Fixed Asset Procedures

Index

1. Introduction2. Purpose Of This Document3. Fixed Asset Movement Form (FAMF)4. Fixed Asset Transfer Form (FATF)5. Areas & National Office Departments6. National Office Finance

1. Introduction

Cafcass has a significant investment in fixed assets. As such it has a statutory responsibility to ensure that these investments are properly managed, controlled and recorded. Currently, this information is held centrally on the Open Accounts Fixed Assets Register (FAR).

The FAR uniquely identifies Cafcass’ fixed assets and records the financial information and history of those assets. A record such as this is required to: Provide information to NO / Areas of the assets under their control. Provide information for management decision-making and external

reporting purposes. Ensure that the financial information of each asset is calculated and

recorded in line with statutory requirements.

The responsibility for the day-to-day administration and management of Cafcass’ FAR is with National Office Finance.

2. Purpose Of This Document

The purpose of this document is to outline the procedures by which Cafcass’ FAR will be maintained on an ongoing basis.

These procedures should always be used in conjunction with: Appendix 1: Fixed Asset Policy Appendix 2: Fixed Asset Movement Form (FAMF) Appendix 3: FAMF Guidance Notes Appendix 4: Fixed Asset Transfer Form (FATF) Appendix 5: FATF Guidance Notes Appendix 6: FAR Manual & OA System Journals

Please note that a full set of the fixed asset procedures and appendices can be found on the Cafcass intranet under Finance.

These procedures will initially discuss the FAMF and the FATF. Further to this, these procedures will discuss the responsibilities of each of the two main stakeholders involved in maintaining the OA FAR. Namely:

Area Or NO Dept Purchasing Asset / Initiating Transfer NO Finance

3. Fixed Asset Movement Form (FAMF)

The FAMF is designed to provide necessary information as to enable the Cafcass Fixed Asset Register to be updated and maintained. The form must be completed for movements of fixed assets relating to purchases, disposals and write-offs. A copy of the form can be found in Appendix 2.

The Area or NO department purchasing the asset will need to complete where relevant sections 01 to 13 of the FAMF. When completing the FAMF, staff should refer to the Guidance Notes in Appendix 3.

A separate FAMF will need to be completed for each fixed asset movement. If however the movement relates to assets that are of an identical nature and have, or are to reside in the same location, only one form will need to be completed.

For assets of an identical nature that are to reside at various locations, a separate FAMF will need to be completed for each location.

The completed FAMF will need to be forwarded to NO Finance for authorisation in section 20. NO Finance will be responsible for ensuring the FAMF has been completed correctly. NO Finance will retain a copy of the FAMF for their records.

In all cases the original completed FAMF and the relevant back-up documents must be returned NO Finance no later than the 26th of each month.

4. Fixed Asset Transfer Form (FATF)

The FATF is designed to provide necessary information as to enable the Cafcass Fixed Asset Register to be updated and maintained. The form must be completed when a fixed asset is transferred from its existing cost centre to any other location. A copy of the form can be found in Appendix 4.

The Area or NO department transferring the asset will need to complete sections T01 to T10 of the FATF. When completing the FATF, staff should refer to the Guidance Notes in Appendix 5.

A separate FATF will need to be completed for each fixed asset transfer. If however the transfer relates to assets that are of an identical nature and have been or are to reside in the same location, only one form will need to be completed.

For assets of an identical nature that are to reside at various locations, a separate FATF will need to be completed for each location.

The completed FATF will need to be forwarded to NO Finance for authorisation in section T14. NO Finance will be responsible for ensuring the FATF has been completed correctly. NO Finance will retain a copy of the FAMF for their records.

In all cases the original completed FATF and the relevant back-up documents must be returned NO Finance no later than the 26th of each month.

5. Areas & National Office Departments

Asset Movements: AdditionsAsset additions relate to any newly acquired fixed assets. This could be through a purchase, or a transfer or donation from another organisation.

Other than the Estates and IT cost centres, your delegated budget has no provision for fixed asset purchases (items over £2,500) unless otherwise stated.

Only Estates and IT have regular authority to commit and incur such expenditures. In the event that a capital payment needs to be made, prior authority must first be obtained from the Accounting Officer via the relevant Corporate Director and / or the NO Finance Department.

To establish whether the purchase is a fixed asset or not, please refer to the Fixed Asset Policy in Appendix 1.

If the purchase is a fixed asset, and approval has been received, a Purchase Order must then be raised on EBIS.

Once the asset has actually been received, a FAMF should be completed and signed by the preparer. The completed FAMF should then be passed to the relevant authoriser for authorisation.

Asset Movements: DisposalsA disposal refers to the sale of a fixed asset. This sale will normally result in a profit or loss on sale to be made.

As outlined in the financial memorandum, Cafcass can only dispose of a fixed asset that is surplus to its requirements, once prior approval is obtained from DfE and the Director of Finance. The request to dispose of an asset should also outline the intended method of disposal. Staff should seek advice from either the IT Department, or NO Finance (for all non-IT Assets), as to the appropriate method of disposal.

Once the asset has been appropriately disposed of, a FAMF should be completed. When completing the FAMF, staff will need to obtain the unique

asset code and(if applicable) the asset serial number for that asset from the FAR. These details will need to be entered onto the FAMF, along with any proceeds from the sale.

The completed FAMF should then be passed to the relevant authoriser for authorisation.

Asset Movements: Write-OffsWrite offs relate to existing fixed assets, which have been lost or stolen, or those fixed assets that are to be discarded for nil proceeds. As outlined in both the Financial Memorandum, and the Special Payments and Write Off Guide, all write offs require prior approval from the Accounting Officer via NO Finance.

Where a fixed asset has been lost or stolen, an Accident and Incident Report must be completed prior to the write off request. A copy of this report can be found on the Intranet under Health & Safety Procedures. This form should then be attached to the write off business case request and returned to NO Finance for consideration.

Once the write off has been approved, a FAMF should be completed. When completing the FAMF, staff will need to obtain the unique asset code and (if applicable) the asset serial number for that asset from the FAR. These details will need to be entered onto the FAMF. The completed FAMF should then be passed to the relevant authoriser for authorisation.

Asset Movements: TransfersTransfers refer to Fixed Assets, which are moved from one cost centre to another. Generally, these transfers will involve the relocation of assets within the same Area.

Prior approval from the appropriate authoriser must first be sought before any fixed asset can be transferred. Once approved, a FATF will need to be completed. The completed FATF should then be passed to the relevant authoriser for authorisation. 6. National Office Finance

Asset Movements: AdditionsOn receipt of a completed FAMF, NO Finance will ensure that the item to be capitalised adheres to the Fixed Asset Policy document contained in Appendix 1.

NO Finance will complete sections 14 to 18 of the FAMF and will also ensure that sections 01 to 13 have been completed and authorised as per these procedures and the Guidance Notes in Appendix 3.

In the case of IT assets and after liaison with IT department / Fujitsu, NO Finance will populate section 19 of the FAMF, as per the Guidance Notes in Appendix 3

NO Finance will also ensure that all relevant back-up documents have been attached, as per Appendix 3. NO Finance will then complete the section 20 authorisations.

Once the FAMF has been authorised, NO Finance will then update the OA FAR with the completed FAMF. When updating the OA FAR, the asset serial number contained in section 19 of the FAMF must be entered into the volume and serial number fields of the system. These fields should on no account be left blank at the entry stage as to do so will make them inaccessible for future use.

If a FAMF contains multiple units of an asset in section 03, one sub-line of the volume / serial number field must be used for each unit.

Costs relating to fixed asset additions are posted to the 721 series of General Ledger accounts. On verifying the contents of the FAMF as described above, NO Finance will prepare and post a manual General Ledger journal transferring the cost from this series of accounts into 981420 – Capital Expense Account.

Once completed, NO Finance will retain copy of the FAMF for record-keeping purposes.

Asset Movements: Disposals & Write-OffsOn receipt of a completed FAMF, NO Finance will where relevant complete sections 14 to 19 and will also ensure that sections 01 to 13 have been completed and authorised as per these procedures and the Guidance Notes in Appendix 3.

NO Finance will also ensure that all relevant back-up documents have been attached, as per Appendix 3.

NO Finance will complete the section 20 authorisations and will then update the OA FAR with the completed FAMF.

Where applicable regarding disposed assets, NO Finance will prepare and post a manual General Ledger journal transferring any relevant amounts from the 970100 – Revaluation Reserve to 960100 – General Fund.

Where applicable regarding written-off assets, NO Finance will prepare and post a manual General Ledger journal transferring any relevant amounts from the 970100 – Revaluation Reserve to 960100 – General Fund.

Once completed, NO Finance will retain copy of the FAMF for record-keeping purposes.

Asset Movements: TransfersOn receipt of a completed FATF, NO Finance will complete sections T11 to T13 and will also ensure that sections T01 to T10 have been completed and authorised as per these procedures and the Guidance Notes in Appendix 5.

NO Finance will also ensure that all relevant back-up documents have been attached, as per Appendix 5.

NO Finance will complete the section T14 authorisations and then update the OA FAR with the completed FAMF.

Once completed, NO Finance will retain copy of the FAMF for record-keeping purposes.

Monthly RequirementsOA FAR will be closed on the 3rd working day of each month. NO Finance must ensure:

That all completed FAMFs received in the previous month have been processed into OA FAR.

That the OA FAR depreciation calculation has been run and the system-based journal accurately posted.

That all other system-based journals have been accurately posted. A listing of OA FAR system-based journals can be found in Appendix 6.

OA FAR vs. OA GL ReconciliationOn closing of OA FAR NO Finance will prepare a standard OA FAR vs. OA GL reconciliation. This reconciliation will as normal be included in the monthly reconciliations pack.

Prepared By: NO Finance August 2013.Review Date: August 2014

FIXED ASSET POLICY (Appendix 1)

Index

1. Objective Of This Document2. Cafcass Fixed Asset Policy3. Implementation & Application Of Policy4. Auditor Treatment Of “IT Infrastructure Assets”5. Fixed Asset Depreciation6. Fixed Asset Revaluations

1. Objective Of This Document

The objective of this document is to define Cafcass’ fixed assets policy:

This states that freehold land and buildings are subject to physical revaluation at least every three years and by indexation using current cost indices during intervening years. Other tangible assets should be stated at current cost using appropriate indices published by the Office for National Statistics.

The minimum level for capitalisation of a tangible fixed asset is £2,500. In the case of IT equipment If they fall below the £2,500 threshold they are to be grouped together and classified as grouped assets and should be capitalised.

HM Treasury Resource Accounting ManualClause 3.2 d grouping of assets: states that where there are large numbers

of a certain type of asset which if treated singly would fall below the

capitalisation threshold, they should be grouped for the purposes of

determining whether they fall above or below the threshold.

2. Cafcass Fixed Asset Policy

Assets costing £2,500 or more will be capitalised.

Assets costing less than £2,500 (except for IT assets) will be expensed in the year.

IT Assets will be treated as follows:

IT Fixed Assets costing less than £2,500 will be grouped together as “IT Infrastructure Assets” and capitalised.

IT Standalone Software (E.g. Software not purchased with hardware) costing £2,500 or more will be capitalised and those costing less than £2,500 will be expensed in the year.

Assets will be stated at current cost (E.g. Subject to revaluation) using indices published by the Office of National Statistics.

3. Implementation & Application Of Policy

Assets will be capitalised in the month in which they impact Cafcass’ accounts.

All non-IT assets (except project-related work) with an individual purchase price of £2,500 or more will be capitalised.

All non-IT assets (except project-related work) with an individual purchase price of less than £2,500 will be expensed in year.

Office furniture is not capitalised but expensed in the year.

Project Related Work: Due to the complexities involving such work, please contact NO Finance for advice as each project will be judged on it’s merits.

IT assets will be treated as follows:

Hardware Individual Capitalisation: Individual hardware >= £2,500 including software,

peripherals and resources (if any). Group Capitalisation: Individual hardware < £2,500 including software,

peripherals and resources (if any), where the purchase is part of an larger scheme. E.g. Multiple purchases of laptops costing £800 per unit as part of a modernisation program.

Software Individual Capitalisation: Standalone software >= £2,500 including

peripherals and resources (if any), that are not part of ‘Hardware’ above.Note: Multiple copies of the same software whose total cost is >= £2,500 are treated as per this section.

Expense: Standalone software < £2,500 including peripherals and resources (if any), that are not part of ‘Hardware’ above.

Peripherals Individual Capitalisation: Peripherals >= £2,500 including resources (if

any) that are not part of ‘Hardware’ or ‘Software’ above. Expense: Peripherals < £2,500 including resources (if any), that are not

part of ‘Hardware’ or ‘Software’ above.

Resources Individual Capitalisation: Resources >= £2,500 that is not part of

‘Hardware’, ‘Software’ or ‘Peripherals’ above. Expense: Resources < £2,500 that is not part of ‘Hardware’, ‘Software’ or

‘Peripherals’ above.

IT Definitions Hardware: PC, printer, laptop, servers, peripherals >= £50, etc. Software: NetEnforcer, NetAccountant, Windows, etc. Peripherals: Cabling, switches, etc. Resources: Network support, desktop support, etc.

4. Auditor Treatment of “IT Infrastructure Assets”

The auditors have confirmed that they would audit the IT Infrastructure entries in the fixed asset register as follows:

Auditing: Would check the assets grouped in the IT Infrastructure in year of

additions. Would take a sample from the code in the ledger entries and check

through these. Would look for invoices confirming the purchase of a sample taken. Would not ask for the whole line to be reconciled.

Other Controls: NO Finance maintaining its own verification of assets NO Finance would be carrying out quarterly IT and Estates verifications to

make sure IT and Estates records reconciles with Cafcass Fixed Asset Register. The auditors would be relying on the controls that have been put in place if they find these to be reliable.

5. Fixed Asset Depreciation

Depreciation is the accounting process used in allocating of the cost of a tangible, long term asset over it’s useful life.

Depreciation on an asset commences from the first full calendar month following the invoice date.

CAFCASS depreciates fixed assets on a straight line basis, over their expected useful lives or for leased assets, over the life of the lease.

Expected useful lives are as follows:

Freehold buildings Up to 60 yearsLeasehold land and buildings Up to 50 years, or over the term of the leaseLeasehold improvements Over the term of the leaseOffice equipment Seven yearsInformatuion technology Five yearsLaptops under Flex Estimated replacement dateLaptops (non-Flex) Five years

6. Fixed Asset Revaluations

Fixed assets are not subject to revaluations in the financial year in which they are purchased.

Freehold land and buildings are subject to physical revaluation by the VOA at least every three years and by indexation using current cost indices during intervening years.

Other tangible fixed assets except for leasehold property are subject to annual revaluations using appropriate indices published by the Office for National Statistics (ONS).

The contra entry for the upward revaluation of fixed assets is the revaluation reserve account in the balance sheet.

The contra entries for the downward revaluation of fixed assets are the diminutions accounts in I&E.

Note: Office for National Statistics indices can also be downloaded via the website www.statistics.gov.uk.

Prepared By: NO Finance August 2013.Review Date: August 2014.

FIXED ASSET MOVEMENT FORM (Appendix 2) : Complete with reference to Guidance Notes in Appendix 3

To Be Completed By Area Or NO Department Purchasing Asset

01 Transaction Type (Tick): Purchase Disposal Write Off

02. Date of Transaction

03. Number of Units

04. Asset Description

05. Current Cost Centre & Expense Code

06. Depreciation Start Date

07. Total Including VAT

08. Disposal & W/O Only – Asset Code

09. Disposal & W/O Only – Asset Tag

10. Disposal Only – Proceeds from Sale

11. Supporting Documents Required

12. Prepared By

13. Signature & Date

To Be Completed By National Office Finance

14. Current Location

15. Asset Code

16. Asset Group

17. Asset Type

18. Analysis Code

19. Asset Serial Number

20. Authorised By

Position

Signature & Date

Please refer to the Guidance Notes in Appendix 3

Area & National Office: NO Finance to authorise

COMPLETING THE FIXED ASSET MOVEMENT FORM (FAMF) GUIDANCE NOTES (Appendix 4)

To Be Completed By Area Or NO Department Purchasing AssetDetails Details To Be Entered01.Transaction Type

Preparer to tick one of the boxes to indicate whether the transaction is a: Purchase: A new asset has been acquired. Disposal: An existing asset has been sold for

proceeds. Write Off: An existing asset has been discarded

for nil proceeds. This box should also be ticked where an asset has been lost or stolen. Please also see (6) of the procedures for additional requirements for assets written off or lost / stolen.

02.Date of Transaction

Purchase: Purchase date. Disposal: Proceeds date. Write Off: Business Case Authorisation date.

03.Number of Units

This box should only be used if the transaction relates to multiples of exactly the same item, otherwise please complete a separate FAMF for each transaction.

Enter the number of items to be purchased / disposed / written-off.

04.Asset Description

Additions: A brief description of asset including (where possible) make and / or model details.

In the case of Land or Buildings, enter the site address.

For existing assets, enter the details as shown on the Fixed Asset Register.

05.Current Cost Centre & Expense Code

Purchases Only: The cost centre & expense code to which the cost of the asset has been charged.

06.Depreciation Start Date

The start date for depreciation is always the first working day of the first full month following the invoice date.

07.Total Including VAT

Purchases Only: The total invoiced cost of the capital element of the asset.

If possible provide a cost breakdown of all major elements of the invoice. E.g. Peripherals, resources etc.

08.Asset Code

Disposal & Write-Offs Only: The unique asset code given to the asset when capitalised on OA FAR.

09.Asset Tag

Disposal & Write-Offs Only: The unique asset tag assigned to the asset when capitalised on OA FAR.

10.Proceeds from Sale

Disposals Only: Enter the proceeds received from the sale of an existing asset.

11. Additions: A copy of the Purchase Order (printed

Supporting Documents Required

in landscape format) to which the asset relates. Additions: A copy of the invoice to which the

asset relates. Additions: IT Assets Only: A copy of the UNC

quote to which the asset relates. Disposals: Copy of authority to dispose. Disposals: Copy of proceeds MR1. Write-Offs: Copy of business case.

12 & 13.Prepared By

In all cases the preparer of the FAMF must complete these two sections.

20.Authorised By

Areas & National Office: NO Finance will be responsible for authorisation.

To Be Completed By National Office FinanceDetails Details To Be Entered14.Current Location

Four-digit location code, re OA FAR asset maintenance routines.

NB: This code must be consistent with the two-digit location code.

15.Asset Code

Sequential asset code for loading onto OA FAR.

16.Asset Group

Four-digit code indicating type of asset, re OA FAR asset maintenance routines.

17.Asset Type

Two-digit code indicating method by which asset was acquired, re OA FAR asset maintenance routines.

18.Analysis Code

Two-digit location code, re OA FAR asset maintenance routines.

NB: This code must be consistent with the four-digit location code.

19.Asset Serial Number

IT Assets Only: The asset serial number allocated to that asset.

For existing IT assets, enter the asset code.20.Authorised By

Areas & National Office: NO Finance will be responsible for authorisation.

Prepared By: NO Finance August 2013.Review Date: August 2014.

COMPLETING THE FIXED ASSET TRANSFER FORM (FATF) GUIDANCE NOTES (Appendix 5)

To Be Completed By Area Or NO Department Initiating TransferDetails Details To Be EnteredT01.Asset Tag / Serial Number

The asset tag of the asset being transferred must be listed on the form.

The serial number should only be listed when an asset tag has not been allocated to the asset in question.

Where the preparer is unsure of the asset tag of the asset in question, please contact NO Finance.

T02.Asset Code

The asset code of the asset being transferred must be listed on the form.

Where the preparer is unsure of the asset code of the asset in question, please contact NO Finance.

T03.Asset Description

Please enter the details as shown on the OA Fixed Asset Register.

T04.Number of Units Transferred

This box should only be used if the transfer relates to multiples of exactly the same item, otherwise please complete a separate FATF for each transaction.

Enter the number of items to be transferred.T05.Current Location

The location where the asset currently resides. Please enter the four-digit location code, re OA

FAR asset maintenance routines. Where the preparer is unsure of the location code

of the asset in question, please contact NO Finance.

T06.New Location

Please enter the four-digit location code, re OA FAR asset maintenance routines for where the asset will reside.

T07.Date Transfer Effective From

The date the transfer effectively took place.

T08.Supporting Documents Required

A copy of any documentation authorising the transfer of the asset from one location to another. The documentation must include enough detail to reasonably identify the asset in question.

T09 & T10.Prepared By

In all cases the preparer of the FATF must complete these two sections.

T14.Authorised By

Area & National Office: NO Finance will be responsible for authorisation.

To Be Completed By National Office FinanceDetails Details To Be EnteredT11 to T13.Verification Details

NO Finance must verify that the details entered in T02, T04 & T05 match the OA FAR.

Inaccuracies will result in the entire form being

returned to the preparer.T14.Authorised By

Area & National Office: NO Finance will be responsible for authorisation.

Prepared By: NO Finance August 2013.Review Date: August 2014.

Local Asset Procedures

Index

1. What Is A Local Asset?2. Recording Transactions3. Updating The Local Asset Register4. Physical Checking & Verification

1. What Is A Local Asset?

The £2,500 Rule

A Local Asset is defined as all physical assets owned by Cafcass that were purchased at a cost price of less than £2,500. These will include (but is not limited to): Fax Machines Franking Machines Photocopying Machines Cameras & Video Equipment Furniture

All IT assets regardless of value are considered to be Fixed Assets, and are therefore capitalised. As such, IT assets will in general not be treated as Local Assets.

£500 De Minimus Limit

Local Assets of £500 per item or less need not be recorded on the Local Asset Register.

2. Recording Transactions

Each Operational Area should ensure that all local asset transactions within their area are adequately documented, and that this documentation is sufficient in order to effectively update their Local Asset Register, a template of which can be found on the intranet.

There are four main types of local asset transactions that will impact on the Local Asset Register and which therefore need to be documented. These transactions are: Additions (When an asset is purchased) Disposals (When an asset is sold) Transfers (Between Cafcass offices) Write-Offs (When an asset has been stolen, broken, or lost)

3. Updating The Local Asset Register

A single consolidated Local Asset Register should be emailed to NO Finance from the Area Finance Manager and National Office Manager.

Please do not include leased assets on the Local Asset Register.

The template extends to line 1500 of the spreadsheet and given the experience of past returns and De-minimus limit of £500 this should be sufficient for an Operational Area’s entire return.Please note that whilst the print range of the template defaults to two pages this can be changed as required.

The template is structured as follows: Cell D3: Please type in the Operational Area to which the Local Asset

Register relates. Cell F3: Please type in the name of the person completing the single

consolidated Local Asset Register that is to be sent to NO Finance. Cell D6: Please type in the date on which the Local Asset Register is to be

sent to NO Finance. Cell F6: Please type in the name of the person authorising the Local Asset

Register that is to be sent to NO Finance. This individual must be either the Area Finance Manager or NO Manager.

Column A (Cell A10 onwards): Use the drop-down menu to select the Service area to which the local asset relates.

Column B (Cell B10 onwards): Use the drop-down menu to select the Cafcass office to which the local asset relates.

Column C (Cell C10 onwards): Use the drop-down menu to select the category to which the local asset relates.

Column D (Cell D10 onwards): Enter a brief description of the local asset. Column E (Cell E10 onwards): Enter (if available) the model or serial

number of the local asset. Column F (Cell F10 onwards): Use the drop-down menu to select the

number of units of local asset being recorded. Column G (Cell G10 onwards): Enter (if available) the purchase date of the

local asset in DD-MM-YY format (E.g. 21-12-12).

The Local Asset Register needs to be kept updated and made available for review by External Auditors, Internal Auditors, National Office, etc.

4. Physical Checking & Verification

An annual physical check of Local Assets must take place within each Operational Area, typically during December of each year. The process of the physical check is left to the discretion of each Operational Area, but an example of an appropriate check may be as follows:

An allocated individual within an office undertakes a physical verification by ‘checking off’ the existing assets against the previous year’s register.

Office based Local Asset Registers are then prepared and an electronic copy provided to the Area Finance Manager/National Office Manager.

A single consolidated Local Asset Register is then completed and emailed by the Area Finance Manager/National Office Manager to NO Finance.

In addition to the annual audit Operational Areas should maintain sufficient records to ensure movements in the Local Asset Register during the year are fully documented and reconciled.

Prepared By: NO Finance August 2013.Review Date: August 2014

Disposal of Cafcass Assets1. GENERAL 1.1 Assets are defined as something valuable that an entity owns, benefits from,

or has use of, in generating income or performing duties. It includes tangible items such as real estate, furniture, office and IT equipment as well as intangible items such as property rights and website costs.

1.2 The purpose of these procedures are to provide the means for the disposal of redundant or surplus assets, to ensure that any disposals are dealt with in an auditable manner and are in compliance with the requirements set out in the Financial Memorandum (section 3), Fixed and Local Asset policy and procedures.

1.3 Asset disposal decisions and the reasons for taking them should be properly documented. Not only does this assist in audit and other examinations, but it highlights successes and problems for future reference.

1.4 Cafcass’ objective in relation to this policy is to ensure that disposals are being conducted according to good practice and sustainability requirements.

1.5 In the interests of promoting probity, fair dealing and openness, sections must not sell or otherwise transfer surplus assets to staff (for personal use) (or their relatives or friends) unless arising from a public competitive process, i.e. an advertised sale that is open to the public. Where a member of the public and a staff member offer an equal price, the item must be sold to a member of the public. The sale price must be the best market price and under no circumstances may equipment be donated to staff.

2 REASONS FOR DISPOSAL 2.1 Assets can be available for disposal because they are:

No longer required, due to changed procedures, functions or usage patterns

No longer complying with occupational health and safety standards

Beyond repair but able to be sold for scrap.

2.2 An employee should report any item that they consider to be in need of disposal or condemnation to their Office Manager. The Office Manager will be responsible for advising their Head of Service and either the Estate Manager (in the case of freehold property disposal) or NO Finance of the item concerned.

3 FINANCIAL MEMORANDUM REQUIREMENTS 3.1 Cafcass shall dispose of assets, which are surplus to its requirements.

Assets shall be sold for best price, taking into account any costs of sale. High value assets shall be sold by auction or competitive tender, unless otherwise agreed by the DfE, and in accordance with Government Accounting, Chapter 24.

3.2 Outside of the approved Cafcass Estates Strategy, Cafcass may normally retain receipts derived from the sale of assets provided that all of the following are met:

The DfE and the Treasury are content for Cafcass to retain these receipts;

They are used to finance other capital spending;

The DfE receives prior notification of individual sales; and

Total sales in any financial year do not exceed a specified limit (normally 3% of the Grant–in–Aid).

3.3 If, notwithstanding the above, Cafcass disposes of assets which have been purchased, improved or developed with Exchequer funds and the receipts amount to more than £1 million, or where the disposal has unusual features of which Parliament should be aware, Parliamentary approval shall be secured for the receipts to be reinvested. The receipts shall therefore be surrendered to the DFE, which will then submit an Estimate seeking approval for the receipts to be appropriated in aid by the DFE and for a corresponding increase in Cafcass Grant-in-Aid. If the proposed new investment exceeds Cafcass’ relevant delegated authority, the approval from the DFE will be needed. If the proposed new investment is novel or contentious, the Treasury’s approval will be also needed.

3.4 Where Cafcass has financed expenditure on capital assets by a third party, Cafcass shall make appropriate arrangements to ensure that any such assets above a value of £1,000 are not disposed of by the third party without Cafcass’ prior consent and that repayment conditions are sufficient to secure the repayment of the Exchequer’s due share of the proceeds of the sale, in order that funds may be surrendered to the Department.

4 DISPOSAL OF FIXED ASSETS 4.1 Fixed assets are physical assets owned by Cafcass that were purchased for

more than £2,500. They are shown on our fixed asset register either with or without a residual value and normally consist of land, buildings and IT equipment. In the case of IT equipment and furniture they were grouped together if they were below the £2,500 threshold and classified as grouped assets.

4.2 Procedure to follow when disposing of a fixed asset:

4.2.1 Confirm with NO Finance that the asset is appearing on the fixed asset register and request the original purchase price, residual value and asset code of the asset.

4.2.2 High value assets shall be sold by auction or by competitive tender unless otherwise agreed by the DFE. High value assets are being considered as all assets that have a residual or market value of £10,000 or higher. In some cases a formal valuation of the asset may be required as in the case of freehold property. Valuations of other tangible assets could be obtained from indices published by the Office of National Statistics.

4.2.3 All disposals of freehold property should be in accordance with the Cafcass Estate Strategy. A formal business case, which needs to be submitted to the DFE, needs to be approved by the Estates Manager and the CEO.

4.2.4 All other assets shall be sold for best price, taking into account any costs of sale. VAT at 20% should be charged on all sales of assets. NO Finance should maintain a log of all sales of assets as the total sales in a financial year should not exceed 3% of the Grant-In-Aid. The following procedure should be followed in the case of any proceeds on the disposal of the asset:

A business case needs to be submitted to the DFE, which has been approved by the Head of Service and the Operational Director, which should set out the conditions of sale

All the requirements of section 3.2 should be met A fixed asset movement form should be completed and NO Finance

should be notified

4.2.5 If the amount that could reasonably be expected to be achieved by the sale does not justify the cost of the sale the following procedures should be followed:

Enquire if asset could be used within another Cafcass office or government department.

Consider whether the asset is fit for donation to schools or charities which in turn will be in line with Cafcass objectives.

If the asset cannot be sold or donated, use an accredited list of suppliers who will dispose of the assets according to sustainability requirements. Should the cost of disposal be more than £10,000 a business case needs to be submitted which needs to be approved by the Operational Director and CEO. Should the cost be less than £10,000 a non-business case should be submitted which needs to be approved by the Head of Service and Operational Director.

Complete a fixed asset movement form and notify NO Finance. Ensure all procedures are documented.

5 DISPOSAL OF LOCAL ASSETS

5.1 Local assets are all physical assets owned by Cafcass that were purchased at a cost price of less than £2,500, except for IT equipment which have been grouped together. These will appear on the local asset registers and will include (but is not limited to) furniture, photocopiers, franking machines, fax machines and cameras. Local asset registers are maintained as a method for recording and safeguarding Cafcass assets that may otherwise be neglected and at risk.

5.2. Procedure to follow when disposing of a local asset:

5.2.1 All assets shall be sold for best price, taking into account any costs of sale. Should there be any proceeds on the sale of the asset all requirements of section 4.2.4 should be met.

5.2.2 If the amount that could reasonably be expected to be achieved by the sale does not justify the cost of the sale the following procedures should be followed:

Enquire if asset could be used within another Cafcass office or government department.

Consider whether the asset is fit for donation to schools or charities which in turn will be in line with Cafcass objectives.

If the asset can not be sold or donated, use an accredited list of suppliers who will dispose of the asset according to sustainability requirements. The same requirements would apply as in section 4.2.5.

Ensure that the asset is removed from the local asset register. Ensure all procedures are documented.

6 DISCLAIMER 6.1 Cafcass will not be held liable for any Health and Safety issues surrounding

the use of the asset. Ensure that a Furniture and Equipment Disclaimer is signed by the recipient upon transfer.

Prepared By: NO Finance August 2013.Review Date: August 2014.

Finance Control - Authorisation Guidance for Managers

CONTENTS

1 INTRODUCTION..............................................................................................................12 THE “CONTROL CULTURE”...........................................................................................13 SUPPLIERS..................................................................................................................... 24 SELF-EMPLOYED PRACTITIONERS.............................................................................25 STAFF.............................................................................................................................. 36 IMPLICATIONS FOR AUTHORISED SIGNATORIES......................................................37 OTHER GUIDANCE AND PROCEDURES......................................................................38 TRAINING NEEDS...........................................................................................................4

Document Owner: Director of FinanceLast Updated: July 2012Updated by: Julie Brown

INTRODUCTION

1.1 Each time any of us signs a document or approves a transaction we give it authority on behalf of Cafcass. This must not be taken lightly or undertaken under undue pressure.

1.2 When signing-off invoices or other documents involving a payment we commit public money and we are expected (by our Board, DFE, H.M. Treasury, the National Audit Office, tax payers, etc) to operate a financial “Control Culture”. Avoiding waste and any suspicion of fraud means that Cafcass can devote all the money allocated to it to achieve its objectives for families and children.

1.3 In this context “Control Culture” means: taking the necessary steps to ensure that public money is spent properly, payments are duly authorised and recorded against the services and goods commissioned and received, and that value for money is delivered.

1.4 This is an area of focus for Internal Audit and all areas of the organisation will be subject to an audit of their compliance with controls.

1.5 The guidance below refers to a regional setting but applies equally to the National Office and Legal Services.

THE “CONTROL CULTURE”

2.1 The aim of developing a Control Culture is to ensure that managers understand:

that control is an integral part of their job; that they are personally responsible for ensuring that adequate and effective

controls exists and is evidenced; and that control can help them to achieve their objectives by ensuring:

policies and directives are followed; assets are safeguarded; financial records are complete and accurate; waste is prevented; staff are protected from suspicion or false allegations.

Control should be an integral part of a Manager’s thinking.

Managers are expected to accept responsibility for control as part of their basic management function. Assessing and controlling risks are key management functions, which must be regarded as equal in importance to other core management functions. Control cannot be considered as optional or something to be considered in isolation.

The importance of Controls for fraud prevention and detection is highlighted below by quotes from the Treasury’s report on Fraud 1999–2000:

“…the main means of discovery of cases (of fraud) was through the normal operation of control procedures”, and

“…failure to observe control procedures ... the dominant cause of Fraud.”

All managers have the responsibility for ensuring that effective control systems operate. In addition to ensuring financial control checking takes places, managers are required to assess what other control activity is required to safeguard public assets and prevent fraud or misuse. All managers with financial responsibility are required to manage risk and this role should be reflected within their Job Objectives against which their performance will be appraised on a continuous basis.

Managers are expected to assess the risk of loss or fraud on an on-going basis, and increase or decrease any management control activity, dependent on the knowledge, skills, experience, and dependability of their staff.

SUPPLIERS

3.1 Suppliers include all those organisations and individuals who provide goods and services to Cafcass. New suppliers will need to provide their bank details on letter-headed paper to help ensure that payments are only made to legitimate suppliers.

3.2 When dealing with significant suppliers, the Manager or a member of staff should be aware of the terms and conditions. These may be contained in a contract, leaflets or exchange of correspondence. They should be reviewed prior to agreement to ensure that they are reasonable and could not have an adversely effect Cafcass. Further guidance is available in the procurement manual and further advice can be obtained from the National Procurement team.

3.3 The delivery of physical goods should be checked prior to the processing of the Goods Received Note.

3.4 Charges for people services such as consultants, contract staff and self-employed practitioners are usually based on time. Records of time worked by such individuals should be kept and reviewed and approved by the relevant Manager on a regular basis. Weekly time sheets provide the most manageable record of time. These should be submitted promptly.

3.5 Where the time claimed is in excess of estimates or informed professional experience, seek a meeting to obtain explanations.

3.6 Report any discrepancies to your Line Manager as appropriate.

SELF-EMPLOYED PRACTITIONERS

4.1 Self-employed practitioners are subject to the same level of financial internal controls in terms of the processes applied and value for money as other suppliers. In addition to these managers must be aware of the contract under which they provide their services and the procedures and guidance of the contracts issued regarding implement.

4.2 Managers should ensure that: Work plans are agreed for each case (where applicable). Progress is monitored

4.3 Where self-employed practitioners work across a number of teams/areas they should be managed by one contract manager who takes overall responsibility i.e. ensure appropriate co-ordination with all relevant colleagues.

STAFF

5.1 Staff expense claims should be scrutinised, and where applicable checked against backing receipts and diaries and confirmed that they are in line with HR policies. It is also the Manager’s responsibility to judge whether Value for Money (VFM) was received to inform future action.

5.2 Overtime claims should be preauthorised. There should be a pressing need for authorising overtime. This should be reviewed periodically to ensure that a routine overtime culture does not develop.

IMPLICATIONS FOR AUTHORISED SIGNATORIES

6.1 Signing-off documents should not be treated as a routine task, each instance should be carefully considered. This also applies to “signing-off” transactions using e-bis such as Purchase Orders and “matching” invoices, such “electronic signing” should be considered as the equivalent of a written signature.

6.2 Before you sign-off any payment, authorise a Purchase Order or raise a Goods Received Note ensure that:

You are authorised to do so and the amount falls within your delegated authority,

You are satisfied that the services have been performed or the goods have been delivered in the manner agreed with the supplier,

You or a member of your staff, have followed up any concerns, The price and overall costs are correct, Correct procurement procedures have been followed, Appropriate documentary evidence is obtained to support the payment and

that this is retained for (internal and external) audit inspection.

6.3 If in doubt do not sign. Seek the information you require from those closer to the point of supply or the supplier. If you are still not satisfied refer the matter to your Line Manager or Area Finance Manager who may refer the matter to Cafcass Finance for advice.

6.4 Some suppliers such as consultants or self-employed practitioners work over a period of time. Seek estimated times at the outset and monitor progress. Seek to understand the reasons for variations from estimates. Regular timesheets are useful in these circumstances.

6.5 When authorising transactions online, observe security procedures such as safeguarding passwords and logging-out when leaving your PC.

6.6 Every authorised signatory should be aware of Cafcass’s Fraud Policy. This is available on the Finance section of the intranet.

OTHER GUIDANCE AND PROCEDURES 7.1 This guidance is linked to other internal control policies and procedures that are available

on the Intranet including:

Internal Financial Control Bulletin Fraud Statement, Policy and Guide for Investigations Risk Management Policy and Guidance Financial Policies and Procedures Human Resources Policies and Procedures.

TRAINING NEEDS

8.1 If there are areas in which you require training to undertake the

responsibilities above, inform your Line Manager and or Area Finance

Manager of these, preferably in writing. Cafcass Finance will collate them

and arrange training.

8.2 Conversely, if you have good financial practice in your Team please share it with the rest of Cafcass via the Area Finance Manager. This guidance will be revised in the future to reflect such good practice.

Financial Delegation Guidance

Introduction.........................................................................................................1 Budget Delegation Process...............................................................................1 Authorisation......................................................................................................1 Accountability.....................................................................................................2 Segregation of Duties.........................................................................................2 Further Guidance................................................................................................2 Appendices.........................................................................................................2

Document Owner: Director of FinanceLast Updated: April 2013Updated by: Zubeda Seedat

Introduction

This document describes the budget delegation process within Cafcass. It is Cafcass policy to give operational managers the maximum flexibility in the use of resources commensurate with proper overall control of the organisation’s finances by devolving financial responsibility to managers.

Budget Delegation Process

Cafcass’s budget is delegated from the Treasury to the DfE and then to the Chief Executive of Cafcass, as Accounting Officer. The Accounting Officer then delegates budgets down to ‘primary’ budget holders (e.g. Directors) by issuing a formal budget delegation letter that must be signed. This letter sets out the amount of budget allocated under different categories of expenditure and the restrictions within which the budget must be managed. The template ‘Primary Delegation Letter’ is included at Appendix A.

Primary budget holders can further delegate budgets to staff by issuing a ‘Secondary Delegation Letter’ (e.g. from Operational Director to Assistant Directors/Heads of Service). The template ‘Secondary Delegation Letter’ is included at Appendix B.

‘Authority to Spend’ letters are also available for the purpose of allowing managers to authorise costs which are not necessarily delegated to them. For example, for the purpose of approving Travel & Subsistence , Overtime, Bank and similar costs on i-Trent. The authorised manager is responsible for ensuring all costs are checked before approval is confirmed. The Budget Holder however is overall accountable for the budget and must ensure that the said manager is adequately trained. The template ‘Authority to Spend Letter’ is included in Appendix C.

Authorisation

Within the financial and control limits of the delegation letter a Budget Holder has the authority to:

Commit expenditure – e.g. through the authorisation of Purchase Orders

Authorise payments – e.g. through the authorisation of invoices, T&S claims etc

Expenditure may only be authorised by staff who have delegated authority and within monetary limits set, staff must therefore refer to their line manager any request to authorise expenditure above their personal monetary limit for that category of expenditure.

Accountability

Budget Holders are accountable for safeguarding expenditure; higher budget holders must set and assess their staff's dealing with financial management to ensure that financial standards are maintained. This should be done via performance management records.

Assistant Directors/Head of Service are assessed on resource management via the iTrent performance framework and must ensure that standards are met.

It is not possible to delegate accountability for a budget, and those who delegate budgets remain accountable for the funds delegate and for ensuring that they are managed correctly and within the terms of the delegation letter.

Segregation of Duties

Budget Holders have the authority to incur expenditure within the limits of their delegation letter, however where the expenditure relates directly to them specifically e.g. expenditure on travel and subsistence, training, overtime etc the expenditure must be approved by the line manager of the Budget Holder.

Appendice A:

CHILDREN AND FAMILY COURT ADVISORYAND SUPPORT SERVICE

PRIMARY BUDGETARY DELEGATION TO BUDGET HOLDER

BUDGET DELEGATION (FINANCIAL YEAR)

From: Anthony Douglas, Chief Executive

To: (Name of Primary Budget Holder and job title)

Budget: (Name of Service Area/Department/Cost Centre)

I allocate to you financial and accounting responsibility of the following budget:

Category of Expenditure Budget allocation (£)Workforce CostsOther Running Costs TOTAL BUDGET

Subject to the following restrictions, you are free to manage your budget as you think best, to deliver your plans for 20XX/XX.

DelegationsExpenditure must not be incurred beyond the total delegated limits shown above. You have the power to incur and authorise expenditure directly, and through sub delegation, subject to compliance with the procedures and limits as prescribed in the Finance Manual and the Financial Memorandum.

You have the power to delegate financial and accounting responsibility for elements of this budget, by issuing a formal “secondary” budget delegation letter. You must use this power unless you know of particular reasons why it should not be exercised.

Budget ReportingYou must report to the Director of Finance either using the “Confirmation of Review of Monthly Management Reports and Budget Monitoring” (MMR) document or via the submission of the monthly Operational Management Team (OMT) finance report and minutes. This report will be required on a monthly basis; in addition all budget holders will be required to submit, as a

minimum, quarterly budget forecasts in line with the agreed and published timetable.

Partnership budgetsEach year both the baseline partnership funding (previously included in Operational budgets) and the DfE partnership funding will be held by the National Commissioning and Partnership team with agreement by the Head of Service and the National Commissioning and Partnership team for all new commitments.

Segregation of DutiesAs budget holder you have the authority to incur expenditure, however where the expenditure relates directly to you as budget holder i.e. expenditure on travel and subsistence, training, overtime etc prior approval must be obtained from your line manager.

Purchase OrdersAs budget holder you should ensure that all expenditure is incurred in line with existing financial and procurement policies and procedures. This includes ensuring compliance with purchase order procedures i.e. no expenditure to be entered into or incurred before a purchase order has been raised.  As well as good financial practice it also indicates that the budget holder has given approval for the expenditure.

Timeliness in paying invoicesEnsure at all times that, supplier invoices are properly approved and paid within 30 days of the invoice date, with the exception of disputed invoices which should be resolved as soon as possible. Similarly, monies owed to Cafcass are collected with 30 days of the invoice date.

Authorised SignatoriesYou must ensure that the list of authorised signatories for your budget area remains current with deletions and amendments processed on a timely basis, with a full review undertaken quarterly. You should only delegate budgets to authorised signatories; similarly staffs who are not budget holders should have no requirement to be authorised signatories.

Internal Financial Controls You are accountable for safeguarding expenditure and ensuring your staffs compliance with this guidance. Therefore, you must set and assess your staff's dealing with financial management to confirm that an adequate financial framework exists to safeguard the budget that I have delegated to you in this document. This should be done via performance management records.

Assistant Directors/Head of Service should be assessed on resource management via the iTrent performance framework and you must ensure that the standards are met.

Internal and External AuditorsI will be looking to our internal audit and assurance activities to provide me with independent assurance of your operations and financial controls. Your budget area may therefore be subject to independent scrutiny in this financial

year. You will receive a copy of the internal audit programme for the year, you need to ensure that you are familiar with this and you should share this with relevant staff within your area.

The National Audit Office (NAO) may also seek to provide me with independent assurance for their external audit of Cafcass Annual Accounts. This may involve visits to your budget area to review your systems and controls.

PayrollEach month you are provided with a copy of the Payroll Report detailing all payroll payments (including T&S) made to staff in the month in your budget area. You are required to review the report and confirm the salaries, allowances and travel and subsistence claims paid are complete and accurate. This confirmation/sign off is part of the budget monitoring report referred to above. This function can be delegated (i.e. to the Head of Service/ ABM/Area Finance Manager/HR Transactional Co-ordinator/Service Manager etc) with the appropriate knowledge and skills to do this. This delegation should be appropriately documented.

Starters and LeaversYou must take steps to ensure that HR staff and any staff with line management are aware of their responsibility to submit Starter / Leaver and payroll data / changes forms on a timely basis to the HR Transaction Team to ensure payroll deadlines are met and reduce the risk of salary overpayments or delayed payments. Where overpayments do occur you must ensure that adequate steps are taken by your HR Transactional Co-ordinator to secure a signed recovery plan and recover the overpayment as soon as possible.

Fixed AssetsOther than the National Office Estates and IT cost centres, your delegated budget has no provision for capital/fixed asset purchases (i.e. items over £2,500) unless otherwise stated. Only Estates and IT departments have regular authority to commit and incur such expenditures. In the event that a capital purchase needs to be made, prior authority must first be obtained from the Head of Finance.

Special PaymentsThe Chief Executive as Accounting Officer is ultimately responsible for authorising any special payments made by Cafcass. Special payments may include compensation payments, ex-gratia payments and write-offs.

However, the Chief Executive has delegated approval values of below £500 to Directors and up to £100 to Head of Service. Please refer to the ‘Special payments and write-off’ guidance for further detail, this can be found under Financial Control section of the Finance Manual on the Intranet.

Debtor ManagementAll “sales” / “income” must be supported by the issuing of a properly constituted invoice with VAT charged where applicable. Where invoices need to be raised for income due to Cafcass, this is coordinated via Cafcass

Finance through use of an AR1 invoice request form. As with PO’s an invoice should be raised as a first step in the process. Review and follow-up any outstanding invoices that have not been paid by third party.

Signed: _____________________________

Name: Anthony Douglas CBE

Date: _____________________________

I confirm that I have read, understood and accept the responsibilities as laid down in this document and I am familiar with the policies and procedures referred to in this letter including but not limited to the Finance Manual, the Procurement Manual and the Financial Memorandum.

Signed: _____________________________

Name: Name of Primary Budget holder and job title

Date: _____________________________

CHILDREN AND FAMILY COURT ADVISORYAND SUPPORT SERVICE

SECONDARY BUDGETARY DELEGATION TO BUDGET HOLDER

BUDGET DELEGATION (FINANCIAL YEAR)

From: (Name of Primary Budget Holder and job title)

To: (Name of Secondary Budget Holder and job title)

Budget: (Name of Cost Centre/Service Area)

I allocate to you financial and accounting responsibility of the following budget:

Category of Expenditure Budget allocation (£)Workforce CostsOther Running Costs TOTAL BUDGET

Subject to the following restrictions, you are free to manage your budget as you think best, to deliver your plans for 20XX/XX.

DelegationsExpenditure must not be incurred beyond the total delegated limits shown above. Each budget by category of expenditure is ring fenced and any transfer of budgets between categories of expenditure within your total budget can only be undertaken with prior written agreement from the Primary Budget Holder. You have the power to incur and authorise expenditure directly, subject to compliance with the procedures and limits as prescribed in the Finance Manual and the Financial Memorandum.

You have the power to delegate financial and accounting responsibility for elements of this budget by issuing ‘Authorisation to spend’ letters to your managers. This will allow managers to approve costs i.e. iTrent expenditure. You will however be deemed accountable for the overall budget and you must ensure that the said manager is aware that it is their responsibility to scrutinise claims/PO’s before approval. You must also ensure that they are adequately trained.

Budget ReportingYou must report to Finance or the Primary Budget Holder using the “Confirmation of Review of Monthly Management Reports and Budget Monitoring” (MMR) document. This report will be required on a monthly basis; in addition all budget holders will be required to submit, as a minimum, quarterly budget forecasts in line with the agreed and published timetable.

Partnership budgetsEach year both the baseline partnership funding (previously included in Operational budgets) and the DfE partnership funding will be held by the National Commissioning and Partnership team with agreement by the Head of Service and the National Commissioning and Partnership team for all new commitments.

Segregation of DutiesAs budget holder you have the authority to incur expenditure, however where the expenditure relates directly to you as budget holder i.e. expenditure on travel and subsistence, training, overtime etc prior approval must be obtained from your line manager.

Purchase OrdersAs budget holder you should ensure that all expenditure is incurred in line with existing financial and procurement policies and procedures. This includes ensuring compliance with purchase order procedures i.e. no expenditure to be entered into or incurred before a purchase order has been raised.   As well as good financial practice it also indicates that the budget holder has given approval for the expenditure.

Timeliness in paying invoicesEnsure at all times that, supplier invoices are properly approved and paid within 30 days of the invoice date, with the exception of disputed invoices which should be resolved as soon as possible. Similarly, monies owed to Cafcass are collected with 30 days of the invoice date.

Authorised SignatoriesYou must ensure that the list of authorised signatories for your budget area remains current with deletions and amendments processed on a timely basis, with a full review undertaken quarterly. You should only delegate budgets to authorised signatories; similarly staffs who are not budget holders should have no requirement to be authorised signatories.

Internal Financial Controls You are accountable for safeguarding expenditure and ensuring your staffs compliance with this guidance. Therefore, you must set and assess your staff's dealing with financial management to confirm that an adequate financial framework exists to safeguard the budget that I have delegated to you in this document. This should be done via performance management records.

Assistant Directors/Head of Service will be assessed on resource management via the iTrent performance framework and must ensure that the standards are met.

Internal and External AuditorsI will be looking to our internal audit and assurance activities to provide me with independent assurance of your operations and financial controls. Your budget area may therefore be subject to independent scrutiny in this financial year.

The National Audit Office (NAO) may also seek to provide me with independent assurance for their external audit of Cafcass Annual Accounts. This may involve visits to your budget area to review your systems and controls.

PayrollEach month you are provided with a copy of the Payroll Report detailing all payroll payments (including T&S) made to staff in the month in your budget area. You are required to review the report and confirm the salaries, allowances and travel and subsistence claims paid are complete and accurate. This confirmation/sign off is part of the budget monitoring report referred to above. This function can be delegated to a relevant manager/officer with the appropriate knowledge and skills to do this. This delegation should be appropriately documented.

Starters and LeaversYou must take steps to ensure that HR staff and any staff with line management are aware of their responsibility to submit Starter / Leaver and payroll data / changes forms on a timely basis to the HR Transaction Team to ensure payroll deadlines are met and reduce the risk of salary overpayments or delayed payments. Where overpayments do occur you must ensure that adequate steps are taken by your HR Transactional Co-ordinator to secure a signed recovery plan and recover the overpayment as soon as possible.

Fixed AssetsOther than the National Office Estates and IT cost centres, your delegated budget has no provision for capital/fixed asset purchases (i.e. items over £2,500) unless otherwise stated. Only Estates and IT departments have regular authority to commit and incur such expenditures. In the event that a capital purchase needs to be made, prior authority must first be obtained from the Head of Finance.

Special PaymentsThe Chief Executive as Accounting Officer is ultimately responsible for authorising any special payments made by Cafcass. Special payments may include compensation payments, ex-gratia payments and write-offs.

However, the Chief Executive has delegated approval values of below £500 to Directors and up to £100 to Head of Service Please refer to the ‘Special payments and write-off’ guidance for further detail, this can be found under Financial Control section of the Finance Manual on the Intranet.

Debtor ManagementAll “sales” / “income” must be supported by the issuing of a properly constituted invoice with VAT charged where applicable. Where invoices need to be raised for income due to Cafcass, this is coordinated via Cafcass Finance through use of an AR1 invoice request form. As with PO’s an invoice should be raised as a first step in the process. Review and follow-up any outstanding invoices that have not been paid by third party.

Signed: _____________________________

Name: Name of Primary Budget holder and job title

Date: _____________________________

I confirm that I have read, understood and accept the responsibilities as laid down in this document and I am familiar with the policies and procedures referred to in this letter including but not limited to the Finance Manual, the Procurement Manual and the Financial Memorandum.

Signed: _____________________________

Name: Name of Secondary Budget holder and job title

Date: _____________________________

CHILDREN AND FAMILY COURT ADVISORYAND SUPPORT SERVICE

AUTHORITY TO SPEND LETTER FROM BUDGET HOLDER

AUTHORITY TO SPEND (FINANCIAL YEAR)

From: (Name of Budget Holder and job title)

To: (Name of Authorised Officer and job title)

Budget: (Name of Cost Centre/Service Area)

As the Budget Holder for the above budget, I hereby give permission to you to process and approve financial items against the above cost centre(s) for the following categories of cost:

PURCHASE ORDERS FOR:

EXPENSE NAME EXPENSE CODE LIMIT £

PAYCOSTS FOR:

TYPE PERMISSION LIMIT £Travel & Subsistence Yes/NoOvertime Yes/NoSessional Hours Yes/NoBank costs Yes/No

Signed: _____________________________

Name: (BUDGET HOLDERS) Date:

I confirm that I have read, understood and accept the responsibilities as laid down in this document and I am familiar with the Cafcass policies and procedures.

Signed: _____________________________

Name: (AUTHORISED OFFICER) Date:

Guidance on Special Payments & Losses

1. INTRODUCTION1.1 This guidance details the process and procedures relating to

Special Payments and Losses, including who has the authority to approve such transactions and procedure.

2. SPECIAL PAYMENT2.1 Special payments are those made, at Cafcass’ discretion, to

meet an obligation which Cafcass feels honour bound to pay but for which it is not legally liable. By their very nature they are payments which Cafcass could not have contemplated making when the grant funding was made. Because of this, the delegated authority for special payments rests with Cafcass via DfE.

2.2 HM Treasury Guidance on Managing Public Money categories special payments as the following:

2.3 An Extra-Contractual payment is one which, although not legally due under the contract concerned, appears to be an obligation which the courts might uphold. Such an obligation will usually be attributable to a Cafcass action or inaction;

2.4 An Ex gratia payment is a payment which goes beyond administrative rules, or for which there is no statutory cover or legal liability. They include, for example payments to compensate for Cafcass maladministration or to meet out of court settlements to avoid legal proceedings for Cafcass inadequacy, or special payments made to avoid legal proceedings or payments to a contractor outside a contract, e.g. on grounds of hardship.

2.5 A Compensation Payment is one made in respect of damage to property etc.

3. LOSSES AND WRITE-OFF3.1 Losses or a Write-off is where a transaction has already taken

place and has been expensed through the Income and Expenditure, and can be categorised as follows:

3.2 Debtors Invoice (bad debt write-off)These are usually requested after failure of extensive attempts to recover the debt and further attempts is deemed to be fruitless.

3.3 Salary Related OverpaymentThese are overpayment transaction which, due to mitigating circumstance and the Operational Area or Department deems it inappropriate or fruitless to recover the payments from staff. Refer to the Salary Overpayment and Recovery policy for further guidance.

3. 4 Theft and Loss write-offsWhen assets have been stolen or lost, the assets will need to be removed (written-off) from the accounts, as they can no longer be accounted for.

4. AUTHORITY

4.1 As per the Cafcass Financial Memorandum the current authority for any special payment or losses transactions sits with the Accounting Officer (Chief Executive) only.

5. SPECIAL PAYMENTS AUTHORITY5.1 The Accounting Officer has the personal authority to

authorise special payment up to £10,000 for each case within a total limit of £100,000 in any financial year. Special Payment requests with a value of £10,000 or more are subject to DfE approval (see Appendix B of the Financial Memorandum). DfE, as a government department, acts in authority to strict Treasury rules covering delegations and parliamentary authority.

6. REQUESTING A SPECIAL PAYMENT6.1 If a special payment is deemed necessary the following must be

considered:

Could Cafcass have avoided the action that led to this request?

Does the Area or Department feel bound that this payment should be made?

Have necessary actions been taken to avoid a future request?

6.2 After consideration of the above, a Business Case detailing all the relevant information must be completed and submitted to the Chief Executive via National Office Finance Department for further consideration. The

business case template can be found on the intranet under Finance Department/Finance Manual/Financial Control/Special Payments and Write-offs.

7. WRITE-OFFS AUTHORITY7.1 The Accounting Officer has the personal authority to authorise

write-off transactions up to a value of £5,000 for an individual claim, within a total limit of £50,000 in any one financial year. Write-off requests with a value of £5,000 or more are subject to DfE approval (see Appendix B of the Financial Memorandum).

8. PROCEDURE FOR REQUESTING A WRITE-OFF8.1 Write-Off procedures for Debtors, Salary related overpayment

and Theft & Loss are detailed below:

8.2 DebtorsFailure to recover the debt using the guidelines set out in the Debtors Policy. A request for a debt to be written-off must be submitted via a Business Case (can be found on the intranet under Finance Department/Finance Manual/Financial Control/Special Payments and Write-offs/Business Case) and the recovering supporting documents addressed to the Chief Executive and sent via National Office Finance Department.

8.3 Salary related overpayment

Due to extenuating circumstances and in line with the Salary overpayment Policy an Area or Department may request a write-off for a particular salary related overpayment

8.4 All salary related write-off requests must be presented in a Business Case (can be found on the intranet under Finance Department/Finance Manual/Financial Control/Special Payments and Write-offs/Business Case) detailing how the overpayment occurred and why there is a need for a write-off and addressed to the Chief Executive and sent via National Office Finance Department.

8.5 Theft or Loss (applies to all)To write-off stolen or loss items including fixed assets, form SP06 – Accident & Incident Report (which can be found on the intranet under Health & Safety Procedures) must be completed prior to the write-off request. A copy of this form should be attached to the Business Case request and submitted to the Chief Executive via National Office Finance Department.

9. CODING OF SPECIAL PAYMENTS

9.1 In general special payments and write-offs will be coded to the cost centre responsible for creating the liability, natural account coding will be determined by National Office Finance.

10. The Request10.1 The member of CMT must submit all Business Cases and it

should include all relevant information required for the Chief Executive to make a decision. Decisions will be notified within 5 working days of receipt.

For further assistance on Special Payments and Losses please contact Finance on 0844 353 3357.

Cafcass Finance Created: December 2005Last Updated: September 2009

Business Case Guidance Introduction

This guidance aims to help the user complete the Business Case form appropriately so that the authorisers have all the information they require to make an informed decision. This guidance is broken down in to relevant sections with direction on how to complete each section within the Business Case Form. This document also includes guidance on authorisation requirements, please see section 4.Link to Business Case form/section on the intranetPlease ensure that all relevant sections of the form are completed. Please start by saving the form in an appropriate folder titled: Business Case_‘Reason’_‘Date’Items highlighted in blue in this guide are clickable links to documents on the Cafcass Intranet or the detailed section of the guide. If you have any queries, comments or suggestions regarding this guide, please e-mail the National Office Finance Dept . Contents:

Section 1 – General informationSection 2 – Details

2.1 Local Losses and Write Offs2.2 Fruitless Payments2.3 Constructive Losses2.4 Corporate contingency Bid request

Section 3 – Value for MoneySection 4 – Authorisation

1. Write Offs, Losses and Fruitless payments 2. Corporate Contingency Bids

Section 1 – General information

(a) Details - Please provide your name and job title. This should be the same as the Originator in Section 4.

(b) Please state which Service Area and Cost Centre this Business Case will impact.

(c) Cost – Please give details of costs expected including VAT, ensure to consider all elements such as:

Upfront costs: Start up costs, costs of assets (equipment)/Services or staffing and/or hidden charges.

Ongoing Cost: Are you making any commitments that would have to continue at the end of this work? E.g. Staffing cost i.e. ongoing training &recruitment, maintenance, fees etc.

Section 2 – Details

Please mark an ‘X’ in the correct reason for the Business case and complete the relevant section (by double clicking the document contained within the

form). You will need to save the embedded document by clicking the ‘Save’ button, (this will enable the embedded document to be automatically saved within your Business Case template) do not use ‘Save As’. Please note, you can copy and paste text from other documents into the relevant section of the form, you can also attach other documents within this form as long as it is linked/pasted into the correct section and provides the relevant information sought.2.1 Local Losses and Write Offs Losses or a Write-off is where a transaction has already been incurred and is usually for failure to recover debt, salary overpayment or theft and loss write -offs. For example:

Local losses – Cash losses i.e. Petty Cash (PC) loss or stolen items.

Write-off – Bad debts inc. salary overpayment and fixed assets

All salary related write-off requests must state how the overpayment occurred and why there is a need for a write-off. Please refer to the Salary Overpayment and Recovery policy for further guidance on overpayments. To write-off stolen or loss items i.e. PC losses, fixed assets etc the Accident & Incident Report must be completed prior to the write-off request. This can be found on the intranet under Forms/ Health & Safety Forms or via the below link:Accident and Incident ReportA copy of this form should be attached to this Business Case request when submitted for authorisation. Please refer to the Special Payments and Write Off section on the intranet for more details before completing the Business Case:http://cafcassintranet/Intranet/departments/finance/finance_manual_new/financial_control_new.aspxWhat to do:a) In this section please select the appropriate box that applies for your

request. To determine which category your request falls into please see the guidance above.

b) Reason for the loss/write off – Please detail the circumstances that led to the loss of cash/asset or reason that there is a need for a write off. Please also state:

What is the background? What issue is being addressed?

Include any information that you think would be helpful for the authoriser to know about to enable them to make a decision on the proposal.

c) Action taken to resolve issue– Please detail what has been done so far to resolve the issue in hand?

d) Learning points and action taken to prevent reoccurrence – Please detail the learning points recognised and what action has been taken to ensure that the current issue will not arise again and all risks have been mitigated.

e) Has an Incident & Accident Form been completed and attached? This is only applicable for stolen or loss items (see above).

Please now complete Section 3 and obtain authorisation as per Section 4.2.2 Fruitless Payments There are two types of Fruitless Payments which require a Business Case to be completed; these are Court Orders and Compensation.

Court orders - It is essential for the Service Manager to contact Legal via the duty line immediately, whenever the issue of a costs order against Cafcass is raised. Please refer to the Cost Order guidance before completing the Business Case:

Cost Order Guidance

Compensation – This can fall into two categories:

i. Compensation for Financial Loss - “Financial loss” occurs when a complainant is for any reason out of pocket as a result of Cafcass’ maladministration.

ii. Consolatory Compensation - Where a complainant has not suffered financial loss but has suffered injustice as a result of Cafcass’ maladministration, a consolatory payment may sometimes (though not always) be appropriate. This can be in the form of a non-financial compensation.

Please refer to the Guidance on Compensation available on the intranet before completing the business case.

Compensation Guidance

Please note that a Business Case is not required to be completed if compensation has been requested by the Ombudsman as we have a detailed report from the Ombudsman.

What to do:a) In this section please select the appropriate box that applies for your

request.

b) Reason for the Court Order/Compensation – Please detail the circumstances that led to the Court order or why you feel a compensation payment is required? Please also state:

What is the background? What issue is being addressed?

Include any information that you think would be helpful for the authoriser to know about to enable them to make a decision on the proposal.

c) Has Cafcass Legal been notified of Court cost order? This only applies to Court orders but it is essential that this has been done even if the hearing is months away.

d) Has the Customer Service Team (CST) recommended this payment? This only applies to compensation payments.

e) Action taken to resolve issue– Please detail what has been done so far to try and put things right?

f) Learning points and action taken to prevent reoccurrence – Please detail the learning points recognised and what action has been taken to ensure that the current issue will not arise again and all risks have been mitigated.

Please now complete Section 3 and obtain authorisation as per Section 4.2.3 Constructive Losses Constructive Losses are those losses which have occurred due to the decision taken to abandon a project as it is no longer a viable proposition and will not add value if completed. This is to be used corporately only.What to do:In this section please state: a) Key facts about your proposal –

i. Why are you making a proposal?

ii. What is the reason for the loss?

iii. What is the background?

Include any information that you think would be helpful for the authoriser to know about to enable them to make a decision on the proposal.

b) Action taken to resolve issue– Please detail what has been done so far to try and put things right?

c) Learning points and action taken to prevent reoccurrence – Please detail the learning points recognised and what action has been taken to ensure that the current issue will not arise again and all risks have been mitigated.

Please now complete Section 3 and obtain authorisation as per Section 4.2.4 Corporate contingency Bid request A Business Case is required when making a bid for funds via the corporate contingency so that the proposal can be assessed and an informed decision made by the relevant parties.What to do:a) In this section please select the Operating priority this bid will support.

b) Please provide the timescale expected for the proposal.

c) Key facts about your proposal –

i. What is the background?

ii. What is being proposed?

iii. Why are you making a proposal?

iv. What issue or business need is being addressed?

Include any information that you think would be helpful for the authoriser to know about to enable them to make a decision on the proposal.Please now complete Section 3 and obtain authorisation as per Section 4.Section 3 – Value for Money

This section will help the approvers consider the Value for Money aspect of the proposal and hence will impact whether the business case is approved or declined. Therefore, please ensure all relevant information is provided.(a) Please state whether there is an alternative option, what it is and why it’s

not being considered? I.e. is it due to higher cost/time or business need?

(b) Identify what risk is likely if this business case is not approved? Indicate the seriousness of the risk.

(c) Identify what benefit will be received if this Business Case is approved? State the expected impact on existing ways of working as well as finance and performance measures if applicable, ensure to include:

Intangible Assets – Non measureable benefit

Tangible Assets – Quantifiable/Measureable benefit i.e. cost savings,

(d) Explain how these benefits/improvements will be maintained in the long run? And any resources needed for this.

Section 4 – Authorisation

The Business Case must be completed electronically and sent to the appropriate person to authorise electronically.There are different Authorisation requirements dependent on the nature of the Business Case, please follow the below guidance.Write Offs, Losses and Fruitless payments There are different authority levels dependent on value of the item when approving Write Offs, Losses and Fruitless Payments. Head of Service (HoS) and Core Management Team (CMT) members are also able to authorise these if they fall within their threshold. The Chief Executive (CE) has an overall limit set of £5k, after which the approval will be subject to Department for Education (DfE) approval.Please refer to the Special payments/Write Off section on the intranet under Finance Department/Finance Manual/Financial Control/Special Payments and Write-offs to ensure all supporting documentation is attached to the Business Case before submission for approval. The Four levels of authority are as follows:

1 : Non – financial compensation worth under £100

2 : Financial payment/WO Up to £500

3 : £500 - £5k

4 : £5k and above

For further assistance please contact Finance on 0844 353 3357.Corporate Contingency Bids The completed Business Case must be submitted by the CMT member as originator and sent to the Director of Finance for approval as Approver 1. This request will then be considered and signed off by the Chief Executive for final approval as Approver 2.

Please note: The final approved Business Case must be sent to National Office Finance for action.

Please complete this form electronically with reference to the 'Business Case Guidance' to ensure all relevant information is provided in order to assess and approve the proposal.Section 1 – General information(d) Details : Proposer (Name & Job title)

(e) Service Area: Cost Centre:

(f) Cost (£) :Date:

Section 2 – DetailsPlease mark ‘X’ in the relevant box and complete the relevant document:2.1 Local Losses and Write offs

2.2 Fruitless Payments (Court Orders and Compensation)

2.3 Constructive Losses

2.4 Corporate Contingency Bids

Section 3 – Value for MoneyPlease complete this section to help us consider the Value for Money element.(a) What is the alternative Option to what is being proposed and why is this

not being considered?

(b) What risk do we face if this Business Case is not approved?

Please rate the risk: HIGH MEDIUMLOW

(c) What benefit will be received if this Business Case is approved?

(d) How will these benefits/improvements be maintained in the long run?

Section 4 – AuthorisationPlease sign and authorise electronically according to the 'Business Case Guidance'.

Originator Name  

Approver 1 Name  

Position   Position  

Date   Date                   Approver 2 Name  

Approver 3 Name  

Position   Position   

Date   Date  

Approver 4 – Only for Write Offs, Losses and Fruitless payments over £5kName Position Date

Costs orders: what to do about them Costs orders in children proceedings are relatively rare. It is essential for the service manager to contact Legal via the duty line immediately, whenever the issue of a costs order against Cafcass is raised. Steps to take to avoid parties asking for costs If we are unable to comply with a filing date – o Inform the court and parties well before the deadline. o Offer an alternative date to file the report, and invite the court to revise the timetable. Always inform the court and parties well in advance if the FCA is going to be unable to attend a hearing.

Warning signs can include the following - A judge says the court is considering making a costs order against Cafcass A party or solicitor warns that they are going to apply for a costs order You receive a court order telling us to “show cause” why we shouldn’t pay costs: these need urgent action and should be sent to us straight away. Sometimes the terms "wasted costs" or “costs thrown away” are used.

Court powers Costs orders against us are made under the court's discretion “to make such order as to costs as it thinks just”. It is very important to remind the court and lawyers that Cafcass is NOT a party to court proceedings, even if there is a guardian who is represented. The distinction is really important, because special rules apply if the court is considering making a costs order against a non party. Cafcass must be added as a party to the proceedings for the purposes of costs only and must be given a reasonable opportunity to attend a hearing at which the court will consider the matter further.

What to do If an application is made while the FCA or SM is at court, they need to ask for Cafcass to be joined, limited to costs. Try to get at least 14 days to take legal advice. A few days isn't enough. If the application is being made in the middle of a case, ask for the costs issue to be put over to the final hearing, or at least to another hearing in the proceedings. It is better to have it dealt with at the final hearing because by then the situation should be clearer and the trial judge would be able to put the actions or inactions of Cafcass in context. Notify Cafcass Legal straight away even if the hearing is months away. This is essential Provide Legal with the information set out in the checklist below: we can only advise you when we know the specific circumstances.

Common reasons for costs orders The usual reason for costs orders is the court considering that the FCA failed to do their job professionally and caused the parties to incur extra legal costs, for example: The FCA failed to turn up to a hearing at which they are supposed to give evidence Failure to provide a report for a hearing A report which does not address the issues it was directed to deal with There had to be more hearings than there would have been if everything was done right and on time.

What if a costs order has already been made? If the order was made without going through the proper procedure we may wish to appeal against it, and there are strict time limits so please make sure the order is sent to us immediately.

Checklist of information needed by Legal The names and addresses of

o the court, o the parties o any solicitors and the phone/fax details of the solicitors.

If time allows, a brief written summary of the reasons costs are being sought/have been ordered.

Any court order about the possibility of Cafcass paying costs.

All relevant court orders (e.g. order(s) requesting report(s), orders adjourning hearings because FCA failed to attend or report not ready).

Any other of the court documents which relate to the issue about costs.

An attendance note of what happened at any relevant hearing.

Correspondence from solicitors/parties either raising the issue of costs, or about any criticisms of Cafcass which are relevant to the reason a costs order is being sought.

Any correspondence Cafcass has sent to the court or parties about the relevant issue/alleged failings.

Details of anything Cafcass has done to try to avoid legal costs being incurred by the parties (e.g. if the report wasn’t ready by the hearing, did we write to the court and/or parties suggesting that the hearing was adjourned?)

If costs are being sought because of criticism of the analysis in any report, copies of all Cafcass reports in the case.

Guidance on Compensation for Complaints

1. Introduction

1.1 This guidance applies when, following a complaint, there is reason to believe that Cafcass has behaved in a way which amounts to maladministration.

1.2 Maladministration occurs when we fail to provide a proper service, e.g. causing unnecessary delays, making mistakes or causing wasted hearings. When this happens, the Customer Service Team (CST) should identify whether it is possible to put things right by – apologising; offering an explanation; offering compensation; and/or taking other action appropriate in the circumstances of the case.

1.3 While most cases will be put right with an apology, an explanation of what happened and, where appropriate, a summary of steps taken to prevent the problem occurring again, sometimes an offer of financial compensation is also appropriate. This guidance considers when it is appropriate to exercise the discretion to offer payment following assessment of a complaint, and if so how the payment should be calculated.

2. Deciding whether to offer compensation

4.1 A decision to offer financial compensation may be made even if the complainant does not request it, if compensation is assessed by the CST as appearing to be necessary to put things right.

4.2 If, following a recommendation by the CST the Head of Service (HoS) believes that compensation should be offered, the HoS forwards a business case to the Chief Executive (CEO). If the CEO approves the payment, the CST makes the offer of compensation to the complainant.

3. COMPENSATION FOR FINANCIAL LOSS

3.1 “Financial loss” occurs when a complainant is for any reason out of pocket as a result of Cafcass’ maladministration. The CST should always seek advice from Cafcass Legal before recommending to a Head of Service that financial loss compensation should be paid.

3.2 Cafcass’ aim is, wherever possible, to place a complainant in the position that s/he would have been in if the maladministration had not occurred. So compensation for actual, financial loss should be offered if the complainant is financially worse off as a result of maladministration, and the payment is necessary to reimburse the complainant for that loss.

4. CONSOLATORY COMPENSATION

4.3 Where a complainant has not suffered financial loss but has suffered injustice as a result of Cafcass’ maladministration, a consolatory payment may sometimes (though not always) be appropriate. The CST may wish to seek advice from Cafcass Legal in such situations, but is not required to do so. The guidance below should be used.

4.4 A decision on whether to make a consolatory payment should have regard to – the impact that the maladministration had on the complainant; the length of time Cafcass took to resolve the complaint; and the time and trouble the complainant had to take, to get it resolved.

4.5 Consolatory payments will usually range between £25 and £300, although higher payments may be appropriate, depending on the circumstances of the case.

4.6 The figures in the examples below are taken from recommendations by the Ombudsman with other examples by way of contrast, and can be used as a rough guideline when making a decision on how much should be offered.

An Introduction to Accounting Accruals

More detail on the issues covered in this document can be found in ‘Monthly Returns – A Guide for Budget Managers and Administrators’ on the Intranet under Finance/Financial Management/Month-End

What do we mean by “accruals” accounting?

Accruals accounting is a system whereby the goods and services are accounted for in the period they are used, rather than the period the invoice is paid.

Accruals accounting is referred to as the matching principle. Expenditure is “matched” with resource usage.

The term “Accruals accounting”, relates both to accruals and prepayments. Prepayments are, in effect, negative accruals. Any reference to accruals in this paper includes prepayments.

Accruals accounting is also referred to as “Resource Accounting” and “Commitment Accounting”.

The accruals are the accounting entries (debits) to reflect goods and services which have been used in the period to date, but for which no cash expenditure has been incurred. Accruals “add in” missing expenditure.

Prepayments are the accounting entries (credits) to reflect goods and services that have been paid for in the period, but the benefit will not be received until future periods. Prepayments “remove” expenditure.

Which areas of expenditure should be covered by accruals?

Ideally we should make adjustments for all areas of expenditure, however, the key is to focus on areas of significant expenditure, i.e., those that if ignored would result in a misleading view of actual expenditure.

The 80/20 rule (supported by yearend accruals data) tells us that a small number of budget areas (20% say) will represent the majority (80% say) of the missing expenditure. Our attention and effort should therefore be concentrated on the key areas where accruals will have the largest impact on expenditure.

For Operational areas/local teams the four key areas are:

Flexible staffing i.e., SEC, bank staff, overtime and temporary staff Accommodation costs i.e., rent, rates and service charge T&S Partnerships

The above covers the minimum Service Areas should be considering. Service Areas are of course free (and encouraged) to expand the scope of the accruals exercise to include further categories of expenditure, where they feel they can achieve this.

Unlike year-end, there is no de-minimis limit i.e. no lower limit on: the value of monthly accruals although as above the focus should be on “significant items”.

If these items are accrued, the monthly reports will provide a more accurate view of the service area’s and organisational resource usage. This will lead to a position where both the monthly reports and the year-end Accounts, provide a “true and fair view” of Cafcass activity.

The accruals made in any month are cumulative accruals and should cover any goods and services used in period one (April) to the current month, for which no payment has been made.

How do we arrive at the accruals?

Ideally we should be able to generate automated accruals from EBIS using information on outstanding PO and GRN’s and this process is used by a limited number of budget holders where appropriate..

We are not in a position to do this across all budgets however, as PO coverage is insufficient for this approach to provide comprehensively robust results.

Given the issues above, a manual review needs to be undertaken informed by the system information available and local knowledge.

The accruals will be loaded on to the system on a reversing journal. Full final (2nd cut) monthly reports will be issued around the 6h working day of the month. These are the reports that will be used to report Cafcass position both internally and externally.

Monthly accruals and year end accruals follow the same principles. Year end accruals form part of Cafcass's annual accounts and are the subject of external audit scrutiny. As such all year end accruals must be fully supported by comprehensive supporting documentation. Internal and external audit will be interested in monthly accruals, but they do not require the same level of certainty and supporting documentation. Monthly accruals require a clear rationale and supporting documentation however this is more likely to be based on estimates, assumptions and workings, than actual invoices/claims.

NO FinanceWritten: 1st June 2006Updated by: Julie BrownUpdated on: July 2012

Budget Management for Non Financial ManagersIntroductionThe aim of this guidance is to promote a consistent and effective approach to financial management across CAFCASS. This guidance aims to:

• Show you the financial context in which Cafcass operates

• Explain the delegation process

• Outline the budget process/financial cycle

• Make you aware of the issues to consider when preparing and reviewing budgets

• Explain the approach, key principals and need for on-going budget monitoring

• Help you to understand what to consider when interpreting budgetary information

• Help you to appreciate what effective budget management achieves

You can work your way through the guidance or click on each section below to be taken to it.Contents:

1. Overview

2. Delegation of Cafcass Budget

3. The Budget Process/Financial Cycle

4. Budgetary Information

5. Budget Monitoring

6. Interpreting Budgetary Information

7. Financial Accountability

8. Conclusion

9. Further Information

Overview Overall financial context in which Cafcass operates

As a Budget Holder you will be primarily concerned with your own budget. However, it is useful to know the "big picture" when managing and monitoring your budget.

Each of the headings below will tell you more:

H.M Treasury H.M Treasury controls the Government’s overall purse strings and is concerned with macroeconomic planning and strategic direction of funds.

Government Assembly budgets are set each year allocating resources to spending priorities. It is monitored through a process known as the Spending Review. Department of Education (DfE) Cafcass is an executive non-departmental public body, accountable to the Secretary of State in the Department for Education (The Department). The Department sets out the financial framework within which Cafcass is required to operate. Every year DfE will send the annual budgetary provision allocated in the light of competing priorities across the Department. Transfer to Ministry of Justice (MoJ) The Government has also signalled that sponsorship of Cafcass is to be transferred from the Department of Education to the Ministry of Justice by the end of this spending review period (which ends in March 2015). Planning is currently underway with both Departments to facilitate a smooth transfer of sponsorship.

Delegation of Cafcass Budget How does Cafcass delegate the budget?

CAFCASS’s budget is delegated from DfE to the Chief Executive as Accounting Officer. It is then delegated to the Service and Corporate Directors and further to Head of Service (HoS)/Dept. by issuing a delegation letter. The HoS has ultimate responsibility for the Service Area budgetBudgets are delegated to managers accompanied by a statement setting out how much budget has been delegated and their responsibilities for its management. In particular, this includes being clear about how much of the budget has been spent and what commitments are planned over the remainder of the year. This is captured in regular budget monitoring returns which we will come to later.Only those staff authorised to incur expenditure on behalf of Cafcass (via a delegated budget) should be set up as Authoriser’s in EBIS so that they can approve expenditure they are committing to on behalf of CAFCASS. Authorisation to spend letters can also give people the authorisation to approve expenditure that is detailed in the letter, such as authorisation to

approve expenditure on I-Trent. However, HoS has ultimate responsibility for the budget.Here is the delegation chart:

Click this link for more information on Financial Delegation:http://cafcassintranet/Intranet/departments/finance/finance_manual_new/financial_control_new.aspxBudgetary responsibility of the Line/Office Manager (OM)Generally HoS has overall budget responsibility for staffing costs, whilst OM has budget responsibility for running costs. However, Service Managers (SMs) and other line managers have responsibility for costs such as Bank, Overtime, Sessional hours etc which they approve via I-Trent.It is important that practitioners and Service Managers work closely with the Office Manager to provide them with the relevant information so that they can raise purchase orders and approve costs for which they are responsible for.

If budget holders (HoS and OM) are not aware of decisions SMs make which have a financial impact then they cannot manage their budgets effectively.

The below terms explains more about OM responsibilities.Purchase Orders (PO)It is the Office Managers responsibility to ensure that purchase orders are raised before the receipt of an invoice/before the cost is incurred, for all running costs they hold budget responsibility for. If the PO is raised before the order is placed then the PO number can be provided to the supplier which will mean that the PO number will appear on the invoice once received.Purchase orders are used to confirm approval; indicate types, quantities, and agreed prices for products/services. The Office Manager’s must arrange for purchase orders to be raised before an expense is committed or soon after (but before the receipt of an invoice) for all costs that they manage as this shows that they have control of their budgets (by approving the costs before it is incurred) and this is also a finance performance indicator used in the annual accounts and is reported on a monthly basis.

Petty Cash (PC)The Petty Cash is also the responsibility of the OM; therefore staffs need to ask for authorisation to use the PC and not assume its okay to do so without receiving authorisation from the OM. There is guidance available on the intranet on the use of PC i.e. what PC can be used for. Please see link below:Link to the Finance Intranet page - Finance Management section where the PC policy can be found

The Budget Process/Financial Cycle What is a budget? A budget is a plan expressed in monetary terms. Traditionally, it is prepared for a 12 month period, the financial year being from April to March. It helps the organisation to make more effective use of the money available, to provide more and/or better services for the children we work with. However, this can only be achieved if it is managed effectively.

The Head of Service/Department is the prime source of information when preparing budgets.

The budget setting exercise is an opportunity to review service provision and identify future efficiency savings. However, the efficiency process should be ongoing throughout the year with efficiency savings being highlighted as they are identified, as part of the budget monitoring exercise.

Financial CycleThe financial cycle is a series of stages which link together. See each bullet point below for the various stages in the financial cycle:

Budget Preparation Exercise

The budget preparation exercise is part of an on-going process. Technically budgeting follows priority-based budgeting principles.

Prior to the start of each financial year (which runs from 1st April to 31st March), the budget for the current year is reviewed and amended as appropriate to produce a anticipated budget for the coming year taking into account future factors. This is done via meetings between finance and budget holders, a safe minimum/adequate budget is agreed following a formal discussion each year about future needs of the service in question, taking into account workload points, commitments, demand, risks etc.

Budget Estimates -

The budget is based on estimating the future needs and level of service required as well as incorporating issues identified and agreed from the business plans, thus ensuring change is budgeted for. This does not necessarily mean an injection of new money but could mean the reassignment of existing resource or even a possibility of a reduction in budget.

Estimate Assumptions

The estimate for the coming year, which is approved by CMT, will be based on various assumptions. Some will be of a general financial nature requiring input from the Finance Department eg: Inflation, salary increment assumptions etc. Others will be of a more service specific nature requiring input from Service Managers eg: Staff Numbers/workload/Demand. Thus, the budget setting process should be considered a corporate exercise.

Budget Monitoring Once the Budgets are set, these will be monitored against the expenditure on a monthly basis. The Accounting Officer obtains assurance that arrangements agreed when setting the budget are working properly through the Expenditure Control Group, the Budget Approval Panel, and Star Chamber sessions directly with Budget Holders, as well as routine monitoring by managers and finance staff working together.

Monitoring of Budgets is dealt with in more detail in the next section.

Final Accounts

The annual cycle ends with the reporting of the actual performance (management accounts outturn) for the year, and the reporting, publication and audit of the final accounts of Cafcass. The final Annual Report and Accounts of Cafcass will be presented to Houses of Parliament via the DfE.

The final accounts process should be a seamless continuation from the production of the budget.

Budgetary information Issues to consider when Preparing and Reviewing Budgets

When preparing and reviewing budgets there are many different issues one must consider.

The largest proportion of Service Area budgets will be for staffing costs.

The main issues to consider overall when preparing a budget are summarised below:

Efficiencies - We need to consider what service efficiencies are planned?

o Existing staff productivity/case management o Existing asset obligations/rationalisationo Improvements in technology and changes in its usage i.e.

ECF/wireless devices.

Staffing

o Have there been or are there likely to be any staffing changes? This could include redundancies, retirements, maternity leave, sickness and changes in hours, ongoing recruitment, vacancies etc.

o What is the productivity of existing staff? o Are there going to be/or have been any redeployment costs? (due to

change in area structure) i.e. increase in Travel costs

Assets

What assets are you responsible for and is there any health and safety or other unavoidable commitments which cannot be met from National budgets?

One off costs

Is there any significant one off costs coming up?

Changes

o Are there any legislative, demographic or social changes that could impact on the caseload/budget?

o Are there any changes planned for the Service Area in terms of restructuring/relocation and its impact?

o Are there any planned changes in the way we work as an organisation? Will this have an impact? I.e. changes in approach to work due to change in culture or technology.

Key information for a Staffing Budget

In order to set a staffing budget, a Budget Holder requires:

1. Details of the approved established posts and the actual situation including review of all posts including vacancies.

2. The salary grade and salary point for each post and details of increments due in the year for example, ‘Golden Hello’ or enhancements.

3. If the department/area is due to be restructured, approved restructuring plans must be incorporated in the budget. Information required will include the date the restructuring comes into effect, details of new and reviewed posts.

4. Details of pay awards.

5. Any additional known allowances i.e. Home working. It is not usual to include overtime in the budget except in exceptional circumstances where there is planned overtime for specific duties.

6. Details of long term sickness or maternity leave and details of temporary staff providing cover if required.

7. Details of any flexible workforce budget, such as Bank, Sessional, Agency and SEC.

Budget Monitoring PurposeBudgetary control in the broader sense is more than the scrutiny of historic expenditure and income. It is a continuous management process reviewing:

management information which compares estimated performance against actual achievement in delivering the services.

the assumptions regarding cost, thereby facilitating corrective action to be taken as required (amendments to budget or updates of forecast).

The regular review of the budget against actual committed spend, is obviously an integral part of this process.

Approach

The budgetary control process is a partnership between the Area/Departments (who are responsible for controlling and monitoring service budgets and the performance assumptions underpinning them) and Finance, who provide technical assistance in compiling budgets, interpreting information, providing financial performance data and assisting managers in solving finance related business problems as they occur throughout the year.

The ultimate responsibility for managing and monitoring financial performance is the Budget Holders.

Key PrinciplesManagers need to establish a budgetary framework which takes account of the following principles:

I. Robust In-Year Reporting Requirements Directors/Heads of Service must establish reporting procedures which identify high risk areas and concisely produce the key information upon which they need to focus. They should ensure the officers responsible for budget monitoring are appropriately trained and that there is continuity if long term absences occur.

II. Consistent Application and Prioritisation

The monitoring process should be a continuous process throughout the year. Local processes and procedures should be reviewed at least annually or after major restructuring to ensure they are still relevant. Budget monitoring is part of good corporate governance and as such must be allocated the time it demands.

III. Clear Definition of Responsibility Directors/Heads of Service have overall responsibility for their budgets. Head of Service will assign relevant responsibility for area budgets to Office Managers and Service Managers.

National departments may appoint a dedicated budget manager.

In both cases, it is important that the person who is the nominated budget manager understands that he/she is directly accountable for that budget and all the budgetary control issues.

IV. Learning and Development Budget managers should have a thorough knowledge and understanding of the principles and assumptions regarding resources underlying the budgets for which they have responsibility. They also need to understand IT and other systems and procedures that are in place to assist with the monitoring process. It is the Directors/Heads of Service responsibility to ensure the staff(s) tasked with budgetary control are adequately trained.

V. Clear Analytical Reporting

Budget Managers should be capable of focusing on the important issues and follow a principle of exception reporting based around guidelines established by Directors/Heads of Service.

VI. Empowerment of Budget Managers

Wherever possible, budget managers, under the overall supervision of senior managers, should be empowered to take appropriate action to avoid potential budget problems. However, empowerment should not take place until senior managers have established satisfactory operational guidelines and are satisfied that budget managers are adequately trained.

VII. Corporate Awareness

The action or inaction of one budget manager can impact on the performance and service delivery of another area or Cafcass as a whole e.g. Budget Managers should be aware of the Bank worker costs for their service area as overspends in one service area may have to be met by reduced spending in other services.

VIII. Service Improvement

Successful budgetary control facilitates the automatic production of some of the information required for service improvement purposes. For example, non-financial data is fed into the Value for Money report which produces unit costs and financial performance indicators (from the financial data held there automatically) as well as other information which is used for evaluating performance.How is the budget monitored?

The Budget is monitored on a monthly basis by analysing reports which are products of the following monthly process:

Accrual – These are monthly adjustments made to capture costs in the correct month. This adjustment is based on estimated cost of goods/service we have received the benefit for but not paid for yet. This information is captured at month end so that the monthly expenditure reported for the month is as accurate as possible leading to a more accurate forecast.

Click here to learn more about the Accruals Principal:

G:\CAFCASS\Shared Data\Finance\MySkills\Finance for Non-Financial Managers\An_Introduction_to_Accruals_Accounting[1].doc

Variance Analysis (VA) - On a monthly basis, after the month end adjustments have been captured, the finance team will make available a report for the Budget Holder and Service Director which compares the current month’s expenditure to the budgeted expenditure and Year to Date (YTD) expenditure v YTD budget. It is the HoS/Dept’s responsibility, working closely with the OM and SM to look at any variances that have occurred, provide an explanation to the finance team and to take any action if required to control the variances.

Forecast – This is an estimate of future financial expenditure. The budgets are set and based on assumptions made at the beginning of the financial year. So by analysing the monthly/YTD variances we can estimate what the level of variation is likely to be between the budget and expenditure by the end of the year. The forecast is updated regularly according to the month end results as it can move depending on the actual events/expenditure.

Why is the budget monitored?

Budget monitoring leads to better decisions by budget holders. This is because month end adjustments lead to more accurate month end information that is analysed.

Understanding the monthly variances leads to a more accurate forecast for the future months and hence the annual outturn expected.

The forecast helps Budget Holders to:

• Maintain expenditure within budget.• Make better decisions about Over/Under spends and can ensure safe

level of service is maintained by using public funds effectively.

The forecast also helps finance teams and Director’s to understand the pressures within all service areas so that budgets can be prioritised accordingly by them to ensure all areas remain at a safe level of funding across the operational area.

The monthly results are also analysed by National Office so that they can report to DfE.

Interpreting budgetary information

AssumptionsBudgets are plans expressed in monetary terms, of how we are going to use the resources to deliver a service. Because they are estimates, assumptions

have been made in their construction about the number of people employed, their pay levels, the cost of their travel, the cost of other services (interpretation etc) and the level of demand expected for our service. If these assumptions are realised, then the actual expenditure position will reflect the budget/estimate set at the start.

Key Questions for a Budget ManagerA Budget Manager must consider the following:Estimated Figures:

1. Do I understand the assumptions behind the figures? 2. Have I identified my high risk areas? E.g. an office with high demand and which

cannot cut its costs easily. 3. Do I know what costs I can directly control and what are agreed annual charges?

E.g. Operating Lease charges.

Actual Figures

1. Do I understand what information I am looking at? When was the information last updated?

2. Do I understand the pattern of expenditure throughout the year? Are contract payments made at the start, the end, or each month? Are any payments missing which appear to produce an under spend, or have any payments been made early which appear to give an over spend?

3. Have any commitments been entered into which have used up the budget but which are not reflected in the actual figures?

Technical TermsWhen dealing with budgetary information you may come across technical terms you are unfamiliar with, some of these are explained below:Virements – These are transfers of budget from one place to another within financial limits. This can be an amount from or to a cost centre or natural account code.Journals – This is a method used by finance staff to make adjustments to the accounts once a cost has been realised. It is used to transfer the expenditure from one place to another. This can be an amount from or to a cost centre or natural account code.Commitments – These are future costs which have not yet been paid but for which there is a commitment to pay at a later date or in other words they are forecasted costs which are committed. This is more relevant for National Office Departments.

Cost Centres (CC) – These are numbers assigned to a team/local office e.g. CC006 is the code for HQ Finance.Natural Account Codes (NAC) - These are numbers assigned to an item of expenditure e.g. 350100 is the code for Travel and Subsistence expenditure.A comprehensive list of CC and NAC’s can be found on the intranet by clicking here.Reading monthly financial reportsPart 2 of this module (on MySkills) will help you gain an understanding of what monthly reports look like and what they are telling us. The Screen cast will

take you through a report and show you how to manipulate the report and what to look out for.In the meantime if you would like to learn more about what the reports look like and what to look out for then you can access the Monthly Returns Guide for Budget Holders and Administrators here.

Information and Communication

Failing to plan is planning to fail!Budget monitoring can be seen as part of our daily life. Everyone holds monetary resource from pocket money to wages to savings or loans. To make effective use of the money, you plan what you are going to do with it.

Failure to plan can lead to problems - blow all the pocket money on sweets and there is nothing left to pay for the cinema!

Remember – Failure to monitor the plan can lead to difficulties.

Communication of issues is vital. If there are any areas of concern, it is imperative that your Finance Team is notified as soon as possible.

Financial Accountability Why follow procedures?Here is a brief insight of why we need to ensure that financial procedures are followed.

Integrity and Efficiency – This is reinforced by internal and external audit and inspection regimes. Included in these are Financial Regulations which are part of the governance regime to ensure income and expenditure are properly accounted for and controlled.

Financial Regulation - Financial regulation in the United Kingdom is divided into three departments:

1. The Bank of England, 2. The Financial Services Authority, and 3. The Treasury.

These three departments regulate various facets of British financial life. The Treasury regulates Local Government. As Cafcass is accountable to the Secretary of State in the Department for Education (the Department) Cafcass must also abide by these regulations.

It is therefore extremely important that any employee who undertakes an activity which affects Cafcass's finances is made aware of the requirements of those regulations and understands them.

Statutory Framework - Local Government can only undertake the functions for which it has the appropriate powers; otherwise it is acting "ultra vires" i.e. beyond the law.

Financial Memorandum – This forms part of the management statement for Cafcass and sets out the relationships between the DfE and Cafcass. It sets out in greater detail certain aspects of the financial framework within which Cafcass is required to operate. It highlights that Cafcass shall prepare accounts for the financial years in accordance with Government Financial Reporting Manual (FReM): The Financial Reporting Manual (FReM) – This is the technical accounting guide that complements guidance on the handling of public funds published separately by the relevant authorities. The Manual is prepared following consultation with the Financial Reporting Advisory Board and is issued by the relevant authorities in England and Wales, Scotland and Northern Ireland.

The Public- They have the right to inspect the financial and other records of Cafcass as we are financed by the public purse!

Requirements of the Financial Memorandum

Some of the main aspects of the Financial Memorandum within which Cafcass must operate include:Budgeting and budgetary control– Ensuring that the correct method and procedures are followed in respect of budget setting, monitoring of the annual budget and other cash procedures. It also outlines the provision of monitoring financial information to The Department and the monthly requirements.Value for Money (VfM) - Ensuring that Cafcass' limited resources are used as effectively as possible.

This is evaluated via comparing unit cost and performance points for each service area to see how efficiently they use their funding. It also helps managers understand where they stand relative to the value for money benchmarks in place at any one time and assists the Chief Executive in determining individual service area budget allocations. Value for money is also achieved via the procurement process.

Risk Management- Identifying the key strategic risks which may prevent Cafcass achieving the objectives outlined in the Corporate Business Plan via a Corporate Risk Register (CRR). The CRR is regularly reviewed by the Board and the Audit and Risk Assurance Committee.

The service area risk register provides a tool which aides the management in identifying the risks that may hinder the delivery of objectives in the service

area business plan. The Head of Service owns the risk register and has the responsibility to identify, evaluate and manage operational risks. They are ideally placed to pick up on those early warning indicators that could identify where problems are developing and this is an important responsibility.

Staffing Conditions – Ensuring that the correct staffing conditions in respect of salary (banding/ scale), pensions, redundancy and compensations are followed.

Capital Expenditure – How to deal with Capital expenditure, in terms of recording and dealing with disposal/acquisition of assets. This is for National Office Finance use only.Others – Dealing with transfer of funds, write-offs, gifts and many more issues. You can access the full Financial Memorandum on the Finance intranet page.

Conclusion Getting the best for our service users.....

Remember we can get the best for our service users by:   Efficient budget management - In other words using money efficiently. This means focusing it on outcomes for service users.

Good financial information – Producing good financial information means good decisions will be made.

Following procurement guidelines – This ensures money is used wisely and that we are obtaining Value for Money.

Effective Risk Management - Managing risks that may otherwise hinder the delivery of service objectives.

Effective communication – See below

Getting the best for our service users via effective communication

HoS hold overall budget responsibility and are aware of over/under spends forecasted. Therefore their authorisation in approving additional costs such as overtime or commissioning Bank, Agency or SEC work/hrs is imperative as these costs have an impact on the forecast and the ability to then recruit to permanent posts. The SM and OM also need to be involved in key decisions as they can provide up to date knowledge of workload pressures and costs involved.

Hence, effective communication between the management team will result in better decisions by HoS as they will be better placed to understand the Service Areas needs and make a decision that will assure a safe level of service is maintained.

Finally.....We work in a highly regulated and closely scrutinised environment. The challenge is to have in place processes that automatically minimise risk and allow us to focus on delivering the services our users require in a way that derives the most value from the available resources.

All Budget Holders are accountable for the budgets they manage and Cafcass is accountable to the DfE.

Remember: its public money- we have to be able to prove we’ve used it well!Your role as a Budget Holder is an essential one in ensuring financial controls are maintained and the finances are kept in order via effective budget management as this leads to better outcomes for our service users.

Hopefully you now have a clear idea of your important role as a Budget Holder and feel confident in taking on this task.

Further Information: Contact Information:

If you have any questions or concerns, please do not hesitate to get in touch with your finance team. They are at hand to help you with your finance queries.

For general queries you can email the Area Finance inbox.

If you need to speak to a finance colleague then you can contact them on the below contact numbers. NO Finance contact details: Christiana Iwalesin 0844 353 3357

Area Finance Manager: Heather Jefferies 0844 353 1764

Estates, Accommodation and NIS Business Support Finance Officer: Natalie Padfield 07854113118Area Business Support Finance Officer's:

A1-A5: Aisha Mahdi 0844 353 3463

A6-A8 & A15 : Mark Everard 0794 412 2069

A9, A10, A12, A13: Marie Barry 0844 353 1763

A11, A14, A16, A17: Anna Sheffield0844 353 2192

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Created : March 2013 by ZS

Natural Account Code / Cost Centre Maintenance Form Procedures Notes

Where can I find the Natural Account Code / Cost Centre Maintenance Form??

The form can be downloaded from the CAFCASS intranet. The form can be found under FORMS/FINANCE FORMS/Natural Account Code-Cost Centre Form.

When do I need to complete a form?

There are two occasions when a “Natural Account Code / Cost Centre Maintenance Form” needs to be completed:

To set up a new Natural Account Code / Cost Centre which is currently not in use

To amend the details of an existing Natural Account Code / Cost Centre

How do I know if a Cost Centre already exists?

Log into Open Accounts Select the GL option From the list open the Maintenance Routines file Select Cost Code Maintenance, this will show you all current Cost Codes,

their Name and their Short Name.

How do I know if a Natural Account Code already exists?

Log into Open Accounts Select the GL option From the list open the Maintenance Routines file Select Expense Code Maintenance, this will show you all current Expense

Codes, their Name and their Short Name.

Who can “Originate” a form?

Anyone can complete a “Natural Account Code / Cost Centre Maintenance Form” within your Team, Office or Service Area. This task may be assigned to certain individuals or posts – please check with the Service Area. You should firstly check with your Area Finance Manager to ensure work on this has not already been done. The originator should sign and date the form.

What do I do once I have completed the form?

Once the originator has completed the form, it should be passed to the Area Finance Manager for monitoring and strategic decision making purposes and then sent to Finance HQ for approval. Finance will contact you to advise you either when the code has been created or an explanation why it has not been created.

How to Complete the Form

Action

Type “N” in the action box if you are creating a new code and “A” if you are amending an existing one.

Natural Account Code

This is filled in by Finance if you are creating a new code, but for amendments to existing codes, you will need to complete this section.

Natural Account Code Name

You need to give the new code a name. The name should not exceed 40 characters including spaces. Type the name in the spaces provided.

Reason for Creation

You need to give a valid reason as to why a code/centre is being created or changed. For new Natural Account Codes you also need to enter a budget head i.e. suggest where this code best fits into the chart of accounts.

Cost Code Centre

In the spaces provided, you need to enter the cost centre you wish to be created. This should be completed by the Area Finance Manager or by Finance HQ. Enter one digit in each box and if, for example, the cost centre you require is a two-digit number i.e. 55, enter it as 055.

Linked to Service Area/Dept

You need to enter which service area/dept the Cost Centre will be linked to. This will be the Service Area e.g. S1, or the Department e.g. Finance, that the cost centre code relates to.

Cost Centre Name

You need to give the new code a name. The name should not exceed 40 characters including spaces. Type the name in the spaces provided.

Short Name

You need to enter a relevant logical short name for example; a possible short name for University of Glamorgan could be Uniglam. The short name must not exceed 16 characters. If this section is left blank, Finance will enter a short name using the first 16 letters of the filename.

Requested by

The person requesting the new account code/cost centre needs to sign and date here.

All other sections will be completed by Finance. Please contact Finance HQ on 0844 353 3350 should you have any queries.

MONTHLY RETURNS A Guide for Budget Holders and Administrators

1. AIM........................................................................................................32. SOME USEFUL ACCOUNTING CONCEPTS.......................................3

a. Cost Allocation.................................................................................3b. Journals............................................................................................4c. Accruals Basis.................................................................................4

3. MONTH-END TIMETABLE...................................................................64. WHAT WE GIVE YOU – “1st Cut”.........................................................6

a. 1st Cut MPS (Example - Appendix 4)...............................................6b. 1st Cut Transaction Report (Example – Appendix 5).....................7c. Outstanding Purchase Order Report (Example Appendix 6).......7d. SEC Reports.....................................................................................8e. PO Compliance and Prompt Payment Reports.............................8f. Payroll Reports.................................................................................8

5. WHAT TO LOOK FOR..........................................................................8a. Things that just look wrong............................................................8b. Significant overspends....................................................................8c. Significant underspends.................................................................9d. General review of transaction listing.............................................9

6. JOURNALS...........................................................................................9a. How to complete a journal...............................................................9b. What to do when the journal has been completed......................10c. What happens after I have emailed the journal...........................10

7. ACCRUALS.........................................................................................11a. How do I know when to raise an accrual?...................................11b. How do I complete the accruals sheet on the return?................12

8. REACCRUALS....................................................................................12a. How do I know what needs to be reaccrued?..............................12b. How do I complete the reaccruals return?...................................12

9. PREPAYMENTS.................................................................................13a. How do I know when to raise a prepayment?..............................13b. How do I complete the prepayment return?................................13

10. SUBMITTING YOUR RETURN........................................................1311. AFTER SUBMISSION......................................................................1312. THE 2ND CUT....................................................................................13

a. What is the 2nd Cut?.......................................................................13b. What should I do with the 2nd Cut?...............................................14

13. THE MONTHLY MONITORING REVIEW........................................14a. Why do I need to prepare a monthly monitoring review?..........14b. How do I prepare the monthly monitoring review?.....................14c. What do I do with the review once it is completed?...................16

14. FURTHER GUIDANCE....................................................................16

Appendices1. List of cost centres2. List of natural account codes (NAC)3. Common NAC errors4. Example 1st cut MPS

5. Example 1st cut transaction reporta. Current monthb. Year to datec. Pivot

6. Journala. Exampleb. Template

7. Example outstanding PO Reporta. PO no GRNb. GRN no Invoice

8. Example Returna. Accrualsb. Reaccrualsc. Prepayments

Document Owner: Director of FinanceLast Updated: February 2011Updated by: Julie Brown

1. AIM

The aim of the monthly report cycle is:o To have results that reflect the activity for that month.o To report performance to senior managers, the Board and the DFE.o To be able to accurately assess performance against budget.o To be able to use the results to make informed decisions about future spending.o To make sure costs are in the right place (through use of journals) and the right period

(through use of accruals and prepayments).

2. SOME USEFUL ACCOUNTING CONCEPTS

a. Cost Allocation Finance uses a number of different ways of organising costs. These enable us to analyse costs by department (i.e. cost centre) or analyse costs by type of expenditure across the organization. The main ways costs are allocated are as follows

Cost Centres (CC) – Each local office and national office department is a cost centre. These are denoted by a 3-digit number followed by a hyphen (-). For example Durham is 062- and KLD is 015-. Local offices are currently grouped into 19 Service Areas. A full list of cost centres has been included in Appendix 1 and can be found on the intranet under Finance. A list is also included within the monthly return excel file under tab ‘CC’.

Natural Account Codes (NAC)/Expense Code – All expenditure is coded to an NAC or expense code on Open Accounts (OA - our accounting software) which link related expenditure together. The NAC is a 6-digit number with a dash on the end. For example the NAC for temp staff is 375000-. A list of NAC’s is in Appendix 2 and can be found on the intranet under finance. A list is also included within the monthly return excel file under tab ‘NAC’.

Expenditure should be coded to the NAC, which describes it best, not where the budget is!

If, after reviewing this list, you are unable to identify a NAC that matches the nature of the cost, please consult your local office Finance staff or member of the Finance team who will be happy to provide advice.

Budget head/Expenditure Types – These are broad categories of expenditure which group like types of expenditure, for example Pay Costs, Accommodation, they will be made up of a defined list of NACs. These are the headings that appear on the MPS report.

An example of how the costs of a train fare and sandwiches might be allocated is given below:

Expense Train Fare SandwichesCost Centre 027- Partnerships 008- Customer ServicesBudget Head/ Expenditure Type Travel and Subsistence Supplies and ServicesNAC/ Expense Type 350100- T&S UK 425000- Catering

Coding invoices to the correct cost centre/NAC helps to:

o Accurately monitor and control spending against budget.o Allows comparisons across teams/areas.o Aid in forecasting annual spendo Act as an indicator when setting next year’s budget.

To help ensure correct coding Finance has developed a list of common coding errors and this is included as Appendix 3. The list is not exhaustive, however, it does cover the major problem areas. A copy can also be found on the Intranet under Finance/Financial Management/Month-End

So we place an order i.e. raise a PO it will be allocated to a cost centre and a NAC. When the invoice is paid it will be charged to this CC/NAC On the basis of this information it will appear within a cost centre’s monthly results included within the expenditure type related to that NAC. b. Journals It is possible that expenses may get coded to the incorrect cost centre or expense code and it is part of the month-end returns process to check whether this has happened.

Journals may also be required where you do not have eBis access to another cost centre but need to split out an invoice between various cost centres. E.g. HR may pay a hotel bill that includes charges for 5 staff members (each from a different Regional cost centre). HR can raise the PO and pay the invoice in full, then afterwards complete a journal to split out the invoice between the various staff member’s cost centres and allocate costs to local budgets

c. Accruals Basis The CAFCASS monthly accounts are prepared on an accruals basis. This means that they should reflect all the costs that relate to the current month not simply the costs for which invoices have been received or been paid. The idea is that the accounts and expenditure should match the activity in the period.

Accruals relate to when we have had the benefit of a good or service but we have not yet been charged for the good or service.

It may be useful to consider the ‘expense life cycle’ as shown below. We start accruing when

the good or service is received and stop accruing when the invoice is entered on the

accounting system, which is when it will appear on the monthly transaction listing.

Therefore we raise accruals to in effect put missing costs into the accounts in the month.

At CAFCASS the term Reaccruals is used to refer to accruals that were outstanding at the last year-end. Conceptually these are no different to other accruals, but they are identified

1 PO Raised2 Good received/Service delivered Accrue3 Invoice received Accrue4 PO GRN’d on eBis Accrue5 Invoice sent to Cafcass Finance Accrue6 Cafcass Finance enter invoice on Open

Accounts (OA) and pay it. It will then appear on the monthly transaction listing (see 4b below).

Example – In April 10 we raise a PO for an external company to provide training in May 107 at cost of £10k. They send the invoice in and it is entered onto the system and paid in June 10.

We should accrue for the cost of the service in May, as this is the month the organisation gains the benefit and the invoice has not yet reached the accounts. Once the invoice is entered on the system and paid in June and it appears on the transaction report there is no need to accrue further.

separately to give them increased visibility so they can be easily monitored to check they are being released and test the accuracy of the year-end accruals.

Prepayments relate to when the invoice has been entered on the system and paid but we have not yet had the whole benefit of the good or service.

Therefore prepayments would be raised at the following points in the ‘expense life cycle’. We start prepaying when the invoice is entered and appears on the monthly transaction listing and stop when the good/service is received.

Sometimes a good or service is supplied over a period longer than a month. In these cases the prepayment should be adjusted each month for the proportionate amount of the service that has not yet been received.

Therefore we raise prepayments to take costs out of the accounts in the month for goods and services which have been paid for but we have not had the benefit of.

Accruals and prepayments are always reversed at the start of each new month so we should always consider the cumulative accruals and prepayment adjustment required.

3. MONTH-END TIMETABLE Task Responsibility

(Finance or Cost Centres

Deadline - Working Day (WD) of Following

Month

1 PO Raised2 Invoice received 3 PO GRN’d on eBis4 Invoice sent to Cafcass Finance5 Cafcass Finance enter invoice on Open

Accounts (OA) and pay it. This will then appear on the monthly transaction listing

Prepay

7 Good received/Service delivered

Example – In April 10 we receive and pay a rates bill for £12k for the year from April 10 to March 11.

We should prepay the element of the invoice for which we haven’t had the benefit. In April we have only had 1/12th of the benefit, so we should prepay £11k (i.e. £12k/12mtns *11mtns). Each month the prepayment should reduce by £1k. In December 10 the prepayment should be £3k (i.e. the remaining unused benefit from Jan 11 – March 11).

Example - In June 10 we raise a PO for £6k for a conference stand for a conference to be held in September 10. The supplier sends an invoice in July 10, which is due for payment in July, and it is entered onto the accounting system and paid.

We should raise a prepayment in July 10 for £6k at the point it appears on the transaction listing. This should continue to be prepaid until September 10 when the conference takes place. In this way the cost of the conference will be ‘matched’ to the benefit of the attendance.

1st cut Monthly Management Reports saved in Finance Folders

Finance 1WD

Outstanding PO Report sent by email Finance 2WDSEC Analysis saved in Finance Folders Finance 2WDPayroll Report saved in Finance Folders Finance 5WDMonthly Returns to be saved in Finance Folders Cost Centres 5WDPerformance Reports (PO, Invoice Rej, Prompt P/ment) sent by email

Finance 5WD

Accruals posted into GL Finance 6WDMonthly Accounts Review Finance 7WD (PM)Adjustments (if required) posted to GL Finance 8WD (PM)2nd cut Monthly Management Reports saved in Finance Folders

Finance 8WD (PM)

Monthly Monitoring Report due back from Cost Centres

Cost Centres 18WD

A full Finance Timetable is included on the Intranet under Finance/Financial Management/Month-End

4. WHAT WE GIVE YOU – “1 st Cut” The 1st Cut is in effect the 1st draft of the results for the month. For the month under review they will include any expenses that have been invoiced and put on the accounting system in the month. All in year accruals will have been reversed, so in effect the 1st Cut shows cash spend less year-end accruals.

These reports will be saved in your finance folder during the 1st working day of the month.

a. 1 st Cut MPS (Example - Appendix 4) An MPS report is a budget statement that shows actual spend in the month and year to date against a list of expense codes and then compares these to the spend budgeted. Other terms that are sometimes used to describe this kind of statement are ‘Income and Expenditure Statement’ or ‘Profit and Loss Account’.

The 1st cut MPS shows for each cost centre.. Comparison of expenses in the month to budget Comparison of the year to date expenditure to the year to date budget Shows ‘Forecast Expenditure’ for the full year – this is a system generated forecast

that shows year to date actual expenditure plus budget for the remainder of the year. It is NOT the forecast as prepared by the Budget Holder in Q1, 2 or 3.

Shows Budget for the full year Compares Forecast expenditure to Budget

All variances are given in £’s and as a %. A negative variance shows expenditure is greater than budget i.e. an overspend. A positive variance to budget shows that less than budget has been spent – an underspend.

In accounts, when we say ‘has been spent’ or ‘over/under spend’ we are referring to whether the expense has been accounted for in a particular month not whether the budget money was physically spent. This is because we prepare accounts on an accruals basis as discussed in section 2c.

The expenditure types are listed in the first column. If the +sign is clicked the expenditure types are ungrouped and you will be able to see the NAC’s expenditure against each expense code.

b. 1 st Cut Transaction Report (Example – Appendix 5) The transaction report is produced directly from the accounting system and shows all the individual transactions for each cost centre – these may be invoices, credit notes, journals, accruals or prepayments,

The Transaction report has three sheets: “Cost Centre_Current_Trans” – list of expenditure posted to the accounts in the

current month. “Cost Centre’_YTD_ Trans” – list of expenditure posted to the accounts in the

financial year so far. “Pivot” – a summary of expenditure in the financial year so far, analysed by month, by

budget category (i.e. expenditure type) and by name (i.e. NAC/expense code).

If you double click on any number within the pivot table it will ‘explode’ out a new sheet giving you details of the individual transactions that make up that expenditure. Please note that all values include VAT.

In the transaction lists the key columns to look at are… “E” - Name (i.e. expense code) “I” - Description “J” - Value

c. Outstanding Purchase Order Report (Example Appendix 6) This report is emailed out on the first working day after month-end (WD1). There are two spreadsheets

“PO’s – No GRN’s” – lists details of purchase orders for which a goods received note has not yet been processed on eBis. See Appendix 6a.

“GRN – No invoice” – lists details of purchase orders for which a goods received note (GRN) has been processed but for which an invoice has not yet been received. See Appendix 6b

The examples in the appendix go through what each column in the reports refers to. Where these reports cover more than one department or cost centre you can easily filter for those that relate to your department cost centre by clicking on the downward arrow in column B and selecting your cost centre number.

These reports are useful to help in deciding what needs to be accrued and this will be discussed in more detail in the accruals section.

Detailed guidance on understanding and using this report can be found on the Finance manual on the Intranet – “Understanding and Using the Outstanding Purchase Order Report”.

d. SEC Reports

This report is issued via email on the 2nd working day of the month by NO Finance. The purpose of this report is to give regions detail of their spend on Self-employed Contractors (SECs). Detailed guidance on understanding and using this report can be found in the Finance manual on the Intranet – “Understanding the SEC Expenditure Report”.

e. PO Compliance and Prompt Payment Reports This report is issued via email on the 5th working day of the month by NO Finance. The purpose of the report is to give service areas and National Office departments information on their compliance with Cafcass compliance targets for raising PO’s in advance of invoices and paying invoices within 30 days of receipt.

f. Payroll Reports This report is saved in the Finance Folders of regions and National Office departments on the 5th working day of the month by NO Finance. The report provides details on all payments to employee through the payroll system in the month. This includes both the main and supplementary payroll includes these payments a breakdown of the cost to Cafcass by splitting the salary paid into it’s constituent parts.

5. WHAT TO LOOK FOR Start by looking at how the actual results of the month, in month and year to date, compare to the budget. Look at the £ and % variances. As a rough guide you should be interested in variances to budget that are greater than 10% of budget.

It is useful to do this with a print of the transaction report for the current month to hand, as this will give you the detail of what makes up each balance.

This first review will give you an indication of where you will need to raise journals, accruals or prepayments and areas it may be useful to make a note of in your commentary. Each of these will be looked at in more detail later.

In particular look at…a. Things that just look wrong

Expenses in a category that you don’t normally useo E.g. Temporary staff when there are none currently working in your

department.o E.g. Fuel and utilities charges in HR cost centreo Check transaction report for expenditure type (can ‘explode’ this from pivot

table) to see detail of what has been paid.o If something has been misposted a journal will need to be raised.

Negative amounts in an expense categoryo Could be reversal of an accrual – does an amount need to be accrued this

month?o Could be receipt of a credit noteo If it’s correct give explanation in commentary

b. Significant overspends Mispostings?

o Check transaction report for detail of expenditure type o Are expenses in right category?o If something has been misposted a journal will need to be raised.

Need to prepay?o Check transaction reporto Do expenses relate to future periods?o If so include in prepayments

Overspend correct, why?o Compare what’s happened in month to what was expected in budgeto E.g. Timing difference – cost is budgeted in a future montho E.g. Unforeseen circumstances – explaino E.g. Use of temps rather than full time staffo Include reason in commentary

c. Significant underspends Mispostings?

o Check transaction report for detail of expenditure type.o Have costs been included in another expenditure category.o If something has been misposted a journal will need to be raised.

Need to accrue?o Should there be a cost in this month, has a ‘benefit’ been received by the

business for which an invoice is not on the transaction report?o E.g. Temp costso If so include in accruals

Underspend correct, why? o Compare what’s happened in month to what was expected in budgeto E.g. Credit received in month.o E.g. Timing difference – cost will appear in a future montho E.g. Unfilled postso Include reason in commentary

d. General review of transaction listing Consider whether expenditure belongs in your cost centre.

o E.g. rates expenses in IT would appear to be a misposting. Consider whether expenditure been posted to the correct expense code does

the description match the expense code account code. o E.g. Description ‘Travel costs’ Name ‘Fuel and Utilities’ would appear to be

a misposting. Raise journals to correct if misposting uncovered.

6. JOURNALS (Example Appendix 7) If you have identified costs that have been incorrectly allocated to your cost centre or to the wrong expense code during your review of the MPS and transaction report, you will need to raise a journal to correct this. An example journal in included in Appendix 6a. This has been annotated to help you in completing your own journals. A template is included in Appendix 6b.

Journals are not only raised at month-end. If you are aware of a misposting during the month, perhaps when authorizing an invoice for payment, you can raise a journal immediately.

Detailed guidance on how to raise journals and a template and example journal can be found on the Intranet – Finance/Financial Management/Month-End

a. How to complete a journal An example of a journal can be found in Appendix 7a. This has been annotated with notes to

aid completion.

Key points to remember when preparing journals are:

o Only enter information in the cells that have been highlighted red in the example in the Appendix

o Enter cost centre codes in the format xxx-o Enter expense codes in the format xxxxxx-o Enter line descriptions that give a meaningful description of the journal. These will

appear on the transaction report so it is useful to put in as much information as you will need to understand why the journal was raised.

o Only the first 40 characters will appear on the transaction list.o Amounts in the debit column will increase expenditure in the cost centre and expense

code.o Amounts in the credit column will decrease expenditure in the cost centre and

expense code.o The journal must balance – the sum of all the items in the debit column must equal

the some of all the amounts in the credit column.

o Don’t leave any blank lines between entrieso Don’t use more than one worksheet per journal.

b. What to do when the journal has been completed 1. Double check that the journal is formatted correctly. The journal voucher is an

electronic form which is imported into Open Accounts. If the journal is not formatted correctly, the form will not load into Open Accounts.

2. Common formatting errors include missing dashes (-) after CC and NAC codes, blank lines between entries, debit and credit columns not balancing, missing Journal Description, more than one worksheet per journal.

3. If the journal is moving costs to another cost centre authorization in the form of email confirmation of acceptance by the relevant budget holders must be included with the journal.

4. All journals should be accompanied by back-up where possible. For example when correcting mispostings you should attach a spreadsheet showing the relevant lines in the transaction report. This is necessary for the audit trail and will also help NO finance provide a double check of the transactions.

5. Journals should be emailed to ‘CAFCASS NO Finance’ by the budget administrator or budget holder; except for GPC journals, which should be sent to the GPC Administrator (Cafcass Finance). Only Journals from Area Finance Manager/Finance BSO’s will be accepted, any journals prepared by any other individual should be sent via the budget administrator or holder.

c. What happens after I have emailed the journal You will receive an email confirmation from Finance that the journal has been posted. If there are any queries, the journal will be sent back along with the queries that require rectification before the journal can be posted.

Finance will review the journal for any major errors; however, it is ultimately the Service Areas responsibility to ensure all entries are correct.

When you receive the second draft of the monthly results, you will be able to see that the journal has been posted, as it will appear on the Transaction Report.

7. ACCRUALS a. How do I know when to raise an accrual?

As discussed in accrual ‘theory’ in section 2c accruals need to be raised when you have had the benefit of the expenditure but an invoice has not yet been processed for the cost.

There are a number of ways that you may become aware that you need to accrue for something. You do not need to accrue for every single cost to the penny that you haven’t yet been expensed for – the idea is just to get a reasonable reflection of your expenditure in the month.

The steps to go through when thinking about what accruals need to be raised are.

1. Focus on large cost items. For Service Areas these are likely to be Flexible staffing i.e., SEC, bank staff, overtime and temporary staff Accommodation costs i.e., rent, rates and service charge Travel and Subsistence PartnershipsFor National Office the large cost items will be more varied but the following are likely to impact on a number of the departments and should be considered: Temporary Staff Costs Travel and Subsistence

External consultancy

2. As discussed in section 5 look at areas where you are underspending to budget or forecast– is a possible reason that you haven’t been charged for some expenses that you have had the benefit of.

3. Think about the main areas of spending in your cost centre. Review the transaction report of these expense areas. Think about whether all the expected costs are included. For example if you are currently employing temp staff are there a full month of costs for that temp on the transaction listing – if not you will need to accrue for the ‘missing’ costs.

4. Look at the outstanding PO reports for your cost centre (see guidance on Intranet ‘Understanding and Using the Outstanding Purchase Order Report’), particularly the one that shows items that have been ‘goods received’ but have not been invoiced. As discussed previously in section 2c, accruals are raised when the good or service has been received but the invoice has not yet been processed. Thus it would be expected that items on this report would need to be accrued.

In theory simply raising accruals for all the items on the ‘GRN – no invoice’ report should

be sufficient to cover all the accruals you need however unfortunately in practice this is not

the case. This is for three main reasons

a. Goods or services are ordered without a PO being raised, therefore a GRN will not be raised on receipt. This is a key reason why it is important that PO’s are always raised for expenditure to help the accuracy of the monthly results.

b. Goods or services are not GRN’d on receipt. It is therefore also useful to review the report ‘PO- no GRN’ to check whether there are any items that have been received that haven’t been GRN’d. If this is the case you should GRN the PO on eBis and also raise an accrual for the expenditure.

c. There are quite a lot of old PO’s on the reports for which goods or invoices will never be received. The report should be reviewed regularly (see PO Guidance?) and PO’s that are old or no longer required should be deleted.

5. Look at the accruals that were raised last month and consider whether they are still required in the current month. They will no longer be required if

a. The invoice for the cost is in the transaction report.b. The order for the good or service has been cancelled (in this case the accrual

should really not have been raised in the first place).c. For whatever reason it is not expected that the cost will be invoiced.

It may also be possible that you now have a better idea of the expected cost and therefore

might need to adjust the amount accrued in the previous month up or down.

b. How do I complete the accruals sheet on the return? An example of an accruals return is included in Appendix 8a. This has been annotated to

explain what should be included in each column and how to present the accruals.

Key points to remember are

You need to include the cumulative amount to be accrued – not just the costs that haven’t been invoiced for the current month but also for previous months where invoices have not yet been processed.

It is useful to leave the accruals history (the entries in the previous months in the year) in the spreadsheet. This will give a record of how the accrual has moved over time and show clearly when accruals were raised and released.

It is useful to use a different line for each month of an expense that needs to be accrued as this will make it easier to see which accruals are no longer required. For example each month of a temps costs that have not yet been invoiced to show on a separate line.

It is useful to add the related PO number to this sheet. You can then check these numbers against the transaction report each month to check whether the invoice has been received.

8. REACCRUALS a. How do I know what needs to be reaccrued?

Reaccruals are accruals that were outstanding at year-end and have not yet been released.

Each month they are ‘reaccrued’ unless they are marked as ‘paid’. You should not add any

new reaccruals to the list but you may need to release (i.e. remove) some that are there

already. Reasons to remove a reaccrual would be:

a. The invoice that relates to the cost has appeared in the transaction listing for the month.

b. An invoice is no longer anticipated to be received for the cost.

If there are still reaccruals after Q1 (June), a full check should be undertaken to ensure that

the invoice has not been received and missed. A full check should then be done every

quarter end. This can be done by looking at the full cumulative transaction listing for invoices

that have gone against your cost centre. If there are other invoices that you would have

expected to have received by this point talk to someone in finance to help you check on the

accounting system as perhaps the invoice has been charged against another cost centre.

b. How do I complete the reaccruals return? An example of a reaccruals return is included in Appendix 8b. The return lists all the

accruals that were in place at the year-end.

Select the month of the return from the drop-down box in the top left hand corner.

If a reaccrual is no longer required type ‘paid’ in column G and then that accrual will no

longer be reaccrued each month.

9. PREPAYMENTS

a. How do I know when to raise a prepayment? Following your review of the MPS report and the transaction listing you may have come across costs that relate to future periods. These might be spotted as:

the costs for one month seem a lot higher than budgeted as it may be that the cost relates to more than one month, for example rent, quarterly utility charges, maintenance charges

you are aware that you have purchased something in advance of its use – for example external training costs, external room bookings, marketing campaigns or conference space

you notice on the transaction listing that the narrative relates to a future time period.These costs need to be prepaid so that the costs are deferred until the benefit of the cost is taken in the business.

b. How do I complete the prepayment return? An example of a prepayment return is included in Appendix 8c. This has been annotated to

explain what should be included in each column and how to present the prepayments.

Key points to remember are:

You need to include the cumulative amount to be prepaid – not just the costs that have been invoiced in advance in the current month but also for previous months where the company has not yet received the benefit.

It is useful to leave the prepayment history (the entries in the previous months in the year) in the spreadsheet. This will give a record of how the prepayment has moved

over time and show clearly when prepayments were raised and released. It should help each month in deciding how much of a prepayment may need to be released.

It is useful to use a different line for each month of an expense that needs to be prepaid as this will make it easier to see which prepayments are no longer required.

10. SUBMITTING YOUR RETURN The return should be saved in your finance folder by the end of working day 5 after the month-end.

Please do not change the name of the file or change the formatting of any of the sheets within the returns as they are all linked up to centrally kept spreadsheets.

11. AFTER SUBMISSION Finance creates journals to post the returns into the accounting system. When the journals have been processed a second version of the monthly results is run – the 2nd cut.

Finance will undertake a brief review of the 2nd Cut and the NO returns and they may contact you at this time to clarify any queries. As review time is limited between receipt of the returns (WD5), their processing (WD6) and the issue of 2nd Cut (WD8), finance only have time to undertake a brief review. They may undertake a more detailed review of some cost centres after WD8 and if any changes arise these will need to be processed in the following month.

12. THE 2 ND CUT a. What is the 2 nd Cut?

The 2nd cut is made up of the following documents 2nd Cut MPS 2nd Cut Transaction ListingThese are the same as 1st cut with the additional postings of the information within your return related to accruals, reaccruals and prepayments and any journals that have been raised to correct mispostings or reallocate expenditure.

2nd Cut is thus the final results for the month.

b. What should I do with the 2 nd Cut? You should review the MPS report and check that the numbers look reasonable and meet your expectations of what they should be following the posting of the return and journals.

One quick way to check that the postings have been put through correctly is to take your spend figure from 1st cut, add on all your accruals and reaccruals, deduct your prepayments, add/deduct any costs that have been journalled in/out of your cost centre and this should give you the total spend in 2nd cut.

£Total Spend per 1st CutExpenditure in month – Total (net)

25,000

Accruals 5,000Reaccruals 12,500Prepayments (3,000)Costs journalled IN to cost centre 1,000Costs journalled OUT of cost centre (1,500)Total Spend per 2nd CutExpenditure in month – Total (net) 39,000

If you think anything has been posted incorrectly or have any queries on your numbers please contact NO finance to discuss.

2nd Cut can then be used to help prepare the monthly commentary.

13. THE MONTHLY MONITORING REVIEW (Example Appendix 9)

a. Why do I need to prepare a monthly monitoring review? This review was introduced following internal audit recommendations. The purpose of the review is to Ensure that the monthly results are reviewed by the budget holder who has

responsibility for the expenditure within the budget.This has a number of benefits: It can act as a check for budget administrators to make sure all monthly reviews have

been undertaken. It helps ensure that both budget holders and administrators are aware of their

expenditure and if necessary can take action regarding over/underspends It gives NO finance early visibility of any significant variances to forecast. It can assist budget holders and administrators with budgets and forecasts by

ensuring familiarity with variances to budget and the reasons for these

b. How do I prepare the monthly monitoring review? The form is designed to be as self-explanatory as possible. It has 5 main sections:

Section 1 – Sign-offThis needs to be signed (or initialed and emailed) by the Budget Holder at a minimum (Budget Administrator sign-off optional but desirable) to confirm that the reports have been received and reviewed in full.

Section 2 – Use/DisseminationThis section should be completed to explain how the information has been used within the Department.

Section 3 – OverviewThis section asks you to complete some details regarding your expected full year position.

- Latest Forecast – you can take this figure from your latest quarterly forecast (Q1, Q2 or Q3). Please note this is NOT the same figure as the ‘Forecast Expenditure’ column in the MPS report.

- Budget – This can be taken from the MPS report – the total of column M.

- Var £ & % - You need to calculate the difference between the budget and the forecast – put a forecast overspend in brackets.

- Outturn – As explained on the form, the outturn is a calculation of what the full year spend would be if spend in the month was the same as the current month for all future months. To calculate this you would take the total from column G of your MPS and then add to this the total of column B multiplied by the number of remaining months in the financial year.For example if in August the monthly spend was £24k and the year to date spend was £140k, then the outturn would be calculated as follows:

£140,000+(£24,000*7 remaining months) = £308,000

i) You are then asked to give reasons if there is a significant (+/-£50k, 10%) variance between the outturn and the latest forecast. Reasons for such a variance might be:

Profiling – e.g.s. - Your departments spend is not even throughout the year therefore this month’s spend is not representative of the monthly spend for the remainder of the year.- There is a one-off cost this month or in a future months which means this months spend is not representative. Please identify the relevant cost.

Over/understated forecast

- The month’s spend is probably representative of future spend, therefore the forecast has been over/understated by approx £xx. If possible identify the cost area that this relates to.

ii) The next question asks if you aware of any significant changes (+/- £50k, 10%) that will affect the full year position that haven’t already been taken into account in the latest forecast. If there are please give details of what they are and how much they are.

Section 4 – ReviewThis section considers the detail of the monthly results.

MPS ReportFirst you need to complete the table from the information in the 2nd Cut MPS report with regard to monthly and year-to-date actual spend compared to budget.

It then asks you to give details of any significant variances (+/-£10k, 5%) to budget relating for the month relating to one cost line – for example Travel and Subsistence. Please give details of what was spent and what the budget was and give a reason for the variance – for example expense claims received relating to a prior period that had not been adequately accrued for or conference expenses that had not been anticipated in the forecast.

It then asks you to do the same for year-to-date significant variances (+/- £20k, 5%) relating to one cost line. This is useful year-to-date figures won’t be so susceptible to timing differences and thus are more likely to indicate actual variances that may not be offset later in the year. It is thus important that the budget holder and NO finance are aware of such variances, and they should be factored into future forecasts if there are considered to be likely to continue.

The next question asks you to give details of any action that is being taken to manage areas of over/underspend. For example this might include limiting items of expenditure for the remainder of the year if in an overspend position, or identifying areas that the overspend could be offset against an underspend. If in an underspend position consideration should be given to whether a portion of the budget should be passed back so that it is fully utilized within the organization.

Transaction ReportThis section seeks to confirm that the transaction report has been reviewed and asks for confirmation that journals, accruals and prepayments have been raised appropriately. If any were not raised prior to the 2nd Cut please give details in this section.

Payroll ReportThis section seeks to confirm that the payroll report has been reviewed and asks for details of any issues found and how they have been dealt with.

SEC Report (Service Areas Only)

This section seeks to confirm that the SEC report has been reviewed and asks for details

of any issues found and how they have been dealt with.

c. What do I do with the review once it is completed?

The completed review should be emailed to xxxxxxxxx@xxxxxxx.xxx.xx in accordance with the deadlines in the Service Area Requests calendar. The review is typically due 18 working days after month-end.

The review should also be saved in your finance folder.

The review should be used to assist with forecasting in future months.

14. FURTHER GUIDANCE If you require further guidance or have any specific queries please contact National Office Finance on 020 7510 7000 or at xxxxxxxxx@xxxxxxx.xxx.xx.

There are also lots of useful documents on the Finance Section of the Intranet.

Also if you have any suggestions for improving this guidance please let us know!

PETTY CASH POLICY

1. Summary

1.1 Petty Cash is used to claim reimbursement for small items of incidental expenditure where it is not practical to make payment by any other means. It must not be used to circumvent the procedures for claiming travel and subsistence expenses nor must it be used to bypass purchase order requisitions, which require prior authorisation.

1.2 Office Managers and Administrators need to ensure that petty cash reconciliation/reimbursement returns are forwarded via Area Finance Team to the Accounts Department on a monthly basis. In order for reimbursements to be made, accurate reconciliation/reimbursement forms must be submitted on a monthly basis. Also from an audit prospective, because the reimbursement has to be equal to spend, then there is a better audit trail linking money issued to money reimbursed to spend. Electronic copies of the forms can be found on the Finance Section of the Intranet.

http://cafcassintranet/Intranet/departments/finance/finance_manual_new.aspx

1.3 Other electronic forms are also available for opening and closing a petty cash account, increases and decreases in a petty cash account, and closing a petty cash account.

2. Principles

2.1 Petty Cash is a small fund retained in the local office for day-to-day expenditure on small miscellaneous purchases or incidental office expenses, where payment by any other means is not economical or practical. Examples of items usually purchased with petty cash are minor office supplies and cleaning products.

2.2 Petty cash advances may be made to staff for occasional travel costs and should be immediately accounted for once the full travel claim has been made and receipts have been provided. Claims for taxi fares may only be met for journeys for which there is no other suitable form of public transport, or where heavy luggage has to be transported to and from the place of departure or arrival, or where saving in official time is important. Petty cash cannot be used for subsistence payments.

2.3 Petty cash should not be used as a means of bypassing payment procedures. The maximum limit for individual petty cash payments is £50. Petty cash must be accounted for in detail and kept secure.

2.4 Entertainment expenses must not be met from petty cash.

2.5 Petty cash records should only be amended by: drawing a single line through the original entry, initialling the deletion and entering the amendment either above or below it. Erasers or correction fluid should never be used.

2.6 The cash box should be checked against the balance shown in the cash book at the end of each month and spot checks should be carried by the Area Finance Manager. The box on the PC2 form indicating that the cash box has indeed been counted should be ticked before sending the form to the Area Finance Manager for review. Any discrepancies found should be investigated and reported immediately to the Accounts Department. Under no circumstances should you attempt to top up any differences/discrepancies to make the physical cash balance agree to the authorised float from your personal funds.

2.7 All Petty Cash Vouchers should be signed by the recipient, authorised by his/her immediate Manager and deposited with the person responsible for administering Petty Cash. At all times, the total of the Petty Cash Vouchers and remaining cash in hand must equal the amount of the original Petty Cash Float.

2.8 Only one person should have delegated responsibility (i.e. Office Manager or Administrator) for processing all Petty Cash Claims. Each person claiming payment from the Administrator or Senior Administrator must complete a ‘Petty Cash Voucher’, which should give reasons for payment and must be attached to any necessary proof of incurring the expense (e.g. receipts, which must be retained locally in the Office)

3. Petty Cash Monthly Returns

3.1 In order for your Petty Cash Float to be topped up each month, monthly reconciliation & reimbursement forms must be completed and authorised by the Office Manager, or the Head of Service in the Office Manager’s absence, and sent via Area Finance Team to the Accounts Department within 10 working days of month-end. All monthly returns received after this time frame will only be processed in the following month. The reconciliations achieve the following objectives:

Collates monthly spend by Natural Accounting Code (NAC) type, facilitating easy and timely coding of expenses onto the accounting system

Refunded cash replenishes float up to agreed level every month, rather than when the cash runs out

In the event of any fraudulent activity, the timely reconciliation enables any concerns to be immediately investigated rather than at the next reconciliation, which could be several months away.

Analysis will indicate to the Finance Manager and Accounts Department whether or not cash balances are adequate, relative to the level of expenses, are adequate. For example, if the month-end cash balances are too high, it needs to be reduced and vice versa. The objective being that cash balances ought to be kept at the minimum level required to meet the needs of the local office.

Undertaking Petty Cash reconciliations each month eliminates the urgency for reconciled returns at year-end as the annual reconciliation becomes the final month, which is helpful for Finance and External Auditors.

3.2 The Petty Cash Forms (found on the Intranet) are to do the following tasks:

Opening a Petty Cash Account (PC1) Petty Cash Reconciliation & Reimbursement of Petty Cash

Expenditure (PC2) Increases in a Petty Cash Account (PC3) Closing a Petty Cash Account (PC4) Reducing a Petty Cash Account (PC5)

Completing these Petty Cash forms are detailed in the Petty Cash Explanatory notes.

3.3 Late Returns

Any late petty cash returns will be chased in the first instance by the Finance Bureau to the Area Finance Team, whom in turn will chase the Office manager.Any return that is outstanding for more than 2 months will be escalated by the Finance Manager / Financial accountant to Head of Service or CMT Director.

Owner: Finance Department

Issued date: July 2012Revise date: November 2012Next revise date: July 2013

Guide to AR1 Form

Procedure Owner: Julie BrownProcedure Deadline/Frequency: When RequiredLast Updated: September 2013Updated by: Heather Jeffries

Introduction

On occasion you will need to raise an Invoice to an individual, or an organisation, as they owe Cafcass an amount of money. To raise an invoice you need to complete an AR1 form.

Process

The AR1 form can be found on the Intranet under the following links: Forms > Finance Forms > AR1 Form.

Once from the intranet, save the file in Excel Close the Intranet and open the Excel AR1 form. In “Section A” enter the details to whom the invoice is to be made out

to and their address. In “Section B” enter any special instructions you may have. This could

include a purchase order number or where to send the invoice to if a different address. Invoices may be rejected by organisations if a purchase order number is not quoted.

In “Section C” select whether the invoice is to be a one off or if it is to be a recurrent invoice. If it is to be recurrent, you will need to enter the date of the 1st and last invoices.

In “Section D” enter the Cost Centre and Natural Account Code of where the invoice is to be coded to and the value of the invoice. If you are unsure of the VAT treatment please refer to the relevant section in the finance manual or contact a member of the NO finance team or CAFCASS FINANCE for advice

In “Section E” enter the value that is to be shown on the invoice and the description that is to appear on the invoice. This needs to describe the reason for the invoice and where necessary give quantities and dates etc.

In “Section F”, the authoriser must date the form and add the address details and contact details as required. The authoriser must be a signatory for the cost centre on the AR1

Once completed, email the AR1 form and all backing documents to CAFCASS Finance with the following statement “I authorise the attached AR1 form and conform that Cafcass is entitled to this income. Please raise an invoice.”

Guide to MR1 Form

Procedure Owner: Julie BrownProcedure Deadline/Frequency: When RequiredLast Updated: September 2013Updated by: Heather Jeffries

Introduction

On occasion you may receive a cheque from a supplier or member of staff. In the case of suppliers, these will normally be to reimburse CAFCASS for an invoice paid in error. Where we received a cheque from a supplier, we should expect to have the invoice/statement that it relates to attached to the cheque.In the case of staff, these will normally be received to reimburse expense on GPC cards or for agency staff to reimburse personal phone calls made on Cafcass mobiles etc. In the case of service users these will normally be received for Subject Access Requests.NB Insurance excess cheques must be passed to the Finance car lease contact in the first instance.

Process

Download MR1 Form from the intranet In the top left box, enter the office name, the address, the date, your

name and your contact number. In the top right box under “Receipts Details/Nature of Receipts” box,

enter the cheque number, sort code, account number and reason i.e. Mobile Phone Reimbursement.

Enter the correct cost centre and natural account code. These can be found in the chart of accounts.

Enter the amount of the cheque in the “Amounts” box, and then copy it to the “Total Amount”, and again into the “Totals line in the same columns. Do not enter a VAT amount.

Print off the completed form and sign it. This must be signed by an signatory for the cost centre quoted on the form.

Photocopy all paperwork including the cheque. Post the Original and backing documents to Cafcass Finance at the

Basingstoke office File all copies in the MR1 folder

Debtors and Recovery Policy

1. Aims of PolicyThe Debtors Policy refers to all debts owed to Cafcass. Cafcass will actively recover debts by making early contact with individuals, suppliers and organisations.

2. Definition of a DebtorA debtor is someone or an organisation that owes Cafcass money.

How to request an invoice to be raised?Once a debt has been identified, an invoice must be raised as soon as possible via an AR1 form. The AR1 must be fully completed, authorised by the budget manager and sent to the Accounts Processing Team for processing.Payment termsThe invoice date and due date are the same, as all invoices are payable immediately upon receipt. Payment should be received within 30 days from the date of the invoice.

3. Debt Recovery ProcedureOutstanding debts will result in prompt and decisive measures being taken.Should no payment be received within 35 days, the following actions must be taken by the Accounts Processing Team:

35 to 40 days First letter of demand 40 to 50 days Second letter of demand 50 to 60 days Final letter of demand 61 to 70 days Accounts Processing Team to refer debt

back to Budget Manager for advice, with the view of chasing directly or pursue via legal action.

71+ days Matter referred to the Area Finance Manager to make a recommendation to pursue via legal action or write-off.

4. Legal ActionWhere efforts to recover the debts have been unsuccessful, the Area Finance Manager may decide to pursue the recovery through legal actions. The Director of Finance will make the ultimate decision upon recommendation from the Area Finance Manager to pursue recovery via legal action.

Where the debts are referred for legal actions, the Accounts Processing Team are required to forward all documentations (invoice, purchase order, letter of demands and phone conversation notes) to the Area Finance Manager.

Any legal and associated costs incurred for debts recovery will be passed on to the appropriate customer. However, where the recovery is unsuccessful, the costs will be transferred to the budget manager.

5. Write-offsDebts should only be written-off after following decisions that it is fruitless to pursue the debt any further. All applications to write-off the debts should be done using the special payment and write-off business case which can be found in the Finance Manual on the intranet then forwarded to the Director of Finance via the Financial Accountant.

The write-off amounts will be charged to the relevant cost centre.

6. Debt MonitoringAt the beginning of each month, a list of current debt outstanding will be placed in the shared drive for Areas and National Office by the Accounts Processing Team.

NO FinanceIssued: November 2012Review due: November 2013

Hotel & Conference booking Policy & Procedures

Owner Finance Issued December 2008

Approved by Julie Brown Version No 3.0

Next review date July 2013 Ref

©2012 CAFCASS

Contents Page No.

1.0 Introduction 3

2.0 Booking Process 3

3.0 Monthly Processing Requirements 4

4.0 Conditions of Use 4

5.0 Disputes and Discrepancies 4

1. Introduction

This document details the arrangements for booking hotels and meeting rooms. The contract procedure in place will save CAFCASS significant time, effort and resource by placing all of its requirements through a specialist service provider at pre-agreed preferential rates.

The contract with Redfern is secured as part of the OGC framework and as such provides a significant saving for Cafcass. To ensure we realise the full cost and efficiency savings that working with Redfern can provide, all your hotel and meeting room requirements are to be placed with Redfern.

1. ALL hotels bookings must be booked through Redfern. Any hotels booked on GPC cards or through invoicing, evidence must be provided that Redfern were unable to provide a hotel for you on the day that you requested.

2. Booking Process

2.1 Bookings can be made via the Redfern website https://www.trips.uk.com/js/SABS/Corporate.html

2.2 A unique reservation number will be provided.

2.3 Any hotel booking above the Cafcass budget policy, as noted below, must be approved by the line manager prior to booking. The line manager approval must be obtained before booking if above the budget limit. The agreed budget limits are:

London £130All other areas £ 90

2.4 Late arrival is automatically guaranteed but no-show fees will be charged.

2.5 Cancellations must be made in accordance with the individual hotel policies. You must contact Redfern if you are unsure of the cancellation policy.

2.6 Where possible please book hotels using the Crown Programme.  These are indicated with a small gold star to indicate participating hotels in the main display and the specific rate in the rates display

2.7 Please be aware that hotels booked outside the Crown Programme, may not include VAT (in London) and breakfast.   Please make sure you read the Hotels policy.

2.8 Hotels booked outside of the Crown Programme may not be refundable.

3. Monthly Processing Requirements

3.1 Redfern will provide one consolidated invoice for the whole of Cafcass. It is the responsibility of the Accounts Payable to process and pay the invoice.

3.2 Any queries in relation to the charges should be raised by the Cost centre directly with Redfern via xxxxxxxxxxxxx@xxxxxxxxxxxxxx.xxx, copying in, the Redfern contract manager.

4. Conditions of Use

4.1 Hotel accommodation cannot be used for personal travel. Hotels will only be provided when staff is travelling on Cafcass business and this requires an overnight stay as part of the business.

4.2 Hotel accommodation must be booked through Redfern. Any hotel accommodation

booked outside of Redfern will be subject to query and staff must provide evidence that Redfern were unable to provide accommodation.

4.3 Staff who continues to use GPC for hotel accommodation without first contacting Redfern, will have their GPC access reviewed.

4.4 If Redfern are unable to provide a hotel within the agreed budget limit, line manager authority must be obtained and provided to Redfern.

4.5 Any expenditure that is incurred during the hotel stay is to be settled at the time of departure from the hotel and claimed as expenses where appropriate. This includes breakfast if this wasn’t included within the original rate booked

5. Disputes and Discrepancies

5.1 Should you have any complaint or should you experience any difficulty with the hotel in question and you are unable to resolve this during your stay - DO NOT CONTINUE TO DEAL WITH THE HOTEL DIRECTLY, but contact Redfern immediately who are available 24 hours a day.

5.2 It is the responsibility of the Area Finance Team and National Office Departments to handle disputes on their cost centre charges and follow up with Redfern directly.

August 2012

VALUE ADDED TAX (VAT) Guidance

1. VAT Registration Details..................................................................................................12. VAT Status....................................................................................................................... 13. Ordering Goods and Services on eBis.............................................................................14. Self-Employed Contractors (SECs)..................................................................................25. Further Information...........................................................................................................2

Document Owner: Director of FinanceLast Updated: July 2012Updated by: Julie Brown

1. VAT Registration Details Cafcass is registered for VAT under registration number 774 1613 27. Quarterly returns are prepared by Cafcass Finance and checked by NO Finance. Quarter-end months are March, June, September and December. VAT returns are due one month after the quarter end date.

2. VAT Status As Cafcass is a Non Departmental Public Body it is unable to reclaim any VAT it is charged by suppliers (unlike Local Authorities and Government Departments). However Cafcass does have to charge VAT when it raises invoices for taxable supplies.

3. Ordering Goods and Services on eBis When ordering goods and services Cafcass staff should ensure that they are quoted a price that is inclusive of VAT. As part of raising a Purchase Order it is necessary to include a VAT code to denote the VAT status of the supply. The eBis tax codes are as follows:

eBis Tax Code

Description Rate Comments

E Exempt 0% Some types of expenditure are exempt from VAT. This includes certain types of education and training and some property transactions (selling, leasing and letting land and buildings). Please also see note on SECs below.

F Reduced Rate

5% (Shown as Electricity & Gas on eBis)Some categories of expenditure are subject to a reduced rate of VAT at 5%. Examples are domestic fuel or power, installation of energy saving materials, children car seat.

N Not VAT Registered

0% Not all businesses are required to be VAT registered. Businesses with an annual turnover exceeding the current VAT threshold (£70,000) must be VAT registered and show a VAT registration number on their invoice.Some self employed individuals such as SECs may not be required to be VAT registered because their turnover is below the VAT threshold. This code should be used when there is no VAT number shown on invoice.

S Standard Rate

20% This is the standard rate of VAT applicable on the majority of VAT registered businesses. The standard rate of VAT will apply in respect of a good or service received from a VAT registered business, which does not fall in any other category. (Examples: Agency Staff, advertisements). A VAT registration number must be shown on the supplier’s invoice.

T Travel & Subsistence

0% This code should only be used when there is no VAT shown on the invoice in respect of T&S. Some examples are when a payment is being made through eBis for interview candidate travel expenses or clients T&S.

Z Zero rated 0% Some types of expenditure are zero-rated, some examples are children’s clothing and footwear, most food and drink (but not catering or takeaway).

4. Self-Employed Contractors (SECs) Based on VAT guidance re Exempt Welfare Services (“EWS”), Cafcass believes that regardless of an individuals VAT status they should not charge VAT on “EWS” provided to Cafcass. Some SECs continue to charge VAT on their invoices. VAT is a self-assessed tax i.e. it is the suppliers responsibility to determine the appropriate VAT treatment on the goods and services they provide and Cafcass cannot therefore refuse to pay the VAT on an properly constituted VAT invoice. A letter was sent to all SECs in 2006 highlighting this issue and requesting that they cease to charge VAT on their invoices. A copy of this letter is included as an Appendix to this document. It is the responsibility of Cafcass staff to raise this issue with any SECs who charge VAT on their invoices. The following provides some further context:

Exempt services Following an EC Directive to exempt the supply of services and goods linked to welfare and social work there were changes to VAT regulations. Schedule 9, group 7 of the VAT Act 1994 exempts welfare services provided by state regulated private welfare institutions or agencies. As SECs are required to be registered with the General Social Care Council, we believe this satisfies HM Revenue and Customs criteria that all SEC case related activities for CAFCASS are state regulated. This being the case, services supplied by SECs to CAFCASS (in the course of their case related work) are exempt from VAT.

As VAT is a self-assessed tax, CAFCASS cannot instruct SECs that they should not or cannot charge VAT, nor can we refuse to pay VAT where a supplier charges us VAT (albeit we believe this in error). Under the VAT regulations it is the supplier i.e. the SECs responsibility to determine the correct VAT liability of their supplies. Any incorrect clarification of supplies should in due course be picked up by HM Revenue & Customs (HMRC) as part of their review of returns etc.

We expect that SECs will no longer be charging VAT on the services they provide to CAFCASS. Where a SEC continues to charge VAT on a properly constituted VAT invoice, CAFCASS is obliged to pay. Where SECs continue to charge VAT, contract managers should be raising this with SECs to understand why VAT continues to be charged and encouraging the SECs to seek advice from HMRC, referring them to the CAFCASS letter and the guidance highlighted in the letter.

VAT Registration, Deregistration The SEC may decide to remain VAT registered or they may decide to deregister, either way we believe they should be classifying the services they supply to CAFCASS as VAT exempt. Similarly their VAT status does not affect their ability to make a claim for a VAT refund in relation to the erroneously charged/paid VAT and this refund can be backdated (i.e. from the date of legislation where applicable). The decision to deregister is a personal decision for the SEC and will be determined by their personal circumstances. We cannot advise SECs about their VAT status, this is something they will need to discuss with HMRC and their accountants.

5. Further Information

HMRC Website - http://www.hmrc.gov.uk/

VAT Helpline - 0845 010 9000

Appendix A – Letter to Self-Employed Contractors 17 March 2006

Government Procurement Card (GPC)

Policy & Procedures

This Policy provides guidance and information for GPC cardholders and the reviewers and authorisers of GPC returns. To ensure the success of the GPC scheme it is essential that GPC cardholders comply with the GPC policy & procedures. All Cafcass staff involved in the GPC scheme must ensure that they are familiar with this policy.

Owner Chris IwalesinFinancial Accountant

Issued June 2012

Approved by Julie BrownDirector of Finance

Version No 6.3

Next review date Sep 2014 Ref Sep 13

©2007 CAFCASS

Contents Page No.

1.0 Introduction 3

2.0 Overview of Process 3

6.0 Obtaining a GPC 4

7.0 Cardholder Best Practice Guide 5

8.0 Conditions of Use for Cardholders 5

9.0 Line Manager Requirements 7

10.0 Operational Area Requirements 8

11.0 GPC Coordinator/Administrator Responsibility 8

12.0 Disputes and Discrepancies 913.0 Lost and Stolen GPC 9

14.0 Cancellation of GPC 9

15.0 Revocation of GPC 10

16.0 Increase to Credit Limit 10

17.0 GPC Queries 11

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Appendix Page No.

1.0 Operational Area Lines of Authorisation 12

2.0 National Office Lines of Authorisation 13

3.0 Key Dates 14

4.0 GPC004: Request for a new GPC 15

5.0 GPC001: Receipt for a GPC 166.0 GPC002: Monthly Transaction Log 17

7.0 GPC003: Operational Areas Monthly Summary 188.0 GPC005: Request to Increase Credit Limit 19

9.0 Lost Receipts Memorandum 20

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6. Introduction

6.1 The Government Procurement Card (GPC) is a branded VISA Purchasing Card designed principally to help the Public Sector meet Efficiency Review Targets. The card enables UK Public Sector organisations, such as Cafcass, to remove or at least minimise many of the routine administration and costs relating to purchase transactions.

6.2 As more Government Departments and Agencies have signed up to the GPC, collectively they have also managed to negotiate substantial discounts from major suppliers. These discounts will be automatically available to all GPC users.

6.3 The GPC allows for greater flexibility in areas of expenditure where a Purchase Order or indeed the use of Petty Cash for certain low value transactions is not appropriate. However the GPC must not be used to circumvent existing procurement rules.

6.4 For Cafcass the GPC will aide in alleviating costs and administration relating to supplier set-ups, raising of purchase orders, GRN of purchase orders, multiple BACS payments etc. Further benefits of GPC programmes are outlined by the Office of Government Commerce (OGC) in the link below:

http://www.ogc.gov.uk/tools_services_government_procurement_card.asp

7. Overview of Process

7.1 Just like an ordinary credit card, National Westminster (our card issuer) debits each card transaction against the cardholder’s individual account. The transactions are then aggregated on to a single statement. On the 28 th of each month National Westminster will send out memo statements directly to all cardholders. An electronic consolidated statement/invoice will also be sent to the GPC Administrator. They will make arrangements for the National Westminster invoice to be paid. The GPC Coordinator will oversee this process by coordinating and managing this scheme.

7.2 The GPC Administrator will send the Area Finance Manager and National Office Line Managers a monthly log of cardholder expenditure for all cardholders under their remit. This will act as an aide for checking cardholder’s submissions and reviewing expenditure.

7.3 GPC002 is completed by cardholder on a monthly basis.

7.4 Completed electronic GPC002 is forwarded by email to Line Manager for authorisation by 10th working day of the month. It is the cardholder’s responsibility to retain all backing documents i.e. original receipts and statement for 7 years for audit purposes. The email forwarded with the return must contain an auto signature with the following statement:

‘I am the preparing officer for this form GPC002 and can confirm I am satisfied that the entries made are correct and reflect appropriate goods and services

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received. Please approve for processing.’ ‘Name of GPC holder/preparing officer’

7.5 The Line Manager must forward the electronic version of the GPC002 to the ‘Area Finance’ mailbox in the Operational areas and to the GPC Administrator for National Office with authorisation message by 15th working day of the month contained within an auto signature:

‘I am the approving manager for this cost and have thoroughly checked this form GPC002 and can confirm I am satisfied that the entries made are correct and reflect appropriate goods and services received.  Please process for payment.’ ‘Name of approving line manager’

7.6 For the Operational area the Area Finance team checks the E-GPC002 particularly about details of transaction and coding of the expenses to make sure everything is correct. E-GPC002 and email authorisation is saved in relevant folder in G drive.

7.7 GPC003 is prepared by Area Finance team according to the GPC002 received and checked by Area Finance team.

7.8 The Area Finance Manager (AFM) conducts final checks and authorises the GPC003 and submits to the GPC Administrator at the end of the month, in PDF format. The AFM should submit an electronic copy using the authorisation  statement:

‘I am the AFM for the Operational Area and confirm that Area Finance have thoroughly checked GPC returns and can confirm I am satisfied that the entries made are correct and reflect appropriate goods and services received.  Please process for payment.’

8. Obtaining a GPC

8.1 The major consideration when deciding who will be given a card is effectiveness in local purchasing. Cards will only be issued to staff with a continuing need to purchase goods and services. They will not be issued to staff that may have occasional use for such a facility.

8.2 A GPC will not be issued to temporary member of staff unless there is an exceptional circumstance. In those such cases the Core Management Team (CMT) member will need to demonstrate that extra controls have been put in place to mitigate the risks.

8.3 The Line Manager must complete and authorise a ‘Request for New GPC’ form (GPC004) electronically, this must then be sent electronically to the CMT member for authorisation before being forwarded to the GPC Coordinator.

8.4 Once approval is confirmed a National Westminster GPC application form will be sent out to the proposed cardholder to complete. This form should then be forwarded back to the GPC Coordinator. The new card will be sent via the GPC Coordinator (for logging) to the relevant Head of Service copying in the Area Finance Manager for information.

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8.5 The proposed cardholder will receive the pin details a few weeks ahead of receiving the card.

8.6 On receipt of the new card, the cardholder must sign it straight away. The cardholder should complete a form (GPC001) acknowledging they have read and agree to abide by the cards conditions of use - they will also receive training when the card is issued to them. The GPC001 form should be emailed to the Area Finance Manager who will then forward this electronically to the GPC Coordinator. A copy of this form should also be retained on the employee personnel file. The cardholder should record the contact telephone number for Nat West in the event of the card being lost or stolen.

9. Cardholder Best Practice Guide

9.1 It is the cardholder’s responsibility to reconcile all purchases against their respective statement. The cardholder must review the statement for accuracy and verify purchases.

9.2 When completing the transaction log (GPC002) you must record each transaction on the National Westminster statement of account on a separate line. All details must be completed, including the expense coding under the heading ‘Natural Account Code’. The transaction log must be completed electronically. The total amount of expenditure on the transaction log must always match the National Westminster statement.

9.3 Cardholder should record on the transaction log details of their expenditure as and when it happens i.e. upon their return to the office.

9.4 No submission is required for a zero return, i.e. if no transactions in the month, no statement will be issued from National Westminster.

9.5 Original receipts should be kept by the cardholder for 7 years. The receipts should be numbered as per the return and kept in an envelope with the cardholder name and month of the statement written on it.

10. Conditions of Use for Cardholders

10.1 The cardholder must not use the GPC for personal expenditure. However if an exceptional circumstance does arise and it is not possible to meet the cost any other way, a cheque for that sum should be made out in favour of ‘Children and Family Court Advisory Support Service’. The cheque and completed MR1 form should be supported with a calculation, and an explanation as to what it relates to, and enclosed with the claim. The overall total of your Transaction Log (GPC002), prior to any adjustments for personal expenses, MUST equal what the National Westminster Cardholder Statement.

10.2 Ensure all expenditure is for legitimate business purposes only and in accordance with GPC guidelines and procedures.

10.3 Ensure that the GPC is used only if it is impractical to use other existing methods of payment, and/or it is more cost effective to do so.

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10.4 Use preferred contracted suppliers wherever possible. Alternative suppliers may be used provided there is good reason to do so e.g. the goods/services can be provided at a lower agreed price.

10.5 Ensure that the prices paid for goods and services are fair and reasonable.

10.6 Ensure that all goods and services are received. It is the cardholder’s responsibility to verify that the goods received are indeed what were ordered.

10.7 Ensure that purchases are within the credit limits agreed.

10.8 Take all reasonable steps to secure and safeguard the GPC as you would your own personal credit card. Ensure that the card is kept in a secure location at all times.

10.9 Ensure that no one else uses the card bearing your name and that you never disclose your pin to another person.

10.10 Hand in their cards for destruction by their Line Manager if they cease to be an employee of Cafcass, or have been transferred to another division where the use of a GPC is no longer required. The Line Manager will then ensure that the GPC Coordinator is notified and the cards will then be cancelled with immediate effect.

10.11 Ensure purchases are not split into multiple purchases when the total purchase price would exceed the credit limit.

10.12 Cardholders must not authorise their own statements or have a subordinate counter-sign them.

10.13 Receipts/supporting documentation must be kept by the cardholder. If receipts are missing, the cardholder is required to provide an electronic signed memo (Appendix 9) to their Line Manager within their monthly return, acknowledging the expense(s) incurred. This memo must be printed and kept with the relevant months receipts.

10.14 Cardholders must be able to produce receipts on demand for audit purposes.

10.15 Under no circumstances can the GPC be used for the following:

Personal Use, unless in exceptional circumstances such costs cannot be avoided. These costs will need to be fully explained in your monthly return, accompanied by a cheque reimbursing Cafcass for these amounts.

Subsistence i.e. the purchase of food when away from the office on Cafcass business. Personal meals purchased whilst on Cafcass business must be paid for by the cardholder’s own means and claimed back through the T&S claim form process. Subsistence may be authorised on an exceptional basis only. Pre-approval must be sought by the Service Director and authorised by the Chief Executive Officer on recommendation by the Director of Finance.

Fuel/Petrol. The cardholder must not use their GPC to purchase fuel including fuel for hire cars. This should be paid for by the cardholder’s own means and claimed under the T&S policy.

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Purchase of IT hardware. The card must not be used for purchasing ITC hardware or software as these are procured centrally through National Office ITC.

Cash Advances.

10.16 Authorised expenditure, subject to the limits defined in the Travel & Subsistence rules, and the conditions set out in this policy, include the following:

UK & foreign travel Car parking Office equipment Membership fees Conference costs Catering for meetings when required for external purposes

Redfern must be used for all trains, flights, hotels and accommodation bookings. The GPC can only be used for train travel in exceptional circumstances and the reasons for this should be properly documented on the returns.

11. Line Manager Requirements

11.1 Training must be provided to the cardholder before the GPC is handed over. Area Finance Manager and National Office Line Managers have been trained to provide this. For further information please contact the GPC Coordinator.

11.2 Line Managers are responsible for ensuring all expenditure incurred is correctly coded, narrative completed and expenditure is legitimate Cafcass expenditure, and is incurred within the cardholder’s authority. The Line Manager should speak directly with the cardholder if there are any queries with the return.

11.3 Whilst verifying cardholder returns Line Managers must do the following:

Verify that the cardholder has complied with all procedures as outlined in this document.

Verify that the cardholder’s statement of account and transaction log is reconciled.

Ensure the Natural Account and Cost Centre Code details on the transaction log are correct.

All other details on the log have been correctly completed and authorised. Ensure that transaction descriptions provide enough detail to ensure an

audit trail. Ensure that for any personal expenditure a copy of the cheque and

completed MR1 form have been sent to the Finance Bureau.

11.4 Line Managers must also compare monthly logs against conventional travel and subsistence claims, to ensure there is no double claiming/payment is occurring.

11.5 For National Office, Line Managers must check the GPC002 returns received from the cardholders; authorise these electronically with the appropriate statement as per section 2.5 and submit to the GPC Administrator by the last working day of the month.

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11.6 For Service Areas, Line Managers must check the GPC002 returns received from the cardholders; authorise these electronically with the appropriate statement as per section 2.5 and submit to the Area Finance by the 15th working day of the month.

11.7 An MR1 form must be sent to Finance Bureau for any cheque received from the cardholder for personal expenses incurred on the GPC. The cheque(s) should be attached to the MR1. The total of the cheques received from the cardholder must equal the ’Total of Cheques’ amount entered on the transaction log (GPC002). The MR1 form should be submitted to Finance Bureau by the last working day of the month. A copy of the MR1 form and the cheque must be held with other receipts for audit purposes. Spot checks will be conducted as part of the Business Assurance Health check at which point requests may be made to see copies of cheques and MR1 forms.

11.8 Operational Area lines of authorisation can be viewed as Appendix 1. National Office lines of authorisation can be viewed as Appendix 2. A list of key dates can be viewed as Appendix 3.

12. Operational Area Requirements

12.1 The Area Finance Manager (AFM) must have in their possession, all GPC submissions from his/her Operational Area, checked and signed by 17th working day of the month.

12.2 The (AFM) must ensure appropriate systems are in place for the monitoring and tracking of GPC returns. They must also ensure that spots checks of returns as per requirements of the Line Manager are performed on a regular basis and logged. Any issues with compliance must be raised immediately with the Line Manager.

12.3 Once all documentation has been reviewed, the (AFM) must then prepare an electronic copy of a fully reconciled cardholder summary (GPC003).

12.4 An electronic copy of the cardholder summary (GPC003) must be submitted to the GPC Administrator by the last working day of the month with the appropriate signature as per section 2.8.

12.5 The GPC Administrator will post the monthly GPC journal for all areas and National Office, on to the Open Account system. The monthly journal must be posted in the same month of spend, for example the March 28th statement must be posted in the March accounts.

13. GPC Coordinator/Administrator Responsibilities

13.1 The GPC Coordinator is responsible for the coordination and management of the system and is supported by the GPC Administrators who deals mainly with the processing of returns and invoices. The split of duties is as follows:

13.2 The GPC Coordinator is responsible for:

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The overall coordination, administration, and management of the GPC scheme.

Coordinate the application process for new cards, and make all necessary arrangements for the delivery of new cards, replacement cards, and making amendments to cardholder details.

Receiving the completed GPC001 forms Ensure that the GPC policy & procedures are updated with regards to any

changes and that all staff involved in the scheme are notified of any changes. Cancellation of cards Dealing with requests to increase the credit limit Fielding Queries

13.3 The GPC Administrator is responsible for:

Authorise payment to National Westminster Bank on receipt of the consolidated statement (usually the 28th of each month). All reasonable steps should be taken to ensure prompt payment of the account in order to avoid finance/late charges when settling the account.

Prepare and send to the Area Finance Manager and National Office Line Managers a monthly log of cardholder expenditure within 3 working days of receipt of the master consolidate statement.

Ensure that the GPC holding account (Natural Account Code 356000) is cleared on a monthly basis.

14. Disputes and Discrepancies

14.1 It is the responsibility of the cardholder to handle disputes and follow up on them promptly. In most cases these can be resolved directly between the cardholder and the vendor.

14.2 If items or services procured with the GPC are found to be defective or in dispute, the cardholder has the responsibility to return the item(s) to the merchant for replacement, or to make arrangements to receive credit on the purchases. If the merchant refuses to replace or correct the faulty item/service, then the purchase will be considered to be in dispute. A disputed item/service must be noted on the cardholder’s statement and monthly log and bought forward to check against the following month’s statement.

14.3 Where National Westminster credits (clears) the sum of previously disputed transactions back to the monthly statement, the cardholder should note in manuscript that this information has been resolved next to the entry. If a refund appears on your monthly statement, it should be entered on your transaction log (as a negative figure) to assist the GPC Administrator reconciliation of the log against the consolidated bill. Should the transaction remain in dispute, please contact the GPC Administrator before taking further action.

15. Lost and stolen GPC

15.1 If your card is lost or stolen, you must immediately telephone National Westminster Lost and Stolen Cards on 0870 6000 459 (24 hours a day, 7 days a week), or call (+44) 1423 700 545, if abroad. Please also inform your Line

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Manager and the GPC Coordinator as soon as possible. A new card will be issued via the GPC Coordinator in a matter of days.

16. Cancellation of GPC

16.1 All requests to cancel a GPC must be emailed to the GPC Coordinator by the cardholder’s Area Finance Manager (for the regions) or by the cardholder’s Line Manger (for National Office) as soon as notification is received that the cardholder is leaving or no longer requires the card due to a change of role. In addition to this the Line Manager must:

Ensure that the GPC is handed in and destroyed. If the cardholder is going to be away for an extended period of leave i.e.

maternity leave, long term sick leave, the Line Manager must notify the GPC Coordinator immediately so that a temporary freeze can be placed on the card. The Line Manager must ensure that the GPC is handed in and kept in a secure place with restricted access i.e. a safe.

Ensure that the cardholder is making regular use of the GPC and as per the policy and procedures have systems in place to identify and report to the GPC Coordinator any GPC’s not used over a period of four consecutive months and therefore require revoking.

17. Revocation of GPC’s

17.1 Misuse of the card can result in revocation, or indeed disciplinary action being taken against the cardholder. The following may result in the GPC being revoked:

Failure to adhere to the conditions outlined in this policy and procedures document; or

The cardholder is charged with a criminal offence or with fraud; or Have otherwise engaged in activities that bring Cafcass into disrepute; or Over a period of six months, failure to submit on three occasions the appropriate

transaction logs to your Line Manger within the agreed timeframe; or Have a change of role or responsibilities, where the use of a GPC is no longer

appropriate or necessary; or Failure to use the card over a period of four consecutive months.

18. Increase to Credit Limit

18.1 The table below outlines the GPC credit limits based on the current levels of usage. The current limits allow for flexibility whilst balancing the risks of the organisation. Limits will only be increased above the standard credit limit where there is evidence of a genuine need.

Job Title Credit LimitOffice Manager

£1000Service ManagerHead of Service Area Finance ManagerService Director

£2000

Corporate Director £3000

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CEO 18.2 A request to increase a credit limit must be raised through the Area Finance

Manager (for the Operational Areas) or the CMT member (for National Office) by an electronic completion of a GPC005 ‘Request to Increase Credit Limit’ (Appendix 8). This form should then be sent electronically to the GPC Coordinator.

18.3 All requests will be reviewed and if the reasons are considered to be valid, authorised by the GPC Coordinator.

19. GPC Queries

19.1 For most queries e.g. replacement cards, changes of address, National Westminster Cardholder Services can be contacted directly by the cardholder (you will need the password you provided on your application). Cardholder Services can be contacted on 0870 909 3702 Monday to Friday 8am to 6pm, and Saturday 9am to 1pm.

19.2 Any other issues or queries in relation to the use of the GPC should initially be raised with your Line Manager. Should any matters still remain unresolved, they should be directed to Operational/National Office for further consideration. Finally, the GPC Coordinator (see contact details below) can be contacted for assistance on issues that cannot be adequately addressed at the operational level.

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GPC Coordinator contact details:

Chris IwalesinCafcass National Office FinanceSanctuary BuildingsGreat Smith StreetLondonSW1P 3BT

Tel: 07500 553 897

GPC Administrator – Jamie Wates

Appendix 1

Operational Area Lines of Authorisation

Appendix 2

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GPC Holder Line Manager

Area Finance Manager

GPC Administrator

OM

Service Manager

Area Finance Manager

Head of Service

Head of Service

Service Director

ServiceDirector

GPC holder (left) must have their returns authorised electronically by their line manager (right) with the appropriate statement contained in the email

The Line Manager checks and electronically authorises all returns, and then sends electronically to their Area Finance by the 15th working day of the month.

Cardholder Summary (GPC003) is prepared & signed by the Finance Manager

The signed Cardholder Summary must be forwarded electronically to the GPC Administrator as per the timetable.

National Office Lines of Authorisation

13

GPC Holder

Service Director

Head of Service

CorporateDirectors

ChiefExecutive

Chairperson

The GPC holder (left), must have their returns authorised electronically by their Line Managers (right) with the appropriate statement contained in the email

Line Manager

Chief Exec

Corporate Director/Chief Exec

Chief Executive

Chairperson

Chief Executive

The Line Manager checks and electronically authorises all returns, with the appropriate statement contained in the email and then sends electronically to the GPC Administrator by the last working day of the month.

GPC Administrator will check all documents are received. Prepare and post the journal for the month.

GPC Administrator

Appendix 3

Key Dates

Date Operational Area Timetable National Office Timetable

28th National Westminster sends central statement to the GPC Administrator and ‘memo statements’ to individual cardholders.

National Westminster sends central statement to the GPC Administrator and ‘memo statements’ to individual cardholders.

2nd Individual cardholder ‘memo statements’ received by cardholders.

Individual cardholder ‘memo statements’ received by cardholders.

2nd GPC Administrator send cardholder expenditure log to Area Finance Managers.

GPC Administrator send transaction breakdown to N.O Line Managers.

10th Working Day

Completed transaction logs (GPC002) to be submitted to Line Manager.

Completed transaction logs (GPC002) to be submitted to Line Manager.

15th Working Day

Line Manager to have checked returns, and sent electronic copies to Area Finance Manager.

Line Manager to have checked all logs submitted to them.

17th Working Day

Area Finance Manager to have in their possession all electronic GPC002 submissions from within their Operational Area

Last Working Day

Area Finance Manager to have prepared the Cardholder Summary (GPC003) and Operational Journal for the month. Electronic copies of the Cardholder Summary GPC003 to be submitted to the GPC Administrator.

Line Manager to have submitted all Electronic copies of GPC002 with the appropriate statement to the GPC Administrator.

5th Working Day of new month

GPC Administrator to have received completed Cardholder Summaries so a journal can be prepared and posted into the general ledger.

Monthly journal to be prepared and posted into the General Ledger by the GPC Administrator

Appendix 4

GPC004 Request for New Government Procurement

Card

CARDHOLDER DETAILSProposed Card Holder Name

Position

Office Address

Cost Centre

Reason for Application

AUTHORISATION DETAILS

Cardholder’s Line Manager (NAME)

Position

Date

N.B: This form must be completed electronically by the proposed cardholders Line Manager and sent via email attachment to the CMT member for authorisation with a copy to the Area Finance Manager before being forwarded to the GPC Administrator.

Appendix 5

GPC001Receipt of CAFCASS Government Procurement Card

CAFCASS CARDHOLDER DETAILS

NAME

JOB TITLE

OFFICE ADDRESS

TELEPHONE

GPC CARD NO

Please mark the box with a ‘X’ to confirm you agree with the below statement

I, the Cardholder, have read and agreed to abide with the CAFCASS Policy regarding Government Procurement Card use, and the Terms and Conditions of the Government Procurement Card. I can also confirm that I have received training for the appropriate use of the card.

DATE

Return this form electronically to your Finance Manager to be forwarded to the GPC Coordinator, and retain a copy on your employee personnel file.

Appendix 6

GPC002 MONTHLY TRANSACTION LOG (PLEASE RETAIN A COPY OF YOUR MONTHLY STATEMENT & RECEIPTS)           Name: Mike Anybody        

Card Number: (NO SPACES) 1122334455667788        Statement Month: Jun 13        Cost Centre: 062- Durham Alport House               

Transaction Transaction DescriptionJournal Description

(Automatically Updated)

Cost Centre

(Journal Format)

Natural Account Code (Journal Format)

Total (Inc. VAT)

1Car parking at court

12/06/13Jun 13-GPC-Mike

Anybody 062- 350100 8.00

2 Desk FanJun 13-GPC-Mike

Anybody 062- 430100 10.00

3Catering for judges

meeting 15/06/13Jun 13-GPC-Mike

Anybody 062- 425000 20.004        5        6        7        8        9        

10        11        12        13        

       Total (Must Equal Statement

Total) 38.00Less: Cheques for Personal Expenditure       

1        2        3        

        Total of Cheques 0.00           

       Grand Total (Statement Total

less Cheques) 38.00           

Cardholder: 

       

Please send completed form via email to your line manager with the following statement contained within the body of the email:

‘I am the preparing officer for this form GPC002 and can confirm I am satisfied that the entries made are correct and reflect appropriate goods and services received. Please approve for processing.’

Name of GPC holder/preparing officer.        

           Line Manager:          

Please check and forward the electronic copy of this form as per section 2.5 of the policy, the email must contain the following auto signature:

‘I am the approving manager for this cost and have thoroughly checked this form GPC002 and can confirm I am satisfied that the entries made are correct and reflect appropriate goods and services received.  Please process for payment.’

           Name of approving line manager.                   

Appendix 7

GPC003 - GPC CARDHOLDER SUMMARY FOR OPERATIONAL AREA ONLY

Statement Month:                          Area:        

            

         

  Cardholder Card Number

Cost Centre

(Journal Format)

Monthly Statement Total (Inc.

VAT)1        2        3        4        5        6        7        8        9        

10        11        12        13        14        15        16        17        18      19      20      

        £0.00

         Less: Cheques for Personal Expenditure      

1        2        3        4        5        

        £0.00                 £0.00         This Summary is to be check by the Area Finance Manager and submitted to the GPC Administrator in PDF format. The AFM should submit an electronic copy using the authorisation statement:    

‘I am the AFM for the Operational Area and confirm that Area Finance have thoroughly checked GPC returns and can confirm I am satisfied that the entries made are correct and

reflect appropriate goods and services received.  Please process for payment.’          Name of Area Finance Manager      

Appendix 8

GPC005Request to Increase Credit Limit on CAFCASS Government Procurement Card

CAFCASS CARDHOLDER DETAILS

CARDHOLDER

CARD NUMBR

POSITION

OFFICE ADDRESS

TELEPHONE

COST CENTRE

PREVIOUS CREDIT LIMIT

REASON FOR INCREASE

AUTHORISATION

PREPARED BY (CARDHOLDERS MANAGER) NAME

POSITION

DATE

N.B This form should be completed by the cardholders Line Manager and sent electronically to the Area Finance Manager (for the Operational Areas) or the CMT Member (for National Office). This form should then be forwarded electronically to the GPC Coordinator.

Appendix 9

MemorandumTo: “Line Manager”

CC:

From: “Cardholder”

Date:

Re: Missing Receipts for “Insert Month & Year” GPC Statement

This note is to confirm that I incurred the following expenditure whilst on legitimate Cafcass business however no receipts are available. I can confirm I have not claimed this expenditure via T&S or any other means. My missing receipts are detailed below: -

No Date Description Acc Code Total £ (Inc VAT)

Reason for missing receipts:

CONFIDENTIAL

N.B Cardholders must complete this form and email it to their line manager with their monthly GPC002 and retain a printed copy with the monthly receipts.

E-bis User Guide 2006

Produced by E-bis Review GroupV1.8 - Updated 1 st August 2006

Section Contents

Intro. How to open eBis and Amend Personal Settings

1. Raising a Requisition (Commitment)

2. Raising a Requisition to Cover Multiple Invoicese.g. Annual or Quarterly / Rent/Rates, Mobiles

etc.

3. A Guide to Blanket Purchase Orders

4. Sending for Authorisation and View All Orders raised

5. Viewing/Printing Authorised Purchase Orders

6. Entering a Goods Received Note (GRN)

7. Cancelling a Purchase Order e.g. No longer required, Duplicate etc.

Authoriser Contents

8. Authorising a Requisition

General Contents

9. Procedure for Invoice matching

10. How to Produce Reports

11. Mail Merge Purchase Orders (PO Printing)

AppendicesAppendix 1. eBis VAT Codes

Intro: Getting Started:

From your desktop Double click on the Live eBis icon

The screen below will open

Enter your Username and Password and then single click on Login

You will now be presented with the following screen. If you want you may now amend your settings Including changing of your password. To enable this, click on My Settings

Using this screen you can enter a New Password and Contact Details then +Save

You are now ready to use the system for transactions and requisitions.Proceed to Step 1 on the next page.

Step 1. Raising a Purchase Order “ Commitment ” for goods or services:

1.1Click once on Requisition Entry

1.2 Click on Add

1.3 Make sure Company is 1-CAFCASS and Cost Centre is your office. Click OKIf you now click on Keep Company/Department for future Adds theneach time you open this screen, these settings will be saved and you will automatically proceed to the next screen as shown below in 1.4

Selecting a Supplier and Goods Description1.4 Complete the form by Tabbing through 1.4.1 Only type in the

boxor clicking in each Box in turn and using when the Lookup

boxthe Lookup button to find the correct entries is greyed out

1.5 When this page is complete click on More to add a product or ServiceGoods Description and Cost Detail

1.6 Entries in Blue/Underlined – Click on the Actual Text and Select Entry from Listing

1.7 Entries in Black text should be entered/typed in manually (Quantity, Unit Price etc.)

1.8 The text you enter in the Description box is printed on the Purchase Order so include suppliers’ catalogue or product numbers here. Also refer to Note on 1.11 below.

1.9 If the order is an annual one change the Due Date to cover the whole year.1.10 Fill in all the boxes then click on click on Save. Add a new line for each

type of product or service.

1.11 When all lines complete click +Save Note. Before saving you can add extra detail by clicking on +Free Text, Type detail and Save this text will also appear under each Product Line on your printed PO.

1.12 For Tax Code guide, see appendix 1 at the end of this guide. This relates to whether VAT is payable on the order towards

Step 2. Raising a Requisition With Multiple Product Group Lines

Follow steps 1.1 to 1.10 as above then follow steps below

2.1 To manually enter a second line, Click on +Add and a second Line will appear below the first, now follow steps 1.5 to 1.11 for each line you enter in this way. Alternatively, if second and subsequent lines are similar, Click on +Copy and previous line details will be carried down which you may edit by clicking on More

When you send the requisition off for authorisation, note the Item Number that will appear as this will help to match up the order when authorised.

Also once it is sent a box appears with the name of the person the requisition has been sent to and the ID number.  This has to be OK'd before the requisition is actually sent and therefore,

gives a chance to change the name of the authoriser at this point if need be.  If the authoriser is correct then click OK to send the requisition.

Unless you require instructions on BLANKET PURCHASE ORDERSNOW PROCEED TO SECTION 4

Step 3. A Guide to Blanket Purchase Orders

3.1 What is a Blanket Purchase Order (PO)?

A Blanket (or Bulk) PO is used for the committing and recording of expenditure for a time period within a financial year.

3.2 Why would you need to raise a blanket order?

A blanket order would need to be raised in two situations;

1) Periodic/Fixed Invoices Where the frequency and fixed of the invoice is known i.e. annually, quarterly, and weekly.E.g. Rent, Rates, Utilities, Mobile phones rental, Video Conference line rental, telephone line rental, cleaning costs, photocopier hire and vehicle rental.

2) Variable InvoicesRegular invoices are received yet at varying amounts yet on a regular basis.E.g. Temporary staff, phone call charges, Recruitment, Occupational Health and catering.

3.3 How do you enter a blanket PO onto eBIS?

For both types of Invoice follow the initial process detailed in Steps 1 and 2 above, then proceed to the following;

1) Periodic/Fixed InvoicesAs the amount per period is known the PO can be set up using the appropriate amount of lines (i.e. one for each month)E.g. Rent- £1000 per month set up 12 lines at £1000 each. When an invoice is receive simply GRN that appropriate line for the corresponding month)

See Step 2 for details of how to raise this type of Invoice.

1) Variable InvoicesIt is recommended that you set up the PO using suitable units. (Tip: it’s useful to use the same value unit for all POs to avoid confusion) The value of the PO should be calculated using the NET amount.For example- Temporary staff- If you anticipate committing £10,000 in total on temporary staff throughout the year the following calculation can be made to determine the NET value of the PO and the number of units required

CalculationNET VALUE = Total commitment * 85% / (chosen unit value) =

number of units

DESCRIPTION3.4 General information describing the PO and the period that it covers i.e. Annually or 6

months and Office details.

QUANTITYThe quantity is based on the Net amount.If you have an expected expenditure of £10,000 in total for the calculation is as

follows;£10,000 @ 85% = £8500

8500 divided by £5 = 1700

UNITSUnits of £5 have been used in this

example. You are free to use whatever value of units suits you

Step 4SAVE – CLICK ON HERE AFTER

ENTERING THE UNITS RECEIVED

Step 1Wherever possible, the Invoice Number should always

be available. It should be entered into the GRN Reference Box

3.7 What happens when there are only a few units left to GRN on a Variable Invoice?

If the value of the invoice is within 20% or £500 (whichever is less) of the remaining value of the PO then you can click on Complete. If not then you will need to raise a new PO. (Tip: It is better to make provision to raise a new order if you anticipate that the current PO will not cover the next invoice).

Step 2GRN UNITS RECEIVEDNET COST ON INVOICE / UNIT PRICE (5.00)

For infoTOTAL NET COST OF BLANKET PURCHASE ORDER

For infoDO NOT CLICK ON UNTIL ALL

UNITS ARE USED UP BY INCOMING INVOICES

For infoDO NOT

CLICK ON THIS AS IT WILL GRN

THE WHOLE PURCHASE

ORDER

Step 3RECEIVED

CLICK RECEIVED AFTER THE UNIT

AMOUNT HAS BEEN ENTERED INTO THE PURCHASE ORDER

AND SAVED

3.8 What are the Benefits of using Blanket Orders? Saves time-By entering one PO per year for all of your regular

suppliers you are being much more time efficient.

Avoids duplicate entries

Less activity on the eBis system which should result in quicker

processing times

Enables each team to manage their budgets and expenditure more

effectively and aids movement towards a fully accrued budget system.

Alleviates Service Manager workload through avoiding regular PO

approvals

Solves authorisation issues when Service Managers are not available

i.e. on Annual leave

Allows fast and effective payment to our suppliers therefore

maintaining sound contacts and by doing so also helps meet Treasury

targets of invoice payments

Step 4 - Sending for Authorization

After completion of Purchase Order click on Send (Circled in Blue on step 2.1 above). This will automatically forward the Purchase Order Request to your Manager for approval (note the Item Number that will appear as this will help to match up the order when authorised). When the order has been approved the named user’s (‘Originators’) e-mail address in My Settings will receive an e-mail to inform you that the order number xxxx is waiting.

4.1 Go to Cafcass Requisition and select Approved from the drop down list.

4.2 To find your Cost Centre entries enter your 3 digit code in the Dept: box. This will show orders made by you and on your behalf by Regional office.

Or:To search for your own entries click on Advanced

4.3 If you have used Advanced Click in the 2nd box down (Circled) “Search All Stages Once Owned By Me”. Then Find

4.4The next screen will list all the orders you have created and the stage they are at e.g. Entry, Approval or Approved. Use this screen to find orders and their status. Click on the ID number quoted in the e-mail warning and open it to see the order.

4.5 Click on Request Print. An e-mail will arrive in your in box with a Word attachment. This is the Purchase Order.

4.6 Open the Word document. You can save it in your G drive under your own e-bis directory. File them in Supplier folders or type of order. If you want, print off a copy and file until the invoice or goods arrive

The above G: drive storage guideline is optional. Not all regions do this, although Some find it helpful as it gives them easy access to copies of PO's without having

to 1) Start up eBis or 2) Dig out paper copies from files.4.7 A copy of the purchase order should be sent to the supplier by post or

fax.

Step 5. Viewing/Printing Authorised Purchase Orders

5.1 Click on Requisitions Entry.

5.2 Click on Drop Down Box and Choose Approved.

5.3 The following screen will appear, Click on ID button.

5.4 The following screen will appear, Click on Exact button.Then enter 5 figure number recorded when item first sent off for authorisation(as mentioned in section 4) – Then click on Find

Please note, you can Request Print (Purchase Order) at this stage, however, to ensure the order is all correct (Proof Read), I suggest you

carry on as below.

5.5 The following screen will appear, Click on Your chosen Entry Number.

5.6 Check the details of the Approved Item, if all o.k. Click on Request Print

An Email will be sent to your Outlook inbox containing a Word Document Attachment of the Purchase Order.

Step 6. Entering GRNWhen the goods you have ordered have been delivered or you have received an invoice for on-going services like phone, rent, gas etc, we need to update eBis so that the invoice can be paid by Cafcass Finance in Basingstoke.

6.1Find the correct purchase order in the G drive eBis directory (this will always begin with your Cost Centre Code) or the hard copy in your file.

6.2Click on GRN Entry

6.3 Click on +Add. Make sure the correct Cost Centre is selected. Click OK

You can now see all outstanding Approved orders for your cost centre waiting for delivery or the latest invoice

6.4 Click on the Order number link on the left hand sideNote. If Invoice does not show order number refer to part 3.3 and repeat process

In the Qty Received box enter the number of goods (e.g. 2 desks) or invoices received against an annual or ongoing order whichever is appropriate. If the Outstanding quantity is nil a tick will appear in the Completed box.

Complete all the lines of the order. Please Re-enter the Invoice number (or your original GRN Ref)

For Multiple Line Entries that need GRN’ing at same time, see 6.6 below

6.5 Finally, Click on Received at the top

The order will remain in the GRN section until all the items have been cleared.A message box will show When the GRN process has been completed, photocopy the invoice and send the original to CAFCASS FINANCE with the eBis Purchase Order clearly marked on it in case the PO goes missing. You should wherever possible send a hard copy of the purchase order.6.6 If a Requisition is to be GRN’d and there are multiple line entries to be OK’d, then you can speed up the process by following steps 6.1 to 6.4 above then, instead of performing step 5.5 on each line you can click on +Auto

This will copy all Qty Ordered amounts into Qty Received column.Only perform this function if you are certain all items or services have indeed been received.

Finally, follow step 6.5 above.

6.7 How do I GRN a Blanket Purchase Order Variable Invoice (e.g. a weekly Temporary staff invoice or a catering invoice)

Step by Step process of Goods Receiving Units for a variable invoice;

1. Enter the eBIS site

2. Go to GRN

3. Click on ADD4. Click onto the appropriate office (e.g. Lincoln)

5. Click onto the appropriate supplier pre-set up PO (e.g. Adecco)

6. Divide the NET total on the invoice by your single unit value

7. This figure is the amount of units (rounded up to whole number) you are to

GRN

8. Enter that figure into the Quantity Received Box (which always shows as 0.00)

9. DO NOT Press AUTO or COMPLETE10.Click on SAVE11.Take note of the GRN and copy it onto the Purchase Order master with the date, Units used and units remaining12. Click into the GRN entry and then click on Received13. Write the PO number onto the invoice

14. Copy the invoice as usual and send original to Cafcass Finance for payment

(Tip: write the GRN number on the invoice too. This will aid Cafcass Finance in

matching the invoice correctly)

15. Attach the copies to the master PO for your files   

16. When next invoice(s) is received do exactly the same until the units have all

been used (if at that stage, there are more invoices anticipated within the

financial year ensure another blanket PO is set up prior to units on the existing

order running are exhausted.

Step 7: Cancelling PO at GRN stage

7.1 Follow steps 6.1 to 6.4 above7.2 Type the word “Cancelled” in the GRN reference field7.3 Overwrite Quantity received with number ‘0’ this ensures that we know we did not receive the product ordered.7.4 Tick in complete field7.5 You can also click on notes, and type in reason for cancellation and

save

7.6 Finally click on received which will inform CAFCASS FINANCE that this order will no longer be required.7.7 If the GRN has already been raised for a PO but needs to be reversed,

you will have to contact Cafcass Finance by Email with: PO number, Values, Supplier details, and they will cancel the PO for you.

Step 8: Authorising a Requisition8.1 Select “Requisitions for Approval” by clicking once

8.2 EBIS now shows you the list of requisitions that are waiting for you to approve.

By clicking on the box marked ‘APPROVAL’ you can choose to see any that you have raised yourself (unlikely), waiting for approval.

8.3 After selecting approval, and you will be restricted to those waiting for your decision now. Click on the ID number relating to the requisition that you wish to process.

8.4 As shown in the image below, you now have access to the requisition details of supplier.

You are able now to change any of the details by using the procedure for raising a requisition as shown in sections 1 and 2 of the guide. However, we will concentrate on enabling you to authorise and go straight to dealing with the details of the requisition itself. Scroll down.

8.5 The following details will have been included by the originator who raised the requisition, Ensure they are clear enough to be able to make a decision as to approve or not. If not you may need to look at further details, to do this you should click on the MORE box.

8.6 This opens up the details of the order. By clicking on the boxes with Blue Font underlined, you can change the details by using the look-up facility. However it is best practice that if you do need to make changes to use the Next>> button, insert message and then close this detail, and select reject.

8.7 If you need to use the notes column, click on notes and the following free txt window opens. Simply type in your message and then save. You will note that a pencil will appear to the top right hand corner of the requisition.

8.8You can choose, +Save Rejected or Approved to do later. Click on one of the three options at the top.

8.9 The requisition now goes into Open accounts for the first time and undergoes the transformation from requisition to an Order and also a Commitment. An email will be sent back to the originator saying that the order has been approved and is ready to be printed out.It is at this point that you, as the approver, have committed the service to spend the value as stated on the order. By selecting approval, this is the same as signing a hard copy with your name.

Step 9. Procedure for Invoice matching requests

9.1 What is the Invoice Matching Procedure?

Under our current payments systems, purchase orders must be raised for all items of expenditure. In many cases, such as SEC's or Utility bills, the Purchase Order value may necessarily be an estimate. When the actual invoice is sent to Cafcass Finance for payment there may be a difference between the value of the invoice and the value on the Purchase Order for which a Goods Received Note has been raised.

When this happens, and the difference is not greater than 20% or £500 (whichever is the lesser), the invoice can be matched and paid automatically.

However, if the difference is greater than these tolerance limits, the invoice can only be paid with the authorisation of the first authoriser of the Purchase Order. Cafcass Finance will send them what is known as an Invoice Matching Request, asking them to authorise (in eBis) payment of the invoice amount.

9.2 How do I access and use Invoice Matching?

There are two ways of accessing invoice matching.

The first is through the email request sent by the payments Team at Cafcass Finance. If you click on the blue underlined link in the email, it will take you directly to the invoice matching screen. If you are not logged into eBis, it will ask you to do that first.

The second method is to log into eBis by clicking on your desktop icon. Once you have entered your user id and password you will be presented with the My Forms screen. Invoice matching is the fourth option under the standard menu.

If you have any requests they will show be on the next screen, the Invoice Matching Requests screen.

Click on the blue underlined "ID" number, if the stage says request. Anything marked as Completed you have already dealt with.

The next screen will show a summary of the invoice to be matched. Maximise the screen to see all the fields.

The 'Requested by' box at the top of the screen is the user ID of the person in the payables team at Cafcass Finance in Basingstoke who sent you the invoice matching request. The 'Refer to' box on the other side of the page is not used.

The next box down is the requesters E-mail address. The Supplier box displays the name of the supplier the invoice relates to and clicking on the blue link next to their name takes you to a window that lists their transactions to date.

The Matching ID box on the other side of the page is the number that is used to identify the transaction in Open Accounts by Cafcass Finance.

The next box down, Invoice Total is the value of the invoice that needs to be matched. The box across the page, Goods Total is the value on the Purchase Order for which a Goods Received Note has been. The box directly underneath, Variance Total is the difference between the two and is the cause of the matching request being generated.

The request dialog box contains the narrative from Cafcass Finance. The approver reply box lets you send a message back to Cafcass Finance.

The password box is where you enter your Invoice Matching Password.

To see the details of this request, click on the Show Details of Matching link at the bottom of the screen. This will show a summary of the invoice and the Purchase Order including their reference numbers, supplier, invoice amount, purchase order amount and the difference. If you wish to see more details of the invoice and/or Purchase Order, click on the reference numbers highlighted and underlined in blue.

Close these screens by clicking on "X" in the right hand corner.

If you are satisfied that there is a genuine reason for the discrepancy and would like Cafcass Finance to go ahead and pay the amount on the invoice, you should enter your Invoice Matching Password in the Password box. If you do not have an Invoice Matching Password, you should speak to National Office Finance dept.

After that, click on Generate Override Password. A password for this matching session will be automatically generated (your own password will not be seen by anyone else). The override password takes the form of a random collection of letters and numbers that appear in a box next to the password box.

Finally click Respond by Open Messenger. This will send the authorisation password to Cafcass Finance who will then be able to pay the invoice.

You can now click on any remaining, outstanding invoice matching request on your list and repeat the process above.

When they are all done, log out.

If the invoice matching request has been sent to you in error or does not relate to you, let Cafcass Finance know by typing a message in the Approver Reply Box and then clicking on the Respond by Open Messenger button. This will alert them to the situation.

If you have any queries or problems with this procedure, please contact National Office Finance Dept. on 0207 510 7006.

Step 10. How to Produce Reports

10.1 From the front menu, select ‘Reports’

10.2 There are 2 reports that you will use most often:Purchase Order Report or Single Supplier Details Report

10.3

Purchase Order ReportsSearch Supplier to Identify PO numbers, or

Identify PO line content and value - Quick ref, orIdentify Origin of the original requisition and the

status of the PO.

10.4 Purchase orders can be located using a PO / Order number or by using combinations of your Cost Centre (Branch), the Supplier and your eBis ID (e.g. MMAG).We will now look at searching by supplier.

10.5 After clicking the blue supplier link (See above), the screen on next page will appear. Search for the supplier as one would when raising a requisition (See Section 1.4)

Enter first few letters of the supplier in SUPPLIER NAME: and click on +Find, then

select the correct Supplier by clicking once on the coloured numberadjacent to the name.

The supplier box is then populated with the

appropriate supplier number

(See 10.6 Below)

10.6 At this point, you can press +Submit, or if you wish to narrow the search, enter some Order Dates. You must click both Order Date and to and select dates from calendar. Or use an eBis ID (Our Ref) if other eBis users use the supplier.

10.7 You will now be able to view all orders raised against your chosen supplier, and if specified, between certain dates.•A PO number can be obtained in this way and used to print off a PO.•Please note that all amounts exclude VAT.

10.8 Single Supplier Details Report Used to identify if a supplier is set up, clarify an existing

supplier’s details, to identify payments to specific supplier in a certain period or to viewscanned images of invoices that have previously been paid!

We will look at Mail Merge Purchase Orders in Section 11

We will now look at an example of viewing a supplier’s details and looking at invoices either paid or about to be paid.

10.9 After selecting ‘Single Supplier Details’ from the Reports section of eBis the screen below will appear. Select the supplier as described previously (10.4) then select

‘Document Type’ Click ‘+Submit’ for the next page of options.

10.10 Now select PINV / AP Invoice Line

10.11Ensure the Include Matched and Include Unposted boxes are checked and enter the year and period as appropriate. Tip – Current year is 2006, period 1 is April. Lastly, click +Submit.

10.12Below the supplier’s details is a list of all invoices received by Cafcass Finance in the period.

You will note that some invoices have the status ‘Paid’, whilst others do not.

10.13This report can be used to establish if an invoice is paid or if an invoice has been received by Cafcass Finance but is yet to be paid. Select an invoice to view more details.

10.14These further details will show how the invoice was paid, and when.Select the ‘Image ’ button at the bottom to view scanned versions of the actual invoice.

10.15 Now click ‘Open ’ when presented with this message.Click ‘Open ’ if presented with this message again.

10.16 Finally click the printer icon to obtain a hard copy of the invoice.Use the arrows ( ) to scroll through pages.

Step 11. Mail Merge Purchase Orders

Used to print off purchase orders individually or in a series in MS Word format

11.1 The POs are split into Un-printed or Reprint - If for example you request a reprint of an unprinted PO it will not work and vice versa.

Branch always needs to be filled in with the relevant Cost centre code. Clicking on theOrder number gives you a selection of all the POs available on the mail merge (Below)11.2 If you have only recently completed order and not printed PO off then select Un-printed

11.3 You may now click the first and last purchase orders you require (see above).

This will then include for printing all the visible purchase orders in between your selections. Then click on OK

Press +submit and an email with attachment will be sent to your outlook account. The POs can then be edited or printed off as required. The same process is used for Reprint purchase orders.

Appendix 1.eBis Tax Codes

EBis Tax

CodeDescription Rate Comments

E Exempt 0%Some types of expenditure are exempt from VAT. Including certain types of education and training and some property

transactions (e.g. selling, leasing and letting land and buildings). This will also include Occupational Health

(Mayfair) Invoices.

FReduced Rate

(Shown as Electricity & Gas on eBis)

5%Some categories of expenditure are subject to a reduced rate of VAT at 5%. Examples are domestic fuel or power,

installation of energy saving materials, safety equipment i.e. children’s car seats

N Not VAT Registered 0%

Not all businesses are required to be VAT registered. Businesses with an annual turnover exceeding the current

VAT threshold of £60,000 must be VAT registered and show a VAT registration number on their invoices. Some

self employed individuals such as self employed guardians may not be required to be VAT registered because their

turnover is below the VAT threshold.This code should be used when there is no VAT

number shown on the invoice.

S Standard Rate 20%

This is the standard rate of VAT applicable on the majority of VAT registered businesses. The standard rate of VAT will

apply in respect of supply to, or a service received from a VAT registered business that does not fall into any other category. (Examples: Self Employed Guardians who are VAT registered, Agency Staff, Advertising and most other

goods and services including Telecommunications, Stationery stores orders etc.)

TTravel and

Subsistence 0%This code should only be used when there is no VAT shown

on the invoice in respect of T & S. Some examples are when payment is being made through eBis for interview

candidate travel expenses or clients T & S.Z Zero Rates 0% Some types of expenditure are Zero Rated. Some

examples are children’s clothing and footwear, most food and drink (but not Catering and Takeaways)

Version 1.1, Finance Department, 8 th August 2005 Version 1.2 Finance Department 2 January 2008 – minor formatting and numbering updates. Full review still required

A huge ‘Thank You’ for all the help in the compilation of this guide.

I won’t list all the contributors by name as this is an ongoing piece of work and the list will eventually

end up requiring more space than the instruction pages!

Thank You All – Regards from Roy DudleyBSO – Southern and South East

01256 392790 – xxx.xxxxxx@xxxxxxx.xxx.xx

Accounts Payable Guide

Document Owner: Julie BrownLast Updated: October 2013Updated by: Zubeda Seedat

Contents

1. Introduction 2

2. Overview 2

3. Accounts Payable Flowchart 3

4. Processes 4

(a) Supplier Set-Up & Amendment...............................................................4(b) Raising a Purchase Order.......................................................................4(c) Raising a Goods Received Note..............................................................5(d) Invoices...................................................................................................5(e) Credit Notes............................................................................................6(f) AP1 Form................................................................................................6(g) Payments................................................................................................6(h) Remittance Advice...................................................................................7(i) Supplier Statements.................................................................................7

5. Accounts Payable Definitions 8

6. Contact Information 9

1. Introduction

Accounts Payable is an area which is monitored via reports. The two main reports used as finance performance indicators and which are reported on a monthly basis are:

Purchase Order (PO) before Invoice – Target of 85% of PO to be raised before invoices are received.

Prompt Payment Report – Target of less than 10% of outstanding invoices to be over the payment terms, this performance measure is also used to determine the amount owed to trade creditors in the annual accounts.

The above reports allows us to understand whether correct procedures are being followed when making purchases and payment, this is vital in ensuring that appropriate financial controls are in place,

Understanding the Accounts Payable processes and procedures should help to improve performance, hence this Accounts Payable Guide should be used in conjunction with the various procedure notes.

Items highlighted in blue in this guide are clickable links to documents on the Cafcass Intranet or the definitions section of the guide. If you have any queries, comments or suggestions regarding this guide, or the Accounts Payable process in general, please e-mail the National Office Finance Dept.

2. Overview

Accounts Payable (AP) refers to process used to pay suppliers from whom Cafcass receives goods or services on account, i.e. payment of invoices.

An effective Accounts Payable service has several important roles within the organisation:-

Internal ControlsIf set-up and followed correctly the AP process can help to mitigate the risk of fraud and unauthorised expenditure. This is achieved through appropriate checks and the segregation of duties. An example of this is the purchase order process on the eBis system whereby a PO cannot be raised and approved by the same person.

Prompt PaymentCafcass has an obligation to ensure that payments to our suppliers are made in a timely manner and in accordance with their payment terms. Failure to make payments on time can result in Cafcass having to pay interest and/or late payment fees. It can also damage the reputation of the organisation and in extreme cases lead to suppliers refusing to supply Cafcass with goods or services.

Budget MonitoringAnother important function of Accounts Payable is to ensure that Cafcass can maintain control over its budget. By raising Purchase Orders we are able to identify not only expenditure that we have already incurred, but also expenditure to which we have committed ourselves in the future. This is one of the main reasons that it is essential to raise a PO as the first step in ordering goods or services from a supplier.

AuditAs a public funded organisation, Cafcass’ Annual Accounts are audited after each financial year. Only by following the AP process correctly we can ensure that we have all supporting documentation and checks to satisfy the audit requirements.

NOYE

WHEN SUPPLIER IS

3. Accounts Payable Flowchart

From order of goods

From receipt of invoice

Dept. identifies a need for Goods or Services.

Dept. sends PO to supplier with instructions to quote PO number on invoice.

Dept. obtains quote or estimate from supplier and confirms if budget is available.

Dept. obtains supplier info and completes Supplier Set-Up Form and sends to Area Finance

Dept. Raises Purchase Order on eBis.

Scenario 1:Supplier sends invoice directly to Finance Bureau.

Supplier sends invoice to UISL. If invoice is sent to Dept. this is forwarded to UISL.

Supplier sends invoice to UISL. If invoice is sent to Dept. this is forwarded to UISL.

Is the supplier set-up on eBis?

The Good or Service is received by Cafcass.

Has a Goods Received Note been raised prior to receipt of invoice?

Finance Bureau notify relevant PO Originator by email that an invoice has been received and a GRN is

Originators raise GRN if good/service received.

GRN is raised by PO Originator on eBis

NO

YES

Scenario 2:Supplier sends invoice to local office/Dept who check if goods/service is received and raise a Goods Received Note on Ebis and then send to Finance Bureau.

4. Processes

The AP process is made up of many steps, some of which are performed by Cafcass staff. Below is a list of the main stages and a brief description of the purpose of each.

(a) Supplier Set-Up & Amendment

Cafcass can only make payments to suppliers who are set up on our Accounts Payable system. Hence, when we are looking to order goods or services from a supplier, the first step should be to check if they are already set up by checking on the eBis system. If they are not then we need to go through the supplier set up process.

This process is very important from a fraud prevention and payment control perspective, as we need to ensure that we are only making payments to genuine suppliers and that the payment details we hold are correct. In order to achieve this, the process involves some checks and segregation of duties.

The first step involves obtaining from the supplier, in the form of a letter on their company letterhead, trading and payment information. This should then be used to complete the Supplier Set Up and Maintenance Form, which can be found on the intranet under Finance Forms. The completed form then needs to be appropriately authorised and sent to Area Finance who check them before sending them to Finance Bureau with the supplier’s original letter.

From time to time we may also need to amend suppliers details e.g. name, bank account or address, in which case the same form and process as above applies.

(b) Raising a Purchase Order

Finance Bureau make BACS payment or issue cheque to supplier based on details on Ebis set-up form.

Finance Bureau match the invoice to a GRN on the relevant PO.

The eBis User Guide on the intranet provides comprehensive instructions on how to raise a Purchase Order correctly. This guide should give staff an understanding of what a Purchase Order is and its applications within Cafcass.

Purchase Orders may sometimes seem to be an unnecessary bureaucracy, but they are in fact a vital part of the AP process. They serve several functions:-

Ensure that any expenditure is appropriately authorised by the person responsible for the budget.

Form a clear record of the type, quantity and price of Goods/Services ordered.

Provide a simple way for Cafcass to identify money we have committed to spending.

From an accounting point of view the last function is vital. In order to monitor Cafcass’ expenditure against our budget, we need to be able to identify money that we have committed to spending or we run a great risk of significantly under spending or overspending.

Areas and National Office Departments are required to produce Accruals on a monthly basis. If used correctly, Purchase Orders and Goods Received Notes can greatly simplify this task. For this to be achieved it is not only essential that PO’s are raised in advance, but also that they are raised correctly with attention to completing the ‘Due Date’ field correctly for each line.

To monitor compliance with this requirement, Cafcass produces monthly reports on the proportion of PO’s that have been raised in advance, i.e. before the invoice date. Departments should use these reports to identify problem areas and improve compliance.

(c) Raising a Goods Received Note

As with PO’s, the eBis User Guide provides detailed instructions on how to raise a Goods Received Note (GRN) using the eBis system, whereas this guide should give staff a better idea of what a GRN is and how it is used. In general the GRN should be raised by the originator of the PO.

As the name suggest, a Goods Received Note is a document that we create to show that we have received some or all of the goods/services on a PO and confirms that these should now be paid for. If goods/services are received that do not meet the standards expected as per the PO, then a GRN should not be completed until the issue has been resolved. If the goods/services received are satisfactory, a GRN should be raised on eBis. A GRN can be raised on eBis on either the receipt of goods/service or invoice.

On receipt of goods/service By raising a GRN on satisfactory receipt of goods/service we are able to use reports such as ‘GRN no invoice report’ to determine the monthly Accruals or for the purpose of automatic accruals. If a GRN has been raised prior to the invoice being received then the invoice can also be sent directly to the Finance Bureau to process for payment preventing any delay in payment.

On receipt of InvoiceBy raising a GRN on receipt of invoice, the invoice number can be used to keep track of any issues that may have arrived on delivery of goods/service. The invoice in this case will need to come to the local office first for the GRN to be raised before it can be sent to the Finance Bureau for payment.

Both of the above procedures are acceptable. Please check with your local/finance team which methods is being utilised.

(d) Invoices

Invoices are usually issued by a supplier either at or shortly after delivery of goods or services. An invoice is, in effect, a demand for payment from a supplier

Cafcass can only pay invoices if they meet certain minimum standards. These standards and a sample invoice can be found on the intranet. Some of these standards are necessary to protect Cafcass from fraud or duplicate payments, whilst others are HM Revenue & Customs requirements for tax purposes. These standards include the requirement for a valid Purchase Order number to be included on the invoice.

If the process has been followed correctly, when we receive an invoice, we should already have raised a PO and therefore the invoice should state the PO number which we would have provided to the supplier when placing an order. In some instances a GRN for the relevant goods or services may also have been raised by this point.

If an invoice is received and the PO has not yet been raised, the reason for this should be identified and measures put in place to prevent, as far as possible, future occurrences.

If the invoice arrives at the local office, the local office staff must check that the goods/service has been received and the GRN has been raised on the system. The invoice should then be sent to Finance Bureau for payment.

When Finance Bureau receives an invoice (either form the local office or directly from the supplier) they will use the details to match it to a GRN on a PO. When the invoice is matched they will then pay the invoice using the payment details held on eBis.

Copy Invoices If the original invoice is missing and is unpaid, we should ask the supplier to issue a copy invoice. Any copy invoices (this includes faxes, photocopies or a re-issued invoice marked as a copy or duplicate) need to be signed by an authorised individual before being sent to Finance Bureau for payment. By signing the copy invoice, the authoriser is confirming that the original invoice is not available and that the invoice has not already been paid. If there is any doubt as to whether an invoice has been paid, this should be checked with Finance Bureau before signing and sending the copy.

Rejected InvoicesIf Finance Bureau receives an invoice that does not meet the requirements they will send this back to the supplier with a note detailing the reasons for the rejection. The main reasons that invoices are rejected are:

PO related problem (e.g. no PO number) Invoice does not have a unique invoice number. Invoice does not meet other minimum standards.

Late PaymentOn a monthly basis, Cafcass generates reports on late payment of invoices. Departments need to ensure that they use these reports to identify reasons for delays in payment so that they can be avoided in the future.

Finance Bureau will pay an invoice as soon as there is a matching PO and GRN for the invoice – almost all delays in payment will be due to either the lack of a PO number on the invoice leading to it being rejected or the lack of a GRN evidencing receipt of the good or service.

(e) Credit Notes

From time to time a supplier may make a mistake when invoicing Cafcass or goods may be returned or refunded. In this case the supplier will normally issue Cafcass with a Credit Note. A Credit Note is, in effect, a negative invoice. If a Credit Note is expected from a supplier for an invoice it is best to notify Finance Bureau of this as early as possible via email (xxxxxxx.xxxxxxx@xxxxxxx.xxx.xxx.xx ) with details of the original Invoice so that it is not paid.

If a Credit Note is received and the invoice to which it relates has not yet been paid a PO will need to be raised for the Credit Note (this is done in exactly the same way as an Invoice but with negative amounts – see eBis User Guide). The Invoice and Credit Note should be sent together to Finance Bureau who will process them and make a Net payment to the supplier (zero if it is a full refund)

If a Credit Note is issued after an Invoice has been paid we should still raise the PO as above. Finance Bureau will then process this and the resulting credit will be netted off against any future payments. If we are not likely to use the supplier again or we are approaching the end of the financial year, we would ask the supplier to make a payment to us.

(f) AP1 Form

AP1 refers to a form to be completed when we need to make a payment to a supplier where we do not have an invoice or where it is not appropriate to raise a PO e.g. when we receive a Pro forma invoice or Subscription Notification.

(g) Payments

All payments are dealt with by the Finance Bureau. When Finance Bureau receive an AP1 form or an invoice (and match it to a GRN), they will make a payment to the supplier based on the information given when the supplier was set up.

Cafcass can make payments to suppliers in three main ways:-

BACS (Banks Automated Clearing System) The majority of Cafcass’ supplier and payroll payments are made using BACS. BACS is an ‘account to account’ method of payment that is very simple and reliable as it does not rely on the post. Finance Bureau make one BACS payment run at end of each working day and the money will usually show in the suppliers account on the third working day following the payment day.

Cheque Some suppliers (usually individuals) still prefer to be paid by cheque. When we need to make a payment to a supplier by cheque Finance Bureau will raise the cheque on our behalf and send it to the supplier at the address specified when they were set up.

CHAPS (Clearing House Automated Payments System) CHAPS Payments are similar to BACS in that they are made from one

account to another. However, CHAPS payments arrive in the suppliers

account on the same working day. Another difference is that whilst BACS

payments to do not incur any bank charges to Cafcass, CHAPS payments do.

For this reason, CHAPS payments are only made in exceptional

circumstances and with appropriate authorisation.

For instruction on how to check if an invoice has been paid, please refer to

section 9.9 of the eBis User Guide .

(h) Remittance Advice

Finance Bureau will send a remittance advice with every payment. A remittance

advice lists the invoices that have been paid and the total amount paid. This

enables suppliers to allocate the payment received from Cafcass against the

correct invoices.

(i) Supplier Statements

From time to time suppliers will send us a statement of our account with them. This normally comprises a list of outstanding invoices and credit notes and their respective details.

When we receive a statement, we need to check the outstanding items. By checking these statements routinely on their receipt we help ensure that any outstanding or disputed invoices are highlighted early, thus helping to avoid ongoing issues with a supplier or possible court action. The first step is to check on eBis whether any of the outstanding invoices have been paid (see section 9.9 of the eBis User Guide). If they have been paid we should then contact the supplier and give them the details of the payment.

If we have not made the payment and the invoice cannot be located or we do not recognise the invoices, we should contact the supplier to clarify and ask them to send us copies of the outstanding items. We must ensure that any copy invoices

that are sent to Finance Bureau for payment have been appropriately authorised (see Copy Invoices).

5. Accounts Payable Definitions

Accounts Payable Accounts Payable is the term for a system of accounting where suppliers offer a form of credit to Cafcass by allowing us to pay for goods or services after they have already been received i.e. on account.

Supplier A supplier is any organisation or individual that supplies Cafcass with goods or services for which we pay.

Purchase Order A Purchase Order (PO) is a document issued to a supplier that commits Cafcass to purchasing specified goods or services. The PO indicates the type, quantities and agreed prices for goods or services that the supplier will provide to Cafcass. Sending a PO to a supplier constitutes a legal commitment by Cafcass to incur expenditure. The purchase order is also used to specify to which budget and expenditure type the costs will be coded.

Goods Received Note A Goods Received Note (GRN) is a document produced on the eBis system when goods or services are received by Cafcass. Raising a GRN confirms that the goods/services received are satisfactory. It is used to check against invoices before payment is made to the supplier.

Invoice An invoice is a document issued by a supplier to Cafcass, indicating the products, quantities and agreed prices for products or services with which the seller has already provided Cafcass. An invoice indicates that payment is due from Cafcass to the supplier.

Credit Note A credit note is a document issued by a supplier to cancel out or correct the amount of an invoice. It is in effect a negative invoice.

eBis Ebis is the web based system that Cafcass uses to raise Purchase Orders and Goods Received Notes. When a PO is raised on eBis, this also specifies to which budget and expenditure type the expenditure should be coded. The eBis system is linked to the main accounts system (Open Accounts).

Cost Centre CodeEvery National Office Dept. and Area Team has a Cost Centre code (sometimes called CC) that represents their budget in the Accounting System. The Cost Centre code consists of three numerical digits followed by a hyphen (-).

Expense CodesExpense Codes (sometimes called Natural Account Codes or NACs) are used to define the type of expenditure e.g. Temporary Staff or Stationery. Each type of expenditure has an expense code consisting of six numerical digits followed by a hyphen (-).

The Cost Centre Code and Expense Code are used to identify against which budget and what expenditure type any expenditure should be coded. For example, when raising a PO for a temp working in the Customer Services dept we would use the code the PO on eBis to cost code 008- (Customer Services) and expense code 375000- (Temporary Staff).

Open AccountsOpen Accounts is the accounting software that Cafcass uses to maintain the Accounts Ledger. The eBis PO system and GRN system links with Open Accounts.

Accruals A simple definition of Accruals for AP purposes is that they are ‘dummy’ transactions entered on the ledger to represent expenditure for Goods/Services we have received in a particular financial month or year that have not yet been paid for in that year.

6. Contact Information

Cafcass FinanceCafcass FinancePriestley HousePriestley RoadBasingstokeHampshireRG24 9NW

DX 159050 Cafcass SouthBasingstoke 25

Please note that all mail MUST be marked as Cafcass FinanceTelephone: 0844 353 1627

Fax: 0844 353 1621

Email: xxxxxxx.xxxxxxx@xxxxxxx.xxx.xxx.xx

National Office Finance Department

National Office Finance DepartmentCAFCASSSanctuary Buildings Great Smith StreetLondonSW1P 3BT

Tel: 0844 353 3350Fax: 0207 222 4687

E-mail: xxxxxxxxx@xxxxxxx.xxx.xx

Cafcass PayrollCafcass PayrollPriestley HousePriestley RoadBasingstokeHampshireRG24 9NW

DX 159050 Cafcass SouthBasingstoke 25

Please note that all mail MUST be marked as Cafcass PayrollTelephone: 0844 353 1624

Fax: 0844 353 1621

Email: xxxxxxx.xxxxxxx@xxxxxxx.xxx.xxx.xx

AP1 & AP2 Completion Guidance

Procedure Owner: Julie BrownProcedure Deadline/Frequency: When RequiredLast Updated: September 2013Updated by: Heather Jeffries

Introduction

Occasionally, Cafcass will need to pay for goods without receiving an invoice, for example when paying for a publication subscription in advance. For these payments, a Purchase Order is not appropriate and we need to complete an AP1 form to instruct CAFCASS FINANCE to make a payment to the supplier.

Process

Open the blank AP1 template. This can be downloaded from the intranet. In Section A you will need to enter the Payee’s name and address details.

These should be taken from the supplier’s supporting documentation. Section B should be completed as follows:-

Invoice Date - This should be completed as the date on the supplier’s documentation e.g. the payment demand or subscription notice.

Invoice Received Date - This is the date the document was received

Invoice Number – The document should have some form of unique reference or subscription number you can use.

Cost Centre & Natural Account Code – This is the Cost Code and Natural Account Code to which the payment should be coded. Please speak to Finance if you are unsure of the correct codes to use.

Amount Exc VAT – This will be the amount before VAT on the documentation.

Amount of VAT – This is the amount of VAT as on the documentation.

Total Amount – This will be automatically calculated from the previous two items.

In Section C – Part A the originator should type their name and the date In Section C – Part B the authoriser should type their name and the date In the top right corner of the form is a section called Special Instructions,

for example instructions that the cheque be sent to an address other than

that of the supplier.

Authorisation of AP1 forms The originator should email the AP1 and supporting documentation to the

authoriser with the following statement in the body of the email: “I certify that the Goods/Services* invoiced for were a valid Purchase/Service* and have been satisfactorily Received/Performed*” deleting the appropriate words.

The authoriser, who must be a signatory for the cost centre quoted, should forward the form with supporting documentation to Cafcass Finance with the following statement:“I am satisfied that Part A has been properly completed. Please arrange for this payment to be made”

If the AP1 relates to a special payment i.e. an amount to be paid is following authorisation of a business case then the AP1 will need to be authorised by the budget holder as above and then forwarded by them to a CMT member.

The CMT member will need to forward the documentation and previous emails to Cafcass Finance using the following statement: “I agree to the payment requested within this AP1.”

CAFCASS Authorised Signatory Process including e-BIS and Open Accounts Access

Table of Contents1 Introduction..................................................................................................2

1.1 General Policy - Financial Approval......................................................2

1.2 AP1 Payment Approval.........................................................................2

1.3 eBIS Account Expiry.............................................................................3

2 eBIS Originator – Setup and Maintenance..................................................3

3 Signatory and eBIS Approver – Setup and Maintenance............................4

3.1 Delegate amendments..........................................................................5

3.2 Routing amendments............................................................................5

4 Adding and Amending Accounts – OpenAccounts user..............................6

5 Authorisation and Processing......................................................................7

6 Contacts......................................................................................................8

Version HistoryVersion Description Author Date1.0 Process Guidance and policy

DocumentJ Wates / L Alade 16.09.11

1.1 Update of guidance - October 2013

1 Introduction The purpose of this document is to provide guidance when setting up an individual on eBIS as an Originator or Approver, as an Authorised Signatory, or as an OpenAccounts user.When setup as a user on eBIS, an individual would be able to raise requests for the expenditure of Cafcass funds (eBIS originator level) or authorise expenditure of Cafcass funds (eBIS Approver level). Authorised signatories may sign off various finance forms as indicated on their form, OpenAccounts access is used by Finance staff for a range of purposes.To setup an individual with the above access/authority, the ‘Notification of Signatory and eBIS user’ form needs to be completed. This can be found on the Intranet via the following link and under ‘Signatories’

http://cafcassintranet/Intranet/departments/finance/finance_manual_new/suppliers_and_ebisnew.aspxPlease note: Authorisation of T&S expenses is not assigned via this form as the authorisation for T&S is done via iTrent and not Ebis.1.1 General Policy - Financial Approval Only the Budget holder of a specific cost centre (as well as Area Finance Manager, Head of Service, and Operational Director) should be able to authorise expenditure for that cost centre. However based on local circumstances and business need additional approvers may be setup for a cost centre, this should be controlled by each CAFCASS area and kept to a minimum where possible.There are four levels of approval authority which are restricted to the roles as follows:

Up to £20k Approval – Budget Holder Up to £50k Approval – Head of Service Up to £100k Approval – Operational Director Above £100k Approval – Director of Finance

Where these roles do not exist for a cost centre e.g. HQ or other non-standard cost centres then appropriate managers may fill the roles below Head of Finance, e.g. in the case of HQ the Operational Director level may be omitted and the Department Head would fill the Head of Service role.Purchase requisitions ought to be sent to the lowest level approver for approval in the first instance, if the requisition is above £20k in value then it will progress up the levels of approval automatically until it reaches the appropriate level, so a purchase requisition for over £100k will be approved at all four of the approval levels.1.2 AP1 Payment Approval Payments via AP1 form should be avoided where possible; when a payment via AP1 is required the originator should email the completed AP1 form and supporting documentation along with the appropriate statement to the authoriser, who must be a signatory for the cost centre quoted, who should then forward the form with supporting documentation and authorisation statement to Cafcass Finance.

If the AP1 relates to a special payment i.e. an amount to be paid is following authorisation of a business case then the AP1 will need to be authorised by the budget holder and then forwarded by them to a CMT member who will need to forward the documentation and previous emails to Cafcass Finance.

Please refer to the detailed guide to completing and authorising an AP1 form here.

N.B AP1s related to Finance Bureau processes may be signed by the Finance Bureau Manager.

1.3 eBIS Account Expiry All eBIS users that have not used their account in 12 months or more will be removed from the system. To enforce this policy a review of eBIS user accounts will take place every 6-12 months and a list of all accounts unused for 12 months

will be sent to the Area Finance Manager and NO Finance, who will have the opportunity to veto account closures if there is a valid reason for them remaining open. Payroll leavers will also be identified and their eBIS accounts (if any) will be removed on a regular basis.2 eBIS Originator – Setup and Maintenance In order to raise requests for the expenditure of Cafcass funds, individuals need to be set up as an eBIS Originator. Complete the ‘Notification of Signatory and eBIS User’ form link above. Please complete the following sections of the form:Part 1: Details of individual

Enter the individual’s surname, forename, employee number, email address and direct telephone number.

Part 2: Action Required Tick action required. I.e. to setup a new user, remove a user, or add to or

replace an individual’s authorities.

Part 3: Type of Setup Section a. Tick box:- eBIS Originator

Ignore section b.

Ignore Part 4Part 5: Cost Centres and Expenses codes allowed

Enter cost centres and expense codes the individual is allowed to originate purchase requisitions for.

Once the form has been correctly completed it needs to be emailed directly to the Finance Bureau mailbox by the appropriate Signatory. Please note forms not forwarded by the appropriate signatory will be rejected.

3 Signatory and eBIS Approver – Setup and Maintenance In order to authorise the expenditure of Cafcass funds, individuals need to be set up as an eBIS Approver or an authorised signatory; by default, all eBIS approvers are also authorised signatories. The “Notification of Signatory and eBIS user” form needs to be completed.http://cafcassintranet/Intranet/departments/finance/finance_manual_new/suppliers_and_ebisnew.aspxPlease complete the following sections of the form:Part 1: Details of individual

Enter the individual’s surname, forename, employee number, email address and direct telephone number.

The individual must give a specimen signature in the space provided.

If an amendment please provide current Authoriser code.

A Specimen signature must be provided for a new setup, but is not necessary for an amendment unless the signature has changed.Part 2: Action Required

Tick action required. I.e. New setup, removal, or add to or replace individual’s current authorities.

Note: “Remove Individual” will remove the individual’s eBIS system access and all authority. Part 3: Type of Setup

Section a. Tick box “eBIS Approver” or “Signatory only” as appropriate.

Section b. Tick all appropriate boxes.

Note: There are restrictions on who can be setup to sign Supplier setup, Copy invoices, and Notification of Signatory and eBIS user forms. Ask your area finance team or the finance bureau if in doubt. Part 4: Level of eBIS Approver (If Signatory only skip to part 5)

Tick relevant Level of eBIS Approver for the individual

Enter the name of the next level approver.

Note the “next level approver” will be the approver with the next highest authority level, e.g. for a Line Approver their next level approver will be their Head of Service.Part 5: Cost Centres and Expenses codes allowed

Enter cost centres and expense codes the individual will be entitled to authorise expenditure for.

Note: These costs are applicable for non-staff; AP1 & AR1 form expenses only. Staff costs such as T&S which are approved via iTrent are excluded.Once the form has been correctly completed it needs to be authorised and passed to the Finance Bureau for processing, please refer to section 5 of this document for details.3.1 Delegate amendments Approvers will have their next level approver set as their eBIS delegate by default when they are setup, if this needs changing e.g. to a covering manager, then an email may be sent to the finance systems mailbox: xxxxxxxxxxxxxxxxxxxxxxxxxxxx@xxxxxx.xxx.xxx.xx with a request. Alternatively an approver may modify their own delegate via the following procedure:

Click the Menu button    to toggle the menu on the left side of the view on if necessary.

Select My Delegates on the WorkFlow menu.

If a delegate is listed, click Edit to change your delegate. Simply replace the current delegate user ID with the user Id of the approver you wish to delegate to. Then press Save.

If a delegate is not listed then click Add, then enter the user ID of the approver you wish to delegate to in to the delegate field. The routing stage must be set to Approval. Click Save to finish setting up the delegate.

N.B. assigning a delegate will not confer any additional authority to that approver, they must already have authority on the necessary GL codes or they will not be able to approve the requisitions sent to them.3.2 Routing amendments If the next level approver for an approver changes the Finance Bureau should be notified as soon as possible, this will help ensure the integrity of the workflow routing within eBIS and help avoid misrouting of purchase requisitions and resultant delays in approval. It is not necessary to complete a form to amend an approver’s next level approver as the routing does not confer any additional authority on either user, to advise the Finance Bureau of a change in routing please email the finance systems mailbox: xxxxxxxxxxxxxxxxxxxxxxxxxxxx@xxxxxx.xxx.xxx.xxN.B. An Approver may only have one next level approver and the next level approver must have authority on all of the approver’s GL codes. Requisitions that exceed an approver’s approval limit will automatically be escalated to their next level approver, if their next level approver does not have permission on the GL codes used in the requisition then the requisition will be stuck and a request to redirect it will need to be emailed to the finance systems mailbox: xxxxxxxxxxxxxxxxxxxxxxxxxxxx@xxxxxx.xxx.xxx.xx 4 Adding and Amending Accounts – OpenAccounts user Finance staff may require access to OpenAccounts for system interrogation and journaling. The “Notification of Signatory and eBIS user” form should be completed to request this access. This access is generally restricted to relevant finance staff.Please note that for access to the OpenAccounts program within FLEX an email request needs to be sent to FLEX by the user’s line manager requesting that they be added to the necessary user group.Please complete the following sections of the form:Part 1: Details of individual

Enter the individual’s surname, forename, employee number, email address and direct telephone number.

Part 2: Action Required Tick action required. I.e. Setup or remove user, or add or replace

individual’s authorities.

Part 3: Type of Setup Tick box OpenAccounts user.

Ignore Part 4Part 5: Cost Centres and Expenses codes allowed

Enter cost centres and expense codes the individual will have access to in OpenAccounts.

Note: These costs are applicable for non-staff; AP1 & AR1 form expenses only. Staff costs such as T&S which are approved via iTrent are excluded.Please state in comments if you require access to be restricted to view only (I.e. for reports and enquiries only). Please also state in the comments what profile the user should be setup with, if you’re not sure you can state another user to copy or call the Finance Bureau for advice. Once the form has been correctly completed it needs to be authorised and passed to the Finance Bureau for processing, authorisation is restricted to senior finance staff.5 Authorisation and Processing Once the “Notification of Signatory and eBIS User” form is completed, please forward forms electronically to an appropriate signatory for approval. For National office this would be the budget holder for eBIS originators, or department director for eBIS approvers. For the operational areas the Area Finance Manager (AFM) and designated senior managers or Area Business Support Officers (ABSOs) may approve the forms. Ask your area finance team or the finance bureau if in doubt. The appropriate signatory should review the form and sign and complete part 6, the form should then be scanned and the scanned document forwarded by email to the Finance and HR systems mailbox below, this scanned document will be taken as authorisation to setup/amend the user who will then be able to request or approve spend for the cost centres indicated.Please note forms to set up an individual as an ‘eBIS Originator’ do not require a signature, the form can be sent directly to Finance Bureau mailbox from the appropriate signatory for processing. The email will be taken as authorisation to set up the individual as an Originator.xxxxxxxxxxxxxxxxxxxxxxxxxxxx@xxxxxx.xxx.xxx.xxIn cases where there are forms for various individuals, please ensure each form is scanned separately before forwarding to the Finance Bureau. This is required because each form will be linked separately to each individual’s profile. Please note forms not completed in full or not authorised by an appropriate signatory as detailed above will be rejected

The Finance Bureau will process the request and in case of a new setup forward the login details directly to the new user. Typical turn around will be within 5 working days however if you mark the email as urgent every effort will be made to process it on day of receipt, please only do this in cases of genuine urgency.

Finance Procedure

Title Supplier Maintenance FormsDepartment CAFCASS – ACCOUNTSAuthor Robert SmithFirst Issued 10 October 2003Last Reviewed 27 January 2012 – Mark EverardLast Updated 26 January 2012 – Joanna Rich

Introduction:

Before a purchase order can be raised for a new supplier to Cafcass, a supplier maintenance form must first be completed by a member of the Cafcass branch and then authorised by the relevant Business Manager or 2nd authoriser. The form is then sent to Basingstoke Finance by post or by email.

Procedure:

Once received, supplier forms must be checked to ensure the authorising signature is valid. Check this with the specimen signature held in the Authorised Signatory log.

It is also necessary to check that the individual who has authorised the form is set up to do so. Details of individuals who are set up to authorise supplier forms can be found in Excel at G > Cafcass > HQ > FMS > Accounts> Authorisations.

Emailed forms can be accepted if scanned and received as a pdf. Forms that contain any corrected mistakes either by correction fluid or crossings out must be returned to the originating office with a request to re-submit the form.

Along with the supplier form, we should receive back-up documentation that has been provided by the supplier. Check that the details provided on the supplier form tally with those on the back-up document. Bank details must be provided on the suppliers headed paper wherever possible. However, there may be instances where the supplier is unable (or does not have the facility) to provide headed paper, for example for Self-employed Contractors, Interpreters, and some utility companies. Exceptions can be made in these instances

The back-up documents can be scanned and e-mailed. If it has not been provided or if the details on the maintenance form differ from those on the back-up then all documents should be returned to the originating office with an accompanying note.

If the documents are satisfactory the information on the maintenance form must then be entered on to the OpenAccounts system so that payments can be made to the supplier accordingly.

To set up a new supplier:

1. Log into OpenAccounts

2. Select Payables > Maintenance Routines > Supplier Maintenance

3. Once in Supplier Maintenance it is necessary to check that the supplier you will be logging is not already set up. To do this click on Query and then, in the Short Name boxtype the first part of the supplier’s name. With some of the larger suppliers there may bemore than one entry and a brief check through will be needed to ensure there will be noduplication of entries. Also check if it’s already set up by searching for the post code.

4. In the main supplier selection screen click on Add.

You will notice that a supplier reference number has been allocated to the new supplier. Write this number on the new supplier form.

Along the top of the next screen will be the following sections:

Supplier, Address, Payment, Codes, Tax, Pop, Mailmerge

All text should be in ordinary upper and lower case.

Complete the sections as follows:

1. Click on Supplier

Enter the full Supplier Name (ensure that no pronunciation marks are used in the SupplierName and Short Name).

The Short Name must be entered according to the supplier’s name. For example, a companyname such as British Gas will be entered as the same, but an individual’s name will be entered

with the surname first. A supplier name beginning with “The”, such as The Royal Mail, will beentered as Royal Mail The. This only applies to the Short Name section – The main Namesection must appear as normal.

The ledger defaults to Accounts Payable.

Enter the currency to be used when paying the supplier. This defaults to £GBP. If the supplier isto be paid in a foreign currency the Currency Code, Invoice Currency and PaymentCurrency sections should be amended to the relevant currency. Click on Find and selectaccordingly.

Click on OK

2. Click on Address

Enter the address, including the postcode.

Click on OK

(If setting up a self-employed guardian the address should not be entered here but insteadthe word PRIVATE should be typed on the first line – once the supplier set-up has beencompleted click on oasystem > Company > Guardian Address Maintenance. Click onQuery to locate the guardian, click on Modify, enter the address and click on OK)

3. Click on Contacts

Enter the contact details that have been provided including email address.

4. Click on Payment

Tab down to Payment Method

Click on Find to choose the appropriate payment method. If the payment is to be made in aforeign currency then D (direct debit) should be selected.

If BACS is selected as the appropriate method of payment enter the bank sort code andaccount number ensuring there are no gaps in the figures entered and that the account numberhas eight digits.

There is no need to enter any account details if payment by cheque is selected.

Once completed, click on OK

5. Click on Codes

Tab down to Supplier Type

Click on Find to choose the appropriate supplier type (VEND for vendor, GUA for guardianetc).

Once completed, click on OK

6. Click on Tax

Enter Supplier Tax Registration number (if available)

Completion of the Pop and Mailmerge sections is not currently required.

Once all relevant sections are completed, click on OK

A supplier file print is required once the supplier details have been entered and the system hasallocated a supplier reference number:

Payables > Maintenance Routines > Supplier Maintenance > Supplier File Print

The supplier file print should then be attached to the original paperwork and passed to anothermember of staff on the section who will check that the details have been entered correctlybefore signing them off.

Once all the details have been checked as correct an email must be sent to the originator of the supplier form advising that the supplier has been set

up on the system. This does not apply to supplier forms that contain only amendments to an existing supplier.

All paperwork concerning new suppliers should be filed in the Supplier Maintenance folder.

****

Amendments to existing supplier details

Supplier maintenance forms are also used to request the amending of existing details held on the OpenAccounts system and are sent in by the local Cafcass branches in the normal way.

The authorising details must be checked as normal.

Locate the existing supplier details by clicking on query, once in supplier maintenance, and entering either the supplier reference number or the name. If entering the supplier name ensure that the correct file is selected for amending as some suppliers have more than one reference number. Amendments to Bank details can be accepted with the suppliers invoice as backup.

When supplier details have been added or amended a supplier file print must be printed:

Payables > Maintenance Routines > Supplier Maintenance > Supplier File Print

In the Supplier Range enter the supplier reference number in the To and From boxes andchange the Format to ‘B’ (detailed print). Select “Print Notes – Yes“. Print as normal.

Also ensure that any changes have been recorded in the notes attached to the account (By selecting the paper clip icon). Make a note of details changed, what they have changed from, date and the name of who requested this.

The supplier file print should then be attached to the original paperwork and passed to another member of staff on the section who will check that the details have been amended correctly before signing them off.

The details should then be filed in the ‘Change of Bank Details & Addresses’ file in date order.

****

Guidance on Interpreters Objective: This guide is designed to clarify the following: The process for booking an interpreter Finance implications/requirements

Process: Translation/interpreters services fall into 3 broad categories all of which are National Contract awarded to ‘Thebigword’. These are as follows: 1. Telephone Interpreting 2. Written Translation 3. Face to Face interpreting

Please note before booking any of the above services listed the Service Manager (SM) must be consulted so that they can consider whether there is a business need and approve accordingly. 1) Telephone Interpreting

This type of interpreting is useful for unusual languages or for short notice when face to face interpreters can be difficult to obtain. Thebigword has set up access codes for each of the Cafcass Offices (These can be viewed on the intranet, link shown below). This access code will need to be quoted when a Translator is required. A Telephone Translation Booking Form and instructions are available to use for this process on the intranet. Please note Dual Handsets are available for the purpose of telephone translation. If required these can be purchase from Thebigword for £10 + VAT. 2) Written Translation

We also have a framework with Thebigword for written translation. A Written translation booking form is available under the Procurement Section of the intranet; it also contains information on pricing etc. 3) Face to Face Interpreting

As from 1st June 2012 Thebigword were awarded the National Contract for the supply of Face to face interpreters. June 2012

All interpreting requests should now be booked on line and all documentation, the booking website and guidance on how to use ‘Thebigword’ is available on the procurement section of the Intranet. Please click on the following link to access this: http://cafcassintranet/Intranet/departments/procurement/national_supplier_information/interpreters__translation.aspx Finance Implications/Requirements: As mentioned earlier the Service Manager (SM) must be consulted so that they can consider whether there is a business need and approve use accordingly. The SM then must inform the Office Manager (OM) that the service has been agreed. This is important as the OM hold the budgetary responsibility for Interpretation costs and hence need to be aware of the forthcoming costs that will be incurred. The invoicing for all the different types of translation for Thebigword has been set up on a consolidated basis. When the Booking Form on the intranet is used for accessing Thebigword service, this will directly link in to the invoice received by CAFCASS. Hence, it is vital that when completing the booking forms that the correct cost centre is quoted. The Finance Bureau will receive and post the invoices into the accounting system and the Area Finance teams will then receive a report with the breakdown of jobs invoiced for that month, which will in turn be made available to budget holders to review. As we have a contract with ‘Thebigword’, their service must be used as they have been selected as a preferred supplier as they offer quality service and competitive pricing. If ‘Thebigword’ are unable to provide the services required then only in exceptional circumstances should any other supplier be used. You must seek authorisation first from the OM and provide the following details so that they can raise a PO in advance and check that we have been charged correctly when the invoice comes in: Date and time of the service to take place Case details Price per hour Estimated time of use of service (including travel time if relevant)

If using a supplier for the first time that is not on our system, then again you must seek authorisation from the OM as they must be informed that this is the case as they will need to set the supplier up on the system first, before they can raise the PO and pay the invoice. It is imperative that a PO is raised in advance as this acts as the authorisation of costs and helps OM’s mange the translation/interpreters budget effectively.

Cafcass Car Hire Policy Overview of Policy This document sets out the procedures to follow for car hire. 1.0 Objective 1.1 The aim of the CAFCASS car hire scheme is to provide efficient and effective car hire for CAFCASS staff, via our preferred supplier, Leasedrive Rental Management. 1.2 Car Hire is an option available to most CAFCASS staff, who are required to travel in order to carry out their duties. Car hire should only be used where it leads to better and efficient performance of duties and no other alternatives were available. 1.3 Certain rules and guidelines are required to be followed. 2.0 Staff with Lease vehicles 2.1 This Car Hire arrangement is not available to individuals who have a lease car provided through Lex Autolease (or any other lease car provider). There are different arrangements in place for these individuals, and they should refer to the Cafcass Car Policy. 2.2 Other staff with lease vehicles that require a hire car because their vehicle is off the road should check with their Lease Provider first, as a courtesy vehicle may be available at no additional cost. 3.0 Vehicle booking procedure 3.1 The individual will have to email their Manager to obtain approval to proceed with the booking. Where the term of the hire is more than 5 days, the Budget Holder must also be informed. The Area Finance Manager or National Office Department Heads (for National office) must approve any car rental, which exceeds 3 days. 3.2 Once the booking form has been completed and authorised, the individual will book using the Leasedrive online booking manager, for registration instruction click here. 4.0 Type of vehicles available and costs 4.1 A group 2 will be the standard vehicle available, and there is a choice of manual or automatic transmissions (group 3). Should a higher category vehicle be required (i.e. group 4 or above) the Area Finance Manager or National Office Department Heads authority must be obtained. The Area Finance Manager or National Office Department Heads must be satisfied that there are valid business reasons for approving a higher category vehicle. 4.2 Please contact Leasedrive for the latest prices. Cafcass Car Hire Policy Full Implementation July 2012 Page 2 of 4

4.3 Delivery and Collections from any UK mainland options are available and are included in the daily charge. 5.0 Fuel and Accounting for Business Mileage 5.1 All cars should (usually) be provided with a full tank of petrol or diesel. Should a car be provided with less than a full tank of fuel, take note of the level of fuel (inform Leasedrive immediately upon receiving delivery of the car) and when the car is returned refill the tank back to the level it was when delivered. 5.2 CAFCASS will reimburse the individual for all business mileage travelled in the hire car. The reimbursement is as per the Expenses Reimbursement Policy and must be claimed for via iTrent Travel and Subsistence (T&S) electronic submission. 5.3 CAFCASS does not pay towards the cost of ‘fuel top ups’ or reimburse the actual cost of fuel even when a receipt is produced. Where a vehicle is returned to Leasedrive and it requires a ‘fuel top up’ it is the responsibility of the individual to pay this. 5.4 It is the responsibility of the driver to ensure that the correct fuel type is used to refill the car. If there is no visible proof of which type of fuel to use please contact Leasedrive request it and to log a formal complaint, as this should be clearly indicated on the hire car. 5.5 The driver will be liable for any traffic offence (i.e. parking, speeding fines etc) committed in the hire car during the period of hire; this will also include any administration fee charged by the hire company. 6.0 Definition of business mileage 6.1 Business mileage is defined as mileage carried out in the performance of CAFCASS duties. This does not include home to work mileage. 6.2 If the vehicle is collected or returned by the individual, this counts as business mileage. 7.0 Controls & Safeguards 7.1 The Account number and Cost Centre number must be quoted for all bookings: The Cafcass account number is: ZC213

7.2 Car hire will be limited to three days. The driver should inform the Area Finance Manager or National Office Department Heads if they plan to exceed the existing car hire beyond 3 days. 7.3 Car keys MUST not be left in unsecured places e.g. under flowerpots, wheel bins, etc. The keys must be handed over by an individual, as we are not insured for leaving the keys unattended. 8.0 Options to consider before hiring a car via Leasedrive: Cafcass Car Hire Policy Full Implementation July 2012 Page 3 of 4

1. Is there a CAFCASS pool car? 2. Has consideration been given to use public transport e.g. buses/ trains? 3. Can you travel with another colleague to the same destination, e.g. conferences/meetings? 4. Is the car required, if you are working in the office that day or on holiday? 5. If a Lease car holder, has prior notice been given to the garage to see if a courtesy car will be available? e.g. 7 days or more. 9.0 Accidents 1. If you have been involved in an accident you must contact Lex Autolease Accident Management on 0870 333 6611 to make an insurance claim and notify National Office Finance of the incident.

2. CAFCASS insurance company is AXA, policy number 6725581.

3. Please note, if the accident is your fault then you are liable to a £50 insurance excess payments towards the repair cost of the car.

4. If your vehicle breaks down please contact the hirer’s breakdown number which can be found either on the back of the tax disc holder in the car, on the car’s key fob or on the paperwork

10.0 Overseas/abroad: 10.1 Subject to the Area Finance Manager or National Office Department Heads’ authorisation, the driver must contact Leasedrive who will advise the driver to take out additional cover at his or her own costs. e.g. AA Five Star. (To recover vehicle back to England.) 11.0 Invoicing: 11.1 Leasedrive will invoice Cafcass. The invoice should show the cost centre and the name of the driver. 11.2 Regular checks will be made, invoices should be checked against email authorisation (which must be kept by the authoriser and the driver) and then authorised for payment. Owner

Finance

To be implemented by

July 2012

Version 2.5 Next Review December 2012

YEAR END TECHNICAL GUIDANCE2012-13

CONTENTS

Terms of reference Page

1. Introduction 04

2. Year End Procedures 05

3. Accruals 07

General accrual 07Travel and Subsistence and Time claim accrual 10Government Procurement Cards (GPC) 12Consolidated Invoices 12

4. Prepayments 13

5. Other Year End Information 14

Journals 14

Operating Leases 14

Accrued Income 14

Capital Commitments 15

Provisions 15Contingent Liabilities 16

Petty Cash Reconciliation 17

Fixed Assets 17

FINANCE BUREAU Payments & Receipts 17

6. Backing Documentation and Electronic returns 18

7. Submission of All Returns 21

QUERIES AND CONTACTSIf you have any queries about Year End policy issues, timetable and queries on completing returns, please contact NO Finance 0844 353 3350.

Terms of reference

1. “Areas or Area” refers to (1) Operational Service Area (OSA), (2) National Business Centre (NBC), (3) National Office (NO) Departments which includes National Improvement Service (NIS), Estates and Accommodation (EST and ACC), and HQ departments.

2. “Finance teams” refers to (1) Area Finance team for Operational Service Areas and National Business Centre, (2) Estates and NIS Finance for Estates projects and Accommodation and NIS; (3) HQ finance team for HQ Departments.

1 . INTRODUCTION

1.1 The Year End process is a series of accounting, financial and auditing tasks, which are carried out at the end of the financial year for the period 1 st April 2012 to 31 st

March 2013, to deliver the 2012/13 Annual Report and Accounts of Cafcass. The publishing of an Annual Report and Accounts is a requirement of the Financial Memorandum and Accounts Direction between the Department for Education (DfE) and Cafcass; it is also a key target of the Public Accounts Committee, National Audit Office (NAO) and Parliament to publish the Accounts before the summer 2013 Parliamentary recess.

1.2 Cafcass produces accounts on an accruals accounting basis, both during the year and at Year End. This means we account for the goods and services used in the period regardless of when the goods have been paid for.

1.3 The de minimus limit is the minimum value of the transaction to be included in the returns. Each return will have its own de minimus limit.

The Year End procedures must capture the following data.

1.4 Accruals are goods and services used but not paid for in the financial year ending 31 st March 2013. An accrual is made when the amount to be accrued is £500.00 or greater for goods and services received before 1 st April 2013. Please see section ‘3’ for examples of accruals.

1.5 Prepayments are expenses paid for but not yet consumed in the financial year ending 31 st March 2013. A prepayment is made when the amount prepaid is £500.00 or greater for goods or services not consumed before 1 st April 2013. Please see section 4 for examples of prepayments.

1.6 Accrued Income is to be recorded when there are individuals or organisations that owe Cafcass money for the financial year ending 31st

March 2013, for which no sales invoice had been raised as at 31st March 2013. Accrued Income information is required when the amount owed to Cafcass is £500.00 or greater.

1.7 Operating Lease data represents property and equipment rentals such as land, buildings etc. Details required are the values of the leases split into 12/13 spend and the amounts Cafcass is committed to pay within one year (1 st April 2013 to 31 st March 14), within 2-5 years (1 st April to 31 st March 2018), and after 5 years (1 st April 2018 onwards).

1.8 Capital Commitments these are expenditures on capital items that we have committed to but not received e.g. assets with a value of £2,500.00 or greater.

1.9 Provisions Details of provisions need to be collated as they highlight where Cafcass has a future obligation e.g. Events which occurred in the financial year 12/13, but where the possible cost will occur in 13/14 onwards.

1.10 After collation of the above and other Finance schedules, the data on the accounting system and returns will be subject to scrutiny by the NAO, whose audit work will extend to visits to Operational Area offices. The

NAO will also examine and comment on the quality of Cafcass Internal Controls at National Office, Finance Bureau and Operational Area offices.

1.11 Subject to the favourable outcome of Operational Area and corporate audits, the objective is that the NAO will recommend an “unqualified” certification on the Cafcass Annual Accounts. Cafcass would want to avoid a qualified recommendation as that indicates significant weaknesses in Cafcass systems and operations.

2. YEAR END PROCEDURES

2.1 The procedures that follow aim to deliver the information needed in the most efficient way possible. The key to achieving this will be adequate controls in local offices to ensure that accurate data is produced in a timely manner. To enable Cafcass to meet its timetable electronic returns should be sent to NO Finance. Please retain a copy for local and audit purposes.

2.2 Prior to the Year End period, two electronic E-Learning Year End packages will be made available via MySkills to train Office Managers/ budget holders as well as Business Support staff so that they fully understand their role within the Year End process. Budget holders and budget managers will be informed of the outcome of the training and of any actions required as a result of the training. In addition, budget holders and budget managers will be briefed about the Year End procedures and processes during February/March 2013 and about the provisional Year End outturns in April 2013 by the Area Finance Manager and NO Financial Accountant/Finance Officer via Operational Management Meetings/HQ team meetings. Minutes of such meetings must be kept and provided to NO Finance when they are available. Together with the use of Budget Delegation Letters and the Financial Manual, this serves as a control to ensure the accuracy and completeness of the annual accounts.

2.3 Please note that it is the responsibility of the Area Finance Manager (AFM) covering Operational Service Area and National Business Centre or NO Financial Accountant/Finance Officer (FA/FO) for NO Departments to arrange their own internal timetable in order to meet the deadlines laid out in the 12/13 Year End Returns Timetable.

2.4 NO Finance must receive the following from AFM or NO Financial Accountant/Finance Officer by the dates given:

A single consolidated electronic copy for each type of return in Excel format.

Supporting documentation for each type of return for items over £5000.

Supporting documents for items under £5000 are retained by Area Finance and submitted to the Business Assurance Team for a health check.

Nil Returns: Nil returns (where applicable) should not be entered on the consolidated electronic copy but must be listed in a separate return marked NIL RETURN list

2.5 The Year End adjustments for 2012/13 will affect the 12/13 Outturn i.e. budget variances and the 13/14 Budgets as well. The timetable aims to ensure that 2012/13 outturn is available in local cost centres by the end of April 2013, and that brought forward balances are stable by June 2013.

2.6 As part of the Year End procedure, various returns (including Accruals and Prepayments) need to be carried out. These are detailed in the schedule below. Not all the returns are applicable to every cost centre, but where returns are required these must be completed even if the return is NIL.

2.7 The AFM and NO FA/FO must collate and check each type of return for their Areas. AFM and NO FA/FO should only submit their data in one electronic consolidation by saving all Final Electronic Copies in the Restricted Finance Folder and send a confirmation email to NO Finance. Once NO Finance receives the return, they will lock the return to save a copy of the original submission for auditing purposes.

2.8 Because the returns contribute to local budgetary performance, AFM and NO FA/FO will need to be directly involved in managing the preparation and collation of return data for their areas.

2.9 Completion of these returns also allows local teams and their Finance teams to monitor accruals posted against actual invoices processed post March 2013.

2.10 All cost centres must keep Final Electronic Copies of all their returns as well as the copies sent to the AFM and NO FA/FO.

2.11 AFM and NO FA/FO are responsible for ensuring that the returns are completed correctly and that the figures look reasonable and are fully backed up by appropriate backing documents.

Returns required Applicable to

Accruals (including Overtime, Bank/Sessional, T&S, and Self Employed Guardians).

AFM for Operational Area and NBC.

NO AF/FO for NO Departments

Prepayments AFM for Operational Area and NBC.

NO AF/FO for NO Departments

Operating Leases AFM for Operational Area and NBC.

NO AF/FO for NO Departments

Accrued Income (Deferred Debtors)

AFM for Operational Area and NBC.

NO AF/FO for NO Departments

Provisions AFM for Operational Area and NBC.

NO AF/FO for NO Departments

Petty Cash Reconciliation AFM for Operational Area and NBC.

Related Party Disclosure Board Members CMT.

3 ACCRUALS

General Accruals 04th April 2013: A single consolidated electronic copy received by NO

Finance. 05th April 2013: Supporting documents for items over £5000 received

by NO Finance. 08th April 2013 Midday 12 pm: Deadline for adjustments (only where

significant) submitted as additional returns 08th April 2013: Supporting documents for items under £5000 received

by Business Assurance Team Where applicable nil Electronic Copy returns are required for control

& audit purposes. The De minimus limit for Accruals is £500

3.1 This return applies to all Cafcass cost centres. An accrual is a liability (or a commitment) to pay for goods or services after the goods or services have been consumed e.g. the goods or services have been received or utilised in the period 1st April 2012 to 31st March 2013, but the invoice has not been paid before 31st March 2013. If there are accruals created prior to 12/13 that is still being re-accrued e.g. Accruals created during the 11/12 Year End or earlier, please discuss these with NO Finance before re-accruing.

3.2 It may be necessary to estimate the amount of an accrual if the invoice has not actually arrived using the best information available by providing the purchase order, quote or previous invoices if appropriate. Please note that all estimates must be backed up by documentary calculations and evidence.

3.3The monthly outstanding purchase order report and the purchase order report of items being GRNed without receiving invoices will be available for use on 25th March 2013. This report can be used to identify which purchase orders remain outstanding as at 31st March 2013 and whether goods/services have been received by 31st March 2013 and which commitments needs to be accrued. At the end of the financial year it is important to make accruals as accurate as possible so that the outturn and accounts accurately reflect the resources consumed during the financial year.

3.4 In order to provide further assistance, NO Finance will prepare an additional transaction report covering the period 25th March 2013 to the 2nd

of April 2013 and issue this on 03rd April 2013. This report should be used by the finance teams as an additional check when preparing your accruals return (e.g. to ensure that items already paid have not been accrued for).

3.5 You should complete the boxes in the workbook as follows:

Column in the Accruals Template

You have an invoice/claim (including invoices under dispute)

You expect to get an invoice/claim but have not yet received it

Sequential Number

Please write on the hard copy invoice the sequential number that matches the entry in this row.

Please write on the hard copy estimate the sequential number that matches the entry in this row.

Backing Document Page in PDF File

This refers to the page number of the backing document that is in the PDF file.

Column in the Accruals Template

You have an invoice/claim (including invoices under dispute)

You expect to get an invoice/claim but have not yet received it

Cost Centre & Natural Account Code

The cost centre and natural account codes you expect to use when you pay the invoice / claim. These should in general be the same as that used when originally raising the purchase order. Use several lines if necessary.

The cost centre and natural account codes you expect to use when you receive and pay the invoice / claim. These should in general be the same as that used when originally raising the purchase order. Use several lines if necessary.

Supplier Name The name of the supplier or person to whom the payment will be made.

The name of the supplier or person to whom the payment will be made.

Supplier’s Invoice Number or Order Number

The supplier’s invoice number.

If you have ordered goods or services enter the EBIS purchase order number.

Invoice/Delivery Date

The invoice date or the date of the claim. If there isn’t a date enter the date stamped on the invoice or claim.

Enter delivery or service date

Brief Description Enter brief description of the goods/services. Where invoice is under dispute, this section can be used to record why the dispute exists.

Enter a quick description of what the estimate is for (including relevant dates). For example – Copier hire January 2013 to March 2013.

Amount This will be either:The 2012-13 element (including vat) of the invoice/claim, or an estimate of the 2012-13 element (including VAT) you are likely to pay, if it is a disputed invoice/claim.

This will be an estimate of the 2012-13 elements you expect to pay (including VAT).

Column in the Accruals Template

You have an invoice/claim (including invoices under dispute)

You expect to get an invoice/claim but have not yet received it

Estimated/Actual (E/A)

If you will settle the invoice in full, enter “A” (Actual) in this column.If you have estimated what you are going to pay, e.g. in the case of disputed invoices, enter “E” (Estimated) in this column.

Enter “E” (Estimated) in this column.

Post Year End CheckInvoice Paid: Please note that completion of this column does not form part of your Year End return but may be used for ongoing checks.

After 31st March 2013 check to see if this invoice has now been paid using the Transaction Report, write actual amount paid.

After 31st March 2013 check to see if this invoice has now been paid using the Transaction Report, write actual amount paid.

3.6 All entries on the accruals return must be supported by either a copy of the invoice or the documentation on which an estimate was based. This could be a copy of the purchase order (if below £5k), delivery note or possibly past invoices (take an average of 3 invoices with the workings clearly shown on the front sheet). For estimated accruals greater than £5,000.00 in addition to a purchase order further supporting evidence is required (also see 6.19)

3.7 The figure on the return should include VAT and split correctly between actual amounts and estimated amounts (see Appendix 1 for example)

3.8 If an invoice relates to a resource consumed over two financial years (2012-13 and 2013-14), only the element relating to 2012-13 should be entered on the return. This will mean splitting some invoices across the Year End pro rata to the proportion of goods or services consumed in each year (as shown in the example below).

Please refer to the example below.

You have an invoice You expect to get an invoice but have not yet received it

A cleaning invoice: Invoice date 15 March 2013. Invoice received on 25 March

2013. Cleaning service from 15

March 2013 to 14 April 2013 is £1200 (including VAT)

A cleaning invoice for March/April 2013 Cleaning service from 15 March 2013

to 14 April 2013 is £1200 (including VAT)

You have not received the invoice

1 Identify the financial year(s) to which the cost relates: Cleaning service from 15 March to 31 March is relating to 2012-13.Cleaning service from 1 April 2013 to 14 April 2013 is relating to 2013-14

Cleaning service for the period 15 March to 31 March 2013 is consumed in financial year 2012-13 and hence the cost needs to be accrued.

2 Disregard the Cleaning service cost from 1 April 2013 to 14 April 2013 as it all relates to 2013-14.

3 Calculate the cleaning service cost for 12-13 to be accrued – ½ month cost

Cleaning cost = £1200/2=£600

Estimate the value of the cleaning services that relate to 2012-13 i.e ½ month’s cost. As you have already estimated the invoice total, for this calculation you can round to the nearest month.

Cleaning cost = £1200/2=£600

3.9 If you have a disputed invoice/claim, relating in full or in part to 2012-13 there are three possible ways of treating it:

(a) If you anticipate paying in full, then put the current year’s element of resource consumed on your accruals return.

(b) If you do not anticipate paying at all, do not make any entry. If you have an invoice that is greater than £1,000.00 please contact NO Finance for advice.

(c) If you anticipate paying part of the invoice, then you should make a reasonable estimate of the resource consumed in 2012-13, for which you are likely to pay, and put this in your return with an explanation.

3.10 Please ensure the return is completed accurately. Each line of data entered on the spreadsheet must be completed in full, as it will be used for electronic input. Do not use “ditto”, “as above” or any such short cut for

details that are repeated. The spreadsheets are uploaded automatically into the system and the use of “ditto” etc will cause the spreadsheet to be rejected.

3.11 Any incorrectly prepared returns received will cause a delay in the accounts production process and may lead to returns missing the deadline for input. Any returns that miss the deadline due to errors in the spreadsheet completion will have an impact on your budget outturn and hence possibly affect your expenditure in the following year.

3.12 Accruals forms must be completed electronically. Local teams must save their electronic returns in the relevant folder as directed by their AFM or NO FA/FO. The AFM or nominated officer must check and collate the returns prior to sending on to NO Finance. The AFM or NO FA/FO will advise their teams of the deadline for the submission of team information.

3.13 Please note that accruals data will be audited by the NAO for accuracy and completeness as part of the Year End audit and that our published accounts could be “qualified” e.g. considered materially inaccurate, if the data viewed by the NAO is deemed to be significantly inaccurate.

Travel and Subsistence (T&S) accruals and Time claim accruals (i.e. Overtime & Bank and Sessional Staff claim accruals)

7th March 2013: Claims must be submitted and authorised by relevant managers via Itrent by this date to be processed in the March payroll.

7th April 2013: Claims must be submitted and authorised by relevant managers via Itrent by this date to be processed in the April payroll.

04th April 2013: A single consolidated electronic copy of T&S accruals and Time claim accruals returns for OSA/NBC/NIS/HQ received by NO Finance.

05th April 2013: Supporting documents received by NO Finance. 08th April 2013 Midday 12 pm: Deadline for adjustments (only where

significant) submitted as a separate return The De minimus limit for T&S claim and time claim accruals is £100

3.14 Staff should ensure that as far as possible that 12/13 T&S and time claims are submitted and authorised by relevant managers via Itrent by the 7 th

March 2013, to ensure that they are processed and paid in the March main payroll run. If this deadline is missed staff should ensure the April main payroll run deadline is met i.e.T&S and time claims to be submitted and authorised by relevant managers via Itrent by 7th April 2013).

3.15 Unlike last year, NO Finance will NOT be using the T&S and time claim data from the April pay run as the T&S and time claim accruals for 2012-

13. AFM and NO AF/FO for NO Departments must to accrue for ALL unpaid claims and include them in the returns.

3.16 Any claims of £100.00 or greater relating to 2012-13 that miss the March main cut-off e.g. be submitted and authorised by relevant managers via Itrent after 7th March 2013 should be included on the T&S and time claim accruals return by the finance teams. A claim history report will be issued on 3rd April 2013 to identify all claims that are submitted and authorised by 12pm on 3rd April 2013 but are not paid in March 2013 or earlier months. The report will be the basis for accrual based on actual claims. This T&S and time claim accruals made should be listed per employee. Please note per Cafcass policy that in general T&S claims greater than 3 months old are not accepted and therefore should not be accrued unless being duly authorised.

3.17 Where T&S and time claims have not been authorised by relevant managers via Itrent by 12pm on 3rd April 12 and hence not been included in the Claim history report, an estimate should be made of the amounts outstanding and entered onto the T&S and time claim accruals return. The estimate for T&S accruals must be supported e.g. based on known travel or an estimate based on the average of the previous 3 claims with the workings clearly shown on the front sheet and backed up with the appropriate supporting documentation. The estimate for time claim accruals must be based on either (1) known overtime or (2) the volume of work estimated by the authorising manager or (3) the average of the previous 3 claims with the workings clearly shown on the front sheet and backed up with the appropriate supporting documentation. These accruals made should be listed per employee. Please refer to section 6 for details of backing documentation required.

Local teams/NO Departments have the responsibility to notify their Finance teams about cases where T&S and time claim accruals are not required such as the employee has been on sick leave, maternity leave or they have confirmed no claims incurred during the month etc. AFM and NO FA/FO will circulate internal deadlines for these activities of local teams/NO Departments.

3.18 Required information on the T&S accrual template:

Employee/Bank Staff Name: Please enter the name of the individual to whom the T&S claim relates. Payroll No: Please enter the payroll number for the individual to whom the T&S claim relates.Brief Description: Please enter the name of the individual and the month the expenses relates to. Amount: Please enter the total value of that T&S claim.

Post Year End Check: Please note that completion of this column does not form part of your Year End return but may be used for ongoing checks . Please enter the actual amount paid after 31st March 2013.

3.19 Required information on Time claim accrual template:

Natural Account Code: Please use the pull-down menu to enter the appropriate Natural Account Code: 300112 – Bank Staff. 300320 – Misc. Allowances. 300400 – Overtime. 300111 - Sessional staffEmployee/Bank Staff/Sessional staff Name: Please enter the name of the individual to whom the overtime/bank/sessional hours relate.Payroll No: Please enter the payroll number for the individual to whom the overtime or bank/sessional hours relate.Employee/Bank Staff/ Sessional staff Name: Please enter the name of the individual to whom the overtime/bank/sessional hours relate.Brief Description: Please enter the name of the staff, the month of claim, number of hours worked by each employee and the estimated hourly rate.Amount Excluding Pension & NI: Please enter the total value of the overtime / bank staff/sessional staff costs excluding pension and NI costs.Amount Including Pension & NI: This is a formula-driven column adding 23.7% to your overtime / bank staff costs. Please do not input any data in this column.Post Year End Check: Please note that completion of this column does not form part of your Year End return but may be used for ongoing checks . Please enter the actual amount paid after 31st March 2013.

3.20 T&S accrual for Operational Service Area and NBC are completed by Area Finance whereas the NO Financial Accountant and Finance Officer will complete the return for HQ teams and NIS. Once your accruals return is complete, save the electronic returns with supporting documentation for any items included on it (including estimates) in the relevant folder as directed by NO Finance by the required deadline and email the NO finance mailbox confirming the submission.

3.21 Please note that accruals data will be audited by the NAO for accuracy and completeness as part of the Year End audit and that our published accounts could be “qualified” e.g. considered materially inaccurate, if the data viewed by the NAO is deemed to be significantly inaccurate.

Government Procurement Cards (GPC)

3.28 As per normal monthly procedures, NO Finance will accrue for all GPC costs incurred on the March 28th 2013 GPC statements. Operational Areas and NO departments should not accrue for these costs.

3.29 The de minimus limit for GPC transactions is £100.00. Therefore Operational Areas & NO departments should include on their accrual returns GPC costs equal to or greater than this amount that were incurred between 28th and 31st March (e.g. costs that do not appear on the March 28th statement but were incurred prior to Year End).

Consolidated invoices

3.30 Finance Bureau will post ALL monthly consolidated invoices into period 1 2013/14 and NO Finance will accrue for all consolidated invoices based on the invoice break-down per cost centres provided by the suppliers.

3.31 Thus, there is no requirement for the Operational Areas or NO departments to include March 2013 costs for consolidated suppliers on their accruals returns.

4. PREPAYMENTS 04th April 2013: A single consolidated electronic copy of each area

received by NO Finance. 05th April 2013: Supporting documents for items over £5000 received

by NO Finance. 08th April 2013 Midday 12 pm: Deadline for adjustments (only where

significant) submitted as separate returns 08th April 2013: Supporting documents for items under £5000 received

by Business Assurance Team Where applicable nil Electronic Copy returns are required for control

& audit purposes. The De minimus limit for Prepayment is £500

4.1Prepayments are payments made in advance where the good or service in question will be consumed in a future accounting period. Unlike accruals, prepayments are not estimated as the bill will already have been paid and the exact amount paid will appear on the invoice or can be calculated. Supporting documentation should therefore be available to complete this return accurately and must be provided as backup for your prepayment calculations.

4.2The Prepayment template will calculate the prepayment element of the invoice details entered.

4.3This return will be required from all cost centres, this may be in a form of a ‘nil’ return.

4.4Where the Finance Bureau have posted invoices as automatic prepayments (shown on the transactions report as PINVP) local teams will NOT need to include these on their prepayments returns. 

4.5 If the invoice paid has items that relate to two financial years, only the element relating to the future period should be included on the return.

For example, an invoice paid in March 2013 for an alarm maintenance service which pays for 1 March 2013 to 28 February 2014 and for a piece of equipment replaced in March 2013. Only the prepayment element of the payment should be recorded in the Prepayment return i.e the alarm maintenance service’s costs. The cost of the equipment replaced will not be entered on the prepayment return.

4.6 As with accruals, VAT must be included on the return.

4.7 Prepayment returns must be completed electronically. Local teams must save their electronic returns in the relevant folder as directed by their AFM or NO FA/FO. The AFM or nominated officer must check and collate the returns prior to sending on to NO Finance. The AFM or NO FA/FO will advise their teams of the deadline for the submission of team information. As with accruals, please ensure the prepayments return is completed accurately. Each line of data entered on the spreadsheet must be completed in full, as it will be used for computer inputs. Do not use “ditto”, “as above” or any such short cut for details that are repeated. The spreadsheets are uploaded automatically into the system and the use of “ditto” etc will cause the spreadsheet to be rejected.

4.8 Please note that prepayments data will be audited by the NAO for accuracy and completeness as part of the Year End audit and that our published accounts could be “qualified” e.g. considered materially inaccurate, if the data viewed by the NAO is deemed to be significantly inaccurate.

5 OTHER YEAR END INFORMATION

Journals Until 4th April 2013: Standard journals only may be posted by the Finance

teams until close of this date. Please check with your AFM or NO FA/FO for the deadline for OM’s.

5.1 Standard journals only may be posted by the AFM and NO FA/FO until the close of the 4th April 2013. No reversing journals should be posted into March 2013. After this date, only NO Finance will be allowed to post journals to General Ledger.

5.2Please note NO Finance will create and post all year end returns journals, mainly the accruals, prepayments and accrued income.

Operating Leases: 28 March 2013: Single electronic consolidated return for each Area received

by NO Finance, consisting of a copy of the contract\Agreement\Invoice in PDF format referenced to the consolidated electronic return.

5.3 This return applies to all cost centres for the 12 month period. The Finance teams must collate these returns and ensure that NO Finance is in receipt of electronic copies by the above deadline date. This is an update of the 9 month return which is due on the 21st December 2012.

5.4 The Finance teams will advise their local teams/NO Departments of the deadline for the submission of team information

5.5 Operating leases are agreements for the rental of property or equipment, such as land and buildings, franking machines, vending machines, cars, photocopiers etc.

5.6 The Finance teams do not have to provide any information on the following as these are accounted for centrally by NO Finance:

Land and building leases. Car leases.

5.7 Details required are the values of the leases split into 2012-13 spend and the total annual amounts Cafcass is committed to pay within one year (1st

April 2013 – 31st March 2014), within 2-5 years (1st April 2014 to 31st

March 2018) and after 5 years (1st April 2018 onwards). Please include the date of expiry of the lease.

Example (as given on template): A photocopier is leased on the 1st April 2010 on a 9-year lease at a cost of £5,000.00 per annum with no annual adjustment to the lease cost for inflation.Lease Amount Due 2012-13: £5,000 x 1, therefore enter £5,000.Date Lease Expires: A 9-year lease commencing 1st April 2010 would expire 31st March 2019, therefore enter 31-03-19.Lease Amount Due 13-14: £5,000 x 1, therefore enter £5,000.Lease Amount Due 14-18: £5,000 x 4, therefore enter £20,000.Lease Amount Due After 31-03-18: £5,000 x 1, therefore enter £5,000.

Accrued Income 04th April 2013: A single consolidated electronic copy received by NO

Finance. 05th April 2013: Supporting documents for items over £5000 received by NO

Finance. 08th April 2013 Midday 12 pm: Deadline for adjustments (only where

significant) submitted as separate returns 08th April 2013: Supporting documents for items under £5000 received by

Business Assurance Team Where applicable nil Electronic Copy returns are required for control &

audit purposes. The De minimus limit for Accrued Income is £500

.5.8 This is income created during the period 1st April 2012 – 31st March 2013,

which has not been invoiced as at 31st March 2013.

5.9 The AFM or NO FA/FO should compile a total listing of all Accrued income for their areas. Finance teams will advise their local teams/NO Departments of the deadline for the submission of team information.

5.10 All team returns must be sent to and collated by their Finance teams.

Capital Commitments

Further guidance will be emailed to specific users on 1 March 2013 by NO Finance for returns to be received by 22 March 2013.

5.11 In general this applies to NO Finance, NO IT and NO Estates and Operational Areas.

5.12 Definition of Capital Commitments:

An agreement with a single supplier to acquire a Fixed Asset item or items.

Fixed asset items are defined as laid out in the Fixed Asset section of the Cafcass Intranet:

http://cafcassintranet/Intranet/departments/finance/finance_manual_new/ asset_management_new.aspx

The commitment will be funded from the 2012-13 or post 2012-13 capital expenditure budgets.

5.13 Characteristics of a Capital Commitment

Payments in relation to the commitment have not been made by the 31st March 2013.

Goods in relation to the commitment have not been received by the 31st March 2013.

Any unsigned contracts for fixed asset purchases that have been approved by the Board and for which the contract amount is certain.

Please note that (for these purposes) capital commitments do not include capital items that has been received or paid for in 2012-13.

5.14 Please note that in the event of there being no capital commitments, an emailed ‘nil’ return is required from specific user guidance recipients only.

Provisions

Further guidance will be emailed to specific users on 1 March 2013 by NO Finance for returns to be received by 22 March 2013.When reviewing provision details, the following will need to be considered:

5.15 With regards to existing provision balances (if any):

a. Can any of the balances be released in their entirety as no longer required as at 31st March 2013?

b. Can any of the balances be reduced to a level sufficient to meet existing obligations as at 31st March 2013?

c. Do any of the balances need to be increased to a level sufficient to meet existing obligations as at 31st March 2013?

5.16 Are there any new obligating events for which provisions need to be created as at 31st March 2013? New provisions should only be created when all of the following conditions can be met:

a. When the event in question has occurred by the 31st March 2013.b. When payment by Cafcass for this event will only be decided by the

occurrence (or non-occurrence) of another event in the future (after the 31st March 2013).

c. When that future event is not wholly within the control of Cafcass.d. When payment by Cafcass for the event in question can be enforced by law.

ORe. When – based on the available evidence, experience, and / or the opinion of

experts – there is a valid expectation of payment by Cafcass.f. When a reliable estimate can be made as to the amount of the provision.

5.17 Please note that regardless of whether any prospective provision being created is an actual or estimated cost, or in the event of

existing provisions being increased, provisions must be backed up and justified with reasonable calculations and documentation.

5.18 In the event of there being no provisions, an emailed ‘nil’ return is required from specific user guidance recipients only.

5.19 Following a return with provision details, a meeting will be organised between NO Finance and the budget holder who submits the provision return. Hard copy of calculations and all relevant explanatory back-ups are required to be seen at the meeting.

Contingent Liabilities

Further guidance will be emailed to specific users on 1 March 2013 by NO Finance for returns to be received by 22 March 2013

5.20 A contingent liability should only be created when both of the following conditions can be met:

a. When the event in question has occurred by the 31st March 2013.

b. When it is unlikely – based on the available evidence, experience, and / or the opinion of experts – that there will be payment by Cafcass.

5.21 Please note that there is no financial impact with regards to contingent liabilities. They are shown in the Accounts in narrative form only.

5.22 Please note that in the event of there being no contingent liabilities an emailed ‘nil’ return is required from specific user guidance recipients only.

5.23 Where a contingent liability is to be created, a meeting between NO Finance and budget holders will be arranged to discuss the contents of the submission. Hard copy of calculations and all relevant explanatory back-ups are required to be seen at the meeting.

Petty Cash Reconciliation

15th April 2013: electronic copies of Petty cash returns to be received by FINANCE BUREAU.

5.24 March 2013 electronic Petty cash returns are to be completed for all cost centres holding a petty cash float, and forwarded to Finance Bureau via the Area Finance team.

5.25 Reconciliations will be required at Year End for all petty cash floats, as per the monthly returns requirements.

5.26 Returns should be submitted to the Area Finance team. The Area Finance team should send all Petty Cash returns after checks and reviews to FINANCE BUREAU by the above deadline.

Fixed Assets

Further guidance will be emailed to specific users on 1 March 2013 by NO Finance for returns to be received by 22 March 2013

5.27 Fixed Assets are physical assets that an organisation owns such as computers and buildings that are regularly used over a long period of time.

5.28 FMs and NO Dept Heads are required to prepare and submit to NO Finance by the above deadline completed FAMFs and supporting documentation of all 2012-13 capital expenditure items not coded to the I&E (721*** series) Natural Account Codes that qualify as Fixed Assets.

5.29 In order to complete this exercise, FMs and NO Dept Heads will need to ensure that they are familiar with the Cafcass Fixed Asset Policy & Procedures, a copy of which can be found on the Cafcass Intranet under the following link: http://cafcassintranet/Intranet/departments/finance/

finance_manual_new/asset_management_new.aspx

Please do not hesitate to contact NO Finance should you have any queries relating to Fixed Assets.

5.30 Fixed Asset returns (FAMFs & their supporting documents) will in the main apply to NO IT, NO Estates and Operational Areas undertaking building fit-out projects where the project has been classified as containing capital costs.

5.31 In the event of there being no Fixed Assets costs, an emailed ‘nil’ return is required from specific user guidance recipients only.

5.32 As per the Policy & Procedures NO Finance will check all received FAMFs. Further to this, NO Finance will also prepare and post all General Ledger journals relating to Fixed Assets.

FINANCE BUREAU Payments & Receipts

22nd March 2013: FINANCE BUREAU must receive all invoices and receipts by this date to ensure that they are accounted for in the March 2013 accounting period (e.g. Paid for or receipted by 31st March 2013).

5.33 Please note that the 22nd March 2013 is the date by which FINANCE BUREAU must receive all invoices and receipts to be accounted for in March. Operational Area and NO departments will need to ensure that all such invoices and receipts are posted/sent in good time in order to ensure receipt by FINANCE BUREAU. Given the early closure of Accounts Department for Year End, it is encouraged to email the invoices to Cafcass Finance mailbox for processing with the GRN details and PO number and Supplier number written on the invoices or in the body of the email.

5.34 If you are unsure whether payments & receipts sent to FINANCE BUREAU have been included in the March 2013 accounts, please note that all such inclusions will appear on the 1st cut transaction listings issued by NO Finance on 25th March 2013.

6 BACKING DOCUMENTATION & ELECTRONIC COPIES

Acceptable Backing Documentation and Electronic copies6.1 To enable both National Office Finance and the National Audit Office to

audit the Year End Accounts effectively all backing documents should clearly show all workings clearly and the amount of each entry listed on each return must match the figure/calculation shown on the supporting documents.

6.2 OM’s/NO Depts completing returns for their areas should provide electronic copy backups for each line of the return be it Accrual, Prepayment, T&S and Time claim accruals etc to their Finance teams by the deadline set by the AFM and NO FA/FO. The AFM and NO FA/FO should in turn provide electronic final copy backups in PDF format for each line of the return to NO finance. This will be more cost efficient, save time and enable anyone to check the backup remotely.

6.3 All local returns must be saved electronically in the destination specified by your Finance teams along with the supporting documentation which must be scanned and saved in TWO files, one for items over £5000 and one for items under £5000. Both files must be saved in the appropriate folders by OM’s as directed by the AFM and NO FA/FO. Consequently, all the areas’ consolidated returns and supporting documents for items over £5000 (including all supporting documents for T&S and Overtime/Bank/Sessional accruals) must be saved in the following directory: G:\CAFCASS\HQ\Finance\Restricted\Year end 2013.

Once all electronic returns and backing documents have been saved local teams need to send an email to their Finance teams about the submission. Similarly, AFM and NO AF/FO need to email NO Finance mailbox about their submission once their consolidated electronic returns and backing documents are saved.

6.4 On the returns template there is a column titled ‘backing document page in PDF file’, this column must be completed with the corresponding page number which shows the relevant backing document for that line. If you have more than one backing document for an entry then you must state all the pages that correspond to it.

Points to Note:6.5 One return template should be submitted/saved, per return type

(accrual/prepayment etc), per Service Area (for OM’s) or for each Area (for AFM/ NO FA/FO).

6.6 All back up sheets should be numbered, in the top right hand corner, with the corresponding line number from the consolidated returns.

6.7 The backing documentation below is listed in order of preference and advance effort should be made to supply the first item in each list.

6.8 All officers responsible for collating year end returns should ensure that invoices are chased in March, purchase orders and GRN’s are raised and T&S claims are submitted up to date.

6.9 “Exceptional circumstances”, when used below, refers to extended staff absence or unavailability.

6.10 Credit notes should be included as negative accruals.

6.11 Emails are acceptable as ‘signatures’ – where they are approving an amount, the amount should be in the body of the email.

General Accruals6.12 If you have 2 or more invoices for one supplier and the amount entered in

the return is collective figure of all the invoices then this must be clearly shown on the first invoice (please see Appendix 1 for an example)

6.13 If an item appears on the ‘GRN no Invoice’ report for March no further back up is needed. The item should be checked for validity and value, and then entered onto the accruals sheet. Where you now have better knowledge of the invoice value expected, please adjust the amount on the report and your template showing your workings/reasoning for the adjustments. The “GRN no invoice” report should be attached as back up, with the relevant items numbered on it, on the right hand side.

6.14 An approved and GRN’d purchase order. (If necessary, amended and signed off by the authoriser, for more up to date costs, preferably with correspondence from the supplier). The relevant entries on the purchase order must be highlighted and calculation of total accrued amount (VAT included) (if there is more than 1 entry on the purchase order to be accrued) must be clearly shown on the face of the purchase order. And the accrued amounts on the return must match the calculated figures shown on the backing documents (please see Appendix 1 for an example)

6.15 Where it is not possible to obtain actual cost information for accrual, accrual can be made on estimated basis using the last three months invoices. In this case, copies of all previous three months invoices should be attached with calculations shown clearly on the face of the first document. The average shown in the calculation should match exactly with the amount accrued; the amount accrued should not be adjusted/inflated unless there is evidence to show the need for adjustment (please see Appendix 1 for an example).

6.16 For estimated accruals greater than £5,000.00 a purchase order alone will not be sufficient, additional supporting evidence must be provided i.e. a contract or an agreement where such contract or an agreement exist. This could be in the form of an email from the supplier confirming the amount etc. Please note the requirement for additional supporting documents to the PO does not apply to Self Employed Contractor and Agency practitioners/temporary staff costs.

Accruals - Self Employed Contractors, T&S claims, Time claims (Overtime/Sessional staff/Bank staff claims)

Backing documentation requirement is as the above, but where unavoidably failing these:

6.17 Confirmation, in writing, from the contractor/claimant, of amounts not yet invoiced/claimed, listed at least by month. This should be signed off by the normal authoriser. This can be in an email format with an electronic signature sent form the authoriser’s mailbox.

6.18 Where it is not possible to obtain actual cost information for accrual, accrual can be made on estimated basis using the last three months invoices/claims. An amount may be calculated using the last three months average from the finance month-end spreadsheets. It is assumed that details of the previous claims as per the spreadsheet match with claim data stored in Itrent/Payroll system and claims can be retrieved to back up those calculations if required. The average shown in the calculation should match exactly with the amount accrued; the amount accrued should not be adjusted/inflated unless there is evidence to show the need for adjustment.

6.19 In exceptional circumstances the relevant manager (who usually signs these claims) should write an email confirming estimated unclaimed costs based on previous spend or other knowledge. This should be accompanied by clear calculation of the estimated amount, with copies of previous claims used in the calculation, if applicable.

Prepayments6.20 A copy of the relevant invoice, showing the dates entered into the return template.

Accrued Income6.21 A copy of the appropriately authorised AR1 form (and supporting paperwork).

6.22 If the income does not require an invoice to be raised, some supporting paperwork from the debtor to confirm payment is due - copy of contract/agreement.

Operating Leases6.23 A copy of the contract or agreement.

6.24 Where above is not available supply last paid invoice and state what the annual cost is.

6.25 Only enter total annual cost in the return template.

6.26 Enter date in this format dd/mm/yy only; do not use dot or space as the separator.

If you do not have the contract or agreement, as a minimum obtain an end date from the supplier.

6.27 You must not leave the contract start and end dates blank. If the contract does not have an end date then enter the end of the next financial year end date 31st March 2014.

7. SUBMISSIONS OF ALL RETURNS

AFM and NO FA/FO’s Actions7.1 Once each cost centre has completed each type of return, they will

provide you with a electronic copy with backing documentation in PDF format, split in two files for each type of return (one file containing all items over £5000 and one file containing items under £5000 if applicable).

7.2 All returns must be collated by type by the Finance teams for each Area and once collated and reviewed; the PDF File should be saved in G:\CAFCASS\HQ\Finance\Restricted\Year end 2013 (nil returns included).

7.3 Once you have received each type of return from local teams/NO Departments, you are required to carry out accuracy and completeness checks before you save them in the ‘Restricted’ folder. This checking is required to give NAO the assurance they need that returns are being monitored thoroughly.

7.4 The Senior Management Team Meeting’s minutes (for Operational Areas) and correspondence between NO FA/FO and budget holders (for NO Departments) relating to the briefing about the Year End procedures and processes and the provisional 12-13 outturn analysis will need to be saved in the “Restricted” folder when they are available.

7.5 AFM and NO FA/FO must retain copies of returns and supporting documentation, as the National Audit Office may need to audit these as part of the Year End external audit of the published accounts.

Types of checks on year returns7.6 Accuracy checks: you should pick cost centres and look at their returns to

see if they are reasonable, comparing this with the forecast outturn for the year, the level of monthly accruals and budget levels etc. For example, if a cost centre has a £300 budget for stationery but they have accrued for £500, you may question why it is so high. Please also ensure that if estimated/average figures are used for the accrual that the calculation clearly shows the accrued figure.

7.7 Please also check for invalid or incorrect account codes and cost centre codes.

7.8 Completeness checks: you must check that all cost centres have submitted a return, including “NIL” returns, for all returns that are applicable to them. You must also ensure that all boxes and authorisation sections of each form have been completed.

7.9 Further to this you must also ensure that all cost centres, natural account codes and values have been entered in the correct format, as incorrect entries can corrupt and distort the results produced as a whole.

7.10 Once you are content that both checks have been completed, you must save the returns (by type) as mentioned in section 7.2 by the due date.

7.11 Please also retain copies of returns for information and for possible checking by the NAO during the audit of the published accounts. NAO may also require you to demonstrate what checks you have completed on the returns to ensure they are accurate and complete.