Appendix 7
The Schools Financial Value Standard (SFVS) and Schools Financial Health and Efficiency
Background
Governing Bodies have formal responsibility for the financial management of their schools. TheSchools Financial Value Standard (SFVS) is primarily aimed at governors.
All Local Authority maintained schools are required to complete the (SFVS) once a year.
The SFVS aims to assist schools with the management of their finances and to give assurance that they have secure financial management in place.
The Standard has been available for schools to use since September 2011. There is no external assessment of the SFVS but a signed copy of the completed document must be submitted to Veritau, the County Council’s internal auditors, by 31st March each year.
The Schools Financial Value Standard (SFVS)
The standard contains questions split into four sections:
- The Governing Board and School Staff
- Setting the Budget
- Value for Money
- Protecting Public Money
The Governing Board should formally discuss these questions with the Headteacher and Senior Staff annually. Although the Governing Board may delegate the consideration of questions to the Resources/Finance or other relevant Committee, a detailed report must be provided to the full Governing Board and the Chair of Governors must sign the completed form. The Local Authority auditor, Veritau, is to receive a copy of the signed form by the 31st March each year so that when they conduct a school audit they can check that the self-assessment is in line with their own judgement.
Schools Financial Health and Efficiency
In January 2016 the DfE launched the ‘Schools Financial Health and Efficiency’ guidance on their website. This includes ‘Schools financial efficiency: top 10 planning checks for governors’.
As the name implies it includes 10 planning checks are to support school and academy governors by providing information to help governors understand effective financial management. Governors can then use this information to make sure their school is efficient in managing its resources. These 10 planning checks are to be used alongside the SFVS and does not replace it.
The role of the Governing Board
The statutory responsibilities of the governing board of a maintained school are detailed in section 21 of the Education Act 2002. Their key financial roles are to:
- manage the school budget;
- decide on how to spend the delegated school budget, depending on any conditions for maintained schools set out in the local authority scheme for financing schools;
- be consulted by their local authority on funding;
- ensure accurate school accounts are kept;
- determine the number and type of staff and a pay policy in accordance with the School teachers pay and Conditions; and
- act as a “critical friend” to the school leaders by providing advice, challenge and support to ensure that (i) resources are deployed appropriately in line with the school’s priorities, (ii) planned levels of financial performance are achieved, (iii) the school avoids incurring financial loss and waste and (iv) the school receives favourable audit assessments.
It is essential for the governing board to have access to adequate financial skills to ensure they meet their statutory responsibilities for the financial management of the school and can safeguard the large amounts of public money for which they are responsible. Not all governors need all these skills, but collectively members of the governing board (and finance committee or equivalent) should have these skills among them.
Schools should analyse their governing board’s skills on a regular basis to identify any skills gaps or training needs.
The DfE has produced a Skills analysis matrix for the financial management skills needed by the governing board. This can be found at
The role of the Clerk to the Governing Board
Timetabling of Governing Board and Committee Meetings
Meetings should be timetabled to coincide with deadlines for important financial decisions including the approval and signing of the SFVS.
Minutes
The SFVS does not demand paper evidence. However, the provision of good quality and comprehensive yet concise minutes demonstrate that the questions have been considered by the governing board and/or its committees. Reference should be made to source documents and information such as the budget consultation, governor bulletins and governor training opportunities that have been issued to the Governing Board for consideration.
Declarations of Interest
All governors should complete the school’s Register of Business Interests. All business interests should be declared that could result in a conflict of interest. The Clerk should ensure that this register is kept up to date and is freely available for inspection by governors, staff and parents.
Governors should be reminded of the need to declare any interest they may have in relation to agenda items. The Clerk should minute these as and when they arise.
Policy Review
An up to date and regularly reviewed Budget Management Policy is an essential document to assist with financial management in school as well as agreeingResources/Finance Committee Terms of Reference. This document will provide evidence and information for the completion of the SFVS.
The review of this document should be built into the school’s Policy Review schedule alongside other policies including that relating to the scheme of delegation to committees/headteacher and whistle-blowing.
The adoption or review of these policies must be recorded in the minutes of the meeting of the governing board or committee that undertakes this function.
Governing Board Records
All Governing Board records should be up to date and accessible within school.
Other Resources
To assist schools in achieving the Standard, support and resources are available from both the FMS Team and Veritau. These resources include:
Schools Financial Value Standard –questions with suggested answers for illustrative purposes only
Financial Control Checklist (August 2011) – to focus on the financial risks in school and the controls already in place
Both can be found on the FMS - Schools Financial Documents page of the cyps.info website (for FMS subscribers only)
Advice and guidance of your FMS Support Officer or Veritau
Veritau’s Governor Training Programme includes information about SFVS
DfE website at:
School Finance Manual at:
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Finance for School Governors Information – July 2016