ST PETER’S CATHOLIC HIGH SCHOOL
& SIXTH FORM CENTRE
Finance Policy
January 2012
Contents
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Section 1: |
Organisation 1.1 The Governing Body 1.2 Buildings and Finance Committee 1.3 Headteacher 1.4 Business Manager 1.5 Responsible Officer 1.6 Other Staff |
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Section 2: |
Budgets |
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Section 3: |
Payroll |
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3.2 Time sheets |
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3.5 Supply teachers |
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Section 4: |
School Fund |
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4.1 Accounts |
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4.2 Signatories |
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Section 5: |
Assets |
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5.1 Inventory |
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5.2 Depreciation Policy |
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5.4 Investments |
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Section 6: |
Income |
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6.1 Credit income |
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6.2 Cash income |
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6.3 Banking |
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6.4 Charging policy |
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6.5 Donations |
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Section 7: |
Purchasing |
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7.1 Ordering |
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7.4 Receipt of goods |
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7.6 Petty cash |
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7.7 Credit Card |
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Section 8: |
Register of Interests |
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Section 1: Organisation
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1.1 The Governing Body
The Governing Body has overall responsibility for the administration of the Academy’s finances, compliance with the Funding Agreement and the Academies Financial Handbook. The main responsibilities include:
· Ensuring the funding is used for the purposes intended
· Approval of the annual budget
· Appointment of the Headteacher
· Appointment of the Business Manager in conjunction with the Headteacher
· Appointment of auditors
· Review and approval of the annual report and accounts
1.2 Buildings and Finance Committee
Much of the day to day financial management and monitoring is delegated to the Buildings and Finance Committee within the detailed terms of reference. The main responsibilities of the Buildings and Finance Committee include:
· Review of the annual budget and proposal to Governing body for approval
· Regular monitoring of income and expenditure against budget. Including reporting of any significant budget amendments
· Approval of; opening and operation of academy bank accounts; authorised signatories; transfers between accounts; operation of credit cards; payment system controls including BACS.
· Ensure compliance with the Finance Policy and academies Financial Handbook
· Ensuring the annual accounts are produced in accordance with the Academies Financial Handbook.
· Consultation on awards of contracts over £50,000.
· Ensure a strategic financial view of income, staffing, other expenditure and capital projects.
· Appointment of responsible officer.
· Review of reports from the responsible officer on the effectiveness of the financial procedures and controls.
· Review of the annual report and accounts and recommendation for approval to the Members and Governing Body
1.3 Headteacher
The Headteacher is appointed as the Accounting Officer; the Headteacher has overall responsibility for the Academy, including financial activities. Much of the financial responsibility is delegated to the Business Manager but the Headteacher still retains responsibility for:
· Ensuring regularity and propriety
· Ensuring prudent and economical administration
· Avoidance of waste and extravagance
· Efficient and effective use of available resources
· The day to day organisation, staffing and management of the academy
1.4 Business Manager
The Business Manager works in close collaboration with the Headteacher and is responsible to the governing body via the buildings and finance committee and full governors meetings. The main responsibilities are:
· Day to day management of financial issues including staffing and operation of the finance system
· The management of the academy financial position at a strategic and operational level within the framework of the Finance Policy and Academies Financial Handbook
· Ensuring the annual accounts are properly presented and supported by the financial records and systems.
· Preparation of interim financial reports
· Approval of orders up to £50,000, in conjunction with budget holders.
· Ensuring the required returns are sent in to the Department for Education in line with timetables
1.5 Responsible Officer
The responsible officer is appointed by the governing body provide the governing body and finance committee with on-going independent oversight of the academies financial affairs and assurance that:
- The financial responsibilities of the governing body are being properly discharged
- Resources are being managed in an efficient, economical and effective manner
- Sound systems of internal control are being maintained
- Financial considerations are fully taken into account in reaching decisions
1.6 Other Staff
The finance team have specific responsibilities for the accurate maintenance of the academy finance systems, records and compliance with the Finance Policy and Academies Financial Handbook. The specific responsibilities are detailed in individuals’ job descriptions.
Budget holders have financial responsibility for managing within their delegated budgets and ensuring best value.
Section 2: Budgets
2.1 Budget construction
The Head is responsible, with the Business Manager, for the detailed preparation of the annual budget. In doing this they will consult with other members of staff to ascertain detailed requirements.
The Finance Committee will determine the overall sum within which the budget must be set, and the amount of any anticipated balance to be carried forward into the following financial year.
In constructing the budget, the Head and Business Manager must take account of priorities identified in the School Improvement Plan and incorporate the costs of these in the budget. Priorities identified in the School Improvement Plan must always be costed.
The budget expenditure total must not exceed the amount of the income total plus or minus any balances brought forward from the previous year. If it appears that this cannot be achieved, the Head and Chair of Governors must inform the Department for Education immediately this becomes apparent.
The Finance Committee must meet in the Autumn term to consider a broad budget strategy, and again in the Spring term to consider and approve the detailed budget. The full Governing Body must subsequently approve the full budget, and minute this approval. The approved Governors Budget must then be submitted to the Department for Education in accordance with the timeline required.
In constructing the detailed budget, factors the Head and Business Manager must take account of include:-
· changes in pupil numbers
· changes in overall and specific funding
· flexibility of use or ring-fencing of funding
· current and previous year's expenditure levels at individual budget heading levels
· School Improvement Plan priorities
· staff pay awards and increments
· anticipated price inflation
· changes in the staffing complement
· changes in the supply of services (gas, electricity, water etc.).
· facilities development
· IT resources
2.2 Budgetary control and monitoring
The Head and Business Manager are responsible for regular, detailed control of the school budget. To achieve this they will analyse monthly reports from the school's accounting system. Such reports shall show, for each budget heading:-
· total budget for year
· total commitment and expenditure to date
· variances
The Head and Business Manager are empowered to take remedial action to address variances, by effecting virements between individual budget headings. Individual virements may be authorised as follows:-
· up to £50,000 - Business Manager
· 50,000 to 75,000 - Head
· Over £75,000 - Finance & Premises Committee
All virements, once approved, must be promptly recorded in the school's accounting system to keep the approved budget up to date.
The Head and Business Manager will present detailed budget monitoring statements to the Finance and Premises Committee each financial quarter, such statements shall show for each budget heading:-
· total budget for year
· total commitment and expenditure to date
· variances
The Finance Committee shall consider such statements; the Business Manager will provide explanations for any significant variances identified. The Chair of the Finance Committee, supported by the Head and Business Manager, shall report to each full Governing Body meeting, identifying any significant budgetary issues and any remedial action taken or needed, and any policy decisions needed.
The Head may assign budgetary control of individual budget headings to other members of staff (e.g. Deputy and Assistant Heads, Business Manager and Heads of Department). Such members of staff must control their own budget area, control equipment and stock, receive regular budget statements and submit an annual report and funding request for the department based on perceived need and prioritisation of objectives based on the departmental improvement plan. The Head remains ultimately accountable to the Governing Body for all budget headings.
All staff must contribute to best value and the efficient running of the school by maximising efficiency and minimising waste (e.g. heating, lighting, telephones).
All staff should ensure that all school facilities, equipment and resources are taken good care of.
Teachers should ensure that students are properly prepared for all exams and qualifications for which they have been entered.
Payroll expenditure data must be entered promptly each month on to the school's accounting system.
Other, non-pay, expenditure must be reconciled promptly on a monthly basis to the school's accounting system by the finance team.
When the accounts for each financial year are closed, a final statement from the school's accounting system must be presented to the next meeting of the Finance Committee.
A Statement of Internal Control must be prepared, reviewed and approved by the Head, Chair of Governors and Finance Committee each year, as soon as practicable after the end of the financial year.
The
FMGE (Academies Financial Management and Governance Evaluation) framework must
be adhered to. Back to contents
Section 3: Payroll
A list of authorised payroll signatories must be maintained by the Business Manager. This includes the Head, Chair of Governors, Deputy Head and Business Manager
3.1 Starters/variations/leavers
All forms for:-
· setting up new employees and new contracts on the payroll
· effecting variations to pay
· taking existing employees off the payroll
must be made out by the HR Manager and authorised (signed) by the Business Manager, or in his absence the Head. The information from the forms must then be entered on to the payroll system.
3.2 Time sheets
All time sheets submitted by a member of staff must be checked initially by the HR Manager, and then authorised (signed) by the Business Manager, or in his absence, the Head. Authorised time sheets must be sent directly to the Finance Department.
3.3 Checking of payroll data
Payroll data must be scrutinised by the Business Manager, in conjunction with the HR Manager, to ensure all employees are recognised, pay appears reasonable and for the accuracy of pay calculations.
3.4 Pay-related expenses
All pay-related expenses must be processed through the payroll system. Pay-related expenses must never be paid via petty cash, or by the creditor payment system.
3.5 Supply teachers
The Governing Body will decide, on the basis of advice from the Head and Business Manager, whether supply teacher insurance cover shall be taken out, and the extent of the cover. All claims submitted by supply teachers must be authorised (signed) by the Business Manager, or in his absence, the Head. Reimbursement claims must be submitted on a monthly basis by the HR Manager. The Business Manager in conjunction with the HR Manager must check on a monthly basis that correct amounts have been charged as per the payroll summary data.
Section 4: School Fund
4.1 Accounts
The accounts of the School Fund are to be maintained on a day to day basis by the school Finance Officer. All income and expenditure will be entered promptly in the accounts. A Bank reconciliation will be performed monthly when bank statements are received, between the balance as per the accounting record and the balance as per bank statements.
4.2 Signatories and banking online facility
4.2.1 The following are authorised to sign cheques on the bank accounts:-
- Head
- Deputy Head
- Business Manager
- Assistant Heads (2)
There must be two signatures on each cheque.
4.2.2 When payment is made using the banking online facility the following procedures must be followed:-
1. Generation of a printed summary of payments which are due, by the Finance Assistant.
2. Authorisation of the payment summary by two authorised signatories.
3. Run conversion file to transfer the payment data from the PS Financial system to the Bank online system, by the Finance Officer.
4. Validation of the payment schedule on the Bank online business banking payment system against the original signed and authorised payment summary by a Finance Officer.
5. Approval and release for payment by the Business Manager.
6. The deputy for steps 3, 4 and 5 is the second Finance Officer. Note – payments must not be validated and approved for release by the same person
4.3 Final accounts and audit
Final accounts are prepared at the end of the School Fund financial year by the school Finance Officer and reviewed with the Business Manager. The accounts will be audited by an auditor appointed by the full Governing Body. The auditor will not be a member of the Governing Body. In appointing an auditor and operating the Fund, the Governors will follow the instructions laid down in the Academies Financial Handbook.
The audited accounts should be presented to the full Governing Body as soon as possible for approval. Governors' approval must be recorded in the minutes of the meeting.
School Fund monies are kept, and recorded, separately from the school's capitation monies and securely held.
Section 5: Assets
5.1 Fixed Asset Register and Inventory
The portable, desirable, attractive assets of the school, as well as any assets of intrinsic value (e.g. antiques) will be recorded in the school's inventory. Full details (make, model, serial number, approximate value) shall be recorded, subject to a minimum value for an individual item of £1,000.
The Business Manager has overall responsibility for keeping the inventory up to date; each department head is responsible for keeping their individual department’s inventory up to date by adding new items when they are received into school.
All inventory items should be security marked by a suitable permanent security marking system e.g. smart water, ultra violet pen, bar coding, warning stickers.
All asset disposals must ensure the best possible value is obtained. Items up to a value of £1,000 may be sold or written out of the inventory on the authority of the Business Manager or Head. Over this limit, the Governing Body must authorise and details recorded in the minutes. Reasons must be recorded in the inventory, together with the Head’s or Business Manager's signature (items up to £1,000) or the Governors' minute reference (£1,000 and over). An official receipt for sales income must be issued to the purchaser. VAT must be charged when required.
For disposal of fixed assets over £20k which have been funded by the YPLA the Business Manager will consult advise YPLA in advance.
Inventories shall cover all areas of the school, and be arranged on a room-by-room basis. A separate inventory will be maintained to include items which are not allocated to a specific room.
The inventory shall be checked against the actual assets by the Business Manager on an annual basis. Any discrepancies shall be investigated immediately, and if necessary the Governors, Police and the authority's auditors shall be informed. The check shall be evidenced by the checker signing and dating the inventory.
5.2 Depreciation
Depreciation is provided on cost or valuation in equal annual instalments over the estimated useful life of the assets.
Assets are capitalised for all single items above £1,000.
A full year’s depreciation is provided for in the year the asset is acquired and nil depreciation in the year of disposal.
The standard rates of depreciation are as follows:
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Asset type |
Depreciation period |
Depreciation rate |
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Computer equipment and software |
3 years |
33% |
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Motor Vehicles |
5 years |
20% |
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Equipment |
6-10 years |
10-16% |
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Buildings |
50 years |
2% |
Note:- the above are general standard depreciation rates. Individual capitalised fixed assets may need to have specific depreciation periods set; this will need to be specifically approved by the Governors Finance Committee.
5.3 Off-site register
Any inventory items taken off-site by members of staff for official purposes must be recorded in a register. The date borrowed, and the signature of the borrower, must be recorded. On the return of the item, the date of return will be recorded.
5.4 Investments
Available funds in Bank account cash surpluses are to be invested, by the Business Manager, in accordance with the following rules:
- Money will only be placed with financial institutions who are considered to be “safe” having good credit ratings and in countries known to be stable.
- Consideration should be given to spreading the risk of any bank defaulting by spreading deposits across more than one financial institution
- To maximise income level
- The length of investment must not compromise academy cashflow
- All investments must be approved in advance by the Head and Chair of Governors and reported at the next Finance Committee meeting
Section 6: Income
6.1 Credit income
(Where payment for goods/services provided by the school is made after the provision takes place).
An official invoice must be raised by the Business Manager, or other person under the direction of the Business Manager, in all cases and sent to the debtor as soon as possible after the provision of the goods/service, and no later than one month after the provision.
A file of copy invoices will be maintained by the Finance Team; this will be arranged into 'paid' and 'unpaid' invoices. The copies of unpaid invoices will act as a control record for the sending of reminders and the chasing of unpaid debts.
Reminders will be sent after the following periods if the debt remains outstanding:-
1st reminder 30 days after the due date
2nd reminder 60 days after the due date
If after 90 days the debt remains unpaid, consideration will be given by the Business Manager, Head and/or Governors to writing the debt off in accordance with the following limits:-
- up to £200 - Head or Business Manager may authorise write-off
- up to £500 - Chair of Governors may authorise write-off
- over £500 - Finance Committee may authorise write-off.
In each case, the possibility of taking legal action to recover the debt must be considered by Business Manager, Head, Chair, and Governors as appropriate.
As well as sending formal reminders, efforts must be made by the school to contact the debtor in order to secure recovery of the debt. If payment has not been received after 28 days of the due date, no further goods or services must be provided until the outstanding debt is settled.
When an invoice is paid, details of the payment must be written on the copy invoice. Receipts can be issued to debtors on request, the receipt number is to be written on the copy invoice and a duplicate copy of the receipt must be retained at school.
6.2 Cash income (i.e. where payment is received at the time goods/services are provided).
Detailed records must be maintained for all cash income. An official receipt may be issued to the payer on request at the time the payment takes place, and a duplicate copy retained at the school.
6.3 Banking
All income received (cash or cheque) must be banked promptly and intact. No payments may be made out of income collected. A record to evidence the banking must be kept (e.g. stamped paying-in slip).
6.4 Charging policy
The full Governing Body will set a charging policy to cover:-
- lettings
- school visits (which will be costed by the teacher organiser, who will also take into account any students in financial difficulty)
- music tuition
- exam fees
- private photocopying
- private telephone calls
The charging policy will be reviewed annually by the Governing Body. Charges levied by the school will be in line with this policy.
6.5 Donations
Donations from any sources must be acknowledged by the issue of an official receipt to the payer. All donations must be banked promptly and intact.
6.6 Other income
All income used to offset expenditure (e.g. lettings, photocopying, telephone calls, music tuition, sales of work) must be paid into the Academy bank account and coded to an appropriate income code. Monies received from any sales of school equipment must similarly be paid into the Academy bank account.
Donations should be properly recorded into the appropriate income budget.
6.7 Cash received from pupils
Cash received from pupils must be fully and accurately recorded. Cash collected must be handed over to the Finance Office frequently. A receipt for the income will be generated and retained with the income record.
6.8 Security of receipt books and tickets
All unused receipts and tickets to be used to acknowledge receipt of income, must be held securely in the school finance office.
Section 7: Purchasing
7.1 Ordering
School procedures for purchasing should ensure that purchases are as required and are only for valid school purposes.
The schools Best Value Statement details the principles and procedures which apply to the purchase of all goods are services for the school and must be followed at all times.
Orders must be approved by the appropriate budget holder. The orders should then be processed by the finance office team. The official order produced from the finance system must be authorised on the system by the Business Manager before it is sent to the supplier.
If an order has been placed over the telephone by the finance team an official order number will be given and the invoice will be checked against this number. Alternatively official confirmation of the order must be sent as soon as possible afterwards, e.g. by email.
The IT Manager must always be consulted before ordering any computer equipment.
Official orders must not be used to procure goods for private purposes.
Records of all official orders placed must be retained on file at the school by the finance team.
When placing orders it is the responsibility of the initiator to ensure that Standing Orders are adhered to, these being -
7.2 Quotations/tenders
For orders for goods/services under £50,000:
· £1,000 - £5,000 - at least three prices to be examined and retained, these prices may be taken from suppliers' written or verbal quotations or catalogues/price lists.
· £5,001 - £50,000 - independent written evidence of at least three prices must be obtained and retained.
Independent written evidence means quotations provided on suppliers' headed notepaper.
For orders for goods/services over £50,000.
Tenders must be invited in accordance with specific Standing Orders.
· from at least three appropriate contractors, or
· by open competition by advertisement in local newspaper or appropriate journal.
For contracts over €200,000
In the event that the school wishes to place a contract worth over €200,000 (for the lifetime value – not just a single year). European purchasing rules apply and the Finance committee and Business Manager should review the detailed requirements.
7.3 Governor involvement
DELEGATED RESPONSIBILITY Governors delegate the responsibility for adherence to the above requirements to the Head and Business Manager.
As well as ensuring that the above requirements have been adhered to, it is the responsibility of the Head and Business Manager to ensure that Governors are consulted in the following circumstances:-
- Review of quotations obtained where estimated costs exceed £50,000.
- Review of quotations when the lowest quote is not the most suitable or when the pre-requisite number of quotes could not be obtained. In such circumstances the Governors should formally authorise a waiver of the regulations, either prior to the purchase or retrospectively, if necessary.
7.4 Receipt of goods
Once items ordered have been received, the Budget Holder must ensure that items delivered, correspond to details contained in the delivery note. Upon examination of goods the Budget Holder must also ensure that both quality and quantity are appropriate.
7.5 Invoice check and authorisation
Invoices received must be checked to both copy orders and delivery notes to ensure that invoices relate to goods ordered and delivered. Invoices should also be checked for arithmetical correctness. All invoices must be certified for payment by the Budget Holder before being passed for payment (or the Head in the Budget Holder’s absence).
Invoices passed for payment must be recorded promptly in the school's accounting system by the finance officer.
7.6 Petty Cash
Day to day operation of the petty cash account is the responsibility of the Finance Officer.
All petty cash expenditure, and reimbursement income, must be promptly recorded in the petty cash record.
Each time a reimbursement claim is submitted, the finance officer must complete a reconciliation ensuring that cash expended, plus cash in hand or at bank, equals the amount of the advance.
All members of staff who wish to purchase goods or services from the petty cash account must present vouchers (receipts, paid invoices etc.) and authorisation from the relevant budget holder to the Finance Officer when reclaiming cash from the account. These vouchers must be retained by the Finance Officer and returned with the reimbursement claim. All petty cash claims must be countersigned by the Business Manager.
In normal circumstances individual purchases from petty cash must not exceed £50. Amounts above this sum, up to a maximum of £250, should only be in exceptional circumstances and with prior approval of the Business Manger. Such payments should be for emergencies only and should not simply result from a lack of planning.
All cash and cheque books held must be retained securely.
7.7 Credit Card
Governors have authorised the use of two school credit cards. The first is for the use of the Finance Team and is in the name of the Business Manager. The second is for the use of Extended Schools, Food Technology and Hospitality & Catering staff; there are five cards, in the names of the relevant staff who are the only persons who are authorised to use the card.
The credit cards have credit limits of £10,000 and £4,000; any changes in the limits will be implemented by the Business Manager, following consultation and approval by the Head and Chair of Governors.
The credit cards must be kept securely, ideally in the safe, and only taken out when required.
A detailed record of expenditure must be kept for all purchases.
Care must be taken with all internet purchases, including purchasing only from known, trusted, reliable and reputable suppliers and only from sites adopting the internet security protocol https://
The credit cards must be settled in full each month; it must not be used as a line of credit.
The Finance credit card will be held in the name of the Business Manager. The credit card may only be used by the Business Manager and Finance Officers.
The Extended Schools, Food Technology and Hospitality & Catering credit card will be held in the names of the relevant staff. Each named person must sign an assurance that they will only use the credit card in accordance with the Finance Policy and specifically only for school related expenditure and never for any personal expenditure.
The Finance Officer is responsible for reconciling the monthly expenditure. Any items which do not have detailed record of expenditure or do not appear to be for bona fide school purposes must be immediately reported to the Business Manager and Head and fully investigated immediately.
Failure by an individual card holder to adhere to the rules for the use of the school credit card will result in removal of their credit card, and may lead to disciplinary procedures.
The Business Manager will authorise all purchases made on the credit cards. The Head will authorise all purchases made on the credit card by the Business Manager.
The Business Manager will carry out a monthly check on a sample of the transactions.
The credit card transactions will be posted monthly onto the finance system.
Section 8: Register of Pecuniary and Other Interests
The school shall maintain such a Register.
8.1 Persons to be included:-
1. All Governors
2. Headteacher
3. All senior staff i.e. Deputy Head, Assistant Heads, Heads of Departments, Business Manager
8.2 Interests to be recorded
The basic principle to be followed is that any interest should be recorded which could be seen to improperly influence any decisions taken, pecuniary or otherwise, regarding the operation of the academy.
Examples of such improper influence might be:-
· to purchase goods or materials from a company in which a Governor/senior member of staff has a financial interest without going through the correct procedures re. obtaining competitive prices;
· promoting a member of staff who has close personal relationship (spouse, partner, son, daughter etc.) with Governor/senior member of staff, without going through correct procedures re. recruitment and selection.
There can not be a definitive, comprehensive list of the interests which should be recorded.
The following is intended to give some guidance:
- having a financial, or other, interest in an organisation which could feasibly be in a position to supply goods/services to the school.
- having a close personal relationship with a person in the above categories.
- being in a position to potentially influence decisions made about the school.
- having a close personal relationship with a Governor or member of staff.
The bribery policy details the school’s position with regard to the acceptance of cash, gifts or other inducements. All gifts with a value of over £50 received, or given, to any member of staff, governors, suppliers or contractors must be disclosed to the Business Manager who will report these at the next Finance Committee.
If staff or Governors are in any doubt, guidance should be sought from the Head or Chair of Governors.
Date approved January 2012
Date for next review January 2013