Trinity School. Finance Policy

Transcription

1 Trinity School Finance Policy DOCUMENT REVIEW GOVERNOR APPROVAL DATE: 7 December 2016 COMMITTEE RESPONSIBLE: RESOURCES COMMITTEE NEXT REVIEW DATE 1 December 2017

2 Index 1 Introduction and Overview 2 Roles and Responsibilities 3 Accounting System 4 Financial Planning & Management 5 Income Accounting 6 Payroll Accounting 7 Employee Expenses 8 Procurement 9 Purchasing 10 Cash Management 11 Petty Cash Policy 12 Credit Cards 13 Capital Policy Appendices Appendix A: Powers and Duties the Governing Board, Resources Committee, Headteacher, Business Manager and Other Staff Appendix B Summary of Financial Authorisation Levels Appendix C Payroll Procedures Appendix D Employee Expenses Appendix E Employee Credit Card Declaration 2

3 Finance Policy Better is a little with righteousness than great income with injustice. Proverbs 16:8 1. Introduction and Overview Scope This policy applies to all staff Overview The Governors of Trinity School Sevenoaks are committed to sound financial controls to achieve value for money and to be worthy custodians of public money. To achieve these aims the Headteacher and the Governing Board have drawn up this Finance Policy to provide the guiding principles that all Governors and Staff will operate within. It is essential that these principles meet the requirements of the Funding Agreement made under Section 1 of the Academies Act 2010 between The Secretary of State for Education (DFE) and Trinity School Sevenoaks. Consultation: All governors were provided with draft copies of the document for review and comment. Sources and references: This Policy has also been drawn up with reference to the Academies Financial Handbook issued by the Department for Education (DFE) and should be read in conjunction with this document. Introduction The purpose of this manual is to ensure that the School maintains and develops systems of financial control which conforms to the requirements both of propriety and of good financial management. It is essential that these systems operate properly to meet the requirements of our funding agreement with the Department for Education (DfE). The School must comply with the principles of financial control outlined in the free schools guidance published by the DfE and Education Funding agency (EFA). This manual expands on that and provides detailed information on the School s accounting procedures and system. All staff involved with the School s financial systems should read this manual. 3

4 2. Roles and Responsibilities The School has defined the responsibilities of each person involved in the administration of School finances to avoid the duplication or omission of functions and to provide a framework of accountability for governors and staff. The financial reporting structure is set out below: The Governing Board Overall responsibility for the administration of the School s finances. Key responsibilities set out in the Funding Agreement between the School and the DfE and in the School s Articles of Association Key Responsibilities Ensure DfE/EFA grant is used only for the purposes intended; Ensure donations are received according to the School s Funding Agreement, and are used only for the purposes intended; Approve the annual budget; Appointment of Headteacher and Appointment of the Deputy Headteacher and Business Manager, in conjunction with the Headteacher. Receive financial reports at least three times a year Appointment of the School s auditors, The Resources Committee Sub Committee of the Governing Board Responsible for the function of an audit committee Initial review and authorisation of the annual budget; Regular review of income and expenditure against budget; Ensure annual accounts are produced in accordance with the requirements of the Companies Act 1985 and the DfE guidance issued to free schools; Authorise the award of tenders and contracts between 30,000 and 100,000; Authorise changes to the School personnel establishment In its capacity as Audit Committee, to provide assurance over the suitability of, and compliance with, its financial system Recommend to the Governing Board the appointment or re-appointment of the Responsible Officer and the Auditors of the school Review the Auditor s reports on the effectiveness of the financial procedures and controls for onward circulation to the full Governing Board 4

5 The Headteacher The EFA designates the Headteacher to be the School s Accounting Officer, accountable for the regularity, propriety and value for money. Manage the programme of risk review and checking of financial controls in the way deemed most appropriate e.g. appointment of auditors, peer review, bought in services. Overall executive responsibility for the School s activities including financial activities, even where this has been delegated to the other members of staff Approve new staff appointments within the agreed budget, except for any senior staff posts which require approval of the governing Board Authorise tenders and contracts up to 20,000; Sign cheques and authorise electronic bank payments in conjunction with other authorised signatory The Business Manager The EFA designates the Business Manager to be the School s Chief Financial Officer, who leads the finance team. The Business Manager reports to the Headteacher but also has direct access to the governors via the Resources Committee. Staff Day to day management of financial issues Establish robust accounting policies and procedures underpinning financial information Operate an effective system of financial controls Prepare and present the annual budget to the Resources Committee for approval Prepare monthly management accounts for circulation to the Governors; Authorise orders above 500 and up to 5000 in conjunction with budget holders; Sign cheques and authorise electronic bank payments in conjunction with the Headteacher or other authorised signatory and Liaison with the School s auditor, ensuring returns are sent to the EFA in line with the timetable in the DfE or EFA guidance Ensure the value for money and probity of all expenditures, including a regular review of benchmarking data. Responsible for the security of School property, for avoiding loss or damage, for ensuring economy and efficiency in the use of resources and for conformity with the requirements of the School s financial 5

6 procedures. Register of Interests It is important for anyone involved in spending public money to demonstrate that they do not benefit personally from their decisions. All School governors and staff with significant financial or spending powers are required to declare any financial interests they have in companies or individuals from which the School may purchase goods or services. The register is open to public inspection. The register should include all business interests such as directorships, share-holdings or other appointments of influence within a business or organisation which may have dealings with the School. The disclosures should also include business interests of relatives such as a parent or spouse or business partner where influence could be exerted over a governor or a member of staff by that person. The existence of a register of business interests does not, of course, detract from the duties of governors and staff to declare interests whenever they are relevant to matters being discussed by the governing Board or a committee. Where an interest has been declared, governors and staff should not attend that part of any committee or other meeting. The EFA requires Schools to publish on their websites relevant business and pecuniary interests of trustees and members. Trusts have discretion over the publication of interests of other individuals including parent, spouse, civil partner, cohabitee and child. Appendix A: Powers and Duties the Governing Body, Resources Committee, Headteacher, Business Manager and Other Staff Appendix B Summary of Financial Authorisation Levels 3. The Accounting system Trinity School uses SAGE as its accounting system. Access to SAGE is password restricted and only the Business Manager, Finance Manager and Finance Officer have access. In addition, the Business Manager has administrator rights and can set access permission levels within the system. The system is backed up every week to a secure hosted facility. The maximum possible loss is 5 days data which is considered to be manageable. The Sage accounting system is fully automated with an integrated purchase ledger and sales ledger facility. Payroll is outsourced to UHY Hacker Young who are also the schools appointed auditors. All bank transactions currently require manual processing. 6

7 All transactions input to the accounting system must be authorised in accordance with the procedures specified in this manual. To ensure the robustness of the financial information, each week the Finance Manager will reconcile the bank and cash accounts to ensure that all transactions have been posted onto the system. In addition, the Finance Manager will review all the debtor and creditor control accounts to ensure that all assets and libaialities are reported within the correct accounting period. The Business Manager will report any unusual or long outstanding reconciling items to the Headteacher At the end of month, the Finance Manager will produce a set on management accounts which will be supported by a working file which details all the reconciliations performed along with accounting listings to show the items included within the accounts. The Finance Manager will be responsible for making the necessary accruals and prepayments so all costs are booked into their appropriate accounting periods. 4. Financial Planning & Management The School prepares both medium term and short-term financial plans. The aim of these plans is to ensure that there are sufficient funds to maintain and enhance the quality of education provided by the School. As part to the School s strategic planning, a development plan is prepared which shows how the School s educational and other objectives will be achieved within the expected level of resources over a threeyear period. The Development Plan guides the annual budget planning process by stating the educational priorities and the resources needed to achieve them. The budget is subject to effective monitoring, allowing the Headteacher and Governors to review spend and take any remedial action where required. Development Plan The development plan covers the strategic aims and objectives of the School and how these will be achieved; that includes matching the School s objectives to the resources expected to be available. In addition, the Development Plan must incorporate any guidance provided by the DfE or EFA. The Headteacher leads on the Development Plan in consultation with the School s Senior Leadership Team. The Development Plan will be presented to the Governing Board for approval. The Headteacher will use the Plan to monitor performance against the defined success criteria throughout the year and report to the Governing Board where there is a significant divergence from the Plan. Annual Budget The Business Manager is responsible for preparation of the annual budget in conjunction with the Headteacher. The budget must be approved by the Resources Committee and the Governing Board. The Annual budget runs from September to August. The budget will be prepared early June and will be based on the School Development Plan and School Improvement Plan with clear budget assumptions being set out. Core planning assumptions will include: 7

8 School roll: based on current school roll and the number of school places offered for the following academic year. Estimate of the expected EFA Grant and any other revenue sources Bids for classroom resources from lead subject teachers Review of past performance against prior year budget and inclusion of known costs for the next financial year. Potential efficiency savings The budget surplus/deficit will be carefully reviewed. The budget surplus is not expected to be more than 5% of income. Where a deficit is identified, opportunities to increase income and/or reduce expenditure will be examined. Also the scope to defer spend will be evaluated. Where the deficit cannot be eliminated priorities will be assigned to spend items to allow the Headteacher and Business Manager to assess where cuts need to be made. Plans and budgets will need to be revised until income and expenditure are in balance. The Headteacher and Business Manager will present to the Budget to the Resources Committee for preliminary review and then onto the full Governing Board for full approval. Once the budget is approved, budget holders will be advised of their allocated spend for the financial year, ensuring everyone is aware of the overall budgetary constraints. The approved budget must be submitted to the DfE or EFA by the published deadline each year. Monitoring and Review The Business Manager will produce a monthly set of management accounts showing actual both for the month and year to date spend against budget income and expenditure categories. The accounts will be reconciled with the Sage accounting system. Summary management accounts will be circulated to the Resources Committee The Headteacher and Business Manager will meet weekly to discuss all financial matters and review the budget and forecast position on a monthly basis. All variances will be discussed with the Headteacher. If a budget overspend is forecast it may be appropriate to vire money from another budget or from the contingency. All budget virements of over 30,000 must be authorised by the Resources Committee. The Headteacher should be satisfied that student s will benefit from any budget surplus being carried forward into the next financial year. 5. Income Accounting The main source of income for the School are EFA grants from the DfE. Funds are remitted monthly and sent with a remittance advice. In addition, the School expects to receive donations during the course of the year. Donations are classified as unrestricted funds and coded to a separate account in order to keep them separate from 8

9 EFA funds. Donations which are made with strict instructions for their intended use will be further ring-fenced in the accounts. The school also received monies from students for trips. This money is accounted for in a separate fund, again to keep separate from EFA funds. Where cash is received from students a paper remittance will be issued to acknowledge receipt of monies. All money will be recorded on a schedule prepared by the finance officer showing those students who are attending the trip. The spreadsheet will be discussed with the teacher each week to identify and resolve any non-payers/outstanding balances. The lead teacher is responsible for discussing any outstanding amounts with students and their parents/carers. All cash and cheques must be kept in the school safe prior to banking. Banking occurs weekly but will be done more frequently should significant cash be held. Moneys will be banked into appropriate bank accounts and bank reconciliations will be performed on a weekly basis to ensure that transactions have been posted correctly in the accounting system and all bank transactions have been recorded. In the unlikely event that any debts are considered unrecoverable, the Headteacher has authority to write off up to 1,000 and further exposure must be granted by the Resources Committee. 6. Payroll Scope This document applies to all paid School staff. Policy Summary All employees will be paid monthly in arrears in accordance with their contract of employment for all salary, allowances and authorised overtime. Payments will be made after statutory, pension and other deductions as appropriate. All deductions are paid to the relevant authorities within the required time frame. The Business Manager is responsible for ensuring that all employees are paid correctly each month and that all statutory and pension payments are made on time. The Business Manager informs the Finance Manager on all pay changes to ensure the correct information is communicated to UHY payroll and entered onto the accounting system accordingly. Once the Headteacher approves the payroll the finance officer sets up electronic payments on the School s bank account which are authorised by the Headteacher. Payslips are produced by UHY. The key financial controls of the payroll system are: To ensure that only valid employees are paid at the correct and authorised rate; To ensure that the calculations of all payments and deductions are correct and in accord with the relevant taxation and other regulations and requirements; 9

10 To ensure that all deductions are correctly disbursed; ; To ensure that all payroll transactions are accurately reflected in the accounting system; and To ensure that regular and accurate management and statutory information is produced. See Appendix C for Payroll procedures 7. Employee Expenses Scope All paid staff. Policy Summary The School will reimburse authorised, reasonable and appropriate expenditure, incurred by staff wholly, exclusively and necessarily in the performance of their duties of employment. References HMRC Expenses and benefits tax guide - booklet 480 HMRC Employee travel tax and NIC guide booklet 490 The School will reimburse reasonable and appropriate expenditure, incurred by staff, wholly, exclusively and necessarily in the performance of their duties of employment. Expenses must be supported by a receipt and must be authorised. The expense claim system can only be used for reimbursing actual expenditure incurred. All expenses must be appropriately authorised by the Headteacher and the expense claim will be paid by cheque. In addition to ensuring that expenses are maintained at reasonable and affordable levels, the amounts in Appendix B are within HMRC rules to minimise the chances of HMRC classing expenses payments as taxable benefits from which a tax liability could arise for either the employee or the School. In certain circumstances it may be more appropriate for small items to be purchased using petty cash, rather than purchased by the employee and claimed back through the expenses system See Appendix D for Employee Expenses procedures 10

11 8. Procurement Overview All School tenders and contracts must be managed in accordance with the principles below. Should the School enter into incomplete, disadvantageous or ambiguous contracts there is a risk of EFA challenge, reputational and financial damage. The School s strategy for procurement is to achieve value for money, sustainability and to adhere to correct procurement practices encouraging supplier competitiveness and fairness. Propriety and the Separation of Duties To protect the School and any individual from any accusation of impropriety it is essential that an adequate audit trail is maintained. Value for Money Value for money is not necessarily the cheapest solution, it is the best combination of whole life costs and quality to meet our requirements it includes all costs associated with the product or services (including energy use, potential energy savings, durability, waste reduction etc), not simply the initial costs. Consideration should be given as to whether the product/service will satisfy both long and short term needs and that it is the best deal available. Where this is a long-term contract, continuous improvement over the life of the contract should be sought. Supplier Competitiveness and Competition All goods and services obtained by means of tender must be purchased by way of competition unless there are convincing reasons to the contrary. Competition avoids any suggestion of favoritism or of developing monopoly (one supplier only providing goods/services). The form of competition should be appropriate to the value and complexity or the goods or services required and (competition) encourages keen pricing and the most efficient use of resources. Business Cases Business cases must be submitted for all requirements and are subject to the School s tender process. A business case should address why, how, when and how much. This can be demonstrated by including the following information: Purpose of the requirement 11

12 Benefits to be derived - how it will deliver value for money; when the benefits are likely to accrue a positive ROI (return on investment) Systematic assessment of the possible alternatives including the do nothing one Proposed project management arrangement where applicable Details of the budget to cover the cost of the requirement Supplier Contracts To ensure that contracts are managed effectively and that the School is not at risk of early termination charges or litigation - all supplier contracts must be checked by the Business Manager before signature. All contracts will be held by the Business Manager. The end contract date and notice period will be recorded and the contract will be discussed with the Headteacher when it comes up for renewal. Routine Purchasing Budget holders will be informed of the budget available to them before the start of the academic year. It is the responsibility of the budget holder to manage the budget and to ensure that the funds available are not overspent. A print detailing actual expenditure against budget will be supplied to each budget holder after the end of each month Routine purchases up to 500 can be ordered by budget holders provided they have sufficient budget allocation remaining.. A quote or price must always be obtained before any order is placed. If the budget holder considers that better value for money can be obtained by ordering from a supplier not on the approved supplier list the reasons for this decision must be annotated on the order form and approved by the Business Manager. All Purchase Order requests must be raised and bear the signature of the budget holder and forwarded to the Finance team. The Finance Officer will check to ensure adequate budgetary provision exists before inputting the order. Forms of Tenders There are three forms of tender procedure: open, restricted and negotiated and the circumstances in which each procedure should be used are described below. Open Tender Restricted Tender Negotiated Tender: Potential suppliers are invited to tender. Potential suppliers are identified from trade/local press, and will be contacted and asked to quote against a specified scope of work. Suppliers are specifically invited to tender. Likely to occur where: -there is a need to maintain a balance between the contract value and administrative costs, -a large number of suppliers would come forward or because the nature of the goods are very bespoke -the costs of publicity and advertising are likely to outweigh the potential benefits of open tendering. The terms of the contract may be negotiated with one or more 12

13 chosen suppliers. Likely to arise circumstances: the above methods have resulted in either no or unacceptable tenders, -only one or very few suppliers are available, -extreme urgency exists, -additional deliveries by the existing supplier are justified. Tender Acceptance Procedures The invitation to tender should state the date and time by which the completed tender document should be received by the School. Tenders should be submitted in plain envelopes clearly marked to indicate they contain tender documents. The envelopes should be time and date stamped on receipt and stored in a secure place prior to tender opening. Tenders received after the submission deadline should not normally be accepted. Tender Opening Procedures All tenders submitted should be opened at the same time and the tender details should be recorded. Two persons should be present for the opening of tenders as follows: the budget holder, the Business Manager, or the Headteacher, or a member of the Resources Committee. A separate record should be established to record the names of the firms submitting tenders and the amount tendered. This record must be signed by both people present at the tender opening. Tendering Procedures The evaluation process should involve at least two people. Those involved should disclose all interests, business and otherwise, that might impact upon their objectivity. If there is a potential conflict of interest then that person must withdraw from the tendering process. Those involved in making a recommendation to the Resources Committee must take care not to accept gifts or hospitality from potential suppliers that could compromise or be seen to compromise their independence. Those involved in making a decision, as a member of the Resources Committee must take care not to accept gifts or hospitality from potential suppliers that could compromise their independence. Full records should be kept of all criteria used for evaluation and for tenders over 50,000 a report should be prepared for the Resources Committee highlighting the relevant issues and recommending a decision. This should also be provided to the Governing Board for tenders over 200,

14 The Business Manager must ensure that tenders comply with the requirements of OJEU and or Light Touch UK procurement practices where appropriate. Where required by the conditions attached to a specific grant from the DfE or EFA, the department s approval must be obtained before the acceptance of a tender. The accepted tender should be the one that is economically most advantageous to the School. All parties should then be informed of the decision. 9. Purchasing Purchases of goods and services must demonstrate value for money and should be authorised by approved staff only. At least two members of staff are required in all ordering and purchasing processes. For each purchase staff must use the most appropriate purchasing process. Suppliers will be paid in line with the agreed credit periods, which should generally be 30 days. Methods of purchase and payment Goods and services can be purchased and paid for in a number of ways: Invoice paid by cheque or BACS Invoice paid by direct debit or standing order Corporate credit card Petty cash Each of these methods is appropriate for certain types of transaction and all have specific rules and controls. Invoices paid by cheque or BACS A purchase order must be raised for all orders and can be found on the appropriate shared drive and will need to be approved as follows: Once approved the Finance Team will contact the supplier and raise the order. Once the goods/services have been received, the purchase order, delivery note and invoice will be collated and payment will be arranged. Invoices paid by Direct Debit or Standing Order Certain types of expenditure require a regular periodic payment to an approved supplier for example photocopier hire, mini bus payments. 14

15 Direct debit mandates will be entered into and approved by two bank signatories. Copies of the contracts and direct debits will be held by the Finance Team and each month the bank account will be checked to ensure the correct payment has been collected and that this has been recorded on Sage. Corporate Cards Corporate cards are ideal for smaller transactions and for staff who incur significant expenses on a regular basis. Petty Cash Cash can be used for small items of expenditure where a corporate card cannot be used. Please refer to the separate Petty Cash Procedures. Ordering goods and services Before placing an order with a supplier the following checks should be made: Does the proposed purchase represent good value for money? Specific rules apply to goods and services with a value of 3,000 and over (see section 8 on Tenders) Is the purchase being made from an approved supplier and is the supplier reliable? If not an approved supplier, should they be set up as a new approved supplier or is this a one-off payment? Approved suppliers Approved suppliers are set up on Sage Purchase Ledger. A list of approved suppliers is maintained by the Finance Team to ensure Avoid using unknown suppliers who could be expensive and/or of poor quality Develop relationships with good reliable suppliers Increase the potential for arranging discounts due to bulk orders. The list is reviewed on a regular basis to ensure that the approved suppliers are still providing value for money. Quotes and tenders The quotes and tendering process must be followed for all purchases over 3,000. This is to ensure that value for money is being obtained with all purchases. Higher value purchasing decisions should be documented to demonstrate that value for money was achieved. 15

16 Purchases greater than 3,000 For all purchases greater than 1,000, at least 3 quotes should be obtained to ensure that value for money is obtained. These can be obtained in an informal manner such as phone calls or looking in catalogues. To record the fact that quotes have been obtained the prices quoted and the reason for the choice made should be recorded on the standard supplier quotes form. This form should be filed and kept by the Finance Team until the financial year has been closed and audited. The only exception to this rule is for the ordering of agency staff because of the potential high volume and priority of replacing vacant staff posts and the specialised needs of some appointments, there is no need for quotes unless the cost of staffing is expected to exceed 5,000. Purchases greater than 5,000 A formal tendering process should be carried out, obtaining written quotes from 3 different suppliers. These should be summarised on the standard supplier quotes form, and the reason for the supplier chosen stated. The Finance Team will hold the form until the financial year has been closed and audited. Suppliers chosen following this process should be added to the approved suppliers list. The purchase amounts detailed above relate to the cost of the whole purchase, INCLUSIVE of any interim or split invoices issued by suppliers. Purchases for Supplies and Services over 173,934 net of VAT (threshold from 01/01/12) may fall under EU procurement rules which require advertising in the Official Journal of the European Union. The equivalent threshold for purchases for works is 4,348,350. Guidance on the OJEU thresholds can be viewed through the OJEC website, using the following link:- In addition, the Resources Committee will be involved in any contract placing for goods or services in excess of 30,000. The Governing Board will be involved for contracts in excess of 100,000. On-going arrangements In any situation where one entity is the sole supplier of a type of goods or service on a contractual basis ((e.g. cleaning or catering contracts, supply of agency staff) and has a contract exceeding 5,000 per annum, a three yearly review should be undertaken alongside a formal tendering process. Where the annual expenditure with the supplier is less than 5,000 the review could be less formal, using catalogues or brochures rather than written quotations. Receipt of goods/services It is essential that the person placing the order confirms that the goods or services have been received satisfactorily. 16

17 The delivery note should be matched with the purchase order and then invoice and all three documents passed for authorisation. Processing invoices paid by cheque or BACS When invoices are received, a check must be made to ensure that the invoice is correctly due for payment. This will involve the following checks: Invoice is addressed to Trinity School The invoice received is not a duplicate of an invoice already received or paid The invoice received does not include periods already paid for or invoiced The invoice received is for a reasonable amount (compared to the original estimate and to prior periods) The invoice total has not been tampered with or altered Once the finance officer is satisfied that the invoice is valid and requires payment, the invoice should be authorised in line with the authorisation levels set out in Appendix B. Supplier queries The Finance Officer will manage any Invoice / Payment related queries Supplier statements Supplier statements form the basis of reconciliations between school records and supplier records to identify and resolve any discrepancies. For example suppliers may request payment for invoices which have already been paid, but has not been identified correctly and allocated against an invoice. Credit notes Credit notes may be issued by a supplier to correct or cancel an invoice issued to the School. In Sage credit notes can be matched against invoices. Where an invoice has been paid the credit note may be held on account or the supplier will be asked to raise a cheque. Cheque requests Cheque requests should be avoided wherever possible and should only occur when a supplier is not able to accept an electronic bank payment. Prepayments and Accruals To comply with statutory reporting requirements and to make monthly accounts more meaningful, prepayments and accruals are used. A fundamental concept in accounting is that income and expenditure should be recorded in the period to which it relates. Prepayments and accruals are the mechanisms used to achieve this. Prepayments 17

18 Where an invoice relates to goods or services to be received in the future (eg a 12 month maintenance contract), the invoice will be paid in full but the charge will be spread over those 12 months. Accruals Where goods or services have been received in a previous accounting period, but no invoice has been received or processed, then an accrual must be processed. Old accruals Where an accrual has been processed but no invoice has been received for several weeks or months, an investigation should be carried out to ascertain the reason why. 10. Cash Management Bank Accounts The opening of all accounts must be authorised by the governing Board which must set out, in a formal memorandum, the arrangements covering the operation of accounts, including any transfers between accounts and cheque signing arrangements. The operation of systems such as Bankers Automatic Clearing System (BACS) and other means of electronic transfer of funds must also be subject to the same level of control. Deposits Particulars of any deposit must be entered on a copy paying-in slip, counterfoil or listed in a supporting book. The details should include: The amount of the deposit and A reference, such as the number of the receipt or the name of the debtor. Payments and withdrawals All cheques and other instruments authorising withdrawal from School bank accounts must bear the signatures of two of the following authorised signatories: Headteacher; Business Manager Deputy-Headteacher; This provision applies to all accounts, public or private, operated by or on behalf of the governing Board of the School. Authorised signatories must not sign a cheque relating to goods or services for which they have declared a business interest. Administration The Business Manager must ensure bank statements are received regularly and that reconciliations are performed weekly. Reconciliation procedures must ensure that all transactions are recorded on Sage. Petty Cash Accounts 18

19 The Petty cash transactions are normally only used for small reimbursements to budget holders under the Business Manager s authority. The cash is signed for by the person being reimbursed when the cash is collected and countersigned by the Bursar. Petty cash held will be a maximum of 300. Investments Investments must be made only in accordance with written procedures approved by the governing Board. All investments must be recorded in sufficient detail to identify the investment and to enable the current market value to be calculated. The information required will normally be the date of purchase, the cost and a description of the investment. Additional procedures may be required to ensure any income receivable from the investment is received. Cash Flow Forecasts The Finance Manager is responsible for preparing cash flow forecasts with support from the Business Manager to ensure that the School has sufficient funds available to pay for day-to-day operations. If significant balances can be foreseen, steps should be taken to invest the extra funds. Similarly plans should be made to transfer funds from another bank account or to re-profile payments to cover potential cash shortage 11 Petty Cash Procedures Scope This applies to all staff. Summary The School provides petty cash float for minor items of expenditure. The petty cash float will be operated on an imprest basis only and at the authorised float level. It will be held securely in the school safe and can only be accessed by the Finance Team. Petty cash will be accounted for weekly using a standard schedule and accompanied with a signed reconciliation. The Imprest System The School operates a single method of managing petty cash, the imprest system. Its basic principle is that the petty cash float should be kept at an agreed level at all times. For example, the petty cash float is 200 on the first day of its use there will be 200 cash. At the end of the first week there may only be 100 cash, but the remaining 100 could be made up of 80 of receipted vouchers and 20 of advance vouchers (advance vouchers are documents showing cash advanced to individuals). When the float is replenished at the end of this week, a cheque would be cashed for 80, the value of the receipts. In this situation the 20 of advance vouchers would be treated as cash. Petty cash returns are prepared on a weekly basis using standard schedules and coded onto Sage. 19

20 It should always be true that the cash balance plus any receipted vouchers, plus any advance vouchers will equal the authorised float. Bank Account The Business Manager and Finance Team can withdraw cash from the School bank account for petty cash purposes, however the cheque for the petty cash will be signed by the Headteacher. The petty cash float should be topped up by writing cheques to CASH.bank. The cheque must: Equal the total amount of the receipted vouchers in the cash box. There must be a signed petty cash reconciliation on file supporting the cash amount per the cheque. The person signing the petty cash cheque should: See a physical copy of the spreadsheet listing receipted vouchers Check that the total of the cheque requested equals the total of the receipted vouchers - showing clearly what the cheque being cashed represents. Sign on the bottom of the return against Chq No and Amount Once the cheque has been cashed, the receipted vouchers can be withdrawn from the cash box and filed separately with a copy of the return relating to these vouchers. A copy of the cheque should be kept on site and attached with the receipted vouchers, providing a clear audit trail from receipted vouchers through to cheques raised to reimburse the petty cash float. Security The cash float must be kept in a locked cash box, with the cash box being held in the school safe. The cash box should only be taken out and opened when cash is to be taken out or put into the float or when the float is being counted or reconciled. The cash box should be locked and returned to the drawer/safe as soon as this has finished. At no time should the cash box be left unattended. The finance Team and business manager are the only people to hold the keys to the safe/drawer and the cash box. Spare keys to the cash tin are placed into a sealed envelope and can only be accessed by the finance Team and business manager. Use of Petty Cash Petty Cash can only be used for minor purchases or small, non-salary, cash advances. Whenever cash is issued a petty cash voucher should be completed and signed by the cashier stating: The amount issued The name of the person receiving the money 20

21 The recipient s signature agreeing that they have received the money The date it was issued What is to be purchased The voucher should be retained by the finance officer as evidence of monies being released. Petty cash vouchers should be kept in the locked cash box and treated as cash until the money is spent and a receipt returned. Should the money be returned unspent the voucher should be destroyed and no entry in the petty cash record is required. All cash advances should be fully accounted for within 5 working days. It should be made clear to any person to whom money is advanced that the money is in their care and should it be lost/stolen, disciplinary action may follow. Receipts or proof of purchase must be obtained for all expenditure. Receipts must have a VAT number on them wherever VAT has been charged, in order for the VAT to be reclaimed. The authorised receipts/proof of purchase and any change should be given to the cashier who should then: Check that the receipt and change add up to the amount issued per the voucher Check that the receipt has been appropriately authorised Enter the details of the amount returned onto the petty cash voucher and sign it Attach the receipt to the petty cash voucher Enter the details of the purchase onto the petty cash return. Petty cash records A petty cash return in Excel format will be completed each week. The petty cash should be balanced at least once a week. This involves: Updating the petty cash return to ensure that all vouchers have been recorded. Counting the cash to ensure that the physical cash held agrees to the amount on the return. If necessary, cashing a cheque at the bank to the value of the receipted vouchers, to top up the petty cash float. Any shortfall in the petty cash balance (meaning that there is less cash actually in the cash box than there should be when taking all the vouchers into account), will need to be referred to the Headteacher The petty cash spreadsheet will be passed to the Business Manager for reviewing and authorising. This review will include ensuring the expenditure has been approved and the total of the transactions on the spreadsheet as evidence of check. All petty cash returns and all receipts should be filed for seven years. 21

22 Petty Cash Reconciliations Each week a petty cash reconciliation will be undertaken to ensure that the records/sage agree to the accounting records and all expenditure is recorded correctly on the finance system, with the result that the total float agrees. The reconciliation will show the amount of cash held and the total of advance vouchers in the cash box and this will be reconciled to Sage. If there is a discrepancy between the SAGE and cash box float, then these will be listed on the reconciliation sheet. The reconciliation sheets will be reviewed and approved by the Business Manager. Adjustments and write offs If a write-off is required, (e.g. due to small discrepancies which cannot be resolved after investigation), a report outlining the reason for the write off must be prepared and passed to the Headteacher. The should clearly state the amount of the write off and the reason as to why the write off is to be made. Any write off will also be reported to the Resources Committee. 12 Corporate Cards Procedures Scope This applies to all staff. Summary The School issues corporate charge cards to individual members of staff as a flexible, convenient, cost effective and secure method of payment for school expenditure. From time to time, for operational purposes, staff maybe given a corporate card on a short term basis; for example staff running overseas trips As Corporate Cards enable purchases to be made by one individual, all new cards must be approved by the Headteacher and appropriate individual credit limits must be put in place to limit the School s exposure. Corporate cards are provided for two main purposes: To make low value purchase in a flexible, convenient and cost effective manner, and For meeting expenses required for an employee s job Corporate Cardholders will comply with the issuing bank s terms and conditions, in particular Corporate Cards must only to be used by the person named on the card and PIN numbers must be kept securely. Corporate Card returns must be made on a monthly basis if any expenditure has been incurred and must be authorised by the Headteacher. The Business Manager will be responsible for the authorisation of the Headteacher s credit card return.. 22

23 Failure to comply with the Corporate Card procedures may lead to the card being put on hold. This means that it will be declined by retailers and so prevent further loss to the School. Consistent failure to abide by the set rules may well lead to a warning being issued which could result in the card being cancelled and / or a possible disciplinary to follow dependent on the severity. Eligible Expenditure The cards will generally be used for: Small purchases (less than 200) Purchases from one-off suppliers (less than 350) Larger items where invoicing is not standard practice (hire vehicles) Purchases from retail outlets where invoicing is not possible Purchase orders must be raised for any item being purchased on a credit card and approved in line with school policy prior to the purchase being made. All orders (telephone or internet) must be delivered to the school address. Non-allowable Expenditure No corporate card can be used for: Withdraw cash Payments for services provided by individuals as this could be classed as taxable income Personal expenditure Staff gifts The cardholder shall authorise the school to recover the cost of any unauthorised transactions and where reimbursement is not received then the school is authorised to make a salary deduction for the unauthorised amount. Fraudulent Transactions Fraudulent transactions may appear on corporate card statements and Finance will be responsible for checking statements carefully. Where a fraudulent item occurs the cardholder should immediately contact Barclaycard in the first instance and have the card placed on stop. This will usually result in the cancellation of that card and the process of reissuing the card and new pin. Credit Limits Each card has a credit limit set on it in order to limit the risk to the School and has been set as follows: Headteacher 2,000 Deputy Headteacher 500 PA to Headteacher 500 Business Manager

24 The expenditure on the card in any month cannot exceed the credit limit. Any transaction that puts the expenditure over the credit limit will be rejected by the retailer. Corporate Card Statements Corporate card statements are sent out by Barclaycard on the 15 th of each month. Once received the Finance Officer will complete a Monthly Corporate Card Return which will be list out all the transactions and include the receipt, invoice or other documentation for each transaction (this should be a VAT invoice/receipt where appropriate). Where a VAT receipt or invoice is not obtained, the School is unable to recover any of the VAT. The return will be fully coded and passed to the relevant person (Headteacher/Business Manager) for approval. 13 Capital Policy Expenditure which meets the definition of capital expenditure will be recorded as a fixed asset and depreciated in accordance with the depreciation policy. Capital expenditure is defined as any expenditure that meets both the following criteria: Involves the acquisition of an asset which will be in use by the School for at least 3 years; and Costs 5,000 or more. The number of invoices from a supplier is not relevant - the cost of the project is the relevant cost. All external costs involved in bringing the asset to a usable state e.g. fees for overseeing contractors, architects plans etc should also be capitalised. Depreciation Policy Depreciation spreads the cost of the asset in equal installments over its estimated useful economic life. It will be charged to the Income Statement. Depreciation rates are as follows: Improvements to leasehold properties over the remaining life of the lease Fixtures, fittings and office equipment 33% (3 years) IT equipment and connected software 33% (3 years) Depreciation commencement Depreciation commences when asset is ready for use. Once asset is in use and depreciation commences, subsequent costs are expensed, unless costs relates to periods before asset was brought into use. Depreciation and restricted funds Fixed assets funded from restricted funds need to be coded to the fund to reduce the cost over time. 24

25 Once the terms and conditions of the fund are discharged, costs as well as depreciation is moved out of the restriction to general fund. Capital Coding All items / works which meet the capital criteria must be coded as capital regardless of funding Asset register All items purchased with a value over the School s capitalisation limit must be entered in an asset register. The asset register should include (as far as reasonably practical) the following information: Asset description Asset number Serial number Date of acquisition Asset cost Source of funding (% of original cost funded from DfE or EFA grant and % funded from other sources) Expected useful economic life Depreciation Current book value Location Name of member of staff responsible for the asset (optional) Security of assets Stores and equipment must be secured by means of physical and other security devices. Only authorised staff may access the stores. All the items in the register should be permanently and visibly marked as the School s property and there should be a regular (at least annual) count by someone other than the person maintaining the register. Discrepancies between the physical count and the amount recorded in the register should be investigated promptly and, where significant, reported to the governing Board. Inventories of School property should be kept up to date and reviewed regularly. Where items are used by the School but do not belong to it this should be noted. Disposals Items which are to be disposed of by sale or destruction must be authorised for disposal by the Business Manager and, where significant, should be sold following competitive tender. The School must seek the approval of the DfE or EFA in writing if it proposes to dispose of an asset for which capital grant in excess of 50,000 was paid. Disposal of equipment to staff is not encouraged, as it may be more difficult to evidence the School obtained value for money in any sale or scrapping of equipment. In addition, there are complications with the disposal of computer equipment, as the School would need to ensure licenses for software programmes have been legally transferred to a new owner. 25