The William Hogarth School Financial Management Policy

AIM

1. To manage the finances in an efficient, controlled and cost-effective manner which will support the school’s efforts in raising pupils’ achievement.

2. OBJECTIVES

2.1. To clearly define the areas of responsibility for Governors, Head Teacher, other staff and Local Management Support Limited.

2.2. To show how income and expenditure are controlled.

2.3. To identify how the budget is set and how the priorities for the financial year are arrived at.

2.4. To enable Governors to identify a clear, direct link between the financial priorities and the School’s Improvement Plan.

2.5. To identify the security procedures for cash control, computerised procedures, data storage and documentation.

2.6. To identify the procedures for implementing the LEA’s Financial Regulations.

ABBREVIATIONS USED

LMS Local Management Support LtdHT Head TeacherDHT Deputy Head Teacher SBM School Business ManagerAO Admin OfficerWO Welfare OfficerSLT Senior Leadership TeamSIP School Improvement Plan LA Local AuthorityGB Governing BodyFC Finance Committee

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MANAGEMENT AND MONITORING

3. BUDGET SETTING3.1. An annual budget will be compiled by the HT and SBM, in conjunction with

LMS between January and March each year. The budget will take into account historical costings, SIP priorities, initiatives and other known factors.

3.2. The budget will show short-term and long-term planning and identify the factors that will influence them.

3.3. The budget plan will be constructed to plan for future financial years according to the LA budget cycle

3.4. The relevant parts of these plans will be reflected in the SIP

3.5. The budget plan will be presented in a format for approval by the GB once the LA has confirmed the formula fund allocation for the financial year (this is usually announced around the 31st March). All planning for future years will remain provisional throughout the planning process.

3.6. The FC meets as soon as is practicable to discuss the draft budget plan once final funding is known. They may meet before this if necessary.

3.7. The full GB will meet to approve the budget plan in the summer term each year in order that it can be submitted to the LA by 30th June.

4. BUDGET MANAGEMENT and MONITORING4.1. LMS Ltd will work with the HT and SBM to monitor as well as support the

management of the budget.

4.2. The GB is responsible for the management of the school with the day to day running being undertaken by the HT and SBM.

4.3. The FC is responsible for setting and management of the budget with specific responsibilities, as detailed below, being delegated to the HT and SBM.

4.4. The HT is responsible for submitting the signed (HT and Chair of Governors) approved school budget plan to the LA (annually by 30th June) and budget monitoring information to the LA as required under LA Financial Regulations.

4.5. The HT and SBM have the responsibility for the day to day running of the budget

4.6. LMS reconciles the AGRESSO (LA Accounting system) payroll information against the budget plan in a timely manner following their receipt from the LA and reports relevant discrepancies to the HT and SBM. The SBM has a monitoring role and responds to the queries raised or ensures responses are

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provided by the relevant officers or departments. The budget plan will be updated if appropriate following the resolution of any queries on the payroll.

4.7. The HT, SBM and LMS are System Managers for the RM Cash Accounts software and are responsible for the management of User access to the accounting system

4.8. The HT and SBM may vire £3,000 between funds without referring to the FC for clearance first. This will be reported at the FC at the next meeting.

4.9. Expenditure up to £3,000 which has not been identified in the current approved budget plan may be exercised by the HT without prior consultation of the GB / FC.

4.10. Virements or expenditure above £3,000 which have not been identified in the current approved budget plan may be made with the approval of the Chair of GB in exceptional circumstances.

4.11. The Capitation/Curriculum budget will be allocated by the HT in consultation with budget holders. Monitoring information will be supplied by LMS to the HT and SBM as requested/agreed.

4.12. The Supply Teacher budgets will be managed by the HT and monitoring information supplied to the HT and SBM by LMS.

4.13. The SBM is responsible for undertaking benchmarking comparisons, using the DCSF benchmarking website.

4.14. The school has a Pay Policy, which will reflect its financial planning. This will be updated annually and will support the staff’s annual salary assessment from the GB.

4.15. The school has a signed Statement of Internal Control (SIC) which has been seen and approved by the governing body

5. MANAGEMENT REPORTING PROCEDURES

5.1. The HT and SBM receive weekly budget analysis reports from LMS.

5.2. The HT and SBM in conjunction with LMS will provide the FC / GB with an up-dated budget plan and analysis of budget against expenditure/income where appropriate in the autumn and spring term.

5.3. The HT and SBM in conjunction with LMS will provide the LA with budget monitoring information, in the format specified by the LA as requested by the LA.

5.4. The Chair of FC will provide a financial report to the Governing Body at the meeting held each term.

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5.5. The Agenda for the FC will be set and circulated to members, at least one week prior to the date of the meeting

5.6. Accurate minutes of the FC meetings will be taken by the SBM and distributed in a timely manner.

5.7. The HT’s termly report to the GB will include an update of financial information.

6. AUDIT

6.1. The school’s funds and procedures will be audited by the LA / external auditors a regular basis for both Internal Audit and SFVS purposes.

6.2. The Chair of Governors and Chair of Finance will be informed of all audit outcomes immediately.

6.3. Any audit report will be presented to the GB at the next meeting and the Action Plan agreed and implemented.

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BANK ACCOUNTS

7. OFFICIAL ACCOUNT

7.1. LMS, HT and SBM will administer the Official/Formula Fund Account.

7.2. The SBM maintains a list of all bank and building society accounts with authorised signatories for each.

7.3. The Unofficial Account/ Voluntary funds will be managed by the SBM and AO who will be directly responsible to the HT.

7.4. All cheques from all accounts require two signatures at all times and these can be a combination of HT and/or DHT and one other authorised signatory, this will usually be the WO or SBM.

7.5. There are no cash limits other than the known available bank balance (which should always be checked first) for authorised cheques.

7.6. Cheque books and/or pre-printed cheque stationary are kept securely in the strong room/safe.

7.7. Bank statements are reconciled by LMS upon receipt by LMS with supporting documentation, to the RM Cash Accounts and verified by who the HT or SBM signature on the relevant documents

7.8. Control sum reconciliations are undertaken with each reimbursement claims made. Claims are made to the LA on a regular basis by LMS from the accounting records and are verified by two of the schools authorised signatories (including the HT where possible) on the relevant documents.

7.9. The SBM will maintain a list of staff authorised by the GB to sign orders. See appendix a. The SBM will maintain a list of staff authorised by the GB to certify invoices for payment. See appendix b

8. UNOFFICIAL ACCOUNT/VOLUNTARY FUNDS

8.1. All Unofficial / Voluntary funds are audited every year by an independent party in the autumn term and the certificate of audit presented to the GB at the next meeting where the audit is recorded in the minutes.

8.2. Audit certificates for all unofficial / voluntary funds are submitted to the LA each year in line with LA Financial Regulations.

8.3. Two signatures are required on all cheques. These include the HT, DHT, SBM or AO.

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8.4. Bank account statements are reconciled by the AO to school records upon receipt. The statement is signed and dated by the AO and SBM or HT to verify it has been reconciled and checked independently.

8.5. All income must be fully accounted for. Invoices / receipts for items of expenditure must be maintained and receipts provided for income received.

8.6. All income and expenditure must be recorded in a clear and transparent format which can easily be checked by the HT or audited.

SECURITY

9. COMPUTER/ SECURITY MANAGEMENT

9.1. The schools ICT network is backed up online via Gigasoft, managed by Chiswick School IT Dept.

9.2. LMS are responsible for taking and additional backup each weekly of the current financial year accounts data and storing off-site.

9.3. Access to RM Cash Accounts is controlled by the System Manager and is set at levels appropriate to level of training and responsibility each user has. Access is password controlled.

9.4. The HT, SBM and LMS are System Managers and have responsibility for managing the security of the system.

9.5. The SBM must authorise any addition of new users and any changes to levels of access rights to the software before they are actioned.

9.6. All system users passwords should be changed on a regular basis – at least once per term.

9.7. The SBM will ensure that the school have an up-to-date registration with the Information Commissioners Office (ICO) as data controllers.

9.8. The school has a key/combination safe with a specified overall cash limit of limit of £1,000. Cash is paid into the bank at least once a week.

10. SECURITY OF STOCKS AND PROPERTY

10.1. An inventory is maintained identifying all items to be insured worth over £200. This will identify the purchase of goods, place of location and cost of purchase or replacement. This is maintained by the AO and WO.

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10.2. All items worth over £200 are security marked upon delivery. The school also uses Asset tags to identify and monitor ICT equipment.

10.3. An annual physical check of the inventory is undertaken annually by the SBM. A copy of the inventory is printed and each item marked as checked. The report is then dated and stored as evidence of the check

10.4. A copy of the latest inventory is held electronically and is backed up on Gigasoft.

10.5. The school safe is combination/key controlled and is securely locked in an alarmed area. It is kept locked unless directly in use. Three members of staff have keys: HT, DHT and AO.

10.6. The strong room is locked during the school day, every night and during school holiday periods. Keys are only accessed by the WO and AO.

11. INSURANCE

11.1. The school will liaise with the LA to effect and review insurance arrangements. All risks will be reviewed annually to ensure appropriate insurance. Arrangements will cover the school grounds, property and the materials within.

11.2. Insurance is arranged and monitored by the AO and HT

11.3. The school holds fidelity guarantee insurance for its unofficial / voluntary funds.

12. EXPENDITURE

12.1. The aim when purchasing is to ensure that the school receives best value for money.

13. ORDERING

13.1. Anyone (all staff including teachers, admin staff, support staff, caretakers and cleaners) wishing to place an order must make their request to the SBM in the first instance.

13.2. The SBM will ensure that the best value is gained for the item and also ensure Financial Regulations are adhered to.

13.3. Business cases will be written for all purchases over £3000

13.4. Quotations/tenders must be obtained for all purchases in line with current LA Financial Regulations a copy of which is maintained in the school

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office. Currently all orders for more than £3,000 require some documentation to be obtained. Please refer to the LA Financial Regulations for further information.

13.5. The SBM or officer will complete a numbered Purchase Order Form, available from the Office and check budget is available for the purchase.

13.6. The purchase order will be passed to the HT (or DHT in the absence of the HT) who will authorise the purchase/s where placed by the SBM. The SBM can authorise all other orders.

13.7. Where the order is in excess of £10,000 authorisation will be sought via the Chair of the Governing Body. This will then be discussed and minuted at the next Finance committee.

13.8. When quotations have been obtained or tenders submitted, value for money and the quality of work, are the key factors which will inform the SBM, HT and FC/GB as they make their decision.

13.9. The authorised order will then be processed by the SBM (order placed and delivery terms identified) and filed within the Purchase Order File.

13.10. Telephone orders may only be placed by the HT, DHT or SBM/ Caretaker in exceptional circumstances, and must be followed up immediately by a standard printed / written order as confirmation.

13.11. Delivery notes will be checked off against the items received by the AO, Welfare Assistant, or SBM on receipt of a delivery.

13.12. Delivered items will be placed in the School Office area until delivery notes are checked, even if they are addressed to a member of staff.

13.13. Delivery notes will then be checked off against the printed authorised purchase order. The delivery note will then be attached to the order. The purchase order will be marked “Received”, dated and signed

13.14. The requesting of samples or inspection copies must be authorised by the SBM and a possible budget with sufficient funds identified on the order for the inspection copy.

13.15. All samples or inspection copies must be checked in as invoiced goods, passed to the relevant person and a decision taken within ten days as to whether they will be kept.

13.16. It is the responsibility of the SBM to ensure the samples or copies are returned within 10 days if they are not to be kept.

13.17. If Inspection Copy items or samples are to be kept the relevant paperwork must be signed as such and passed to the SBM immediately.

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13.18. All requisitions for repairs or maintenance should be treated as orders and made by the SBM or as delegated to the caretaker.

13.19. The school will have a Pecuniary Interest Book, which will record staff knowledge of, or relationships with people concerned in providing any paid service to the school. This will be updated at least once per year and upon employment of any new staff to the school.

13.20. The GB will ensure all members of the GB complete a LBH register of interest form. The GB will ensure this is updated at least once per year and upon appointment of any new governors.

14. PAYMENT OF INVOICES

14.1. Payment of invoices will be authorised by the HT or SBM and bills will be promptly paid providing delivery notes and orders have been satisfactorily cross checked.

14.2. When signing cheques the HT and one other authorised signatory are presented with the relevant computer generated payment authorisation slips and a schedule of all cheques produced in that session including a list of invoices paid. Where the SBM has placed the order and/or authorised the invoice, the SBM will not sign the cheque for payment.

15. GOVERNMENT PROCUREMENT CARD

15.1. All local authority maintained schools in Hounslow Borough can apply for GPC’s free of change under the terms of the LA’s contract with NatWest. A GPC card can be used to purchase goods and services on the internet and in shops that accept MasterCard’s. The Council has tendered for a provider of GPC cards rather than a credit card provider as GPC cards offer the same facilities as credit cards but don’t have annual fees for the cards or fees for the use of the card.

15.2. The FC and GB approved the request by the school to be issued with GPC cards in November 2013.

15.3. Cardholders must be official school bank signatories. Two cards will be issued for use by the school to the HT and SBM.

15.4. The cards should only be used where purchase order and invoice ordering is unavailable (e.g. supermarkets/hardware store/transportation) or when genuine better valuable.

15.5. A purchase order must be completed and authorised for each purchase on the card. Maximum individual spend on the card is £100 without prior authorisation form the other card user.

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15.6. A procurement card purchase authorisation slip must be completed following each purchase for entry onto RM finance by LMS Ltd. A tax receipt must be obtained and attached to the purchase order. Receipts of goods purchased by the GPC cards must be retained. These will be used for accounting and auditing purposes including reclaiming VAT.

15.7. The monthly spend limit on each card up to maximum of £2,000 per month.

15.8. In the event of any losses arising from inappropriate use of the GPC cards these will fall on the schools budget.

15.9. Each purchase transaction will be recorded on the accounts system by LMS Ltd upon provision of completed authorised paperwork and reconciled to the credit card statements by LMS Ltd each month. The statement will be checked to ensure that all charges have been incurred on behalf of the school and the statements authorised to this effect. If there are any charges on the monthly statement that are not the schools the school must take this matter up with NatWest immediately and request that they are investigated and that the money is returned to the schools account.

15.10. The statements will be reviewed by the Chair of the FC on a termly basis to ensure appropriate usage.

15.11. The delivery and billing address must be that of the school unless under exceptional circumstances where the prior authorisation of the Chair of the GB or FC will be sought.

15.12. Cards must be stored securely at all times and should remain in school unless being used by cardholders.

16. CONTRACTS

16.1. The SBM is responsible for ensuring that all contracts are properly dealt with in terms of leasing regulations, EU procedures, Self-Employment Status, VAT, and all other relevant matters included in LA Financial Regulations or other relevant documentation.

17. SELF EMPLOYED PEOPLE

17.1. All payments for services to individuals will be made through the LA’s payroll system unless the school has agreed otherwise and has assured itself

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that the individual is entitled to be considered self-employed in respect of HMRC guidance.

17.2. Individuals seeking payment as self-employed must have the following recorded within the “Self-employed status file”. This file is maintained by the SBM.

17.2.1. HMRC Self Employed ESI checks print out.17.2.2. HMRC Tax reference number (from self-assessment returns)17.2.3. NI number

18. PETTY CASH

18.1. Petty Cash is administered and managed by the AO. In the absence of the AO this will be handled by the WO.

18.2. Sums paid out relate to small items of expenditure of less than £30 using the following system

18.2.1. Petty cash voucher to be completed by recipient18.2.2. Petty cash request to be authorised by SBM using petty cash voucher. 18.2.3. Payment issued by office and form signed by recipient18.2.4. Recipient to return receipt and change. 18.2.5. Receipt to be affixed to voucher and held with petty cash records.18.2.6. Weekly chase of any outstanding receipts by AO/SBM. 18.2.7. Recipients will not be permitted any more petty cash until a receipt or

the money is returned.

18.3. Any purchases over £30 will be made by the school. There are to be NO out of pocket purchases using staff’s own money or credit/debit cards.

18.4. Paid out petty cash expenditure is entered onto the school accounts by LMS each week during term time.

18.5. The school has a maximum limit of £250 cash in the petty cash tin.

18.6. All petty cash expenditure is included in the periodic reimbursement claims submitted to the LA.

18.7. A reconciliation of petty cash is made each week during term time. A statement identifying the opening balance, expenditure during the input session and balance remaining in the petty cash tin is provided each week by LMS for the AO to check and is signed as checked by the AO. This statement is filed in the Petty Cash file.

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19. STAMPS

19.1. Stamps are purchased by the WO/AO. Every stamp used is recorded, accounted for in a stamp book and a running total and balance maintained.

20. PERSONNEL

20.1. The Pay Policy will be reviewed annually by the FC / Pay Committee and staff will receive a Salary Assessment academic year in line with their contract of employment.

20.2. Payroll information is reconciled in a timely manner by LMS upon receipt of payroll information from the LA. The HT is responsible for ensuring the accuracy of the information and for informing the LA of any discrepancies.

20.3. The HT, DHT, SBM or WO will check and authorise timesheets for weekly paid staff. A copy is kept on school files.

21. INCOME

21.1. The transfer of all money between school and staff i.e. petty cash is signed for.

21.2. The AO securely retains receipts and other records of income.

21.3. All monies collected are banked within one week.

21.4. School trips: the WO or AO is responsible for the initial collection of monies and for keeping records of all monies received. The AO records totals but not individual payments. Money is sent to the office and receipts are issued for teachers to give to the children.

21.5. No personal cheques are cashed in school/by the school.

21.6. Monies deposited are reconciled to the sums collected.

21.7. The AO will complete the Item Code and Accounting Code and a suitably detailed description for all income paid in via the LA’s cash collection service.

21.8. Music tuition monies are collected recorded and receipts issued by the AO. The AO then processes the income for banking.

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21.9. A copy of the LA bank paying in slip is made by the AO for all income (except School Meals and Milk) for LMS in order that it can be reconciled with the AGRESSO printout.

21.10. Cheque payments made to the school that are to be paid into the official school funds via the LA cash collection service must be made out to “London Borough of Hounslow”

21.11. The checking of entitlement to free school meals is the responsibility of the AO.

22. Debt Recovery

22.1. The school will take all reasonable measures to vigorously collect debts as part of its management of public funds. A debt will be written off only after all reasonable measures (commensurate with the size and nature of the debt) have been taken to recover it.

22.2. The school’s debt recovery policy will observe any relevant financial regulations and guidance set out by the LA.

22.3. The Governing Body will not allow any debt belonging to the school which exceeds £500 to accrue.

22.4. A formal record of any debts written off will be maintained and this will be retained for 7 years (the form of this record is specified below).

22.5. The school will not initiate any legal action to recover debts, but will refer any debts which it has not been able to collect (unless a decision to write-off the debt is demonstrably a reasonable course of action) to the Local Authority’s Legal Services Section to consider taking legal or other action to recover the debt.

22.6. In general payment for all goods and services supplied by the School should be collected in advance or ‘at the point of sale’.

22.7. If in doubt as to the appropriate action to collect any such debts the school will seek advice promptly from officers of the Local Authority.

22.8. Acceptable ‘credit period’

22.8.1. The Governing Body has decided that the length of time that is an acceptable ‘credit settlement period’ before the debt recovery procedures are applied is:

22.8.2. School lettings Credit period: 7 days however all letting should be paid for in advance of date of booking.

22.8.3. School Meals: Credit period: 20 school days ( 4 weeks)

22.8.4. Trips and activities: Credit period: N/A No bad debt will be accrued on trips as these are voluntary

22.8.5. Any other income activity: N/A. All income shall be invoiced in advance.

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22.9. Reporting of outstanding debt levels

22.9.1. The SBM and HT will ensure that the level of outstanding debt is regularly monitored.

22.9.2. Suitable records will be maintained by the SBM to detail individual debts and the total value of debt to the school in order that it can be determined at any time and reported to the Finance and Premises Committee.

22.9.3. The Headteacher and Finance and Premises Committee will review the level of outstanding debts as a standardised agenda item, every term, to determine whether this level is acceptable and whether action to recover debts is effective.

22.10. Debt Recovery Procedures

22.10.1. Where payment from a parent/guardian has not been received in advance, or ‘at the point of sale’, the following process should be applied.

22.10.2. An invoice should be issued for the full amount in order to officially set up the debt; where invoices are raised they should state the date by which payment is due i.e. the day, month and year.

22.10.3. In all other cases (i.e. not a parent/guardian) an invoice should be raised that states:

the maximum period that the school regards as reasonable before payment is overdue. (i.e. “due within 30 days of invoice date”)

Value type of good/services supplied date(s) good/services supplied; the identity of the ‘debtor’, e.g. hirer, etc.

22.10.4. Details of all reminders, whether verbal or in writing, should be maintained. Where a letter is issued, a copy must be retained on file. Should a debt need to be taken beyond two reminder letters or invoices, formal written evidence may have to be produced. It is therefore important that at least one, but preferably two, written reminders are sent.

22.10.5. If after 2 reminders, a response or payment is not received, a letter will be sent to the debtor advising them that the matter will be referred to the Council’s Legal Services Section.

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22.11. Negotiation of repayment

22.11.1. If people are unable to pay; the School may reduce or write off a debt in certain circumstances. A sensitive approach to debt recovery will be carried out, taking the following factors into account: Hardship: where paying the debt would cause financial hardship. Ill health: where our recovery action might cause further ill health. Time: where the debt is so large compared to the person’s income that it would take an unreasonable length of time to pay it all off. Cost: where the value of the debt is less than the cost of recovering it. Multiple debt: where someone owes more than one debt to the School. In this situation an attempt to agree one repayment plan to include all debts will be established.

22.11.2. Debtors are expected to settle the amount owed by a single payment as soon as possible after receiving the first ‘overdue payment’ reminder. If a debtor requests for ‘repayment terms’ these may be negotiated at the discretion of the Headteacher

22.11.3. A record of all such agreements entered into will be retained.

22.11.4. In all cases, a letter will be issued to the debtor confirming the agreed terms for repayment.

22.11.5. The settlement period should be the shortest that is judged reasonable.

22.11.6. The Headteacher will decide whether any debtor who has been granted extended settlement terms will not be offered any further ‘credit’ and will, in future, be required to pay in advance.

22.11.7. This decision and its basis will be recorded and reported to the Full Governing Body.

22.12. Costs of debt recovery

22.12.1. Where the school incurs material additional costs in recovering a debt then the Finance and Premises Committee will decide whether to seek to recover such costs from the debtor.

22.12.2. The debtor will be formally advised in writing that they will be required to pay the additional costs incurred by the school in recovering the debt.

22.12.3. This decision and its basis will be recorded and reported to the full governing body.

22.13. Bad debts

22.13.1. This debt recovery policy should be cross-referenced to the Local Authority Financial Regulations.

22.13.2. Write-off of any debt requires the written approval of the Finance and Premises Committee up to a maximum of £500.

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22.13.3. A record of the write-off, the reason for it, and the approval for it, will be retained for 7 years.

Autumn 09Autumn 10Autumn 12Review due: Autumn 13Reviewed January 2016

Appendix A: The SBM will maintain a list of staff authorised by the GB to sign orders.

1. SBM (Diana Armstrong) if raised by another member of staff2. HT (Cathy Driscoll) and all orders raised by SBM (Diana Armstrong)

Appendix B: The SBM will maintain a list of staff authorised by the GB to certify invoices for payment.

1. SBM (Diana Armstrong)2. HT (Cathy Driscoll)

SBM and HT will deputise in case of absence in terms of signing orders and invoices. In the absence of both, or ordered raised by SBM, the deputy head will authorise.The SBM cannot raise an order, authorise order and authorise invoice. The HT (or DHT) must authorise an order raised by the SBM.

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