Paper for Information Only SOMERSET SCHOOLS FORUM

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Nov 10, 2013 (3 years and 7 months ago)

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1

Paper for Information Only


SOMERSET SCHOOLS FORUM


Date of meeting




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1
O



Item No
9



Financial Management Scheme


Author: Sue Ford, Senior Finance Officer


Finance (Children & Young People)

Contact Details: Email:
SFord@somerset.gov.uk

or telephone: 01823 273588.


1.

Summary

1.1



1.2



The Financial Management Scheme sets out the financial relationship between
Somerset County Council (SCC) and the maintained schools that it funds.


This pape
r provides a summary of
recent amendments made to the
current
Scheme,
along with
the consultation process for proposed changes for
the
201
3
/1
4

financial
year
.


2.

R
ecommendations

2.1



2.2



2.3

The Schools Forum is recommended to note the
amendments mad
e to the
current

Scheme, in respect of Standing Order Arrangements (
Appendix A

refers)
.


The Schools Forum is recommended to note the consultation arrangements for
201
3
/1
4
.


Members of the Forum are also invited to submit comments or recommendations for
proposed changes to the Scheme
. These should be forwarded

to Sue Ford.


3.

Background

3.1






3.2






3.3




The Financial Management Scheme sets out the financial relationship between
Somerset County Council and the maintained schools
that it funds. The Scheme
contains requirements relating to financial management and associated issues and is
binding on both the Local Authority and on schools through their respective Governing
Bodies.


D
epartment for Education (D
fE
)

guidance describes
what is to be included in
Schemes and Schools Forums have the responsibility to approve any changes.
Somerset’s Financial Management Scheme sets out the requirements on schools in
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Schools are required to follow Somerset County Council’s requirements on financial
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2

3.4






3.5


Section 2.10 of t
he scheme
includes guidance on
purchasing, tenderi
ng and
contracting arrangements.
In July 2012, Somerset County

Council’s Standing Orders
were

updated, and

the Financi
al Management Scheme has been updated to reflect
any changes; full details are provided in Appendix
A

and

a
mendments are shown in
red text for ease of reference.



Details of the consultation process for 201
3
/1
4

changes to the Scheme are as follows:



11

D
ecember

201
2
:

Schools Forum

is notified of the consultation process
for

proposed changes to the Financial Management Scheme for 201
3
/1
4
.




4 January



8

February 201
3
:

Consultation with all schools re proposals.



20 February

201
3
:

Schools Forum to make decis
ion on changes.



April 201
3
: Implementation of revised Financial Management Scheme (t
o be
effective from 1 April 2013
). Notification to schools on
iPost
iX.

5.

Background papers

5
.1

Somerset’s current Financial Management Scheme:

https://slp.somerset.gov.uk/somersetipost/Site%20Pages/ipostsearchresults.aspx?k=i
PostID951&s=Somerset%20iPost

























4.


Implications


Financial and other

4.1

The Scheme sets out the extent to which the local auth
ority can exert financial
influence over a school and it is important that the right balance is struck between
controls

and safeguarding.





3

Appendix A




2. FINANCIAL CONTRO
LS



2.10

Purchasing, Tendering and Contracting Requirements


2.10.1

Schools are required to abide by the
Council’s Contract S
tanding Orders

and
advice on purchasing, tendering and contracting matters.
T
his also includes a
requirement to assess in advance, where relevant, the health and safety
competence of contractors, taking account of the County Council’s policies
and procedu
res. Every contract entered into by a school must be made or
confirmed in writing.


2.10.2

Where the Contract Standing Orders make reference to the “Corporate
Director”, the school’s governing body applies. The

"Responsible Procurement
Officer" should be
designated by the school’s governing body.


2.
10.3

The thresholds
and processes to be adopted according to the value of the
contract as per the current SCC Standing Orders are as follows:




Procurement

Requirement


Value

Procurement Process

All requirem
ents

Less than £25,000

No need to undertake a
formal procurement process.

Best Value evidence required
(e.g. 3 competitive quotes).

RFQ** process
recommended.

Goods and Services

Between £25,000 and the
£130,000 for Goods and
Services Contracts*

Tender pro
cess without OJEU
Notice is required.

Goods and Services

Above £130,000 for


Goods
and Services

Contracts**

OJEU tender process is

required.

Works

From £25,000 and up to
£130,000 the OJEU
Threshold for Goods and
Services Contracts

RFQ process is

required
.


Works

Above £130,000 for Goods
and Services

Contracts and £3,750,000

Tender process without

OJEU Notice is required.

Works

Above £3,750,000 for Works
Contracts


OJEU tender process is
required







4

The value of a contract is calculated as the amount per

annum multiplied by
the number of years duration. For example,

if taking out a 3 year contract at
£50,000 per year this would be worth £150,000 and would fall into the OJEU
tender process.



*

*Note: The Goods and Services threshold is £173,394 for the pe
riod 1
January 2012 to 31December 2014
.



*** RFQ is a ‘Request For Quotation’.


Quotes may be obtained via phone,
catalogues, purchase cards or be written quotations.


Where the value is
significant or the requirement is particularly crucial then a more f
ormal process
is recommended, which would entail writing a specification of what is required
and issuing that to prospective suppliers for them to quote against.



2.10.4 Official orders must be issued for all work, goods or services except for
emergency
work, supplies of public utility services, periodical payments such
as rent or rates, purchases from imprest or local bank accounts of under £100
in value or such other transactions as the Director of Commissioning


Children and Learning may approve. Offi
cial orders for the supply of goods
and services must be in a form approved by the Director of Commissioning


Children and Learning through Finance


Children and Learning and are to be
signed only by the Headteacher or other named members of staff specif
ically
authorised by the appropriate Governing Body and set out in the school’s
Finance Policy which ensures adequate division of duties.


2.10.5

All members of staff authorised to issue official orders must be familiar with
the County Council’s Standing O
rders on Contracts. Any contracts must
comply with the Local Government Acts, EU Regulations and other legislation
governing the expenditure of public funds.




2.10.6 Orders may not be raised on behalf of or for the benefit of private individuals
,
including members of staff, or organisations that are not part of the County
Council.


2.10.7 Any payment from a school’s delegated budget to an individual (other than
some subcontractors and piano tuners/window cleaners using their own
equipment) who un
dertakes work for the school (ie tuition, demonstration,
performance, repairs) must be made via the school’s payroll provider
not

via a
locally produced cheque
or

the central creditors system
nor

paid in cash.
Special legislation (the Construction Industr
y Scheme) covers the payment of
sums due to subcontractors. Payments other than for the supply of building
materials should be made less tax unless a certificate is produced and the
appropriate tax documentation is completed. This is to ensure that Inlan
d
Revenue requirements are adhered to (see also paragraph 7.2).


2.10.8 Where an order placed by a school subject to this Scheme gives rise to a
contractual claim against the County Council, the Head of Finance is
empowered to discharge the claim by imposi
ng a charge against the
delegated budget of the school concerned, after consultation with the school,
the Director of Commissioning


Children and Learning and the County
Solicitor (see also Section 6). In the event of any dispute with a contractor,




5

the H
eadteacher concerned must inform the Director of Commissioning


Children and Learning and County Solicitor immediately through Finance


Children and Learning, so that proceedings
can be defended as appropriate.


2.10.9
Where a school enters into a contr
act for the supply of goods or services
which involve total
payments
of not more than £25,000

from the

school’s
delegated budget, at least three written quotes must be sought.








2.10.
10

A tendering process should be used for contracts over
£
25
,000

an
d
compliance with EU procedures should be adhered to where appropriate.
Where tenders are sought, the criteria to be used in the selection of the
successful tender must be established prior to advertising or receiving
tenders. A record must be kept of how,

and from whom, tenders were
sought, what tenders were received, who was the successful

tender and, if
appropriate, the reason for not accepting the lowest tender. If necessary, a
Contracts Register should be maintained for this purpose. Contracts must
onl
y be entered
after ensuring
best value principles have been followed
(see
also paragraph 2.4 above).


2.10.11
The governing body should take responsibility for the safe receipt, storage
and opening of tenders where necessary.
The governing body may also
a
ccept a tender and award a contract provided that the tender has been
sought, received and evaluated in accordance with the Standing Orders, and
where the EU Procedure applies the Regulations. For contracts over
£25
,000

the Responsible Procurement Officer
is advised to contact Finance


Children and
Learning

for guidance on compliance with Standing Orders.’




2.10.12 Tendering and contract procedures for building works are detailed in the

Corporate Property Standards and Guidance
. These procedures are based
on the Council’s Contract Standing Orders (last updated 18 July 2012) and
set out the administrative procedure that schools must follow in seeking
tenders and letting cont
racts for the supply of goods, services and works.