FINANCIAL SELF ASSESSMENT FOR SCHOOLS

April 2005

CONTENTS: Page

INTRODUCTION

BASIC INFORMATION

A: GOVERNANCE 6

B: FINANCIAL PLANNING 9

C: BUDGET MONITORING 11

D: PURCHASING 12

E: FINANCIAL CONTROLS 15

F: INCOME 17

G: BANKING 18

H:PERSONNEL/PAYROLL 20

I: TAX 21

J: VOLUNTARY FUNDS 22

K: ASSETS 22

L: INSURANCE 23

M: DATA SECURITY 23

APPENDICES

1: CONTROL OBJECTIVES 24

2: USEFUL INFORMATION 39

3 CONTACT NAMES 40


Self Assessment Document

The approach of the Internal Audit Service when auditing schools is based on a risk assessment. The following risk assessment factors have been identified.

·  Ofsted inspections

·  Data from the LEA

·  Previous Internal Audit reports

·  Financial Self Assessment document to be completed by schools

These factors will feed into a risk assessment that will determine the degree of coverage by Internal Audit, in terms of the depth, breadth and frequency of the audit inspections.

The result of the pre-audit questionnaire will not be divulged to other schools.

Please answer all questions as fully as possible, and if you have any queries on any of the questions/sections then please contact the Audit Service. (contact names and telephone numbers are given at the end of the document).

NAME OF SCHOOL: ______

Questionnaire completed by

HEADTEACHER) ______

(please print name)

Signature of Headteacher ______

Date ______

Thank you for taking time to answer the questionnaire.

Please return to

Christine Marshall

Audit Manager

Corporate and Customer Services

Stuart House (3rd floor)

Luton


INTERNAL AUDIT SERVICE

FINANCIAL SELF ASSESSMENT DOCUMENT

INTRODUCTION

This document enables Headteachers and Governors to undertake a financial self assessment of the financial management within the school.

The document is based on the standards as set out in the revised version of “Keeping your Balance”, which was published jointly by the Audit Commission and Ofsted in October 2000 and Financial Regulations and Standing Orders issued by the Luton Borough Council.

The principles of financial management are summarised in 16 key areas which set out the principal elements of a sound approach to the administration and control of school funds, and set out a framework of good practice to enable schools to establish and maintain robust financial systems (see Appendix 1). Within these key areas are questions, responses to which identify areas for improvement and can be used to provide an action plan for the school.

Applying the Standards

This document has been produced to cover all schools within the LEA and it should be borne in mind that the extent to which this document is applicable will vary depending on the size and organisation of the school.

A small primary school, for example, will find it hard to apply some of the controls which may be typical procedures in large schools, particularly in the separation of duties. In such cases, the standard must be interpreted within the context of the school and the school must assess whether controls in place are sufficient to meet the principles behind the standards.

When undertaking the self assessment, schools may find it helpful to refer to the following documents which can be found in “The Schools Financial Handbook” issued by the LMS team.

·  Scheme for Financing of Schools

·  Financial Regulations for Schools

·  Local Bank Account Scheme

·  Imprest Bank Account Scheme

·  VAT guidance notes

·  Insurance guidance notes

·  Voluntary Funds notes of guidance

BASIC INFORMATION REQUIRED
School Roll : ______
School Budget Share (2005/2006) : ______
School Balance Brought forward from 2004/2005 to 2005/2006 :
______
Please list any additional funding for 2005/6 (eg SRB, NOF, Flying Start, Lottery funding etc)

______

______

______

______

______

______

______

Please state if Headteacher or Bursar have taken up post within the last year or if staff changes are imminent.

______

______

______

______

Please state if there is any extended use at the school

______

______

______

______

Where a YES/NO answer is indicated please delete that which does not apply.

A: GOVERNANCE

ROLES AND RESPONSIBILITIES

  1. Are the membership and roles of the following defined in writing? (terms of reference clearly detailing roles and accountability for financial matters) Ref: LEA Pro Forma

a)  Governing Body YES/NO

b)  Committees YES/NO

c)  Head teacher and other staff YES/NO

  1. Are these reviewed on an annual basis? YES/NO

Please state the date that the above were last reviewed ______

  1. Over the past year, have meetings of the Governing Body and its committees been quorate? YES/NO
  1. Has the school experienced problems with governor recruitment or governor attendance? YES/NO

If yes, please give details

______

______

______

______

5. Do new Governors receive an induction pack from the school, which includes details on their roles and responsibilities? YES/NO

6. Are formally documented financial limits in operation that have been approved by the Governing Body? YES/NO

Please state the amounts and the date they were last reviewed.

Headteacher ______Date last reviewed ______

Bursar ______Date last reviewed ______

Finance Committee ______Date last reviewed ______

7.  Do Governors’ Committees report back decisions to the next full meeting of the full Governing Body:

a)verbally YES/NO

b)through submission of committee minutes YES/NO

8.  Is this evidenced in the minutes of meetings of the full Governing Body? YES/NO

9.  Does the Governing body issues an annual report to parents?

Date of Last report ______

COMMITTEE MEETINGS

10. Do Governors committees meet on a regular basis? Please list all Committees, how often they meet and whether minutes exist.

______YES/NO

______YES/NO

______YES/NO

______YES/NO

______YES/NO

FINANCE COMMITTEE

Please give dates of last three meetings

______

______

______

11. Does the Finance Committee have an annual agenda to ensure that all

significant financial issues are reviewed? YES/NO

FINANCIAL INFORMATION

12. Do the Governing Body/Finance Committee receive adequate information to enable them to effectively monitor the budget? (eg. Budget/Standard Fund reports from SIMS/Keys, FMS statements, written reports detailing variations from budget and explanations etc)

YES/NO

Please list and indicate frequency.

______

______

REGISTER OF BUSINESS INTERESTS

13. Does the School maintain a register of pecuniary interests? YES/NO

If YES, does the register cover the following?

  1. Governing Body YES/NO
  2. Any staff who influence financial decisions YES/NO
  3. Is the register held on school premises and open to inspection?

YES/NO

d. Is the register reviewed annually to ensure that entries remain accurate YES/NO

Please state date of last review

______

REGISTER OF HOSPITALITY

14. Does the School maintain a register of hospitality? YES/NO

If YES, does the register cover the following?

  1. Governing Body YES/NO
  2. Any staff who influence financial decisions YES/NO
  3. Is the register held on school premises and open to inspection?

YES/NO

d. Is the register reviewed annually to ensure that entries remain accurate YES/NO

Has there been any entry’s in the last 12 months? YES/NO

WHISTLE BLOWING

15. Does the school have a whistle blowing policy in place? YES/NO

If YES, when was the policy last reviewed? ______

B: FINANCIAL PLANNING

SCHOOL IMPROVEMENT PLAN

  1. Does the School have a School Improvement Plan? YES/NO

Please state period covered ______

  1. Does the plan contain a statement of educational goals? YES/NO
  1. Has the plan been formally approved by the Governing Body? YES/NO

Please provide committee details and date______

  1. Has the governing body approved a timetable for

a)  constructing, YES/NO

b)  monitoring, YES/NO

c)  updating the plan? YES/NO

  1. Does the plan have a set of detailed objectives covering at least one year which link to the annual budget plan? YES/NO
  1. Are new school initiatives appraised for costing purposes and approved by the Governing Body included in the plan? YES/NO
  1. Does the plan clearly identify expenditure on continuing commitments?

(eg projects covering more than one year) YES/NO

BUDGETING

  1. Are there formal timetables and procedures in place to prepare the annual school budget and obtain governor approval? YES/NO

If No, who is involved in the preparation and review of the draft school budget?

______

______

______

______

  1. Was the budget plan formally approved by the Governing Body? YES/NO

Please give date of minutes evidencing approval ______


10. Was this year’s budget based upon realistic estimates of income and expenditure? YES/NO

Please note any exceptional income/expenditure budgeted for

______

______

______

______

11.Have the main elements of the budget been fundamentally reviewed within the last five years? YES/NO

Please state when last reviewed. ______

How does the Governing Body ensure that the finally agreed budget is free from spending inaccuracies carried forward from previous years?

______

______

12. Was your actual c/fwd amount at the end of the last financial year more than 5% of the gross budget? YES/NO

______

If Yes, has the schools budget surplus been earmarked for specific future needs? YES/NO

Please specify

______

______

______

______

(Please note schools should not under resource in the given year)

13. Has the School set a deficit budget YES/NO

If yes,

a)  was the consent of the Director of Lifelong Learning obtained? YES/NO

b)  has the School agreed a budget recovery plan with the LEA to tackle the deficit? YES/NO

14. Did your school submit its approved budget and any subsequent changes to the LEA within the specified deadlines for the current financial year?

YES/NO

Please give date of submission ______

C: BUDGET MONITORING

  1. Have procedures for budget virements been established in accordance with the school’s scheme of delegated authority? YES/NO

2. Are major budget virements documented in Governors/Finance Committee minutes? YES/NO

3. Are budget virements promptly notified to the LEA and updated on the School’s financial system? YES/NO

4.  Does the Headteacher/Governing Body monitor expenditure on initiatives set out in the School Improvement Plan? YES/NO

Please give details

______

______

______

5. For Local Bank Account schools, are cash flow forecasts produced to ensure that the School does not go overdrawn? YES/NO

6. Does the School delegate budget elements? YES/NO

Please state how frequently income and expenditure reports are produced for budget holders

______

7. Has the School set up the detailed code list in line with the Consistent Financial Reporting framework agreed with the LEA. YES/NO

8. Does the School have procedures in place to ensure that at year end and 31/8 it can separately account for Standard Fund Expenditure and report expenditure outturn to the DFES? YES/NO

9. Does the School have procedures in place to ensure that the current years standard funds/grants will be spent by the date specified by DFES/appropriate agency? YES/NO

D: PURCHASING

FORMAL PROCEDURES

1. Does the school have written procedures covering all aspects of the purchasing cycle? YES/NO

Please give date and minutes when approved/last reviewed

______

2.  Do written procedures cover the following

a)  steps taken by the School to obtain best value in procurement YES/NO

b)  quotations/tenders YES/NO

c)  ordering procedures YES/NO

d receipt of goods YES/NO

e) certification of invoices YES/NO

f) payment procedures YES/NO

g) statement forbidding private purchasing YES/NO

3.  For building works, are there written policies/procedures to cover the following:

a)  role of external consultant YES/NO

b)  use of approved contractors YES/NO

c)  provision of written job specification YES/NO

d)  completion of self help forms YES/NO

e)  adherence to CIS scheme YES/NO

f)  monitoring projects YES/NO

g)  certification of completed works YES/NO

h)  responsibility for Health and Safety issues YES/NO

4.  Have Governors approved the following, (in conjunction with the Authority’s Contract Standing Orders):

a)  Levels at which formal tenders should be obtained YES/NO

(Please give threshold amount)______

b)  Predetermined limits for number of quotations required and threshold limits

YES/NO

Please state number and limits ______

c)  Personal purchasing limits delegated to staff YES/NO

(Please state limits)______

5  Are staff with purchasing responsibilities aware of their personal limits and the School’s quotation/tender thresholds? YES/NO

6.  Does the School seek governor approval for exceptions to approved purchasing policy and are these minuted? YES/NO

7. Are Contract files maintained? YES/NO

8. Does the School file quotations with copy orders? YES/NO

9. Does the School have a Governors approved list of authorised signatories? YES/NO

10

ORDERS FOR GOODS AND SERVICES

  1. Are manual requisitions raised by budget holders? YES/NO
  1. Are orders raised on the School’s computer system at the time funds are committed? YES/NO
  1. Are orders authorised in accordance with the School’s approved signatory listing? YES/NO
  1. Do authorised signatories check

a)  Appropriateness of order YES/NO

b)  Quotations/tenders have been obtained YES/NO

c)  Budget availability YES/NO

  1. Are copies of authorised and cancelled orders filed in numerical order to provide a complete audit trail? YES/NO

RECEIPT OF GOODS

  1. On receipt at the school, are goods checked to

a)  Delivery note YES/NO

b. Copy order YES/NO

  1. Are these checks done independently from the person signing the order/invoice? YES/NO
PAYMENT OF INVOICES
  1. Are invoices stamped and checked for accuracy/budget availability prior to authorisation? YES/NO
  1. Are invoices authorised in accordance with the School’s approved signatory listing? YES/NO
  1. Is the certifying member of staff different from the person authorising the order and the person checking receipt of goods? YES/NO
  1. Are payments to suppliers ever made in cash? YES/NO
  1. Are invoices paid within 30 days in accordance with the Late Payments of Commercial Debt (Interest) Act 1998? YES/NO
  1. For local payment schools, are invoices marked with cheque number and filed in cheque number order? YES/NO

E: FINANCIAL CONTROLS

FINANCIAL PROCEDURES

  1. Are there written descriptions of the School’s financial systems and procedures, particularly in the following areas:

GOVERNANCE:

Virements YES/NO

Budget monitoring YES/NO

PURCHASING:

Ordering YES/NO

Receipt of goods YES/NO

Payment of Invoices YES/NO

INCOME:

School Dinner Monies YES/NO

Lettings YES/NO

Grants YES/NO

Other Income eg contributions YES/NO