
Section 3
What do schools need to do?
· The standard consists of 25 questions which governing bodies should formally discuss annually with the head teacher and senior staff.
· The questions which form the standard are in sections A to D. Each question requires an answer of Yes, In Part, or No.
o If the answer is Yes, the comments column can be used to indicate the main evidence on which the governing body based its answer.
o If the answer is No or In Part, the column should contain a very brief summary of the position and proposed remedial action.
· In Section E, governors should summarise remedial actions and the timetable for reporting back. Governors should ensure that each action has a specified deadline and an agreed owner.
· The governing body may delegate the consideration of the questions to finance or other relevant committee, but a detailed report should be provided to the full governing body and the chair of governors must sign the completed form.
· The school must send a copy of the signed standard to their local authority’s finance department by 31st March each year?
There is no prescription of the level of evidence that the governing body should require. The important thing is that governors are confident about their responses.
Section 4
Evidence sources for the Assessment Criteria
This section provides practical guidelines to assist schools with completion of the self assessment form.
Each of the four key areas to the Standard is covered in this section:
· The Governing Body and School Staff
· Setting the Budget
· Value For Money
· Protecting Public Money
THE GOVERNING BODY AND SCHOOL STAFF – SECTION A
SFVS Question 1
In the view of the Governing body itself and of senior staff, does the governing body have adequate financial skills among its members to fulfil its role of challenge and support in the field of budget management and value for money?
Documents and Information you may wish to consider
· Governors Competency Matrix
· Evidence of review to ensure the full range of competencies exist
· Details of training budget and courses planned for Governors
· Action plan to address the current skills gaps
· Governing Body minutes evidencing challenge and support
SFVS Question 2
Does the governing body have a finance committee (or equivalent) with clear terms of reference and a knowledgeable and experienced chair?
Documents and Information you may wish to consider
· Terms of Reference for the finance committee with evidence of annual review
· Skills audit/governor competency matrix
SFVS Question 3
Is there a clear definition of the relative responsibilities of the governing body and the school staff in the financial field?
Documents and Information you may wish to consider
· Terms of reference for the finance committee
· School finance manual and evidence of regular review
· Scheme of Delegation and evidence of review
· Job Descriptions of staff with financial responsibilities
SFVS Question 4
Does the governing body receive clear and concise monitoring reports of the school’s budget position at least three times a year?
Documents and Information you may wish to consider
· Details of how and when budget monitoring reports are presented to the Finance Committee and Governing Body
· Prompt, accurate and up to date financial information presented to the finance committee and the governing body
· The monitoring reports contain numeric information about the budget, spend to date and end of year projections and are accompanied by a suitable written narrative
· Minutes of the Finance Committee and Full Governing Body meetings show evidence of budget monitoring, with evidence of actions taken based on information in the reports
· Staff have access to the monitoring reports and know about the school’s budget and financial affairs
SFVS Question 5
Are business interests of governing body members and staff properly registered and taken into account so as to avoid conflicts of interest?
Documents and Information you may wish to consider
· Register of Business Interests (fully completed and updated annually)
· Opportunity should be given to declare interests at every meeting in case of change of circumstances (i.e. this should be a standard agenda item) – evidence in Governing body meeting minutes
· Minutes of GB meetings show where declaration of interests invited, e.g. Minutes to demonstrate that if there was a pay review for the Headteacher they were requested or volunteered to leave the room
SFVS Question 6
Does the school have access to an adequate level of financial expertise, including when specialist finance staff are absent e.g. on sick leave
Documents and Information you may wish to consider
§ Staff competency matrix, reviewed to identify any training and development needs
§ Details of staff absence cover arrangements
§ Finance Manual
SFVS Question 7
Does the school review its staffing structure regularly?
Documents and Information you may wish to consider
§ Most recent staffing structure and evidence of review
§ GB, Finance Committee and Personnel Committee minutes, which include discussions on the staffing structure.
§ Is the staffing structure an open document available to all staff
SFVS Question 8
Have your pay decisions been reached in accordance with a pay policy reflecting clear performance criteria?
Documents and Information you may wish to consider
§ Most recent pay policy
§ GB and Personnel Committee minutes, which include discussions on and approval of pay policy
§
SFVS Question 9
Does the use of professional independent advice informed part of the pay decision process in relation to the headteacher?
Documents and Information you may wish to consider
§ Evidence of independent professional advice, where appropriate, including external HR providers, LA HR providers, other governing bodies, other external advice e.g. school improvement advisers, employment law firms
§ GB and Personnel Committee minutes
SETTING THE BUDGET – SECTION B
SFVS Question 10
Is there a clear and demonstrable link between the school’s budgeting and its plan for raising standards and attainment?
Documents and Information you may wish to consider
· The School Plan (that show there are financial implications included)
· Three year budgets that include these financial implications.
· Report from FPS Advance.net demonstrating the link between the budget and the School Plan
SFVS Question 11
Does the school make a forward projection of budget, including both revenue and capital funds, for at least three years, using the best available information?
Documents and Information you may wish to consider
· The three year budget for both capital and revenue funding, including pupil number projections, staffing profiles and increments, pay and price increases
· A range of scenarios with different assumptions about income and costs and details of how the budget could be balanced in the different scenarios
· Notifications of funding from the Local Authority used in budget planning
· Notifications of grant funding, pupil premium, external funding used in budget planning
SFVS Question 12
Does the school set a well-informed and balanced budget each year (with an agreed and timed plan for eliminating any deficit)?
Documents and Information you may wish to consider
· Three year balanced budget including known staffing changes, pay awards and increments, income assumptions, changes in pupil numbers
· Analysis of balances, details of planned projects
· School Plan
· Licensed deficit plan with details of budget monitoring
.
SFVS Question 13
Is year end outturn in line with budget projections, or if not, is the governing body alerted to significant variations in a timely manner, and do they result from explicitly planned changes or from genuinely unforeseeable circumstances?
Documents and Information you may wish to consider
· Year end outturn and budget projections together with reasons for significant variations.
· Evidence of regular budget monitoring, written narrative explaining reasons for significant variances, and follow up of recommendations and agreed actions to put the budget back on track.
· Evidence to show actions taken e.g virements, and Governor approval in line with the Scheme of Delegation.
· Evidence of quarterly monitoring and forecast outturn statement provided to LMS Team
VALUE FOR MONEY – SECTION C
SFVS Question 14
Does the school benchmark its income and expenditure annually against that of similar schools and investigate further where any category appears to be out of line?
Documents and Information you may wish to consider
· Evidence of benchmarking against a suitable list of comparator schools
· Governors consider benchmarking annually
· Evidence of targets set and achieved for improved use of resources
· Use of the schools financial benchmarking website.
SFVS Question 15
Does the school have procedures for purchasing goods and services that both meet legal requirements and secure value for money?
Documents and Information you may wish to consider
· Purchasing procedures in school finance manual with clear segregation of duties outlined
· Evidence of quotations and tenders in line with finance regulations
· Scheme of delegation to the headteacher
· Evidence of value for money audit or consideration of LBC checklist for efficiency savings
· Evaluation of lease or buy decisions
SFVS Question 16
Are balances at a reasonable level and does the school have a clear plan for using the money it plans to hold in balances at the end of the year?
Documents and Information you may wish to consider
· Three year budget which demonstrates clearly use of balances
· Analysis of balances and details of planned projects/costed objectives in School Plan/detailed in governing body minutes
SFVS Question 17
Does the school maintain its premises and other assets to an adequate standard to avoid future urgent need for replacement?
Documents and Information you may wish to consider
· Asset management plan/ for five years ahead and updated annually
· Costed maintenance plan covering reactive, planned preventative and lifecycle costs
· Three year budget of capital funding and revenue maintenance funding
· Analysis of balances and details of planned projects for premises
· Evidence of statutory inspections
SFVS Question 18
Does the school consider collaboration with others e.g. on sharing staff or joint purchasing, where that would improve value for money
Documents and Information you may wish to consider
· Evidence of shared resources – staffing, expertise, advice, knowledge
· Evidence of collaboration on purchasing goods, works or services – to procure common goods or secure bulk-buying discounts
SFVS Question 19
Can the school give examples of where it has improved the use of resources during the past year?