POLICY ON INTERNAL FINANCIAL CONTROLS

Transcription

1 POLICY ON INTERNAL FINANCIAL CONTROLS 1. Introduction By any standards Plymouth College, encompassing both Main and Prep Schools, and their subsidiary activities, is a large organisation. We employ some 250 personnel and the combined turnover is over 11 million. If the College is to be efficiently administered we must ensure that wherever possible best methods are employed. By so doing we will ensure that the overall welfare of the College, its Governors, employees and pupils are safeguarded. Controls are a necessary feature of any well run organisation. 2. Aim The aim of this document is to lay down the internal financial controls which are to operate at Plymouth College. 3. Organisation Financial Structure This is shown at Annex A, and shows the lines of responsibility and reporting. The Bursar has overall responsibility for the financial operation of the College according to priorities as determined by the Headmaster(s). He is responsible to the Board of Governors, through the Headmaster(s). He is assisted by the Accountant and Book-keeper, and is advised by various outside agencies. 4. Segregation of Duties Outline duties and responsibilities of the bursarial staff are as follows: a. Bursar Reports to Board of Governors, through the Headmaster(s). Creates Budget. Delegates Budgets. Sets overall financial Strategy. Controls all expenditure and income. Signatory of cheques less than 7.5K. Dual signatory on cheques over Authorises all expenditure. b. Accountant Reports to Bursar. Prepares all accounts for audit. Controls fees database. Prepares management accounts. c. Book-keeper Reports to Bursar. (Part-time) Page 1 of 7

2 d. Clerical Assistants (Part-time) Assists in maintaining ledgers. Receives all cash/cheques. Controls wages/salaries. Reports to Accountant. Inputs invoices to purchase ledger. Day-to-day clerical support. Currently prepares Enterprise and Foundation Office Accounts. e. Prep School Secretary and Compliance Officer (Part Time) Qualification of Staff and Advisers Acts as Bursar s and Accounts Office conduit for information on financial, compliance and HR matters in accordance with Job Description. Advises Headmaster (Prep) of Income and Expenditure of his accounts. 5. The relationships both within the College and with our advisers on the matters of finance is by nature informal and on-going. All specific advice sought from our outside professional advisers must be reported to the Governors whenever appropriate. 6. Staff must possess relevant qualifications and experience, and to this end particular care should be taken to ensure that necessary training takes place as and when required, both to progress the individual employee s qualifications and experience and to ensure that the demands of the College can always be met. Budgetary Controls 7. It is the Bursar s responsibility to prepare indicative annual budgets in the Spring term for Main and Prep Schools, and to present these to the Board of Governors for acceptance prior to the commencement of the next financial year. Thereafter updated budgets are to be given to the Governors at every meeting of the Board. 8. In support of these budgets, management accounts are to be prepared for presentation to the Board and Financial KPIs updated. These are as follows: a. Statements of Assets and Liabilities (presented at each Board Meeting) b. Two Year Plan (revised annually and presented with the proposed budget) c. Benchmarks (revised annually and presented with the proposed budget) d. Cash Flows (revised annually and presented with the proposed budget) 9. The Bursar, being responsible for budgetary control, will move towards producing monthly management accounts by the start of 2106 He will of delegate certain budgets to Page 2 of 7

3 Budget Holders. They are appraised at the start of each financial year of their budgets, and receive each month from the Book-keeper statements of their accounts. The Bursar oversees these budgets and when necessary investigates overspends. Accounts 10. The following Accounts are operated: a. Plymouth College & St Dunstan s Abbey School - The principal account incorporating Main and Prep Schools. b. Plymouth College Enterprises - The trading account for non-core activities such as the Shop. It is VAT registered. c. St Dunstan s Abbey Trust - Owns land at the Millfields on which Plymouth College is licensed to operate. d. Plymouth College Trust - Owns land at Ford Park on which Plymouth College and St Dunstan s are licensed to operate. e. Plymouth College Foundation Trust Raises money for the Legacies, Capital Projects,Equipment, Bursaries and Scholarships. Audit 11. The financial year is 1 September to 31 August. 12. The Accountant will prepare full accounts for the College, and Plymouth College Enterprises and Plymouth College Foundation, in a format ready for audit by the Auditors. The Accounts Office Assistant will provide the first draft of the Enterprise and Foundation Accounts to the College Accountant. The annual audit is to take place before 31 st January each year. 13. The Bursar will thereafter present the accounts to the Finance Committee. The DoER will present the Foundation Accounts. They may be assisted in this by the Accountant. The Finance Committee, having satisfied themselves that the accounts are a true reflection of the activities of the College over the previous period, will recommend, or otherwise, to the next Full Board Meeting (normally in March) that the audited accounts be accepted by the Governors, and that Auditors for the forthcoming year be appointed. 14. The Bursar must also bring to the attention of the Finance Committee and the following Full Board, the auditors Letter of Management, together with his response. He must, where necessary, seek the Board s approval for any comments or courses of action. Controls over Income 15. The principal source of income is fees, the vast majority of which are paid either by cheque, direct debit or credit card. Income from other sources include Appeal income, investments, bank interest, Plymouth College Enterprises, Hydronauts, Lets etc. Page 3 of 7

4 16. It is the Book-keeper s and Fees Ledger Clerk responsibility to record all income received daily, to run list fees income and pass to the Accountant, and to post all other income. The Fees Ledger Clerk is to record fee payments from the run list. Neither should be responsible for both receipt of fees and posting to the fees database. At the Prep School the School Secretary and Compliance Officer will receive monies from Parents or Teachers, sign for and record the amounts, and then arrange for the safe transport and delivery up to the Accounts Office. An describing the transaction should be sent to the Accounts Office, who should acknowledge the safe arrival of the monies. Monies should be sent up to the accounts office on the day of receipt. If this is not possible it can be stored by the School Secretary for one day only. 17. Fees received in cash are to be recorded separately, checked and recorded by both Book-keeper and Accountant, and posted to the fees account. No Fees can be accepted by the Prep School as money laundering regulations must be followed; parents must pay at the Accounts Office. A receipt must always be given for cash, and a copy of this receipt must support each entry. Cash is to be banked on the day of receipt. If this is not possible for any reason it is to be given to the Bursar for security in his safe. There will be a move towards e- banking as soon as practicable. 18. The Book-keeper is responsible for carrying out a bank and cash reconciliation daily which is to be recorded by the Accountant. Controls over Expenditure 19. There is a laid down procedure for normal budgetary expenditure. Each budget holder holds a unique order book. The Prep School book is maintained by the Headmaster s secretary. When an order is made the top copy (white) is to be sent to the supplier and the second copy (green) sent to the Book-keeper for recording. The third copy is retained by the Budget Holder for record purposes. Upon receipt of the invoice the budget holder must authorise payment before settlement is made. Cheques will only be issued for properly authorised invoices. Any expenditure over 300 must be authorised by the Bursar prior to an order being submitted. The Prep School Headmaster will authorise all Prep expenditure. 20. All other expenditure is the direct responsibility of the Bursar, who must authorise payment before it is made. 21. Under no circumstances are payments to be authorised or made without being supported by an official invoice, which would be acceptable to the Inland Revenue. Payments by Cheque 22. There are three authorised signatories for cheques for School, Foundation and Enterprise accounts. They are the Headmaster (Main School), Bursar and Assistant Bursar. Each can sign a cheque for sums less than 7,500. Cheques in excess of 7,500 require two signatories to sign. In the absence of the Bursar, the Assistant Bursar has delegated authority. The vast majority of cheques are signed by the Bursar, and only in his absence will the Headmaster sign a cheque. The Book-keeper is to support each cheque for signature with an invoice or other suitable documentation. Page 4 of 7

5 23. Cheque books and computer printed cheques are to be controlled and secured at all times in the Book-keeper s safe. Under no circumstances are blank cheques to be signed. Tendering Procedure 24. The Bursar is responsible for the system for tendering for goods and services. This should be done routinely for contracts (once every 5 years) over 15,000 unless there are good financial and operational reasons not to do so which should be explained and authorised by to the Finance Committee. 25. For one-off purchasing of goods and services there needs to be a formal tender process for contracts likely to exceed 15,000. Below that figure the Bursar, in full knowledge of the circumstances, can make decisions having received authority from Governors for any services over 5,000. Wages and Salaries 26. Wages and salaries are paid monthly into bank accounts. Wages are never paid in cash. 27. Payments made by Bankers Automated Clearing Services (BACS) must be authorised by the Bursar (or Headmaster in his absence) using the Lloyds payment card and special (to each) PIN number. The total authorised must be verified with the paper print-out, and the latter signed after each individual payment has been agreed. Banking Procedures 28. Cheques and cash are to be banked daily by the Porters. 29. The limits for insurance purposes against loss and theft of invoices are as follows: a. Money on school premises during business hours 5,000 b. Money on school premises outside business hours 2,000 (in Bursar s safe) c. Any other circumstances These limits of liability are increased to 5,000 on three occasions; the start of each term. 31. The limit against misappropriation, deception or false accounting is 5, The transit of cash to the bank is to be by the following able-bodied adults: a. Up to 2,500 1 person b. 2,501 to 5,000 2 persons c. 5,001 to 7,500 3 persons d. 7,501 to 10,000 4 Persons Page 5 of 7

6 c. Over 10,000 No immediate cover Gift Aid 33. The DoER is responsible, with the assistance of the Accountant, for the correct recording of all receipts of donations and gifts under Gift Aid. He is to ensure that full records of declarations are kept and that claims from the Inland Revenue are made quarterly, always adhering to the Gift Aid rules. Page 6 of 7

7 Annex A FINANCIAL STRUCTURE Board of Governors Headmaster Bursar Headmaster (Prep School) DoER Foundation Office College Accountant Book-keeper Intra School Secretary Accounts Assistant Auditors Bank Insurance Brokers Solicitors Northcott Trumfield Lloyds TSB Marsh Brokers Wolferstans Denotes financial authority links Denotes financial advisory links D.J.W. Baylis Bursar Reviewed: November 2015 Review Date: November 2016 Page 7 of 7