Feltham Hill Infant & Nursery School. Finance Policy

Transcription

1 Feltham Hill Infant & Nursery School Finance Policy September 2016 The Finance policy ensures that the school complies with the local authority s financial management guidance and provides accountability for the use of public funds. The policy has been drawn up in accordance with the London Borough of Hounslow School s model financial regulations Autumn 2014 Prepared by: Headteacher and Senior Leadership team Discussed with: Senior Leadership Team Agreed with: All school staff Agreed with Governors (September 2016) To be Reviewed and updated: September

2 Aims of the policy To ensure that procedures are in place for all financial transactions. To establish sound and robust accounting practices that are in line with the local authority s financial management guidelines. To outline the roles and responsibilities of all members of staff and governors who have to manage finance. Responsibilities Headteacher Overall responsibility for preparing annual school s budget, taking into account priorities identified in the school development plan. Ensure local authority financial regulations are implemented. Manage the budget throughout the year and report to the Finance and Premises committee termly. Ensure accounting systems are in place. Authorise deletions from the inventory. Authorise orders or delegate budget holders to do so. Oversee the human resources. Manage the assets held by the school. Alert or inform the Governing Body of any matters relating to finance that are considered relevant. Oversee funds raised by the PTA and ensure that they are accounted for accurately and audited annually. Governing body Establish a Scheme of Delegation that defines and establishes the responsibilities of the Governing body, sub committees, Headteacher and staff for the financial, human resource management of the school. This will be reviewed annually. Establish a Finance and Premises committee of a least three governors plus the Headteacher. Delegated responsibilities will be defined as part of the committee s terms of reference. Follow the guidelines set out in the Pay Policy including Performance Management. Establish and maintain sound systems of internal control to enable the proper processing of the school s transactions and activities. Maintain a register of business interests for all governors and senior staff that is reviewed annually. Ensure that the school follows the guidelines as set out in the London Borough of Hounslow School s model financial regulations Autumn 2014 To maintain a register of member s interest. To be reviewed annually. Agree the annual budget at a Full Governing Body meeting and regularly monitor the actual income and expenditure against the budget and revised forecast for the year. Keep accurate minutes of all meetings including decisions taken and by whom the action is to be taken. The minutes to be signed and dated as a true record of the meeting by the chair of the respective committees. Ensure Headteacher reports fully to the Finance and Premises Committee termly on all matters relating to the financial management of the school 2

3 Scheme of Delegation Financial Area Monitor expenditure in variance of an agreed budget Approve expenditure in variance of agreed budget Requests to purchase Forms are completed by named budget holders Delegated to Finance & Premises Committee Headteacher Finance & Premises Committee Headteacher Subject leaders & year leaders are named budget holders (see Listing of Budget Holders) Requests to purchase Approve expenditure for purchases Payments Processed by Office Manager Headteacher can sign purchase order within the agreed budget In the absence of the Headteacher the Deputy Head is authorised to approve orders Requests are signed by named budget holder and Headteacher Payments are actioned in accordance with LA guidelines There are always 2 signatures on each cheque The approved signatures are: Headteacher, Deputy Head and 2 Assistant Heads Budget The full Governing Body has overall responsibility for the management of all the school s finances covering the budget allocated by the Local Authority; other budgets delegated or devolved by the LA and other funds e.g. the PTA funds. As per the Scheme of Delegation, the Headteacher and the Finance and Premises committee have responsibility for monitoring the budget on a termly basis. See Appendix 1 Terms and reference of the Finance and Premises committee. The annual budget will reflect the priorities set out in the school development plan. Subject Leaders will control only their budget and work in close liaison with the School Business Manager and SLT who will support and advise where necessary. Budget holders will receive regular updates of their spending pattern to date. A copy will be given to the Headteacher by the Office Manager. Overspend across budget headings is delegated by the Finance and Premises Committee to the Headteacher providing it is necessary to allow the school to achieve a particular aim or objective. The Finance and Premises Committee agreed minutes will be available to all the governors in the Governor s shared space and a report will be made at Full Governing Body meetings. The Headteacher will inform and discuss with the Finance and Premises Committee any concerns as and when they arise and report jointly to the relevant Committee if required. LA Policy and all requirements will be strictly adhered to. Finance and Premises Committee will review with the Headteacher the progress against objectives in the School Development Plan. 3

4 Internal financial control The Headteacher has delegated to the School Business Manager and Office Manager the responsibility for purchasing and organising payments on behalf of the school. Checks are made through the authorisation systems on orders, invoices and cheques. The Headteacher and/or the Deputy Headteacher will check periodically. A full description of the Financial System currently used is outlined in the SIMS User Manual. All accounting records, vouchers and other documents will be held for a period defined by the LA and be kept in a secure place. The Headteacher, Deputy Headteacher and School Business Manager will be permitted access to accounting records. No other person will have authorised access unless authorised by the Headteacher. Insurance The governors will check with the LA on an annual basis that insurance for the school is considered adequate. The Headteacher will inform the LA of any large new increased risks on site. All risks will be reviewed annually to ensure their sums insured are at the correct level; this will be done by the School Business Manager in consultation with the Site Manager. The Headteacher will inform the LA of any major alterations. Any accidents, losses or other incident which may lead to an insurance claim will be notified to the LA immediately. In the event of school property being taken off site, the Headteacher must ensure that adequate insurance is in force. (School ICT equipment and musical instruments are covered by insurance whilst off site and in the UK, as long as their removal has been approved.) Purchasing The school will endeavour to obtain three quotations for when purchasing services or resources involving larger sums of money. The Headteacher has the approval of the Governing Body to accept quotations without referral back to the Governing Body. If other than the lowest quotation is accepted then the Headteacher will report reasons to the Governing Body. Order forms are completed by staff and handed to the Office Manager for official orders to be raised. All orders are processed through the current computerised finance module with the exception of utilities, community charges or petty cash payments. All orders are signed by the Headteacher or, in her absence, an authorised signatory, before being sent to the supplier. The person raising the order must ensure that goods or works are necessary and that appropriate quotes have been obtained. When goods are received on site arrangements will be made by the Office Manager for them to be checked against the delivery note. Any discrepancies should be notified to the Office Manager and the company involved contacted to arrange rectification. When the invoice is received it will be checked against the order and delivery note. The invoice will record that this check has been done. Confirmation is needed that: (i) (ii) (iii) (iv) (v) goods or services have been received payment has not already been made prices are accurate, procedures have been followed VAT has been claimed correctly copy orders and inventories are in order 4

5 (vi) discounts have been applied where applicable. All paid invoices should have payment stub attached and be stored securely in alphabetical order. Headteacher, Deputy Headteacher or named SLT members will sign cheques (any two signatures required). Photocopied invoices will only be processed under exceptional circumstances. (e.g. no original invoice received in school). The names of all cheque signatories, together with specimen signatures will be lodged with the LA. Individual staff may not use official orders to obtain goods or services for private use. Payroll The school follow the guidelines as set out in the Pay Policy including Performance Management. (See Appendix). Correspondence between the HR Department (LA) and the school concerning staffing will usually be via the Headteacher or School Business Manager. All documents and claims related to appointments, termination of employment and expenses will be completed and counter-checked by the School Business Manager and Headteacher. The School Business Manager will process all payroll transactions through the payroll system, this without exception. The Headteacher will authorise all claims relative to pay for all staff - e.g. overtime payments. In the absence of the Headteacher, the Deputy Headteacher or Assistant Headteachers will authorise these claims. Security of stock and other property The Office Manager or office staff will record and place monies received in the school safe until banking arrangements are in hand. The Headteacher will instruct staff to replace all equipment taken from secure areas back into the same secure areas after use. Computers will not be transported to a secure room as the whole school is covered by an alarm system. Stock will be purchased as required by budget holders who will be responsible for storage and use. The School Business Manager, together with the Clerical Assistant, will ensure inventories are kept up to date. A security mark will be stamped on all items worth in excess of 150 (one hundred and fifty pounds) where possible. Inventory records are computerised. Annual checks are completed and inventory updated. An annual spot check on stock items will be carried out by the Headteacher. Major discrepancies will be reported to the Governing Body if the value is in excess of 150 (one hundred and fifty pounds). Staff must sign an agreement for taking computer equipment off site. Whenever school property, such as musical instruments and computers, is taken off school site, the item must be registered with the School Business Manager. The Headteacher will authorise write-offs or disposal of old/faulty equipment. School safe keys will not be left in or near the safe. The School Business Manager is responsible for securing of safe and keys with the Site Manager. The safe is to be locked at all times. Safe keys will be held by the School Business Manager. Income The Governing Body has established a charging policy, which is available on the school website. Money raised by the PTA or other donated money will be recorded and kept in the safe until banked in the PTA account. All Official Fund monies and other received by the School are to be processed through the current accounting system (FMS)/ Agresso. 5

6 Banking arrangements / accounting procedures The school operates FMS. FMS6 enables individual account codes/budget headings to be reconciled by the School Business Manager. Current accounting records will be kept securely in the office. Records of previous years accounts will be kept in a separate secure location. Two signatures are required on cheques. Supporting invoices are available to cheque signatories. Cheques should not be pre-signed. The school will reconcile bank statements to their accounting records on a monthly basis. Petty cash The Office Manager will manage petty cash held in school. Petty cash will be held on site in the school safe. Insurance cover will be checked by School Business Manager on a regular basis. Petty cash is to be used for minor items only. A maximum spend of will be reimbursed by cash. Claims over will be reimbursed by cheque. Access to petty cash is to be only through the Office Manager. Use of the petty cash facility will be only possible after discussion and authorisation by the Headteacher. Payment will be retrospective and only after production of an acceptable receipt. Petty cash is only to be used for irregular items of small value and not with regular suppliers. All payment made must have received prior authority from the Headteacher. Official petty cash transactions to be entered on the current finance module. This will be reconciled back to the advance amount. Unofficial petty cash transactions are recorded in the Unofficial Fund Ledger. All records of petty cash payments will trace back to the school accounting records. Cash is to be locked in the safe when not in use. The Office Manager will ensure that: (i) signature on receipt (ii) payment is only made with Headteacher s or budget holder s authorising receipt for cash payment endorsed by recipients signature on receipt (iii) VAT regulations are observed where appropriate - receipt must show VAT Reg.No. and VAT amount or percentage included in total. (iv) safe custody of cash is observed (v) cash or receipts are available for inspection on request of Headteacher, auditor or other authorised person (vi) claims for reimbursement are dealt with regularly and are properly certified and supported by signed receipts. Personal cheques will never be encashed from petty cash. The Headteacher will arrange for periodic checks on the completion of petty cash funds and for bank statements and petty cash to be correctly and accurately reconciled. PTA funds All monies raised by the PTA or other groups are banked into the PTA bank account. In the current absence of a PTA committee the account is managed by the Office Manager and the Deputy Headteacher. It is monitored by the Headteacher and Assistant head who are signatories to the account. The accounts are reported to the SLT and agreed. Decisions of how to spend the money are made by the SLT and reported to parents. 6

7 The Headteacher and assistant head ensure that these procedures are adhered to. PTA funds are always kept separate to other school funds. An independent auditor will be appointed to audit the accounts annually. Accounting procedures will be discussed annually with the auditor and changed if necessary to reflect good accounting practice. A copy of audited school funds will be submitted to the LA immediately after audit The Office Manager will monitor checks on adequate insurance arrangements being in place relative to Unofficial Fund being held on behalf of the school. 7

8 Appendices Appendix A P8-11 Terms of Reference of the Finance and Premises Committee Appendix B P12-33 London Borough of Hounslow School s Model Financial Regulations Autumn 2014 Appendix C P34-37 Charging policy Appendix D P38-42 Pay Policy including Performance Management Appendix E P43 Governing body register of interests Appendix F P44-46 School Business Manager Job Description 8

9 Feltham Hill Infant & Nursery School Appendix A Terms Of Reference Finance & Premises Committee 1. Membership The Committee shall consist of at least three governors, one of whom shall be the Chair/Vice Chair of the governors, and include the Head Teacher. Deputy Head will be a co-opted member but would have no voting rights unless Governor or granted voting rights by the other Committee members. The School Business Manager shall be invited to attend, as adviser, as required by the Committee but would have no voting rights unless Governor or granted voting rights by the other Committee members. The School's Finance Support Manager shall be invited to attend, as adviser, as required by the Committee but would have no voting rights. The Committee shall co-opt such members as it shall require and these members would have no voting rights unless granted voting rights by the other Committee members. 2. Quorum The quorum shall be three governors. 3. Agenda An agenda shall be issued to all members of the Committee at least seven days before the date of each meeting, where possible. 4. Minutes Minutes shall be kept of each meeting and the signing of those minutes by the Chair of the meeting shall be evidence of the accuracy of those minutes. Copies of those minutes shall be distributed to all members of the Finance and Premises committee not later than seven days before the date of the next meeting, where possible. 5. Chair A Chair and Vice-Chair shall be elected by the members of the Committee annually at the first meeting of the new academic year. 6. Meetings The committee shall meet termly or more frequently as may be required from time to time. 7. Responsibilities - Finance To assist the Head Teacher to set an annual budget in accordance with the School Development Plan, as directed by the LA. To agree the budget on behalf of the full Governing Body. Ensure clear minutes are taken and reported at the next Full Governing Body meeting To monitor performance of actual expenditure (and income) on a regular basis in consultation with the Head Teacher and with reference to the School Business Manager and the School's Finance Support Manager. To consult with and advise other Committees on financial matters, as required. To monitor Financial Authority procedures as outlined in The Scheme of Delegation (see Appendix A) To review these Terms of Reference and the Financial Policy of the School on an annual basis. To receive and, where appropriate, respond to periodic audit reports of public funds. To ensure that the unofficial fund is managed as described in London Borough of Hounslow Standing Orders. To consider overall staffing policy issues, particularly those relating to the appointment of staff and the distribution of allowances. This duty will be carried out in full consultation with the Senior Leadership Team and will consider recommendations from the team on staffing issues which arise as a matter of urgency. To consider other staffing responsibilities this may occur from time to time. 9

10 8. Control of Expenditure The school will endeavour to obtain three quotations when purchasing services or resources involving larger sums of money The Headteacher has the approval of the Governing Body to accept quotations without referral back to the Governing Body. If other than the lowest quotation is accepted then the Headteacher will report the reasons to the Governing Body Money may be transferred from one budget heading to another when it is known that the heading from which the transfer is to be made will be showing an underspend at the financial year end, thus releasing money for other urgent needs. Any such transfer can only be made after agreement with the Chair of the Finance and Premises Committee and must be recorded on the variations monitor. 9. Unofficial Fund The committee agreed that income received from fund raising activities (eg school fairs) should be used for the benefit of the pupils. It was also agreed that income generated by other means (eg photograph commission) may be used for the benefit of both staff and pupils and to support the ethos of the school, under the discretion of the Headteacher, with agreement of the committee. 10. Responsibilities - Premises The committee will monitor, co-ordinate action and inform the Governing Body on the following topics:- Definition of the Site Manager s responsibilities and working conditions, in conjunction with the Premises Committee of the Governing Body of Oakhill Academy and the LA. Monitoring of cleaning activities. Planning of improvements to the school premises and prioritisation of work according to the availability of funding. Review of plans and quotations for work on the premises. Liaison with the Local Authority Surveyor on the feasibility of major repair and improvement works to the premises. Consideration of cost saving measures to conserve heating, water, lighting and power consumption and other items consumed. Health & Safety and Security reviews including agreeing emergency evacuation procedures. Assistance with emergency action necessary in maintaining the school routine during major works and emergency failure conditions. 11. Health and Safety The committee will: consider and advise the Governing Body and support the Headteacher on the formulation and implementation of the school s policies and procedures for health, safety and welfare, both statutory and non-statutory and will monitor their effectiveness through a system of regular inspections participate in some such inspections by arrangement with the Headteacher and the Site Manager oversee the preparation and regular checking of emergency evacuation procedures receive and consider at each of its meetings reports on inspections and evacuation drills receive and consider reports of any accidents that occur on the school premises or on activities organised by the school away from its premises carry out an annual review of Health and Safety policies and procedures and will advise the Governing Body on and support the Headteacher in implementing any improvements in them that may be appropriate promote health and safety training throughout the school work in conjunction with the Local Authority Surveyor in order to assess and prioritise improvements to the premises and to ensure the Health and Safety and Security of them. 12. Unofficial Fund The committee agreed that income received from fund raising activities (eg school fairs) should be used for the benefit of the pupils. It was also agreed that income generated by other means (eg 10

11 photograph commission) may be used for the benefit of both staff and pupils and to support the ethos of the school, under the discretion of the Headteacher, with agreement of the committee. 13. Reporting The Committee will report on financial matters to the Governing Body at least once a term, and to the LA as requested. 14. Training Governors and the appropriate staff will be encouraged to attend relevant LA courses and meetings with the School's Finance Support Manager as appropriate. 15. Terms of Reference These Terms of Reference will be reviewed annually at the first meeting of the committees in the annual cycle. Agreed by Finance and Premises Committee: September

12 LONDON BOROUGH OF HOUNSLOW Appendix B Schools Model Financial Regulations & Standing Orders As proposed autumn 2014 Preface and background CONTENTS 1. School Governance 2. Official School Bank Accounts 3. Contracts Generally 4. Orders and contracts Up to 10, Contracts and tendering procedures 10,000 to 49, Contracts of 50,000 and over 7. Income 8. Insurances & Risk Management 9. Inventories 10. Sales and disposals 11. Investment and borrowing 12. Payment of accounts 13. Salaries, wages and pensions 14. Security 15. Travelling and subsistence allowances 16. Unofficial funds 17. Audit requirements and arrangements 18. Document retention 19. Budgetary Control 20. VAT 21. Specific Government Grants 22. Capital expenditure 23. Computerised financial systems 24. Consistent Financial Reporting 25. SFVS (new) 26. School Credit Cards & Government e- ProcurementCards (new) 27. Electronic Banking (new) 12

13 PREFACE This edition of Schools Model Financial Regulations and Standing Orders supersedes all earlier editions. It has been updated to reflect developments in financial management and to give School Governors and Headteachers a framework within which they can discharge their statutory and professional responsibilities to manage and be accountable for public money. The Governing Body of each school must adopt this set of Financial Regulations and Standing Orders, subject to any amendments proposed by the school itself, which must be agreed by the Director CAS and the Assistant Director Strategic Finance in advance of consideration by the Governing Body. In managing their delegated budgets schools must abide by the Authority's requirements on financial controls and monitoring. Financial Regulations are also required in order to show that the Local Authority (LA) is meeting its statutory responsibilities for proper financial management. The Fair Funding framework which replaces Local Management of Schools is based on the legislative provisions in sections of the School Standards and Framework Act It must be emphasised that while the regulations provide a basic set of standards, the LA is committed to supplementing these by providing opportunities for further advice and support. These include: Training for Governors, Headteachers and other school staff on aspects of Financial Management and Financial Regulations and Standing Orders. Provision of additional guidance notes to schools on aspects of the regulations. Advice on the interpretation of the regulations and their implementation is available to all schools from the Schools Section in Strategic Finance telephone Practical assistance on the implementation of the regulations or the carrying out of the duties may be obtained/purchased from CSC Schools Finance or through LBH Services for Schools. 1. Schools Governance 1.1 Governing Body and the Finance Committee The Governing Body is collectively responsible for the overall direction of the school and its strategic management. This involves determining the guiding principles within which the school operates and then making decisions about, for example, how to spend the school s budget. Effective governance results in clear public accountability for the performance of the school. The Governing Body has a strategic role and the responsibility for setting educational and financial objectives, and for ensuring the budget is managed effectively. It is also responsible for ensuring the school meets all its statutory obligations, and, through the Headteacher, complies with the Local Authority s Financial Regulations. 1.2 Roles and Responsibilities The roles and responsibilities of the Governing Body, its committees, the Headteacher and other staff in relation to financial decision-making and administration should be clearly defined in writing and formally agreed by the Governing Body in the form of the school s Scheme of Delegation. These terms of reference should be reviewed and updated annually. A Model Scheme of Delegation may be obtained on request from the CSC Schools Finance Team in Corporate Resources. 13

14 1.3 The Responsibilities of the Governing Body include: Establishing and maintaining sound systems of internal control to enable the proper processing of the school s transactions and activities. Examples of key features are: appropriate segregation of duties the presence of internal checks the establishment of clear audit trails and retention of all financial documents appropriate computerised accounting system approving the annual school budget and the planned use of balances ensuring that best value and the efficient use of school resources is achieved ensuring that the Scheme for Financing Schools, this guidance manual and Contract Standing Orders, together with DfE financial requirements are implemented as appropriate Establishing limits of delegated authority through the school s Scheme of Delegation to the finance committee and Headteacher, which allow sufficient freedom to manage the school at the operational level, whilst maintaining an overall degree of control Approving the virement of funds between separate budget headings, although in practice governors may delegate this power for amounts below an agreed limit Agreeing with the Headteacher the timing and general format of the financial information to be provided to the Governing Body, especially in relation to budget monitoring reports, which must provide a clear projection of the schools year-end expenditure and income. It is recommended that reports as a minimum level of detail be in the format of Consistent Financial Reporting; Agreeing a charging policy, e.g. for school trips and lettings of school premises Approving procedures for personnel matters, including appointments, terminations and promotions Determining the auditors of any school fund, and the frequency reports on its operation should be received (which must be at least annually) Agreeing the level of any petty cash transaction limit Agreeing the holders and terms of use for school credit cards 1.4 School s Scheme of Delegation The Governing Body or its Finance Committee shall establish a Scheme of Delegation that clearly defines and establishes the responsibilities of the Governing Body, sub committees, Headteacher and school staff for the financial, human and asset resource management of the school. An exemplar model Scheme of Delegation may be obtained on request from the CSC Schools Finance Team in Corporate Resources The school s Scheme of Delegation should clearly delegate responsibilities to the Headteacher for the following: The management of the school s finances. The management of effective systems of internal control. The management of other financial issues, including human resources and asset management issues that have financial implications. Signing with the Chair of the Governing Body or other approved person, the Financial Returns to the Council ensuring they are properly presented and adequately supported by the underlying books and records of the school. The decision to agree the school s Scheme of Delegation will be recorded in the minutes of the Governing body who will be required to receive reports of all actions taken by the Headteacher under delegated powers. Any virement in excess of those limits would need to be approved by the Governing Body, following consideration of a report from the Headteacher. The Scheme of Delegation should require that a record be maintained of all delegation to the Headteacher and other school staff and the limits on such delegation and signatories of the persons concerned. 14

15 1.5 Finance Committee Each school may have a Finance Committee consisting of at least 3 governors plus the Headteacher to consider strategic financial issues on behalf of the Governing Body. This Committee s functions may include other resource responsibilities such as personnel or premises. The remit of the Committee and its membership should be reviewed annually. Alternatively, the Governing Body could choose to meet more often in order to fulfil its responsibilities avoiding the need to establish a Finance Committee. It may be appropriate for the Governing Body to delegate powers to that Committee. Delegated responsibilities need to be defined as part of the Committee s terms of reference. All Finance Committee minutes should be reported to the Governing Body. Responsibility for agreeing the budget may be delegated but this must be reported in full to the Governing Body. The requirement for meetings will vary between schools and will be influenced during the year by financial issues arising which require the committee s attention, such as setting the annual budget. In any event the Finance Committee should meet at least termly. Terms of reference for the Finance Committee would normally include: The recommendation of the annual budget to the Governing Body; The regular monitoring of actual income and expenditure against each budget and revised forecast for the year along with the reports to be provided; The awarding of contracts by tender possibly up to a specified limit; Reviewing reports by Internal and External Audit as to the effectiveness of the financial procedures and controls; Receipt of the school voluntary fund audited accounts Job Descriptions It is important that any financial responsibilities and duties of staff are clearly set out in their job description Minutes Minutes should be taken of all meetings of the Governing Body and its committees and should include all decisions and by whom action is to be taken. The minutes should be signed and dated as a true record of the meeting by the chair of the respective committee. 2. Official School Bank Accounts 2.1 The school is entitled to keep a bank account for official purposes. Official bank accounts may only be opened or changed by prior agreement with the Director CAS, and the Assistant Director Strategic Finance and must bear an official title. 2.2 The school will need to set up at least 3 signatories, to arrange this please contact the CSC Finance Operations Team. Any subsequent changes including signatories leaving and being replaced must be notified to the CSC Finance Operations Team in a timely manner in order to ensure these are kept up to date. Only current members of the school staff can be signatories to the official bank account. 2.3 Cheques for amounts greater than 1,500 must be signed by two signatories. The person signing the cheque is responsible for satisfying himself or herself that the payment is a proper one. The member of staff who orders the goods or services and approves the invoice for payment should not be the same person who signs the cheque. Subject to the agreement of the Governing Body, one signatory may sign cheques for less than 1,500 only. N.B. in the smallest schools, e.g. single form of entry primary school, where the number of finance or support staff may be very few, the headteacher and governors will need to ensure 15

16 there is still an appropriate split in duties relating to ordering and payments e.g. between Headteacher, deputy head, Finance Officer. 2.4 A control sum will be agreed by the Head of Finance (Schools) in consultation with the Headteacher. The Headteacher will periodically, and usually on a monthly basis, submit a claim to the CSC Finance Operations Team for re-imbursement of expenditure up to the value of the control sum. Re-imbursement claims, including VAT amounts to be reclaimed from HMRC should comply with the format and guidance issued by the Head of Finance (Schools). 2.5 Any large items of expenditure, which cannot be met from within the control sum can be paid for by requesting a temporary advance from the Head of Finance (Schools). Alternatively, high value items may be passed to the CSC Payments Team for payment centrally and subsequently charged to the school s budget. 2.6 The school s control sum and re-imbursement cheques will be paid into the school s official bank account. From September 2014 other official school income should also be banked promptly and paid into the School s official bank account. Please note as an interim arrangement pending set up of cashless systems up to end December 2014, cash collected for paid meals will be collected by the LBH courier and credited centrally to the school s local bank account (note the school s local bank account paying-in slip is to be used for this, with a separate paying-in slip for each of cheques, notes and coin). N.B. Schools should note however that is a temporary arrangement and all schools will be expected to move to a cashless payment system by 1 st Jan After this (although there may be a limited grace period), schools may be re-charged for the costs incurred by the Council through the Council s banking contract i.e. for bank processing costs relating to schools paying in amounts of coin, notes and cheques being paid in over the counter or otherwise through the Council s cash collections. 2.7 The Official School Bank Account must not be used for cashing personal cheques, nor should expenditure be incurred for other than official school purposes. 2.8 The school bank account should not be used for the payment of staff salaries, wages or allowances. These should always be made through the school s payroll provider to ensure tax is correctly paid. 2.9 In order to comply with the Government controls on LA borrowing the school should not incur an overdraft on its bank account nor enter into any other loan, credit, leasing or rental agreement (Including HP) with an external body without the express approval of the Director CAS and Assistant Director Strategic Finance. N.B. This is a technical area, but for example includes a prohibition on a school entering into a finance leasing agreement for capital equipment e.g. where the school continues to bear the risk of leasing the equipment (there are a number of rule of thumb questions which can be used to test whether a lease is correctly described as a finance lease or an operating lease). Schools considering entering a leasing agreement e.g. for photocopying or ICT equipment should seek advice from the Council before entering a contract, either from the Schools Finance Team or from specialist staff within the Council s procurement team The school should receive a statement from its bank at least monthly. Bank accounts should be reconciled once a month to the control sum using a format provided by the CSC Finance Operations Team The school must also reconcile its bank balance to its accounting system at least once a month. N.B. Dependent on the size of the school, where schools are closed during holiday periods and especially during the long Summer holiday break, it may not be possible to monitor bank 16

17 accounts on a strictly monthly basis, however schools should ensure that bank accounts and reimbursement claims (including school s VAT claims) are monitored and reconciled in a timely manner through the school year, and promptly following holiday periods when a school has been closed For audit purposes bank statements must be kept securely by the school for at least six years. 3. Contracts Generally 3.1 A contract is any form of agreement that the school enters into with a third party outside the LA. For example:- an order for books or stationery an agreement for the maintenance of computer equipment an agreement for the cleaning of school premises the purchase of financial advice and support a contract for building works leases of vehicles or equipment Sections 4, 5 and 6 of this document sets out regulations in relation to contracts of less than 10,000 in value, 10,000 to 49,999, and 50,000 and over respectively. These sums relate to the total value of the contract over its whole life, which might extend over more than one financial year, and are exclusive of VAT. One should not divide any contract which would ordinarily be treated as a single one into two or more in order to reduce the value below any of the sums mentioned in these regulations. The regulations apply equally to quotations and tenders. N.B. The level at which a contract or procurement is set in part relates to the level of risk involved, and partly to the level of expertise available to schools in carrying out procurement for goods and services including higher value contracts. Generally letting an individual school contract will recur only infrequently, and the lower levels set in the schools finance regulations will continue to reflect the higher level of risk to a school for example than where a professional level of procurement can be applied, for example through the LBH Supply Chain. 3.2 Before placing an order or the letting of a contract, budget provision must be identified for the expenditure to be incurred. 3.3 To protect the School and the Council s position all written contracts should, where appropriate, include clauses addressing the following issues: The contract should specify the work or goods to be provided; start and finish dates or delivery dates; any maintenance or defects liability period; the price to be paid or the precise mechanism for calculating the price, including any discounts or other deductions. If there is an appropriate British Standard Specification - issued by the British Standards Institution - then the contract should require that that standard or a higher standard is met. The contract should allow for its cancellation if it is demonstrated that the contractor has offered any gift or favour as an inducement for the award of any contract by the Council. The contract should also allow for any loss to be recovered from the contractor in the event of its being cancelled under these circumstances. Except where a nationally negotiated standard form is used every contract must incorporate a clause so that if it is not properly carried out or any specified time limits are not met then the school can: (a) cancel the contract (b) complete it by the use of its own labour or other contractors (c) recover from the contractor any additional cost of completing it (d) take other legal action against the contractor. 17

18 The contractor should take proper care of the health and safety of its own employees, the school and borough s employees and members of the public. The contractor should allow access to the Council s Health and Safety officers and comply with any recommendations that they make. The contractor must comply with statutory requirements for the storage, use and disposal of materials and provide protective clothing and first aid supplies for its staff. The contractor must comply with the provisions of the law, which prohibit discrimination on the grounds of race. For large contracts specific clauses should be included on liquidated damages and performance bonds. Please see section 6 on contracts exceeding 50,000 for more details. 3.4 Great care needs to be taken in dealing with contracts subject to other considerations such as Value for Money and any added areas that the Government might prescribe. 3.5 The European Union Directives on Public Procurement apply to contracts above the following thresholds (expressed in Euros): Works: 5,186,000 Supplies: 207,000 Services: 134,000 These figures will vary in line with international currency movements. If you are considering a contract, which might be in excess of these amounts, you should consult the Assistant Director Strategic Finance for further advice. 3.6 All orders for works must comply with the HMRC Construction Industry Scheme if it is a contract being let by the LA on behalf of the school, however, this no longer applies to contracts let directly between a supplier and a school s Governing Body from the school s LA Budget Share. 3.7 School staff and Governors must declare to the Governing Body any pecuniary or business interest they have in a contract to be let and must maintain a register of all pecuniary interests. 3.8 A register of all contracts over 10,000 net of VAT must be kept by the Headteacher. For each contract the register will include the name of the contractor, the works to be executed or the goods or services to be supplied, and the contract value. The register will be open to inspection by Governors, LA officers, internal audit and external audit. 3.9 Contracts for the lease, rental or hire of equipment and vehicles are subject to particular Government controls on local authority spending. These should only be entered into with the express approval of the Assistant Director Strategic Finance. 4. Orders & Contracts Under 10, For orders and contracts of less than 10,000 (net of VAT) the Headteacher should draw up procedures for obtaining value for money to be agreed by the Governing Body. The following paragraphs may be of help in doing this: - (i) 3 written quotes from 1,000 up to 10,000 (ii) recommended use of the DfE Procurement Hub (iii) (iv) A clear audit trail must be kept. Use of schools consortia or LA Purchasing arrangements From time to time the Local Authority may issue advice on the use of certain suppliers. 4.2 The above limits are not fixed and each case should be taken on its merits. There is always a need to balance time against cost. When considering the benefits of shopping around, particularly for large orders, schools should bear in mind that they need to be able to protect themselves by showing they have spent money wisely and reasonably. 18

19 Placing an Order 4.3 Once a decision has been made on which supplier to use, an official order should be placed using a format approved by the Head of Finance (Schools). Telephone orders must be immediately confirmed in writing. 4.4 Each order must clearly indicate the nature and quantity of the supplies, services or works required, the estimated price including any agreed discounts, and other relevant details. The order must also request that goods supplied be accompanied by a delivery note. 4.5 Orders must be on serially numbered forms and there should be proper controls over the access to the ordering system. 4.6 All orders must be signed by the Headteacher (or by a member of the school staff designated by him/her). A copy of the signed order must be retained in the school. The person signing the order is responsible for ensuring that there is sufficient budget allocation to cover the proposed expenditure. A record must be maintained of the members of staff who are authorised to sign orders. 4.7 The Headteacher should ensure that there are adequate arrangements for checking the delivery of supplies and ensuring that services and works meet the specification required by the order. 5. Contracts & Tendering Processes - Between 10,000 and 49, Details of the project including the estimated cost should be reported to and agreed by the Governing Body. 5.2 Normally at least three invitations to tender shall be sent to contractors (which may include internal Council suppliers). The selection of potential contractors will be made in a manner determined by the Governing Body. 5.3 If a tender is to be invited from a person or body who has not provided services previously (for example if tenders are requested by advertisement or if the contract is for specialist works) then the Head of Finance (Schools) must be notified so that advice can be sought on the contractor s financial standing. 5.4 Every invitation to tender shall state that tenders must be received in a plain envelope which shall bear the word Tender followed by the subject to which it relates and the date and time of opening, but must not bear any name or mark indicating the sender. The latest date and time by which tenders are to be submitted must also be made clear in the invitation. 5.5 Any tender submitted by an internal Council supplier will be dealt with in the same way as any other tender. 5.6 All tenders received must be recorded in a register. They should be opened with two people present and signed by both of those people. 5.7 Once a tender has been received it may not be altered except if the school discovers an error or omission in the calculations contained in the tender. In this case the school should notify the tenderer in writing of the error or omission and give him/her the opportunity to: a) Confirm the offer at the original amount b) Withdraw the offer c) Amend the offer in writing to correct genuine errors or omissions In the event of any other response being made by the tenderer the tender should be treated as withdrawn and not further considered. 19

20 5.8 If the lowest tendered price is within 10% of the agreed estimate and can be contained within the annual revenue budget the Headteacher may accept the tender in consultation with the Chair of Governors and shall inform the next meeting of the Governing Body. A check on the contractor s financial standing may be made with the Head of Finance (Schools) before acceptance. 5.9 If the lowest tendered price is more than 10% above the estimate, or if the Headteacher wishes to accept a tender other than the lowest, then approval must be obtained from the Governing Body in advance of tender acceptance. Where the tender to be accepted is above the estimated cost, then a virement must be identified to cover the difference In very exceptional cases it may not be possible to comply with the above procedures on the grounds of urgency. Exceptional cases will include natural disasters where swift action has to be taken to save life or property. In the event of such a situation arising then the Headteacher may proceed to let the contract, if possible in consultation with the Chair of Governors. All such cases should be reported to the next meeting of the Governing Body. The report should include a justification for the urgency and the action taken, together with full details of budgetary implications and any necessary virements. 6 Contracts of 50,000 and over 6.1 Details of the project including the estimated cost should be reported to and agreed by the Governing Body. 6.2 All contracts over 50,000 that are not managed by the Children & Adults Services or another Council Department should be managed by an appropriately qualified consultant. 6.3 Normally at least four invitations to tender shall be sent to contractors (which may include Council Departments). The selection of potential contractors will be made in a manner determined by the Governing Body. 6.4 If a tender is to be invited from a person or body who has not provided services previously (for example if tenders are requested by advertisement or if the contract is for specialist works) then the Head of Finance (Schools) must be notified so that advice can be sought on the contractor s financial standing. 6.5 Every invitation to tender shall state that tenders must be received in a plain envelope which shall bear the word Tender followed by the subject to which it relates and the date and time of opening, but must not bear any name or mark indicating the sender. The latest date and time by which tenders are to be submitted must also be made clear in the invitation. 6.6 Any tender submitted by the Council s Property Services Division will be dealt with in the same way as any other tender. 6.7 All tenders received must be recorded in a register. They should be opened with two people present and signed by both of those people. 6.8 Once a tender has been received it may not be altered except if the school discovers an error or omission in of the calculations contained in the tender. In this case the school should notify the tenderer in writing of the error or omission and give him/her the opportunity to: a) Confirm the offer at the original amount b) Withdraw the offer c) Amend the offer in writing to correct genuine errors or omissions In the event of any other response being made by the tenderer the tender should be treated as withdrawn and not further considered. 6.9 If the lowest tendered price is within 10% of the agreed estimate (5% if the contract is over 500,000) and can be contained within the annual revenue budget the Headteacher may 20