Education & Children’s Services

Note for Schools

From:Kate McGee, Finance

To: Head Teachers/Principals of All Leicester City Schools

Date:27/02/2017

Subject:YEAR END PROCEDURES 2016/17

Action Required:Action required byweek commencing Monday27th March 2017.

OVERVIEW

At the end of each financial year, a timetable is set corporately for the preparation and input of year-end transactions, as Local Authorities are required to close their accounts by 30th June. Due to this and the early Easter holiday there is only a short space of time for inputting all the final BAs and reserve forms.

For schools, the process relates to producing the final BA Return and the preparation and input of Estimated Creditors and Debtors.

The principle behind these transactions is to match expenditure and income to the year in which the goods and services have been received or provided. These requirements are a key part of the Accounts and Audit Regulations and the Accounting Code of Practice and are subject to audit by the councils’ external auditor.

CHECKLIST

The following reports and forms must be received by E&CS finance by the dates below. Please see below for more information relating to the preparation of each item.

Period 12 Bank Account returnWeek commencing 27th March 2017 (unless agreed otherwise with E&CS Finance)

VAT submittal3rd April 2017

Aged debtors reportWeek commencing 27thMarch 2017

Outstanding orders reportWeek commencing 27thMarch 2017

Reserve formsWeek commencing 27thMarch 2017

Year end bank reconciliationAfter period 13 tabs have been issued

Fund review reportAfter period 13 tabs have been issued

SCHOOLS’ YEAR END PROCESSES:

Period 12 BA:-

In order to achieve closedown by the due date we will require the Period 12 Bank Account Return (BA) to be completed byweek commencing Monday27th March 2017at the latest and sent to City Hall (4th floor, Granby Wing) in the schools post (Using a VAT end date of 31/03/17). The FMS6 system will not allow the VAT Submittal Report to be printed before 01.04.17. If you are unable to make this date or you are planning to work over the Easter holiday please can you email Simon Walton () as soon as possible.

If the Headteacher is not available to sign the BA, then we can accept the signature of a certifying officer. However, the VAT submittal must be signed by the Headteacher.

Most schools are now using the automatic email system to send in their BA returns. During closedown it is even more important that this system is used to reduce the amount of manual input required at year end. If you encounter problems with this system, please telephone Simon Walton on 4544053 or e-mail the completed BA template and associated csv file to .

If you are unable to send your BA via e-mail please fax the cover sheets and VAT Long Summary to 0116 454 0771.

Reports:-

We also require a print of your aged debtors and list of outstanding orders from your SIMS system. These can be printed by following the path:

Aged debtors – focus – accounts receivable – report – aged debtor report – leave the field blank for a full report and click OK.

Outstanding orders – accounts payable – purchase order report – purchase orders – tag outstanding orders and click OK.

Please send in these reports with your final BA.

Processes:-

The following processes are suggested as guidance to schools: -

  • Reserve creditor listings should include only those goods and/or services delivered or received by 31.03.17 which have not been included in the final BA (i.e. not yet posted to FMS6)
  • Estimates of Payroll Creditors should include March payments paid in the April Payroll e.g. overtime should be made based on the timesheets/ claims made during March.
  • No further transactions, with the exception of the tabulations, should be posted to FMS6 after the final BA for the year has been produced.
  • Please note that FMS6 will not allow the VAT Submittal to be printed off before 31.03.17 so although final BA’s can be completed prior to that date, the submittal would have to be printed on 01.04.17 or after. Where there is a gap between producing the final BA and running the VAT Submittal, it is vital that no bank transactions are processed in FMS6 (in either financial year) until the Submittal has been successfully printed.

Reserve Forms:-

This year Estimated Debtors and Creditors (accruals) forms are available for downloading from the Extranet. Please note that we will not be sending hard copy forms this year.

We would appreciate it if you could complete the forms electronically and return them to us via e-mail rather than inputting manually and sending back hard copies. This will increase accuracy and cut down on manual input. Please note that although there is no corporate requirement to reserve anything under £500, you may still wish to do so for your own needs in school, but you should not be reserving for anything less than £100.

Please also note that you should not reserve against the following items:

Capital Expenditure

VAT Refunds

Whatever it Takes Income

Pupil Premium

NB: Signed hard copies are not required this year – e-mail copies are sufficient.

The forms need to be received in the Finance Dept. by theweek commencing Monday 27thMarch2017. Please e-mail them to .

As some schools have problems sending emails with attachments, we would be grateful, if you could send 2 e-mails, one with the reserve forms attached and one without, stating that you have sent the reserve forms to us.

ESTIMATED CREDITORS

An estimated creditor relates to a payment for goods or services that were delivered/received on or before the 31st March each year.

If you have received goods or services by 31st March which have not been paid for, it should be entered on an Estimated Creditors form. This will have the effect of making a charge against the schools cost centre in the old financial year and will create a credit in the new financial year. The invoice should be paid in the new financial year.

If the school has not received an invoice,an estimate of the likely cost should be entered on the estimated creditor form. Information from the SIMS system will show the outstanding orders at the end of the year, and these should be used to determine estimated costs where the goods have been delivered by 31st March.

ESTIMATED DEBTORS

An estimated debtor relates to income due from goods or services provided on or before the 31st March each year. e.g. Bank Interest

Where the school has provided goods or services and has notraised an invoice prior to the final BA2 submission, the income due should be recorded on an estimated debtor sheet. This will have the effect of crediting the school cost centre in the old financial year and debiting the cost centre in the new financial year. The invoice should be raised in the new financial year.

RECEIPTS & PAYMENTS IN ADVANCE

A Receipt in Advance should be submitted where income has been received/processed that now relates to the following financial year i.e. where the expenditure relating to that income will be incurred in the new financial year. An example of this would be if a school had received a £10,000 donation in March for the purchase of play equipment. It is now too late to receive the goods so a receipt in advance would be required to put the income into the new financial year. The effect of this would be to debit the old year and credit the New Year.

A Payment in Advance should be submitted where a payment has been made that relates to the following financial year (e.g. course fees, subscriptions etc.) This would have the effect of crediting the school cost centre in the old year and debiting the cost centre in the New Year.

PAYROLL RESERVES

Please note that when making payroll reserves (accruals) you should input the relevant employee account code, i.e. from CFR categories E01-E07 and E31.

FINAL NOTES

We will be requiring a year end bank to final BA reconciliation and also a copy of your year end fund review statement. These are not needed until later in the closedown process and so we will send a separate note requesting these items together with your period 13 tabs.

CONTACT DETAILS

Please contact the following members of the Finance Team if you have any queries:

Kate McGee454 4109

Simon Walton454 4053

Raj Patel454 4112

1