ABC SCHOOL FINANCIAL PROCEDURES MANUAL
SECTION 6 – ACCOUNTING ROUTINES
6.1 Guidance Materials
ABC School operates its financial package in accordance with the guidance materials issued through the Local Authority (mainly via FSS). The main reference documents used include:
· HCC Accounting for Capital Guide www.thegrid.org.uk/info/traded/financial/manuals/#rmmanuals
· RM accounting for Capital – Best Practice
OR
· SIMS FMS6 Accounting for Capital – Best Practice
For RMMS (Keys) schools
· FSS Budget Planner
· HCC RMMS Cash Accounts – School Fund Account Manual 2007 www.thegrid.org.uk/info/traded/financial/manuals/#rmmanuals
· HCC RMMS Cash Accounts – Purchase Manual www.thegrid.org.uk/info/traded/financial/documents/purchase2007.doc
· RM Finance: User Guide
· HCC RMMS CFR Assistant
For SIMS (FMS6) schools
· HCC SIMS Accounting for Capital – Best Practice www.thegrid.org.uk/info/traded/financial/manuals/#simsmanuals
· HCC SIMS FMS6 Budgeting User Manual
· HCC SIMS FMS6 CFR Module
· HCC SIMS FMS6 Equipment Register
· HCC SIMS FMS6 User Defined Reports
· HCC SIMS FMS6 User Manual
The [NAME e.g. Finance Manager, Bursar, Secretary, etc] will also refer to the FSS Bulletins, particularly in relation to the year-end, finance and CFR upgrades and the capital return.
6.2 Month-end Procedures
The month-end routine is undertaken by [NAME, e.g. Bursar]. In order for relevant budget monitoring information to be produced, the school’s accounting package must be up to date. The school has a set month-end routine regarding the school’s financial package to ensure that the accounts are up to date prior to the budget monitoring reports being produced. (Please refer to Appendix A to this section of the financial procedures manual for the checklists for FMS6 / Keys.)
This includes ensuring that:
· all postings onto the computerised financial management are brought up to date
· all debtors, creditors, accruals and prepayments (where operated during the financial year) are identified and entered on software. Workings for all such items are retained on file.
· bank reconciliations on all accounts are performed, printed, checked, signed and kept on file (please refer to Section 3)
· control accounts are reviewed and cleared
· budget monitoring reports are printed and monitored (please refer to Section 5)
· VAT returns to the LEA are completed each month (please refer to Section 12)
· other journals or transactions, e.g. trading accounts, earmarked funds are updated.
6.3 Coding Structure
ABC School has set up its coding structure in accordance with the guidance issued by Financial Service for Schools and in accordance with Consistent Financial Reporting requirements. Transactions are posted in accordance with the ‘gold sheets’ provided by FSS on an annual basis.
6.4 System Reconciliations
On a quarterly basis, the [NAME, e.g. Finance Manager, Bursar, Secretary, etc] undertakes a formal system reconciliation (in addition to the standard bank reconciliation) to ensure that there are no significant issues, e.g. all expected VAT claims have been reimbursed, both sides of all journals have been undertaken, etc. The reconciliations are based on the format set out by FSS in their regular bulletins.
RMMS – www.thegrid.org.uk/info/traded/financial/documents/rreconcile.xls
FMS6 - www.thegrid.org.uk/info/traded/financial/manuals/documents/FMSSysRecRevisedDec2008.xls
Once completed, the system reconciliation is signed by the person performing it and is presented to the [NAME e.g. Headteacher] for checking and countersigning. The reconciliation is then retained with the budget monitoring information.
6.5 Year-end / Closedown Procedures
The year-end routine is undertaken by [NAME, e.g. Finance Manager, Bursar, Secretary, etc]. At the end of each financial year it is important not to "close down" the software until all accruals and prepayments have been identified and processed, and all reconciliations and control accounts have been successfully performed.
At the end of the financial year the accounts system must be fully closed down and the accounts opened for the next financial year. The accounts system is established to hold 13 periods for any one year - 12 calendar months and period 13 for any end of year accounting adjustments necessary.
Once all 13 periods have been closed, a back up is taken onto the hard disc. Then the year-end procedure is run in each ledger.
The school follows the year-end checklist published by FSS through their bulletins.
When completing the year-end [NAME, e.g. Finance Manager, Bursar, Secretary, etc] reviews the accruals and records them on the sheets suggested by FSS, as located on thegrid. In preparing these [NAME, e.g. Finance Manager, Bursar, Secretary, etc] takes into consideration:
Debtors - includes an accrual for bank interests and outstanding income for music tuition, lettings and consortium arrangements.
Prepayments - includes payments made in advance for school journeys (e.g. deposits), lease payments that stretch over more than one financial year, courses booked and paid for in advance.
Creditors - supplies and services already received by not yet paid for
Receipts in advance - includes income received for an activity taking place in the following financial year, e.g. school journeys
The [NAME, e.g. Finance Manager, Bursar, Secretary, etc] also carefully reviews the allocation of balances in the year-end return:
B01 - committed revenue balance, the cost of revenue projects planned for the forthcoming year and outstanding orders from the previous year that have not already been included as creditors.
B02 - uncommitted revenue balances
B03 - devolved formula capital balance, the value of all unspent DFC allocations
B04 - other standards fund capital balances, taking into consideration E-learning credits, seed challenge money and specialist school capital.
B05 - other capital balances, taking into consideration privately raised capital funds, privately raised specialist school capital funding, revenue transfers for future years (for projects already started or where planning permission has been granted).
B06 - extended school balance, community focused balances that can not be funded from the delegated budget.
The [NAME, e.g. Finance Manager, Bursar, secretary, etc] ensures that the balances reflected on lines B01 to B06 of the CFR return reconcile to the balances reflected on the annual return. Any differences are investigated and amended prior to submission.
6.6 Suspense, Holding and Control Accounts
All suspense and holdings accounts (e.g. any used for the in-house payroll operation) are reviewed by [NAME, e.g. Finance Manager, Bursar, Secretary, etc] on a [FREQUENCY, e.g. monthly] basis and cleared regularly. Any balances that cannot be immediately cleared are reported separately to governors as part of their monthly monitoring reports.
The VAT control account is monitored as part of the month end procedure to ensure that all expected reimbursements have been received. ABC School is aware that it has a three-year deadline for recovering VAT and that any reimbursements not received within this time will no longer be recoverable and would need to be written out of the package.
6.7 Journals and Other Exceptional Entries
The [NAME, e.g. Finance Manager, Bursar, Secretary, etc] recharges departmental budgets for:
· reprographic costs
· use of the school minibus
· stationery items
On a monthly basis, the [NAME, e.g. Finance Manager, Bursar, Secretary, Reprographics Officer, etc] extracts meter readings from each of the school’s reprographic machines reflecting the number of copies taken by each department. This information is summarised for the finance office and [NAME, e.g. Finance Manager, Bursar, Secretary, etc] raises the appropriate journals to charge the department and credit the central reprographic budget.
A log is maintained within the school minibus to record each journey undertaken and the start and finish mileage. At the end of each month [NAME, e.g. Finance Manager, Bursar, Secretary, Caretaker, etc] checks the log and summarises the mileage undertaken by each department and passes this information to the finance office so that the appropriate internal charges can be made.
Departments are also charged for items taken from the main stationery store. This is administered by [NAME, e.g. Finance Manager, Bursar, Secretary, Administrative assistant, etc] and details of all items are recorded as issued. A summary of issues is passed to the finance office each month to enable the internal recharge to be made.
The rates used for recharge are reviewed and agreed by the Governing Body as part of the annual budget setting process.
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