ABC SCHOOL FINANCIAL PROCEDURES MANUAL

SECTION 19 – PRIVATE (FUND) ACCOUNT

19.1 Account Details

ABC School holds one private account as detailed in banking section of this manual. ABC School currently banks with NatWest under the terms agreed through the Local Authority. However, the governors are aware that this account is separate from the public funds and could be deposited elsewhere. The Governing Body, on a periodic basis, reviews the banking arrangements.

19.2 Account Maintenance

The school’s Private (Fund) Account is administered by [NAME, e.g. Finance Manager, Bursar, Secretary, etc] on a [FREQUENCY e.g. monthly] basis using a manual ledger / Keys / FMS6 / other software package. The same standard of stewardship and authorisation procedures s exercised over the money held in this account as is required for other public funds (please refer to the appropriate sections of this financial procedures manual for the payment of invoices, income collection, petty cash, bank reconciliations, etc).

Purchases of hospitality items, flowers, gifts and refreshments are occasionally made from the Private (Fund) Account, for which a specific collection is not always made. These transactions are recorded under a separate ‘hospitality’ heading within the account which is specifically reviewed by governors on a [FREQUENCY, e.g. annual] basis. The governors of ABC School are aware that under certain circumstances, this type of expenditure may be seen as a taxable benefit and be liable to tax deductions. The Governing Body has agreed a policy on the use of the Fund Account for this type of activity, which ensures compliance with HMRC requirements.

At the end of the financial year [NAME, e.g. Finance Manager, Bursar, Secretary, etc] nets off the balances each under each of the headings within the account by deducting the expenditure from the income total. The [NAME, e.g. Finance Manager, Bursar, Secretary, etc] then reviews the headings and the balances reflected under them to determine whether they need to be brought forward into the new financial year or whether they should be written off, e.g. any fund raising collected will be carried over until it has been spent in full, however any balance on a completed non-educational trip can be written off (i.e. transferred to / from the miscellaneous column).

19.3 Reporting to Governors

The funds held in, and the transactions operated through, the Private (Fund) Account are the responsibility of the Governing Body. In order for its members to ensure that the account has been appropriately used, a termly report is submitted to the members of the Finance Committee for review (as reflected in Appendix A). This highlights each of the headings operated within the account, the turnover, the current balance and any comments / notes required.

19.4 Audit / Scrutiny Arrangements

The school has not opted to have this account privately audited and, therefore, uses the Local Authority Internal Audit service to provide this coverage. In compliance with the Local Authority Financial Regulations, for all private, voluntary or trading organisation accounts controlled by the Governing Body, the school completes a simple Annual Return summarising:

·  the income received and expenditure incurred during the financial year

·  the opening and closing balances

·  an analysis of income sources which may affect the VAT threshold, where requested

The return is prepared by [NAME, e.g. Finance Manager, Bursar, Secretary, etc], before being checked and signed by the Headteacher and Chair of Governors.

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