Financial Management Policy and Procedures

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Financial Management

Policy

and Procedures

Page
1



Financial Management

Policy

and Procedures



STATUS:

DATE
AGREED:

REVIEW DATE:

Policy: Statutory/Recommended/Additional

SPRING 2011

SPRING 2014

WRITTEN BY:

SIGNED:

Allison
Humphreys


CONSULTATION:

F&P COMMITTEE, GOVER
NING BODY

RESOURCES

AND REFERENCES
:

Remit of the Governing Body‘s Finance and Personnel Committee and the attached appendices.

Associated policies, documents and remits

Terms of reference of Governors
Finance and Personnel Committee

School Development Plan

School Fund (Special Activities) Policy

Statement of Internal Control and Best Value Statements

Charging and Remissions Policy

Lettings Policy

Confidential Reporting Code

Keeping your Balance

PURPOSE

AND AIMS
:


Purpose and background:

The school receives on an annual basis a financial allocation from West Berkshire Council
(“WBC”), together with additional monies available through Standards Funds and direct
government grants. This policy and
procedures that follow determine the framework within
which the school conducts its finances, the delegation of responsibility and the methods of
operation, so that all parties concerned are aware of their duties and responsibilities and that
sound interna
l and financial controls are maintained. The implementation of appropriate practice
and procedures will ensure the best use of funds available to enhance the education of the
school’s pupils.


The operation of the school fund is detailed in a separate doc
ument.

ROLES AND RESPONSIBI
LITIES:

School:


This policy is implemented and managed
by the Headteacher and School
Business Manager with reference to the senior leadership team. It will be
circulated to all staff with financial responsibility who must sign

to confirm
read on an annual basis and filed for reference in the policy folder both in
the school office and electronically.

Governing Body:

The Governors’ Finance and Personnel Committee reviews this policy on a

Financial Management

Policy

and Procedures

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2


regular basis and recommends amendments
to the Governing Body for final
decision.

P
OLICY
STATEMENT:

The school adopts and will comply with, ensuring that staff are made aware of as required,
regulations and guidelines as published by the Local Authority, including: the WBC Financial Rules
of
Procedure*; the WBC Contract Rules of Procedure*; the WBC Anti Fraud and Corruption
Policy*; Confidential Reporting Code (Whistleblowing) and the WBC Scheme for Financing
Schools*, to the extent that such regulations and guidelines apply to schools. The s
chool will also
comply with DCSF and Audit Commission regulations and guidelines for budget management,
including ‘Keeping your Balance’* and the spending and receipt of monies, including Standards
Funds and direct government grants. It will operate in acc
ordance within the requirements and
standards laid down in the DCSF Financial Management Standards (FMSiS) and WBC Audit and
Accountancy Departments.


[* these documents are available in school and located in the Finance Office]

The Governing Body delegates to their Finance and Personnel Committee the preparation of an
annual budget for income and expenditure which is then taken to and presented to the full
Governing Body for approval. It will publish, as required, annual statemen
ts relating to the quality
of the school’s internal controls and best value achieved in the use of income and expenditure.


The governing body has delegated certain functions and the making of certain decisions to its
Finance and Personnel Committee, in a
ccordance with the remit of that committee. It has also
delegated to the Headteacher the management of the budget and the virement of funds these
are detailed in the delegation appendix.


The signing of cheques and other bank instructions is delegated to
school staff in line with the
same appendix. The Finance and Personnel Committee will note and approve the Headteacher’s
allocation of financial duties to staff so as best to achieve separation to ensure probity, and that
shadowing of duties occurs to pro
vide continuity in the event of absence. It will monitor the
competencies of school finance staff and make recommendations to the Headteacher as
appropriate.


When setting the budget the Governing Body shall consider the aims and objectives of the school
and School Development Plan and any associated action plans and ensure that the budget and
financial processes of the school support and reflect these as far as possible.


In setting the budget governors will take due account of the need to resource the ma
nagement
and administration of the school’s finances and to ensure, through regular review, that staff
resource and competence is sufficient, and is supported through appropriate development and
training



All material budgetary decisions will be communica
ted between all relevant and interested school
staff and the governing body on a regular and timely basis, to ensure that the financial context
of the school is understood and that necessary actions are implemented. This policy is available
to staff and pa
rents in school and on the school website.


Financial Management

Policy

and Procedures

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3



The school has in place rules for the procurement of goods and services to obtain best value
from the resources available. A statement of best value is published annually by the Governing
Body on the recommendati
on of its Finance and Personnel Committee.


Finance staff are given clear guidance to ensure that effective and robust financial and
accounting procedures are adhered to (see appendices). A statement of internal control is agreed
annually by the Governing

Body on the recommendation of the Finance and Personnel Committee.


Payment of governors’ expenses


Governors may claim allowances in respect of actual
expenditure incurred whilst attending meetings of the Governing Body and its committees,
undertaking
governor development and otherwise acting on behalf of the governing body.
Reimbursements or the payment of allowances or costs to Governors will be reported to the
Governing Body on an annual basis.


Equipment Register and assets statement


The school has in place procedures for the
recording of assets. Finance and Personnel Committee receive and review an Equipment register
report of all equipment on an annual basis which is signed off by the Headteacher once approved.


Pecuniary and busin
ess interests statement
-

All governors, the leadership team, the caretaker
and School Business Manager declare any pecuniary or personal interest annually through the
Register of Business interests maintained by the school. Governors and other attendees w
ill be
required to declare any such interest relating to any governing body or committee meeting
agenda item at the start of that meeting.


Indemnity statement
-

No indemnity of any sort may be given to the benefit of a third party.


Practice and proce
dures

This policy is to be read in conjunction with the Remit of the Governing Body‘s Finance and
Personnel Committee and the attached appendices.


Documents supporting the compliance statement [available from the Finance Office]

West Berkshire Council Fin
ancial Rules of Procedure (copy available from finance office or
www.westberks.gov.uk/media/pdf/e/t/11
-
Financial_Rules_of_Procedure.pdf
)

West Berkshire Council Contract Rules of Procedure (copy available from finance
officeor
www.westberks.gov.uk/media/pdf/2/m/12
-
Contract_Rules_of_Procedure_
-
_.pdf
)

West Berkshire Council Anti Fraud and Corruption Policy (copy available from Finance
Office)

West Berkshire Council Scheme for Financing Schools copy available from the School Business
Manager or

At http://www.westberks.gov.uk/index.aspx?articleid=9301&type=media&add=15215

Audit Commission Keeping Your Balance





Financial Management

Policy

and Procedures

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4


Appendices

DELEGATION AND THE
MANAGEMENT AND VIREMENT OF FUNDS

Subject to the terms of this policy and its appendices, the Governing Body delegates to the
Headteacher (or in his/her absence a nominated representative) authority to make purchases,
decide upon quotations received and ent
er into financial commitments, income
-
generating activity
and to vire monies within the set annual budget. In doing so it will authorise as necessary the
Register of Authorising Officers which records each member of school staff/governor who is
authorised
to sign instructions and their appropriate limits of authority provided to the Local
Authority. The Headteacher may delegate the aspects of day
-
to
-
day administration to the
School Business Manager.


The Governor Body’s Finance and Personnel Committee will
review the school budget at least
termly, in line with its remit, and agree any action where appropriate in relation to both cases (a)
budget variances, anticipated expenditure and income, and (b) any significant virements made or
anticipated where the amo
unt (is greater than £5,000 or 20% of budgets over £5,000 or for any
virements from Contingency). Below this level the Headteacher has full authority to agree
budget variances and virements without reference to governors. Virement will be subject to any

ring
-
fencing’ restrictions.


Authorisation is given for the Headteacher, Deputy, Assistan
t

Headteacher, School Business
Manager to sign cheques and other instructions to the bank against the school’s local authority
bank account. Two signatories shall al
ways be required.


THE PROCUREMENT OF GOODS AND SERVICES

1

Placement of orders


A formal order on paper shall be sent to procure all supplies and services in each case
except in certain specific circumstances. These are stated in The Instructions to office
staff on financial procedures, Orders for Goods and Services attached as an Ap
pendix.

2

Choice of supplier


a)

In all cases any purchase or service contract must comply with Health & Safety and
EC regulations where applicable.


b)

The principles of obtaining ‘best value’ will apply and in particular:

i)

For supplies and services with a total contractual value below £1,000 the school
may select one supplier without obtaining competitive quotations. Where a
sequence of small orders is likely to be placed with one supplier [i.e. a preferred
supplier] a regul
ar check of their pricing against competitors should be made at
least annually eg: ink cartridges / paper.

ii)

For supplies and services with a total contractual value between £1,000 and
£5,000 a minimum of three quotations shall be obtained, except where the
nature of the purchase and/or the range of suppliers and/or the timescale
precludes this, in which case this will be brought to the attention of the
governors’ Finance and Personnel Committee for consideration and approval and
the reason for this shall be
documented with the order. Quotations will be
reviewed by and a decision to order made by the Headteacher or a member of
staff with his/her delegated authority. Internet and catalogue quotations should

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Policy

and Procedures

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be suitably documented for future reference ie photoco
pies kept.

iii)

Subject to iv) below, for supplies and services with a total contractual value of
over £5,000 the nature of the contract may require additional procedures,
including the receiving of quotations from more than three suppliers and a
formal tender
mechanism. A procurement mechanism will be approved in advance
in each case by the governors’ Finance and Personnel Committee, with
appropriate specialist professional advice sought as necessary before
commitment.

iv)

For supplies and services where the tota
l contract sum exceeds £100,000 the
school will comply specifically with the Local Authority’s Contract Rules of
Procedure (12.8.9) in seeking appropriate advice regarding EU and UK legislation.

v)

The most cost beneficial quotation will normally be accepted
and if not, best
value reasons for accepting a more expensive quote will be documented with the
order.


GOVERNOR EXPENSES


Governors may claim allowances in respect of actual expenditure incurred whilst attending
meetings of the Governing Body and its comm
ittees, undertaking governor development and
otherwise acting on behalf of the governing body. All governors and associate members are
eligible to claim allowances in accordance with this scheme.


Governors may not claim for actual or potential loss of
earnings or income. Categories of eligible
expenditure are as follows:



Care arrangements:

Child care o
r baby
sitting expenses, where these are not provided by a
relative or partner;



Care arrangements for an elderly or dependent relative, where these
are
not provided by a relative or partner;




Telephone calls and postage



Travel



Subsistence

Rates at which allowances are payable are as follows:

Care Arrangements:


Actual costs incurred.

Telephone Calls and Postage:

Actual costs incurred.

Travel Rates:

In accordance with the Inland Revenue Authorised Mileage
Rate applicable at the time of claim.


All payments are to be processed through FMS and require the approval of the Chair of the
Governing Body before payment. Any payment to the Chair

requires the approval of the Vice
Chair of the Governing Body.






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Policy

and Procedures

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INSTRUCTIONS TO OFFICE STAFF ON FINANCIAL PROCEDURES

Table of responsibilities.


absence cover procedures


Member of
staff

Cheques


Procurement
Card

Internal
Order Form

External
Order
Form

Equipment
register

Payments

Headteacher

Signing

Reconciling

Signing

/authorising

all orders

Authorising

Authorising

write
-
offs

Authorising

Deputy
H
eadteacher

(Cover
Signing)


Cover
Signing

/authorising

Cover
Authorising



School
Business
Manager

Preparing

(Cover
Signing)

Cover
Purchasing /
Reconciling

Signing
(except
procurement
card orders)

/processing



Reviewing

Processing

Assistant
Headteacher

Signing






ICT Manager





Recording


Finance
Assistant

Preparing

Purchasing

Processing


Recording

Processing


Short term or long term absence of the Finance Assistant can be covered by the School Business
Manager.

Short term or long term absence of the School Business Manager

can be covered by the Finance
Assistant with support from

other Finance Officers in it
s extended school’s cluster, where a
general reciprocal agreement is in place and also from WB School’s Accountancy team. Funding
for long term absence would be provided by the school’s Absence Insurance Policy.

Recording of tr
ansactions and accounting

All financial transactions, journals and virements must be properly recorded without undue
delay on the school’s FMS system. It is the responsibility of the ICT Manager for ensuring
weekly backups of FMS are taken.

Budget
management and monitoring

The School Business Manager will monitor the budget and on a monthly basis reconcile
Agresso printouts from West Berkshire Council with the school’s FMS accounting system
and annually closedown FMS on a timely basis ensuring that
carry forward figures correctly
match Agresso. He/she will produce reports as required by the Headteacher and governors’
Finance and Personnel Committee including a budget report which provides a summary of
issues and basis of figures and explanation of va
riances etc. Meetings to review the budget
position will take place with the Headteacher on a monthly basis at least. Reports for the
Finance and Personnel Committee and full Governing Body should be prepared, to be sent
with each meeting’s agenda at least

a week in advance. The Committee will need to be
informed of the expectation of the school’s outturn positions for the financial year,

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robustly based on information held to date, in order to make any necessary consequent
strategic budget management decisi
ons. The School Business Manager will be expected to
attend all meetings of the school’s SLT whenever financial considerations are relevant.
School budget holders should receive up
-
to
-
date printouts from FMS of their budget
position on a monthly basis. In
struction in budget management and report interpretation will
be the responsibility of the School Business Manager.

Orders for goods and services

Requests to order goods and services must be made using the standard internal Spurcroft
order form and signed

by the school budget holder, School Business Manager and Deputy or
Headteacher. In the case of any more complex transaction the advice of suitably qualified
persons must be obtained in order that all considerations regarding pricing, specification,
health

and safety, etc can be taken into account.

Copies of all orders and supporting documentation shall be kept and recorded promptly in
the school’s accounts. A monthly check of outstanding orders shall be made and any
erroneously outstanding orders removed.

A formal computer generated order (marked confirmation of order if appropriate) on paper
and be reflected in the register of authorising officers will always be sent to procure
supplies and services in each case and a signed copy of this retained in the s
chool office
with the original request form and copies of relevant documentation, including quotations.
The only exceptions are when:

1.

The payment for supplies or services represents one of a sequence of transactions
as a result of an agreed contractual obl
igation.

2.

Internet / Telephoned orders have been raised and/or the order is for payment
through the Government Procurement Card. Prior approval is required by the
Headteacher.

3.

The school does not operate petty cash and staff expense claims are processed
through FMS for reimbursement by cheque. They are limited to those occasions
when direct staff purchase is the only practical option and there is a £50 limit for
such reimbursements unless prior authorisation has been given by the Headteacher.
Expense cla
ims must be signed by the budget holder. All expenses claims must have
full appropriate invoices or receipts attached evidencing purchase and so that VAT
can be reclaimed whenever possible. Staff or pupil personal purchases cannot be
processed through the
school’s account
s nor can personal cheques be
cashed.

4.

In cases of emergency a supplier may be called to the school to undertake work.
The commitment must then be ascertained and recorded as soon as possible.

All order requests for individual items of £1,0
00 or more require at least three quotations
appended or a written statement on the order as to why this was not possible.


2

Invoices and payment

a)

Invoices for payment must be originals or certified copies and fulfil VAT
requirements.

b)

Invoices should be checked for arithmetic accuracy. No invoice should be paid whose
value exceeds 10% more than the original order price without reference to the budget
holder. Service, contract and utility invoices should be checked against preceding
paym
ents to ensure periodic continuity without overlap.

c)

Paid invoices are all filed in monthly sequence.


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d)

Invoices paid for centrally by WBC are filed separately and direct
-
debit invoice
records are filed with the relevant bank statement. Payments made with
the
government procurement card are filed separately and a copy kept with the relevant
bank statement where the monthly direct debit has paid the balance on the card.

e)

The payment of invoices will be made weekly
and I
mprest returns to reclaim the
principl
e sum (less any income received) and net VAT paid/received made accurately
and promptly in l
ine with WBC requirements. The I
mprest account should not be
allowed to overdraw and its level reviewed regularly to ensure that it meets the
school’s cash flow nee
ds. Any exceptional overdraft request and WBC confirmation
must be properly recorded.

4

Security

a)

All cheque books, franking cards and secure boxes must be stored in the school safe
which must be kept locked except when in immediate use. Hard copy financial records
and vouchers are kept in either the locked stock cupboard or the locked Finance
cupboard

for archives.

b)

Safe number holders are the Headteacher, School Business Manager, Finance
Assistant.

c)

All cash received must be counted and confirmed by two people.

d)

A change float is maintained but limited to £5 with any amounts over this being
banked.

5

Ba
nk Accounts, authorisations, income and banking

a)

Copies of all bank mandates and Local Authority lists of authorising officers will be
held in the school safe.

b)

Bank accounts will be reconciled at least once a month. Reconciliation will be approved
by the He
adteacher.

c)

All collections of income over £25 by cheque, cash or otherwise shall be evidenced by a
suitable voucher signed by the member of staff paying in, properly and individually
annotated on bank pay in slips and be immediately receipted and lodged in

the safe
pending processing.

d)

Invoices including those for lettings and other claims for funding will be issued/raised
promptly and payment chased effectively until received.

e)

All cheques and cash are banked at least weekly. No monies due to the main schoo
l
budget (including lettings income) may be banked into staff or other third party
including the school fund bank accounts under any circumstances.

f)

Cheque payments and other instructions to the bank must be signed and the cheque
counterfoil initialled by
two of the authorised signatories. Cheque signatories will
scrutinise and confirm relevant voucher documentation before signing cheques. Only
manuscript signatures are allowed.

g)

Government Procurement Card instructions are sig
ned by authorised signatories
a
n
d

counter
-
signed by WB. Statements and direct debits from the bank are reconciled by
the School Business Manager and reported to the Headteacher monthly.


h)

The writing off of any amounts due to the school and unpaid shall only be made with the
formal cons
ent of the Finance Committee and in line with WBC regulations.

i)

The WBC Account for School Lettings Book is used for the raising of invoices and

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issuing of receipts for all lettings income due.

6

Overspends

The approval of overspends by a budget holder can

only be given by the Headteacher.

7

Equipment Register
-

the recording of assets

An equipment register check is completed annually in the Spring Term and a report made
for the Finance and Personnel Committee. Any unaccounted items will be referred to them

for appropriate action. The taking of any school property, in particular cameras and
projectors, off site must be approved by the Headteacher and recorded in the loan book in
the office where their return is noted. Laptop computers on loan to staff are a
ppropriately
recorded and supported by a loan agreement letter signed by the member of staff. The
disposal of any assets must be authorised by the Headteacher in accordance with Local
Authority regulations.

The equipment register should be updated with the acquisition of new items that are
portable and desirable or with a value of over £100. The ICT Equipment register is
maintained by the ICT Manager and includes ICT hardware and software. All non
-
ICT
equipme
nt is maintained by the Finance Assistant on FMS. All items over £100 and those
deemed portable and easily disposed of are
security
marked and good risk management is in
place for school assets with all laptops in a securely locked area if left overnight.

MONITORING AND EVALU
ATING:


SAFEGARDING STATEMENT

We are committed to safeguarding and promoting the welfare of all pupils in our care. The
health, safety and well
-
being of all our pupils is taken seriously and all staff and volunteers are
aware of
their responsibilities and will do all they can to provide a safe, caring and positive
environment where children feel happy and secure.