Treasury Management Policy

Transcription

1 Treasury Management Policy Review cycle Policy Oversight Body Policy R eviewed (date) Next Review (date) Signed (Academy Principal) Date Signed (Oversight Body Chair) Date

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3 Stokesley School Being the Best We Can Be Stokesley School, Station Road, Stokesley, North Yorkshire TS9 5AL

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5 Treasury Management Policy TREASURY MANAGEMENT POLICY Introduction Treasury Management is defined as: n the management of ALT s cash flows, banking and investment transactions n appropriate financial controls around 1) n the management of the risks associated with these activities n the pursuit of optimal returns consistent with those risks The objectives of this policy are to ensure that the ALT: n maintains sufficient cash balances in its current account to meet its day to day commitments n operates within any agreed bank facilities n manage surplus cash appropriately to support both working capital needs and long term investment strategies n invests surplus cash to earn an acceptable rate of return without undue risk n considers spreading risk between differing types of investment and institutions to reduce credit risk, taking independent sanctioned advice as appropriate Responsibility The CEO/Accounting Officer and Governing Body/Board have overall responsibility for the security and management of funds with appropriate day to day support from the Trust Business Manager and her team. The day to day management of the treasury function is controlled by the Trust Business Manager who will liaise with the CEO/Accounting Officer and Trust Board in relation to investment decisions taking Non- Executive Finance Director input and advice as appropriate. Cash Flow Forecasts The Trust Business Manager will prepare and present detailed regular 12 months rolling cash flows to the Trust Board to identify, for example, expected cash balances throughout the year for investment opportunities and to provide early warning of low cash balances and consider and approve appropriate actions. Where surplus funds exist, the Board is to consider the best use of those funds including working capital support to the day to day activities, as well

6 Treasury Management Policy as long term planning and investment decisions, not just in terms of cash investment and return, but ALT infrastructure investment and plans, and associated cash needs. Borrowing The ALT is not permitted to borrow without prior permission of the Secretary of State. The Board under this policy will consider whether it wishes to operate a bank facility within defined parameters, for example, where there are cash flow pinch points within a month, the ability to consider a bank facility that merely supports that with the remit of funding any pinch point from a working capital back up fund. Investments & Working Capital Support Subject to prevailing external banking offers, the ALT will operate an interest bearing current account with a bank approved by the Governing Body/Board. (Currently banking is with Lloyds) The Board will maintain sufficient balances to ensure there are adequate liquid funds to cover all immediate and forthcoming financial commitments, including maintaining a sufficient contingency for unexpected payments. Monies surplus to the working requirements shall be invested in term deposits with the current banker or with another UK institution regulated by the Financial Conduct Authority or the Prudential Regulation Authority. The ALT will not take out any long term deposits until a reliable cash flow pattern has been established. Initially, monies will only be paid into term deposits for periods not exceeding six months. The Trust Board may consider extending this period to no longer than 12 months once cashflows and associated patterns have been established, reviewed, and impacts fully understood. This would require Board approval. Working Capital and Deposit Support The following balances and deposits will be operated and reviewed every six months to ensure they are appropriate: n Day to day current account is always to have 10,000 in it as a minimum balance. Where a pinch point looks like occurring that will impact on that minimum, then bank facilities are to be implemented that will automatically draw the appropriate level of funding to maintain that minimum, from the working capital reserve account (Deposit 1). n a working capital reserve account (Deposit 1) will be operated where funds allows to ensure there are sufficient funds available to support the day to day needs of the ALT, as well as act as a reserve for unforeseen working capital events. That fund level will be set at

7 Treasury Management Policy 200k (which represents 55% of the monthly payroll cost), and will be drawn upon, and replaced, dependent on cashflow pinch points and surpluses. Where there are cashflow requirements to support point 1), then funds will move to support that. Where there are cashflow surpluses in 1, then funds should be moved to this reserve account. The maximum balance on this account will be 200k. Any surplus funds to that will be moved to an investment fund (Deposit 2). n where there appears to be a long term need to support Deposit 1, then any funds in Deposit 2 will be redirected to Deposit 1 to maintain that 200k balance. The ALT will maintain a long term investment fund (Deposit 2) for appropriate infrastructure, capital investment and building investment needs. This fund will also be available to support the working capital reserve fund as required (Deposit 1) Other than through an automatic sweeping facility with the bank to support deposit 1, any use of this Deposit 2 must have a formal submitted spend or investment spend plan request made to the Board, signed off by the CEO/Accounting Officer, Trust Business Manager and any other input deemed necessary (e.g. the RPE Committee). Interest, etc. and appropriate bank facilities must be implemented as required to support this structure, as reported under the Register of Deposits below. Limits and Authority The Trust Board reserve the powers to: n give prior approval to the opening of new bank current accounts n amend the approved institutions with whom the ALT will invest n give prior approval to any bank deposit with a maturity date exceeding six months The Trust Board delegates authority to the CEO/Accounting Officer and Trust Business Manager to place deposits in the Academy s name, at approved institutions, subject to the agreed limits within this policy. The Board Non- Exec. Finance Director is available for consultation for this decision making process where considered appropriate. No deposits will be placed without prior agreement with the CEO/Accounting Officer or other signatory subject to the relevant limits. Authorised bank signatories of the Academy are set out in the Academy s Financial Regulations Manual.

8 Treasury Management Policy Register of Deposits The Trust Business Manager will maintain a register of all deposits/investments held which will record: n Institution with which deposit placed n date deposit placed n amount deposited n date of maturity n amount returned n interest earned n rate of Interest Monitoring, evaluation and review The Trust Business Manager will present the Register of Deposits to The Board on a six monthly basis. Periodically (at least annually) the Trust Business Manager will review interest rates and compare these with investment opportunities through other institutions. POLICY ENDS

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10 Stokesley School, Station Road, Stokesley, North Yorkshire TS9 5AL Areté Learning Trust is an exempt charity regulated by the Secretary of State for Education. It is a company limited by guarantee registered in England and Wales (company number ), whose registered office is at Stokesley School, Station Road, Stokesley, North Yorkshire, United Kingdom, TS9 5AL