Woodfield School is a company limited by guarantee (company number 8905350, registered in England and Wales) that has its registered office at Woodfield School, Glenwood Avenue, Kingsbury, London, NW9 7LY

Woodfield School 2017

Finance Policy & Procedures 2017-2018

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Policy Review History

Date Adopted / Reviewed

Version

Author

Approved by Resources Committee

Approved by Full Governing Body

Review Date placed on RC & FGB Agenda

7 September 2015

Version 2

G Foley

07.09.2015

07.09.2015

September 2016

16 November 2015

Version 3

G Foley

16.11.2015

16.11.2015

September 2016

29 September 2016

Version 4

G Foley 29.09.2016

29.09.2016

September 2017

12 September 2017

Version 5

G Foley

02.10.2017

02.10.2017

September 2018

Table of Contents

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1. Introduction ............................................................................................6 2. Key AFH 2017 changes …………………………………………..…….…...6

3. Governance ............................................................................................. 6

Corporate Governance.............................................................................................................................. 7

The Governing Body.................................................................................................................................. 7

Obligations of Governors .......................................................................................................................... 8

Conduct of Governors ............................................................................................................................... 9

Declarations of Business Interests ............................................................................................................ 9

Payments to Governors ............................................................................................................................ 10

Governors’ Meetings ................................................................................................................................ 10

Scheme of Delegation ............................................................................................................................... 11

Governors’ Responsibilities for Risk Management ................................................................................... 11

3. Organisation ........................................................................................ 12

The Governing Body.................................................................................................................................. 13

The Resources Committee (including Audit) ............................................................................................ 13

The Head teacher...................................................................................................................................... 13

The Finance Officer ................................................................................................................................... 14

Risk Review & Financial Controls .............................................................................................................. 14

Other Staff................................................................................................................................................. 14

Register of Interests .................................................................................................................................. 14

4. Accounting system ............................................................................. 15

System Access ........................................................................................................................................... 15

Back-up Procedures .................................................................................................................................. 15

Transaction Processing ............................................................................................................................. 15

Transaction Reports .................................................................................................................................. 16

Reconciliations .......................................................................................................................................... 16

5. Financial planning ............................................................................... 17

Development Plan..................................................................................................................................... 17

Annual Budget........................................................................................................................................... 18

Balancing the Budget ................................................................................................................................ 18

Finalising the Budget................................................................................................................................. 18

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Monitoring and Review............................................................................................................................. 18

6. Payroll .................................................................................................. 19

Staff Appointments ................................................................................................................................... 19

Payroll Administration .............................................................................................................................. 19

Payments................................................................................................................................................... 19

7. Purchasing........................................................................................... 20

Routine Purchasing ................................................................................................................................... 20

Ordering procedures are as follows: ........................................................................................................ 21

Receipt of goods: ...................................................................................................................................... 21

Purchase invoices: .................................................................................................................................... 21

Payment of invoices: ................................................................................................................................. 21

8. Tendering Rules .................................................................................. 22

Orders under £10,000 ............................................................................................................................... 22

Orders over £10,000 ................................................................................................................................. 22

Forms of Tenders ...................................................................................................................................... 22

Open Tender: ........................................................................................................................................ 22

Restricted Tender: ................................................................................................................................ 23

Negotiated Tender: ............................................................................................................................... 23

Preparation for Tender ............................................................................................................................. 23

Invitation to Tender .................................................................................................................................. 23

Aspects to Consider .................................................................................................................................. 23

Financial ................................................................................................................................................ 23

Technical/Suitability.............................................................................................................................. 24

Other Considerations ............................................................................................................................ 24

Tender Acceptance Procedures ............................................................................................................ 24

Tender Opening Procedures ................................................................................................................. 24

Tendering Procedures ........................................................................................................................... 24

9. Income ................................................................................................. 25

SEN & other grants.................................................................................................................................... 25

Trips........................................................................................................................................................... 25

Bad debts .................................................................................................................................................. 25

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Other matters ......................................................................................................................................... 25

Dinner money ......................................................................................................................................... 26

Lettings.................................................................................................................................................... 26

Fund raising events ................................................................................................................................. 26

Custody ................................................................................................................................................... 26

10. Cash Management.............................................................................. 27

Bank Accounts......................................................................................................................................... 27

Deposits .................................................................................................................................................. 27

Payments and withdrawals ..................................................................................................................... 27

Administration ........................................................................................................................................ 28

Petty Cash Accounts................................................................................................................................ 28

Cash Flow Forecasts ................................................................................................................................ 28

Investments............................................................................................................................................. 28

Financial Controls.................................................................................................................................... 28

Tax ........................................................................................................................................................... 29

Insurance................................................................................................................................................. 29

11. Fixed assets........................................................................................ 30

Asset register .......................................................................................................................................... 30

Security of assets .................................................................................................................................... 30

Disposals ................................................................................................................................................. 30

Loan of Assets ......................................................................................................................................... 31

12. Appendices......................................................................................... 32 Appendix 1 .............................................................................................................................................. 32 Appendix 2 .............................................................................................................................................. 36 Appendix 3 .............................................................................................................................................. 3 7 Appendix 4 .............................................................................................................................................. 38 Appendix 5 .............................................................................................................................................. 4 7 Appendix 6 .............................................................................................................................................. 48

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1. Introduction Woodfield School (the “Academy Trust”), through the delegated responsibilities of the Governing Board, Accounting Officer, Chief Executive Officer, School’s Management Team and Bursar/Finance Manager will ensure effective financial governance, by applying robust, audit approved, processes in the management of funds. Woodfield School will fully comply with the financial framework as detailed in the Education Funding Agency (ESFA) – ‘Academies Financial Handbook 2017 (AFH 2017)’.

All financial systems will be monitored and evaluated through internal and external assessment, thereby ensuring that Woodfield School properly meets the requirements of the Funding Agreement entered into on the 28 March 2014 with the Secretary of State for Education.

This manual expands on that and provides detailed information on the academy’s accounting procedures and systems. The manual should be read by all staff involved with financial systems. Woodfield School, in ensuring that all parties are aware of the changes provided under the annual review of the Academies Financial Handbook, provide clear reference to the latest changes by highlighting the same in the school’s Finance Policy & Procedure. In this version all such additions have been highlighted in purple.

2. Key AFH 2017 changes

The main changes identified under ‘What has changed in this edition?, have been included in the Finance

and Procedures Manual 2017. Policy & Procedures 2017-2018

1. Financial control

Updated the references to submission of budget information to ESFA to reflect changes

in reporting requirements (2.2.3).

Emphasising that decisions about levels of executive pay must follow a robust evidence-

based process (2.3.5).

Explained that repercussive transactions require ESFA approval, alongside those that are

novel or contentious, and that ESFA may refer these to HM Treasury (3.3.1).

Clarified that trusts’ delegated authority to make non-statutory/non- contractual staff

severance payments under £50,000 is before income tax and other deductions (3.7.6).

3. Governance Woodfield’s Governing board is confident that the Trust Board, by meeting four times a year, and committees, by meeting three times a year, are fully discharging their responsibilities as defined under Woodfield School’s Article of Association, the Funding Agreement, the Academies Financial Handbook 2017 and all obligations placed upon it by the Secretary of State for Education.

Woodfield Governing board having considered the size of the academy is confident that it is neither a medium nor large sized trust.

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Woodfield School will ensure that the Academy Trust neither appoints de facto trustees (as defined in appendix 1 of the Charities SORP 2015) nor shadow directors (as defined in section 251(1) of the Companies Act 2006).

In order to fulfill better, the obligations placed upon it, the Board of Governors delegates‟ financial matters to the Resources Committee. Other matters are dealt with by the Board of Governors itself. Corporate Governance Corporate governance is the way in which organisations are directed and controlled. It defines the distribution of rights and responsibilities among different stakeholders and participants in the organisation, determines the rules and procedures for making decisions on corporate affairs including the process through which the organisation’s objectives are set, and provides the means of attaining those objectives and monitoring performance. The following section looks at governors‟ responsibilities for the corporate affairs of academies.

The Governing Board

The academy is governed by a governing board under a Memorandum of Association and Article of Association. The governing board is responsible for ensuring that high standards of corporate governance are maintained. It should exercise its powers and functions with a view to fulfilling a largely strategic leadership role in the running of the academy, addressing such matters as:

• policy development and strategic planning including target-setting to keep up momentum on school improvement;

• ensuring sound management and administration of the academy, and ensuring that managers are equipped with relevant skills and guidance;

• ensuring compliance with legal requirements; • establishing and maintaining a transparent system of prudent and effective internal

controls; • management of the academy’s financial, human and other resources (in particular

control over the spending identified in the academy’s development plan); • monitoring performance and the achievement of objectives, and ensuring that plans for

improvement are acted upon; • helping the academy be responsive to the needs of parents and the

community and making it more accountable through consultation and reporting;

• setting the academy’s standards of conduct and values; • assessing and managing risk (including preparation of a statement on the

academy’s risk management for its annual report and accounts). Note: The academy’s annual report and accounts must include a statement on the efficiency and effectiveness of such controls.

The governing board also has a duty to take appropriate action when there are weaknesses in the academy. Where individual governors have concerns which cannot be resolved about the running of the academy or a proposed action, they should ensure that their concerns are recorded in minutes. The board should identify the skills and experience that it needs, and address any gaps

through recruitment, and/or induction, training and other development activities. This is

particularly important at key transition points, for example when converting to a multi-

academy trust or during the growth stage of an existing multi-academy trust. The board

should also address this for any local governing bodies it has put in place. The

Governance Handbook identifies a range of training material to help trustees develop and

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engage fully with their role. This includes a competency framework for governance that

trusts should refer to in determining whether they have skills gaps. [1.5.16]

The board of trustees must provide details of the academy trust’s governance

arrangements in the governance statement published within its annual accounts, and on its

website. This includes its scheme of delegation for governance functions setting out what

the board has delegated to its committees and, in the case of multi-academy trusts, to local

governing bodies. Trusts producing audited accounts for the first time must include in their

governance statement what they have done to review and develop their governance

structure, and composition of the board of trustees. Established trusts should also include

an assessment of the trust’s governance, including a review of the composition of the

board in terms of skills, effectiveness, leadership and impact. To help with this, trusts

should refer to the six key features of effective governance set out in the Governance

Handbook (strategic leadership, accountability, people, structures, compliance and

evaluation). [1.5.17]

NB: All duties and responsibilities of governors detailed in this handbook apply equally to persons who are not governors of the academy but who have been appointed to serve on a committee of that academy in an honorary capacity.

The governing board must appoint a Head teacher to the academy who will also acts as an ex-officio governor. The Head teacher is responsible for the internal organisation, management and control of the academy, the implementation of all policies approved by the governing board and for the direction of teaching and the curriculum. The governing board should formally delegate these powers and functions to the Head teacher.

Obligations of Governors As academies are companies limited by guarantee with charitable status, the governors who sit on the governing board are the legal trustees of the charity. This confers certain obligations upon the trustees to protect the assets, property and good name of the charity. The legal requirements of trustees are set out below. As companies, and under their funding agreements, academy trusts must produce audited accounts. It is a condition of academy trusts' company status that they must publish these accounts and provide a copy to anyone who requests it

As charities, academy trusts must maintain accounting records and provide publicly accessible accounts in line with the statement of recommended practice (SORP) for charities

As public bodies, academy trusts must ensure regularity, in line with the ESFA's academy accounts direction

Trustees (governors) have full responsibility for the charity and must: • act together and in person and not delegate control of the charity to others; • act strictly in accordance with the academy's governing documents; • act in the academy's interests only and without regard to their own private

interests; • manage the academy's affairs prudently throughout the life of the academy; • not derive any personal benefit or gain from the academy of which they are

trustees; and • take proper professional advice on matters on which they are not themselves

competent.

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In managing the academy’s finances governors must: make sure that bank accounts, financial systems and financial records are operated

by more than one person; make sure that all the academy's property is under the control of the trustees; keep full and accurate accounting records; ensure that trustees and managers must have the skills, knowledge and

experience to run the trust; must prepare and monitor financial plans to ensure ongoing financial health; must have in place sound internal control, risk management and assurance

processes, that recognise public expectations about governance, standards and openness;

the control framework’s internally managed measures must include: - a) Coordinating the planning and budgeting processes b) Preparing monthly budget monitoring reports c) Reducing the potential for fraud and theft d) Ensuring efficiency and value for money in the organisation’s activities e) Recognising and managing present and future risks;

must have in place a process for checking its financial systems, controls, transactions and risks;

must be transparent with its governance arrangements, and prepare accruals accounts giving a true and fair view of the academy’s incoming

resources and application of resources during the year and of its state of affairs at the year-end;

In applying the academy’s income governors must spend it solely for the purposes set out in the academy's governing documents and spend it with absolute fairness between persons qualified to benefit from the charity.

Conduct of Governors Governors and staff are public servants and as such must not use public monies or official business for personal benefit. The governing board should avoid obtaining goods and services that include elements of private use or accepting excessive hospitality from prospective suppliers. The Treasury rules about the receiving of hospitality and gifts should be followed, as these rules are there to protect staff and governors. A register should be maintained to record hospitality and gifts received. This should record, as a minimum, the name of the organisation that gave the hospitality/gift, the date it was received, its nature and approximate value.

Governors should be aware that the Prevention of Corruption Act places the burden of proof on the recipient of favours.

The Treasury publication "Guidance on Codes of Practice for Board Members of Public

Bodies" has been circulated to members of the governing board as best practice

Declarations of Business Interests

It is vital that governors and staff act, and are seen to act, impartially. All members of the governing board are therefore required to complete a declaration of their business interests. It is also strongly recommended, as a matter of good practice, that the Head teacher and other senior staff complete declarations. Individual declarations should be maintained together in a register of interests. Declarations should include all business and pecuniary (monetary) interests such as directorships, shareholdings and other appointments of influence within a business or other organisation.

The register must also identify any material interests arising from close family relationships between the academy trust’s members or trustees, and relationships between members or trustees and employees.

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They should also include interests of related persons such as parent, spouse, child, cohabitee and business partner where influence could be exerted by that person over a governor or a member of staff.

Where a governor or member of staff or related person has any interest, pecuniary or non- pecuniary, in a matter to be discussed at a governor meeting, the governor or member of staff must declare their interest and withdraw from that part of the meeting.

Where a governor or related person has a pecuniary interest in a business, and that interest exceeds limits that may be specified in the academy’s memorandum or articles of association, the academy must not enter into any contract or arrangement (such as the purchase of goods and service) with that business. For example, an academy would not generally be permitted to trade with a company in whom a governor holds more than 1/100th of the share capital.

It is the responsibility of governors and staff to ensure their declarations of business interests are kept up to date at all times, and to amend or update them as necessary. As good practice, it is recommended that monthly/termly meetings of governors and senior members of staff include a standing agenda item for attendees to declare any changes to their declarations of interests.

Payments to Governors It is illegal for governors to receive any remuneration for their work as trustees, other than payment of all reasonable out of pocket travel, accommodation or other expenses legitimately incurred by them in connection with their attendance at meetings acting in the capacity of governor of the academy.

In addition, no governor may hold any interest in property belonging to the academy. Nor may a governor receive remuneration in respect of any contract to which the academy is a party.

However, nothing prevents the payment of governors for the usual professional charges for business undertaken by any governor who is a solicitor, accountant or other person engaged in a profession, or by any partner or connected person of his or hers, when instructed by the governing board to act in a professional capacity on behalf of the academy. This exception is only allowable if:

• at no time a majority of the governors are engaged in such a professional capacity: and • Governors withdraw from any meeting at which his or her remuneration, or that of his or

her partner / relative, is under discussion.

Governors’ Meetings It is a requirement of all academy governing bodies that they meet at least once a term. No business can be conducted at any meeting unless a quorum is present. A quorum is usually three governors (those with full voting rights) or one-tenth of the total number of governors with full voting rights, whichever is the greater. Governors must appoint a clerk to the governing body, who must be someone other than a governor or the Head teacher of the academy.

Each meeting of the governing board should consider:

• a report of the financial position of the academy, including its income and expenditure and financial commitments;

• whether adequate financial monitoring of the academy’s budget and activities is being undertaken;

• progress on any action identified to improve financial arrangements at the academy;

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• significant contracts proposed to be entered into by the academy; • details of any significant matters affecting the academy’s staff; • details of any significant matters affecting the pupils‟ welfare or education; • details of any significant matters affecting the academy’s assets e.g. computers,

cars, whiteboards etc.;

Matters that should be considered by trustees at least once a year are:

• the academy’s goals and how they are being met; • review of the management structure to ensure it is operating effectively; • review of the performance of external providers e.g. bankers, services provided under

SLAs; • review and approval of the academy’s annual accounts and report of the

trustees; • review and approval of the financial budget for the following year; • review and approval of the levels of insurance cover for the academy’s assets; • findings made by the auditors and the auditor’s management letter, and any

other financial reviews, and consideration of what actions should be taken arising from their recommendations;

• review the risks to which the academy is exposed and determine whether systems are in place to mitigate those risks.

Scheme of Delegation

The trust must be able to show that public funds have been used as intended by Parliament.

The governing board should agree a formal schedule of matters reserved for their decision, i.e. those which should not be delegated within the academy. Beyond this, the governing board should consider establishing separate committees to deal with specific areas of academy business, and should determine the delegated responsibilities to be assigned to those committees, to ensure that matters can be dealt with in appropriate detail and with sufficient frequency. However, as a minimum, it is a requirement that all academies establish a Resources Committee (including Audit) separate from the governing board to deal with financial matters including the decisions upon the remuneration of staff.

Where the governing board decides to delegate certain matters for consideration by committees, each committee should be chaired by a governor. The membership of the committee may include persons who are not governors provided that a majority of the members are governors. The governing board should ensure that it receives adequate feedback on the work of those committees and is able to consider their decisions formally. The establishment of committees does not absolve the governing board of its overall responsibility to manage the finances of the academy.

As Woodfield Academy Trust’s annual income is less than £50m, in line with 2.4.2 of the Academies Financial Handbook 2015‟, Woodfield’s Audit Committee functions will be enveloped as a key element of Resources Committee scrutiny.

In circumstances where a Woodfield employee is a member of the Resources Committee they are permitted to attend, provide information and participate in discussions in relation to audit matters. However, the employee cannot participate in their capacity as a member for the purpose of Audit Committee decisions.

Governors’ Responsibilities for Risk Management The Charity Commission requires charities to include a statement in the trustees‟ annual report confirming that all major risks to which the charity is exposed have been reviewed and systems have been established to mitigate those risks. Academy governors need to think about the major risks from the outset in order to make and sign up to that statement. For example, governors should determine:

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• what the major risks are to the academy; • what the likelihood is of those risks materialising; • what would be the potential impact of the risks; and • what systems have been put in place to mitigate and monitor the risks?

Governors should produce a “risk register” which demonstrates the results of the risk assessment process.

The risk management process should include preparation of a contingency and business continuity plan to deal with crises that could face the academy.

Governors must also ensure that the academy complies with general legislative requirements covering employment, property and health and safety regulations. They also need to think about how they can mitigate against those working for the academy from acting unlawfully, imprudently or outside the terms of the academy’s governing documents, and are expected to consider whether indemnity insurance should be taken out to cover them against this liability.

Governors are at risk of personal liability if they cause loss to the academy by acting unlawfully, imprudently or outside the terms of the academy's governing document.

3. Organisation The following section outlines the roles and responsibilities in relation to the academies finances.

The Department for Education (DfE) The DfE has ultimate responsibility and accountability for the effectiveness of the financial system for academies The ESFA The ESFA has authority to take decisions on behalf of the secretary of state. The ESFA’s accounting officer is responsible and accountable to Parliament for how the ESFA uses its funds. It can also issue a financial notice to improve where it has concerns about the financial management or governance of an academy. Where ESFA has concerns about the financial management of a trust, but has not issued

an FNtI, it may prescribe working with an expert in school financial health and efficiency to

support the trust and identify where improvements could be made. The Department has

produced a range of additional information, tools and training to help trusts improve their

financial health and efficiency. Trusts are expected to make reasonable endeavours to

implement improvements that are identified by an expert in school financial health and

efficiency and failure to do so may result in an FNtI being issued requiring the trust to

implement the improvements. Working with an expert in school financial health and

efficiency may also be prescribed as a condition of an FNtI. [1.5.11

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The Governing Board The governing board has overall responsibility for the administration of the academy’s finances. The main responsibilities of the governing board are prescribed in the Funding Agreement between the academy and the DfE/ESFA and in the academy’s scheme of government. The main responsibilities include: • ensuring that grant from the DfE/ESFA is used only for the purposes intended; • ensuring that funds from sponsors are received according to the academy’s Funding Agreement, and are used only for the purposes intended; • approval of the annual budget; • appointment of the Head teacher, and • appointment of the Finance officer (FO), in conjunction with the Head teacher.

Trustees of the academy trust – the board of trustees of an academy trust is responsible for ensuring that the trust's funds are used in accordance with the law, its funding agreement, its articles of association and the Academies Financial Handbook. The board must ensure funds are spent reasonably and in a way that commands broad public support

ESFA’s accounting officer will send a ‘Dear Accounting Officer’ letter annually to all

academy trust accounting officers, covering issues pertinent to their role such as

developments in the accountability framework and findings from ESFA’s work with trusts.

Accounting officers must share this letter with their members, trustees, chief financial

officer and other members of the senior leadership team, arrange for it to be discussed by

the board of trustees and take action where appropriate to strengthen the trust’s financial

systems and controls. [1.5.5]

The Resources Committee (including Audit) The Finance and Resources Committee is a committee of the governing body. The Finance and Resources Committee meets at least once a term but more frequent meetings can be arranged if necessary.

• The main responsibilities of the Resources Committee (including Audit) are detailed in written terms of reference which have been authorised by the governing body. The main responsibilities include: the initial review and authorisation of the annual budget; • the regular monitoring of actual expenditure and income against budget; • ensuring the annual accounts are produced in accordance with the requirements of the Companies Act 2006 and the DfE/ESFA guidance issued to academies; • authorising the award of contracts over £10,000; • authorising changes to the academy personnel establishment‟ and

• reviewing the reports of the Responsible Officer on the effectiveness of the financial procedures and controls. These reports must also be reported to the full governing body.

The Head teacher

Within the framework of the academy development plan as approved by the governing board the Head teacher has overall executive responsibility for the academy’s activities including financial activities. Much of the financial responsibility has been delegated to the FO but the Head teacher still retains responsibility for:

• approving new staff appointments within the authorised establishment, except for any

senior staff posts which the governing board have agreed should be approved by them; • authorising contracts between £1,000 and £9,999 in conjunction with the FO; • authorising payments in conjunction with the FO or other authorised signatory.

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The academy trust’s accounting officer – the accounting officer of academy trusts is personally responsible to Parliament, and to the accounting officer of the ESFA, for the resources under the trust's control. He/she must be able to assure Parliament, and the public, of high standards of probity in the management of public funds, particularly with regard to propriety, regularity and value for money.

The Finance Officer The FO works in close collaboration with the Head teacher through whom he or she is responsible to the governors. The FO also has direct access to the governors via the Resources Committee (including Audit). The main responsibilities of the FO are:

• the day to day management of financial issues including the establishment and operation of a suitable accounting system; • the management of the academy financial position at a strategic and operational level within the framework for financial control determined by the governing body; • the maintenance of effective systems of internal control; • ensuring that the annual accounts are properly presented and adequately supported by the underlying books and records of the academy; • the preparation of monthly management accounts; • authorising orders below £1,000 in conjunction with budget holders; • authorising payments in conjunction with the Head teacher or other authorised signatory, and • ensuring forms and returns are sent to the DfE/ESFA in line with the timetable in the DfE/ESFA guidance.

Risk Review & Financial Controls The Academies Financial Handbook 2014 removed the term „Responsible Officer‟ to describe a trustee assigned to check the trusts internal controls. Woodfield School elected to retain the main functions of the „Responsible Officer‟ role and utilise the professional expertise of the school’s external auditor to manage a programme of risk review and check financial controls. Other Staff Other members of staff, primarily the budget holders, will have some financial responsibilities and these are detailed in the following sections of this manual. All staff are responsible for the security of academy property, for avoiding loss or damage, for ensuring economy and efficiency in the use of resources and for conformity with the requirements of the academy’s financial procedures.

Register of Interests It is important for anyone involved in spending public money to demonstrate that they do not benefit personally from the decisions they make. To avoid any misunderstanding that might arise all academy governors and staff with significant financial or spending powers are required to declare any financial interests they have in companies or individuals from whom the academy may purchase goods or services. The register is open to public inspection.

The register should include all business interests such as directorships, shareholdings or other appointments of influence within a business or organisation which may have dealings with the academy. 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.

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4. Accounting system All the financial transactions of the academy must be recorded on the FMS SIMS Academy accounting system. The system is managed and operated by the FO and consists of:

Year End Journals (incl. payroll) Non-invoiced income

VAT Nominal Ledger Accounts Receivable

Academies Reporting Bank Reconciliation General Ledger

Financial Reporting Suite Purchases Ledger Budget Planning

Systems set-up Sales Ledger Budget Maintenance

System Access Entry to the FMS SIMS Academy system is password restricted and the FO is responsible for implementing a system which ensures that passwords are changed at least every 3 months. When passwords are changed the new password should be placed in a sealed envelope and passed to the FO to keep in the safe.

Access to the component parts of the FMS SIMS Academy system can also be restricted and the FO is responsible for setting access levels for all members of staff using the system.

Back-up Procedures Data will be backed up off-site electronically. The FO is responsible for ensuring that there are effective back up procedures for the system. Backup copies should be taken on at least a weekly basis.

A hard copy of the nominal ledger and audit trail should be printed each month and should be stored separately from the accounting system in a fireproof container.

The FO should also prepare a disaster recovery plan in the event of loss of accounting facilities or financial data. This should link in with the annual assessment made by governors of the major risks to which the academy is exposed and the systems that have been put in place to mitigate those risks.

Transaction Processing All transactions input to the accounting system must be authorised in accordance with the procedures specified in this manual. The detailed procedures for the operation of the payroll, the purchase ledger and the sales ledger are included in the following sections of the manual. All journal entries must be documented on the appropriate journal form, recorded in the journal book and authorised by the FO prior to being input to the accounting system. Bank transactions should be input by the FO and the input should be checked, and signed to evidence this check, by the Head teacher.

Detailed information on the operation of the FMS SIMS Academy system can be found in the on-line user manuals.

Transaction Reports The FO will obtain and review system reports to ensure that only regular transactions are posted to the accounting system. The report obtained and reviewed will include:

• the weekly audit trail reports; • master file amendment reports for the payroll, purchase ledger and sales ledger; • management accounts summarizing expenditure and income against budget at budget

holder level.

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Reconciliations The FO is responsible for ensuring the following reconciliations are performed each month, and that any reconciling or balancing amounts are cleared:

• sales ledger control account; • purchase ledger control account; • payroll control account; • all suspense accounts, and • bank balance per the nominal ledger to the bank statement.

Any unusual or long outstanding reconciling items must be brought to the attention of the Head teacher. The Head teacher will review and sign all reconciliations as evidence of her review.

Severance Payments [3.7.6]

Academy trusts have delegated authority to approve individual staff severance payments

provided any non-statutory/non-contractual element is under £50,000 gross (i.e. before

income tax or other deductions). Where the trust is considering a non-statutory/non-

contractual payment of £50,000 or more, (gross, before deductions), ESFA’s prior approval

must be obtained before the trust makes any binding settlement offer to staff. ESFA will

also need to refer such transactions to HM Treasury and so trusts should allow sufficient

time for proposals to be considered. Examples of approval requirements are as follows:

Statutory/contractual

payment

Non-statutory/non-

contractual payment

ESFA / HM Treasury prior

approval required?

£30,000 + £30,000 No

£60,000 + £30,000 No

£30,000 + £50,000 Yes – for £50,000

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5. Financial planning The academy prepares both medium term and short-term financial plans. The medium term financial plan is prepared as part of the development planning process. The development plan indicates how the academy’s educational and other

objectives are going to be achieved within the expected level of resources over the next three years.

The development plan provides the framework for the annual budget. The budget is a detailed statement of the expected resources available to the academy and the planned use of those resources for the following year.

The development planning process and the budgetary process are described in more detail below.

Development Plan The development plan is concerned with the future aims and objectives of the academy and how they are to be achieved; that includes matching the academy’s objectives and targets to the resources expected to be available. Plans should be kept relatively simple and flexible. They are the “big picture” within which more detailed plans may be integrated.

The form and content of the development plan are matters for the academy to decide but due regard should be given to the matters included within the guidance to Academies and any annual guidance issued by the DfE/ESFA.

Each year the Head teacher will propose a planning cycle and timetable to the governing board which allows for:

• a review of past activities, aims and objectives - “did we get it right?” • definition or redefinition of aims and objectives – “are the aims still relevant?” • development of the plan and associated budgets – “how do we go forward?” • implementation, monitoring and review of the plan – “who needs to do what by

when to make the plan work and keep it on course”, and • feedback into the next planning cycle – “what worked successfully and how can

we improve?”

The timetable will specify the deadlines for the completion of each of the key stages described above. Lead responsibility for the completion of each of the stages will be assigned by the Head teacher.

The completed development plan will include detailed objectives for the coming academic year and outline objectives for the following two years. The plan should also include the estimated resource costs, both capital and revenue, associated with each objective and success criteria against which achievement can be measured.

For each objective the lead responsibility for ensuring progress is made towards the objective will be assigned to post holders. Each post holder should monitor performance against the defined success criteria throughout the year and report to the Head teacher on a quarterly basis. The Head teacher will report to the governing board if there is a significant divergence from the agreed plan and will recommend an appropriate course of action.

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Annual Budget The FO is responsible for preparing and obtaining approval for the annual budget. The budget must be approved by the Head teacher, Resources Committee (including Audit) and the Governing Body.

The approved budget must be submitted to the DfE/ESFA by the deadline notified by the DfE/ESFA and the FO is responsible for establishing a timetable which allows sufficient time for the approval process and ensures that the submission date is met.

The annual budget will reflect the best estimate of the resources available to the academy for the forthcoming year and will detail how those resources are to be utilised. There should be a clear link between the development plan objectives and the budgeted utilisation of resources. The budgetary planning process will incorporate the following elements:

• forecasts of the likely number of pupils to estimate the amount of DfE/ESFA grant

receivable; • review of other income sources available to the academy to assess likely level of

receipts; • review of past performance against budgets to promote an understanding of the

academy cost base; • identification of potential efficiency savings and review of the main expenditure

headings in light of the development plan objectives and the expected variations in cost e.g. pay increases, inflation and other anticipated changes.

Balancing the Budget Comparison of estimated income and expenditure will identify any potential surplus or shortfall in funding. If shortfalls are identified, opportunities to increase income should be explored and expenditure headings will need to be reviewed for areas where cuts can be made. This may entail prioritising tasks and deferring projects until more funding is available. Plans and budgets will need to be revised until income and expenditure

are in balance. If a potential surplus is identified, this may be held back as a

contingency or alternatively allocated to areas of need.

Finalising the Budget Once the different options and scenarios have been considered, a draft budget should be prepared by the FO for approval by the Head teacher, the Resources Committee (including Audit) and the governing body. The budget should be communicated to all staff with responsibility for budget headings so that everyone is aware of the overall budgetary constraints. The budget should be accompanied by a statement of assumptions and hierarchy of priorities so that if circumstances change, it is easier for all concerned to take remedial action. The budget should be seen as a working document which may need revising throughout the year as circumstances change.

Monitoring and Review Monthly reports will be prepared by the FO. The reports will detail actual income and expenditure against budget both for budget holders and at a summary level for the Head teacher and the Resources Committee (including Audit).

Any potential overspend against the budget must in the first instance be discussed with the FO. The accounting system will not allow payments to be made against an overspent budget without the approval of the Head teacher

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The monitoring process should be effective and timely in highlighting variances in the budget so that differences can be investigated and action taken where appropriate. If a budget overspend is forecast, it may be appropriate to vire money from another budget or from the contingency. All budget virements must be authorised by the Resources Committee (including Audit) in line with the scheme of delegation

6. Payroll The main elements of the payroll system are:

• staff appointments; • payroll administration, and • payments.

Staff Appointments The governing board has approved a personnel establishment for the academy. Changes can only be made to this establishment with the express approval in the first instance of the Finance and Resources Committee who must ensure that adequate budgetary provision exists for any establishment changes.

The Head teacher has authority to appoint staff within the authorised establishment except for the Deputy Head teacher and the FO whose appointments must follow consultation with the governors.

The FO maintains personnel files for all members of staff which include contracts of employment.

All personnel changes must be notified, in writing, to the FO immediately.

Payroll Administration The academy payroll is outsourced. All staff are paid monthly through the payroll contract. New master files can only be created by the payroll bureau with the express approval of the FO. Any master file amendments made by the FO must be printed out each month prior to the payroll run and must be authorised by the Head teacher.

The Finance Department must complete a monthly return by the 7th of the month for all Woodfield contracted staff. The staff return will record, where relevant, sickness, paid and unpaid leave, overtime, notification of starters/leavers/sabbaticals, material changes to employee personal details, incremental / performance pay progression, pay awards, changes to employee-initiated deductions, changes to employee and / or employee pension scheme contributions.

Payments The payroll bureau will, post the checking process; provide Woodfield School with both a BACS and Creditors listing. The print must be reviewed and authorised together with authority to release payment by the FO and the Head teacher. All salary payments are made by BACS.

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The FO should prepare reconciliation between the current month’s actual and budget estimate for that month. This reconciliation should be reviewed and signed by the Head teacher.

The payroll bureau automatically calculates the deductions due from payroll to comply with current legislation. The major deductions are for tax, National Insurance contributions and pensions. The amounts payable are summarised on the gross to net pay print (see reference to creditors listing above) and BACS payments are prepared by the payroll bureau and authorised for payment by the FO and the Head teacher (or other authorised cheque signatory if one is unavailable) by the due date.

The FO should select one employee at random each month and check the calculation of gross to net pay to ensure that the payroll system is operating correctly.

After the payroll has been processed the nominal ledger will be automatically updated. Postings will be made both to the payroll control account and to individual cost centres. The FO should review the payroll control account each month to ensure the correct amount has been posted from the payroll system, individual cost centres have been correctly updated and to identify any amounts posted to the suspense account.

On an annual basis the FO must check for each member of staff that the gross pay per the payroll system agrees to the contract of employment held on the personnel file in his/her office.

7. Purchasing The academy wants to achieve the best value for money from all our purchases. This means they want to get what they need in the correct quality, quantity and time at the best price possible. A large proportion of their purchases will be paid for with public funds and they need to maintain the integrity of these funds by following the general principles of:

• Probity, it must be demonstrable that there is no corruption or private gain involved in the contractual relationships of the academy;

• Accountability, the academy is publicly accountable for its expenditure and the conduct of its affairs;

• Fairness, that all those dealt with by the academy are dealt with on a fair and equitable basis.

Routine Purchasing Written, pre-numbered orders are used for all goods and services. Generally, orders are only made by telephone in exceptional circumstances. Where goods are required urgently and an order is placed by telephone the order must always be confirmed by fax or in writing in the usual way.

Access to the computer system is restricted to Head teacher, FO and any other individual where the Head teacher has authorised the appropriate level of system access.

Commitment accounting is in operation on the computer system.

Orders must only be used for goods and services provided to the school. Individuals may not use official orders to obtain goods and services for their private use.

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Ordering procedures are as follows: A requisition is made by the budget holder and sent to the FO‟s Office. The order is entered onto FMS SIMS Academy system and the available budget is checked on the computer and the order is printed and passed to the FO, for authorisation.

The signatory of the order satisfies him or herself that the goods or services are appropriate and needed, that there is adequate budgetary provision, and that quotations or tenders have been obtained if necessary.

The FO‟s Office dispatches the order.

When an order is cancelled reasons for cancellation are recorded on order form.

Receipt of goods: All goods received should be delivered to the school reception. All staff to be aware that when signing for delivery of goods if not checked they must sign "unchecked" on the delivery note.

The following procedures then take place:

• The requisitioner of the goods will check the delivery (except for food which is

delivered to the kitchen) with the purchase order and goods; • The requisitioner evidences the check of goods received on the delivery note;

• The delivery note and the order are retained until the purchase invoice is received;

• If goods received are part of a larger order, the FO will record the part payment; • Order form indicates which items have been received; • Any shortages or defective items in the goods supplied must be clearly indicated on

the delivery note by the requisitioner. The FO is responsible for ensuring the delivery is rectified. The FO maintains a goods returned book to monitor this process and ensure that all such deliveries are rectified.

Purchase invoices: All purchase invoices are handed immediately to the FO‟s Office. The invoice is stamped with the payment authorisation stamp. The FO‟s Office confirms with the delivery notes that goods/services have been received.

Where goods received were short or defective in some respect, and this still has not been rectified, this must be clearly noted on the invoice so that payment is not made until either a credit note is received or the delivery is put right.

The FO‟s office checks to ensure that all the school's procedures have been followed.

Payment of invoices: The FO‟s office reviews invoices on a regular basis ensuring that they are paid by the due date or that any discounts available for early settlement are not lost.

Invoices should not be paid early as a matter of course.

Payment is only made when the FO‟s office has made the following checks:

• goods or services have been received and checked to the order;

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• expenditure has been properly incurred and payment has not already been made;

• prices agree with quotations, tenders, contracts or catalogue prices and arithmetic is correct;

• VAT has been properly accounted for; • the invoice has been correctly coded and certified for payment. • discounts have been taken where applicable.

The Head teacher authorises payment having ensured that all of the school's procedures have been followed.

All cheque payments from public and non-public funds are signed by two of the authorised signatories.

The following procedures are followed when a cheque is signed:

• all supporting documentation (i.e. delivery note and invoice) are presented to the signatories;

• the cheque signatory must not sign a cheque relating to goods or services for which he has also authorised the expenditure;

• Invoices must be clearly marked with cheque number, date and amount paid. • All cheques drawn are crossed as account payee only to avoid the possibility of

improper negotiation of cheques; • The cheque signatories check the supporting documents are there and that the

invoice has been authorised and evidence. • The FO files all documentation in supplier alphabetical sequence; • In no circumstances will any cheque signatory sign a blank cheque subject to a

second signature;

• No payment will be made on a photocopied invoice unless exhaustive checks have

been made to confirm that payment has not previously been made. Confirmation

that such checks have been made is to be recorded by the FO writing on the invoice

"copy not previously passed for payment and signing". Any copy invoice to be

marked "this is an official copy invoice",

• In no circumstances will payment be made against statements.

8. Tendering Rules Orders under £10,000 Every effort should be made to obtain best value but there is no requirement to obtain written quotations.

Orders over £10,000 At least three written tenders should be obtained for all orders over £10,000 or for a series of orders which in total exceed £10,000 to identify the best source of the goods/services. Written details of quotations obtained should be prepared and retained by budget holders for audit purposes. Telephone quotes are acceptable if these are evidenced and faxed confirmation of quotes has been received before a purchase decision is made. Purchases over £172,514 excluding VAT (2014/24/EU) may fall under EU procurement rules which require advertising in the Official Journal of the European Union.

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: This is where all potential suppliers are invited to tender. The budget holder must discuss and agree with the FO how best to advertise for suppliers (e.g.

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general press, trade journals) or to identify all potential suppliers and contact directly if practical. This is the preferred method of tendering, as it is most conducive to competition and the propriety of public funds.

Restricted Tender: This is where suppliers are specifically invited to tender. Restricted tenders are appropriate 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 such that only specific suppliers can be expected to supply the academy’s requirements,

• the costs of publicity and advertising are likely to outweigh the potential benefits of open tendering.

Negotiated Tender: The terms of the contract may be negotiated with one or more chosen suppliers. This is appropriate in specific 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.

Preparation for Tender Full consideration should be given to:

• objective of project • overall requirements • technical skills required • after sales service requirements

It may be useful after all requirements have been established to rank requirements (e.g. mandatory, desirable and additional) and award marks to suppliers on fulfillment of these requirements to help reach an overall decision.

Invitation to Tender If a restricted tender is to be used, then an invitation to tender must be issued. If an open tender is used an invitation to tender may be issued in response to an initial enquiry.

An invitation to tender should include the following:

• introduction/background to the project; • scope and objectives of the project; • technical requirements; • implementation of the project; • terms and conditions of tender and • form of response

Aspects to Consider Financial

• Like should be compared with like and if a lower price means a reduced service or lower quality

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• this must be borne in mind when reaching a decision. • Care should be taken to ensure that the tender price is the total price and that

there are no • hidden or extra costs. • Is there scope for negotiation?

Technical/Suitability

• Qualifications of the contractor • Relevant experience of the contractor • Descriptions of technical and service facilities • Certificates of quality/conformity with standards • Quality control procedures • Details of previous sales and references from past customers.

Other Considerations

• Pre-sales demonstrations • After sales service

• Financial status of supplier. Suppliers in financial difficulty may have problems

completing

• contracts and in the provision of after sales service. It may be appropriate to have an accountant or similarly qualified person examine audited accounts etc.

Tender Acceptance Procedures

The invitation to tender should state the date and time by which the completed tender document should be received by the academy. 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:

• For contracts up to £25,000 - two of the budget holder, the FO or the Head teacher;

• For contracts over £25,000 – either the FO or the Head teacher plus a member of the Resources Committee (including Audit).

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 decision must take care not to accept gifts or hospitality from potential suppliers that could compromise or be seen to compromise their independence.

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Full records should be kept of all criteria used for evaluation and for contracts over £25,000 a report should be prepared for the Finance and Resources Committee highlighting the relevant issues and recommending a decision. For contracts under £25,000 the decision and criteria should be reported to the Resources Committee (including Audit).

Where required by the conditions attached to a specific grant from the DfE/ESFA, 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 academy. All parties should then be informed of the decision.

9. Income The main sources of income for the academy are the grants from the DfE/ESFA and SEN related funding from the Local Authority. The receipt of these sums is monitored directly by the FO who is responsible for ensuring that all grants due to the academy are collected. The academy also obtains income from:

• Parents for dinner money • Staff - dinners. • Lettings. • Donations. • School trips (residential) • Bank Interest.

SEN & other grants All Invoices for request of funding should be entered onto FMS SIMS Academy Accounts Receivable. This module will maintain a debtor listing and the aged debtor report should be produced monthly and all debtors that have invoices that remain unpaid after 30 days should be sent a statement.

Trips When planning any excursion, the consent of the Head teacher must be obtained before any commitment is made to pupils, parents or third parties. Only voluntary contributions are received for school trips which are passed by the class teacher to the FO for banking.

Bad debts Bad debts are only written off when the school has followed all possible procedures to ensure their recovery. The school keeps a record of any bad debts written off.

The delegated limits to write-off debts, or enter into liabilities, is subject to a ceiling of £250,000. Specifics in relation to the delegated limits are detailed in 3.6.2 of the Academies Financial Handbook 2016.

Other matters Proper records are kept of all income due to the school. The responsibility of identifying sums due to the school is the Head teacher's, but the day-to-day duty of ensuring funding is chased, received and banked lies with the FO. The Head teacher is responsible for reconciling monthly the amounts collected with the amount paid in at the bank.

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Invoices for sums due to the school are issued within 30 days. Income collections should not be used for the encashment of personal cheques. Any transfers of school money between staff are recorded and signed for.

Dinner money Parents pay the dinner money direct to the receptionist who retains a dinner register and supports the finance administration by approaching parents for overdue debts. The system for control and collection of cash is as for school trips.

Parentpay – Woodfield School is looking to establish an online payment process effective from the Autumn Term 2015. Robust processes will be applied for the recording and reconciliation of funds.

Lettings All lettings of school equipment and facilities must be at the rates currently prepared and approved by the Head teacher and formally approved by the Board of Governors. Free use and charges below economic cost are not permitted.

The FO considers all enquiries and the level of costs involved before granting a booking. Letting rates are subject to review by the Resources Committee (including Audit).

All hiring of school equipment and facilities will be recorded in the diary kept by the FO. The lettings diary and the lettings planner are subject to review by the Head teacher to ensure that all lettings have been invoiced.

When a letting is provisionally booked the hirer must complete a hire form.

All monies due are received at the end of each month. The FO records receipts. All receipts are banked intact by the FO.

All hirers must have their own insurance and proof of this must be seen.

Fund raising events It is the responsibility of the event organiser to control income prior to the monies being handed to the FO. Monies are collected by event organisers and then passed to the FO. A paying-in slip is completed by the FO.

The FO records and balances cash. The cash is banked by the FO.

Custody Official, pre-numbered academy receipts should be issued for all cash and cheques received, for example for dinner money and school trips, where no other formal documentation exists. All cash and cheques must be kept in the schools safe prior to banking. Banking should take place every week or more frequently if the sums collected exceed the insurance limit on the schools safe.

Monies collected must be banked in their entirety in the appropriate bank account. The FO‟s Office is responsible for preparing reconciliations between the sums collected, the sums deposited at the bank and the sums posted to the accounting system. The reconciliations must be prepared promptly after each banking and must be reviewed and certified by the Head teacher.

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10. Cash Management Bank Accounts The opening of all accounts must be authorised by the governing board that 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.

The school holds separate bank accounts for restricted and unrestricted funds. Restricted and unrestricted funds are separated in the nominal ledger.

The bank has been informed that the school is not allowed to borrow funds and that no account should be allowed to become overdrawn. The school will not enter into any loan arrangements without the prior approval of the Secretary of State.

Bank statements are obtained monthly. The school has access to online banking and therefore can review the bank account on an ad hoc basis as required

The bank reconciliation is completed monthly by the FO who is not responsible for the processing of either receipts or payments.

All cheques are signed by two signatories, and are crossed "account payee only". Cheques are not pre- signed; cheque books are held in the school safe when not in use.

Cash and cheques are locked in the school safe prior to banking to safeguard against loss or theft. All cash is banked intact and recorded on paying-in slips. Bank paying-in slips show the split of cash and cheques. Cheques will be identifiable by reference to the receipt numbers and names of the drawers and cash by reference to receipt numbers. All cash and cheques are banked by the FO. Where unusually high levels of cash are received these are banked on the day of receipt.

The FO ensures that: -

• Funds held on the school’s premises never exceed the insurance limit, and • That no funds are held on the school premises during school holidays.

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 BACS and other instruments authorising withdrawal from academy bank accounts must bear the signatures of two of the following authorised signatories:

• Head teacher; • Deputy Head teacher; • 2 Assistant Heads.

This provision applies to all accounts, restricted or unrestricted, operated by or on behalf of the governing board of the academy. Authorised signatories must not sign a payment relating to goods or services for which they have also authorised the expenditure.

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Administration The FO must ensure bank statements are received regularly and that reconciliations are performed at least on a monthly basis. Reconciliation procedures must ensure that:

• all bank accounts are reconciled to the academy’s cash book; • reconciliations are prepared by the FO; • reconciliations are subject to an independent monthly review carried out by

the Head teacher or in her absence a responsible member of staff as identified by the Head teacher, and

• adjustments arising are dealt with promptly.

Petty Cash Accounts The petty cash float, is kept in the safe when not in use; in no circumstances should cash holdings on the school premises exceed £1000.

Cheques drawn to replenish the petty cash float are subject to normal cheque signing procedures. Supporting documentation for the value of the cheque is produced to cheque signatories;

Payments from petty cash are only made on production of a till receipt or other certification that payment has been made and cannot exceed £10 in value. Any claim for a sum greater that £10 will be reimbursed through the monthly payroll. The Head teacher can authorise a petty cash payment in excess of £10 in exceptional circumstances. Vouchers are subject to the same authorisation procedures as purchase order requisitions. They are cleared for payment by the FO before the Head teacher countersigns the receipt;

The FO records petty cash on the computer. The FO is responsible for the payment of expense vouchers. The petty cash float is reconciled on a monthly basis by the FO. The reconciliation must be checked by the Head teacher and initialed as evidence of this review.

No personal cheques are cashed through petty cash. The petty cash float is only reimbursed by a cheque from the school's bank account.

Cash Flow Forecasts The FO is responsible for preparing cash flow forecasts to ensure that the academy 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 GAG to cover potential cash shortages.

Investments Investments must be made only in accordance with written procedures approved by the governing body.

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.

Financial Controls The governing board ensures that the school has written descriptions of all its financial systems and procedures. These are kept up to date.

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The school's accounting system is computerised using FMS SIMS Academy system. It is the school's policy that all staff involved with financial administration receives basic training and is familiar with the operation of the computer. The proper functioning of the accounting system is the responsibility of the FO and the Head teacher.

Only authorised staff are permitted access to the accounting records which are securely retained when not in use. Alterations to any original documents such as cheques, invoices, orders and other vouchers are made clearly in ink. The use of correcting fluid or the erasure of information is not acceptable.

All accounting records including invoices, delivery notes, bank statements etc. are retained in hard copy for six years, plus the current year, in a secure area. All financial transactions are traceable from original documentation to accounting records, and vice versa.

The Head teacher ensures that all expenditure from sources of earmarked funds is accounted for separately and that the funding is used for its intended purpose.

Tax The Head teacher is responsible for ensuring that all relevant finance and administrative staff are aware of VAT, Income Tax, and Construction Industry Scheme regulations.

As part of its tests on purchase controls, the calculation of the correct rate and amount of VAT will be checked. The school will also check that VAT invoices show a VAT number.

The school will seek to ensure where expenses are paid for out of petty cash, and the amount is less than £10, the receipt received will show the supplier's VAT number, to enable a VAT reclaim to be made. If, in exceptional circumstances, a petty cash purchase of more than £10 is made, the school will request a VAT receipt to enable a VAT refund claim to be made.

The school makes a monthly claim for a VAT refund from HMRC. The FO is responsible for chasing HMRC in the event of a delayed refund. If the school generates income on which VAT should be charged, it will account for this as a deduction from its normal monthly claim for a VAT refund.

The school will only make payments to building contractors and subcontractors in accordance with the Construction Industry Scheme.

Insurance The adequacy of insurance is reviewed annually by the school in line with the requirements contained within the Academies Financial Handbook.

Details of all insurance policies held by the school are kept in the FO‟s office under the control of the FO. The school will not give any indemnity to a third party without the written consent of their insurers. The school immediately informs the Insurance Company of all accidents, losses and other incidents which may give rise to an insurance claim. Claims under an insurance policy are authorised by the Head teacher prior to submission to the insurance company.

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11. Fixed assets Asset register All items purchased with a value over the academy’s capitalisation limit must be entered in an asset register. The asset register is maintained by the FO and should include the following information:

• asset description • asset number • serial number • date of acquisition • asset cost • source of funding (% of original cost funded from DfE/ESFA grant and %

funded from other sources) • expected useful economic life • depreciation • current book value • location • name of member of staff responsible for the asset

The Asset Register helps:

• ensure that staff take responsibility for the safe custody of assets; • enable independent checks on the safe custody of assets, as a deterrent against

theft or misuse; • to manage the effective utilisation of assets and to plan for their replacement; • help the external auditors to draw conclusions on the annual accounts

and the academy’s financial system, and • support insurance claims in the event of fire, theft, vandalism or other

disasters.

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 academy’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 body. Inventories of academy property should be kept up to date and reviewed regularly. Where items are used by the academy 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 FO and, where significant, should be sold following competitive tender. The academy must seek the approval of the DfE/ESFA in writing if it proposes to dispose of an asset for which capital grant in excess of £20,000 was paid.

Disposal of equipment to staff is not encouraged, as it may be more difficult to evidence the academy obtained value for money in any sale or scrapping of equipment. In addition, there are complications with the disposal of computer equipment, as the academy would need to ensure licences for software programmes have been legally transferred to a new owner.

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The academy is expected to reinvest the proceeds from all asset sales for which capital grant was paid in other academy assets. If the sale proceeds are not reinvested, then the academy must repay to the DfE/ESFA a proportion of the sale proceeds. All disposals of land must be agreed in advance with the Secretary of State.

Loan of Assets Items of academy property must not be removed from academy premises without the authority of the Head teacher. A record of the loan must be recorded in a loan book and booked back in academy when it is returned. If assets are on loan for extended periods or to a single member of staff on a regular basis the situation may give rise to a „benefit-in-kind‟ for taxation purposes. Loans should therefore be kept under review and any potential benefits discussed with the academy’s auditors.

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Role Name Authority Head of School Mr N Cooper Cheque Signatory one of two to sign

Credit Card Holder

On Line Payment Authenticator one of

two to authenticate payments

Deputy Head Mrs P Ash Cheque Signatory one of two to sign

Credit Card Holder

On Line Payment Authenticator one of

two to authenticate payments

Finance Manager Mrs R Mistry On-Line Payment Authenticator one of

two to authenticate payments

On-line access to all bank

account statements and credit

cards P.A. to the Head Mrs M Kadiwar Bank to be advised to act on instructions,

countersigned by the Head and a Deputy Head, to release cash (inclusive of foreign currency) to the P.A. to the Head. Credit Card Holder

Office Supervisor Mrs S Bhimjiani Bank to be advised to act on instructions,

countersigned by the Head and a Deputy, to

release cash (inclusive of foreign currency) to

the Office Supervisor

Credit Card Holder

12. Appendices

Appendix1 Scheme of Delegation

Authorising orders for goods and services, authorising payments, entering into contracts.

Role Name Limit/Restriction Board of Trustees (FGB) TBA (Chair) £35,000 * & **

Resources Committee Ms M Oganbayo (Chair) £25,000 and £35,000* & **

Executive Head Mrs K Charles Up to £25,000 *

Head of School Mr N Cooper Up to £25,000 *

Deputy Head Mrs P Ash Up to £15,000 *

Assistant Head Mr D Phillips Up to £15,000 *

Assistant Head Ms J O’Donnell Up to £5,000 *

Assistant Head Mr P Talbot Up to £5,000 *

Assistant Head Mrs J Moore

Finance Manager Mrs R Mistry Up to £1,500 *

Budget Holders See Appendix 5 Up to £1,500 *

*Subject to full compliance with Contract Procedure Rules

** In emergency can be actioned through authorisation of Chair of Governors, Chair of Resources

Committee and Head of School. All three must authorise and report to next RC & FGB meetings.

Authorisation to make virements between cost centres Role Name Limit/Restriction

Board of Trustees TBA (Chair) Over £20,000

Resources Committee Ms M Oganbayo (Chair) Between £10,000 and £20,000

Head of School & Deputy Head

(both to sign)

Mr N

Cooper & Mrs P Ash

£10,000

Managing Woodfield School Bank Accoun

~ 34 ~

Authorisation to write off bad debts

Role Name Limit/ Restriction

Refer to DfE If limits detailed under „Board of

Trustees‟ are exceeded.

Board of Trustees TBA (Chair) The delegated limits, subject to a

maximum of £250,000, are:

• 1% of total annual income or £45,000 (whichever is smaller) per single transaction • Cumulatively, 2.5% of total annual income in any one financial year per category of transaction for any academy trusts that have not submitted timely, unqualified audited accounts for the previous two financial years. This category includes new academies that have not had the opportunity to produce two years of audited accounts • cumulatively, 5% of total annual income in any one financial year per category of transaction for any academy trusts that have submitted timely, unqualified

Resources Committee Ms M Oganbayo (Chair) Up to £5,000 subject to above criteria

Head OF School & Deputy Head

(both to sign)

Mr N Cooper & Mrs P Ash Up to £1,000 subject to above criteria

Disposal of Fixed Asset (i.e. other than land, buildings and heritage assets) Role Name Limit/ Restriction

Board of Trustees TBA (Chair) Over £5,000 subject to compliance with

AFH 2015

Resources Committee Ms M Oganbayo (Chair) Between £1,000 and £5,000 subject to

compliance with AFH 2015

Head OF School & Deputy Head

(both to sign) Mr N Cooper & Mrs P Ash Up to £1,000

Role Name / Organisation Security Level

~ 35 ~

Use of SIMS and FMS SIMS

Certification of Payroll Documentation

Position Name Limit/Restriction

Board of Trustees TBA Sign payroll forms relating to Head

Head of School Mr N Cooper Sign all appointment & leaver Forms;

Change of contract forms for Deputy

Heads, Assistant Heads & Bursar;

Sign off monthly claim documents for Deputy Heads, Assistant Heads & Bursar.

Deputy Head

(Acting in the absence of the Head)

Mrs P Ash Sign all appointment & leaver Forms;

Change of contract forms for Deputy

Heads, Assistant Heads & Bursar; Sign off monthly claim documents for Deputy Heads, Assistant Heads & Bursar.

Finance Manager Mrs R Mistry Raise monthly payroll journal;

Update FMS SIMS Academy with payroll postings;

Reconcile payroll associated expenditure with bank

statements

School Consultant Mr G Foley Submit validated payroll spreadsheet to

Teesside Payroll Services;

Check payroll output including BACS & Creditors

reconciliation;

Pass authorising documents for Head‟s

consideration and signature.

School Consultant Mrs N Kampta Raise monthly payroll journal;

Update FMS SIMS Academy with payroll postings;

Reconcile payroll associated expenditure with bank

statements

Note: Neither of the school’s commissioned consultants have the authority to make any financial

decisions on behalf of Woodfield.

Head of School Mr N Cooper System Administrator

Assistant Head Mr D Phillips System Administrator

P.A. to Head teacher Mrs M Kadiwar System User

Finance Manager Mrs R Mistry System User

Office Supervisor Mrs S Bhimjiani System User

Office Assistant T.B.A. System User SIMS

Office Assistant T.B.A. System User SIMS

ICT Manager Mr S Haj Abubakari System Administrator

External Auditor Landau Baker System Administrator

School Consultant Mr G Foley System Administrator

School Consultant Mrs N Kampta System Administrator

~ 36 ~

Payroll Monthly Expenditure – Authorising Monthly BACS and Creditors Payments

Position Name Limit/Restriction

Head of School Mr N Cooper BACS Net Salaries: £170,000 (per month)

Creditors Salaries: £150,000 (per month)

Deputy Head Mrs P Ash BACS Net Salaries: £170,000 (per month)

Creditors Salaries: £150,000 (per month)

Completion of VAT returns

Administration of Petty Cash

Position Name Limit/ Restriction Head of School Mr N Cooper N/A Deputy Head Mr N Cooper

Mrs P Ash N/A Finance Manager Mrs M Mistry N/A

Position Name Limit/ Restriction

Finance Manager Mrs R Mistry £400 overall petty cash for school

£100 weekly shopping - student skill

development

~ 37 ~

Appendix 2

Annual Budget Cycle January

Data Manager completes the census return which is used by Government as the basis for the funding for the next financial year.

February

The Senior Leadership Team start work on next year’s priorities and possible staffing needs

March

School receives its Draft Recurrent Grant for the following year from the Education Funding

March / April

The Head and Bursar discuss detail of next years’ budget

June / July

The Head and Bursar presents Annual Budget to Resources Committee

Full Board of Trustees approve final annual budget for the next academic year.

Appointed Auditors start their preparative work on the Annual Accounts

Academies Budget Forecast is submitted to ESFA

Aug/Sept

New Budget set up on FMS SIMS

Financial Year end (31 August)

Bursar & Head support Trustees in preparation of Trustees Report

Oct

Appointed Auditors continue audit field work and produce draft Annual Accounts for trustees to review.

Nov/Dec

Appointed Auditors present accounts to Full Board of Trustees.

Trustees approve Financial Statements

Dec

By 31 December Financial Statements are published.

~ 38 ~

Appendix 3

Schedule of freedoms and delegations (References apply to AFH)

This annex is not a substitute for the full handbook. Trusts’ delegated authorities are subject to

the conditions in section 3.11. Trusts under a financial notice to improve will have their

delegated authorities revoked under section 1.5.9.

Novel and

contentious

Novel and contentious

transactions

ESFA agreement required [3.3]

Borrowing Bank or sponsor loan, overdraft ESFA agreement required [3.4]

Credit cards (for business, not

personal use)

Trust has full discretion provided

charges are not incurred [3.4]

Leasing Taking up a finance lease ESFA agreement required [3.9.3]

Taking up a leasehold on land and

buildings

ESFA agreement if lease term seven

years or more [3.9.3]

Taking up any other lease Trust has full discretion [3.9.2]

Granting a lease on land and

buildings

ESFA agreement required [3.9.3]

Write-offs and

liabilities

(subject to

£250,000 ceiling)

Writing-off debts and losses ESFA consent required if transactions:

exceed 1% of annual income or

£45,000 individually; or

2.5% or 5% of annual income

cumulatively [3.6] Entering into guarantees,

indemnities or letters of comfort

Special

payments Staff severance ESFA agreement required if payment

£50,000 or more [3.7.6 and 3.7.10]

Compensation

Ex gratia payments ESFA agreement required [3.7.15]

Acquisition

and disposal

of fixed assets

Acquiring a freehold on land and buildings

ESFA agreement required [3.8.1]

Disposing of a freehold on land

and buildings

ESFA agreement required [3.8.1]

Disposing of heritage assets ESFA agreement required [3.8.1]

Disposal - not land, buildings or

heritage

Trust has full discretion [3.8.2]

GAG Pooling by multi-academy trusts No limits (except PFI) if trust eligible

[3.10.5]

GAG carry forward No limits if trust eligible [3.10.2]

~ 39 ~

Appendix 4

Schedule of requirements (the ‘musts’) (References apply to AFH)

This annex, which is not a substitute for the full handbook, brings the requirements discussed

throughout the handbook together in one list: the ‘musts’. Academy trusts also need to have

regard to the definition of ‘should’.

Governance and financial oversight

Must have the skills, knowledge and experience to run the academy trust.

Must fully understand duties as company directors and charity trustees, must be aware of Charity Commission guidance CC3: The Essential Trustee: What you Need to know, what you need to do and must not have de facto trustees [page 7, 1.5.12,

1.5.13 and 3.1.12]

Must appoint a senior executive leader (principal or chief executive), in writing, who may act as an ex-officio trustee. The role must not rotate. [2.1.2]

Must designate, in writing, a named individual as the academy trust’s accounting

officer (the senior executive leader - principal or chief executive) who must:

be a fit and suitable person for the role

take personal responsibility for regularity, propriety and value for money

assure the board of trustees that there is compliance with the handbook, the

funding agreement and all relevant aspects of company and charitable law

advise the board of trustees, in writing, of any action or policy incompatible with the

terms of the academy trust’s articles, funding agreement or handbook

notify ESFA’s accounting officer, in writing, if action proposed by the board of

trustees is in breach of the trust’s articles, funding agreement or this handbook

adhere to the ‘seven principles of public life’ [1.1.2, 1.5.19 to 1.5.23, 2.1.8, 4.2.2

and 4.2.3]

Must ensure the board of trustees meets at least three times a year, and conducts

business only when quorate [2.1.3]

Must have a chief financial officer, who is the finance director, business manager or

equivalent, to lead the finance department [2.1.10]

Must have appropriately qualified and/or experienced finance staff [2.1.11]

Must approve a written scheme of delegation of financial powers that maintains robust

internal control arrangements [2.1.4]

Must take full control of the academy trust’s financial affairs, apply the letter and the spirit

of this handbook, and ensure appropriate oversight of financial transactions by:

~ 40 ~

having all the trust’s property and assets under the control of trustees, and

measures in place to prevent losses or misuse

having bank accounts, financial systems and financial records operated by more

than one person

keeping and maintaining full and accurate accounting records

preparing accruals accounts, giving a true and fair view of the trust’s use of

resources, in accordance with existing accounting standards [1.4.1, 1.4.3 and

2.1.8]

Must comply with all terms of any Financial Notice to Improve [1.5.7]

Must waive the right to delegated authorities and seek ESFA prior approval on

those transactions set out in this handbook if the academy trust is subject to a

Financial Notice to Improve [1.5.9]

Must ensure value for money, regularity and propriety in relation to the management

of its funds, using its discretion reasonably to command broad public support [1.5.11 and

1.5.20]

Must provide details of the academy trust’s governance arrangements in the

governance statement published with its audited accounts [1.5.15]

Must provide details of the board of trustees’ review of their governance structure and

composition of the board, in the academy trust’s governance statement when producing

audited accounts for the first time [1.5.15]

Must publish up-to-date details of their governance arrangements in a readily

accessible form on their websites in line with this handbook [2.5.2]

Must ensure there are measures in place to manage conflicts of interest [3.1.12]

Must ensure the chair of the board of trustees and the accounting officer manage their

relationships with connected parties to avoid both real and perceived conflicts of

interest [3.1.13]

Must recognise that certain transactions with connected parties may attract greater public

scrutiny and require sufficient disclosure in annual accounts to support the high standards

of accountability and transparency of the public sector, including:

transactions with individuals in a position of control and influence, including the

chair of the board of trustees and accounting officer

payments to commercial organisations which have a profit motive, as opposed

to those in the voluntary sector

relationships with external auditors that go beyond their duty to deliver a

statutory audit [3.1.14]

Must capture, in the academy trust’s register of interests, and as set out in this

handbook:

~ 41 ~

relevant business and pecuniary interests of members, trustees, local

governors of academies within a multi-academy trust, and senior employees

[3.1.17]

interests of other individuals as set out in [3.1.18]

Must publish, on the academy trust’s website, the relevant business and pecuniary

interests of members, trustees, local governors and accounting officers [3.1.20]

Must ensure that the use of confidentiality clauses does not prevent an individual’s right to

make disclosures in the public interest [3.1.24]

Must complete, and return to ESFA, a financial management and governance self-

assessment for new academy trusts, or constituent academies joining a multi- academy

trust [4.3.1]

Must notify ESFA of any instances of fraud or theft where the value exceeds £5,000,

individually or cumulatively, or of any value where the fraud is unusual or systematic [4.8.2]

Must notify DfE via Edubase within 14 days of the appointment or vacating of the

positions of member, trustee, local governor, chair of trustees, chairs of local governing

bodies, accounting officer and chief financial officer .

The trust must notify DfE of the appointment or vacating of the positions of:

• member, trustee and local governor

• chair of trustees, chairs of local governing bodies, accounting officer and

chief financial officer, including direct contact details

within 14 days of that change. Notification must be made through the governance

section of DfE’s Edubase which is accessed via Secure Access. All fields specified

in Edubase for the named individuals must be completed. The trust must ensure

that its record on Edubase for all individuals holding the above positions remains

up to date. [4.7.4]

ESFA will not tolerate fraud. It reserves the right to conduct or commission

its own investigation into actual or potential fraud, theft or irregularity in any

academy trust, either as the result of a formal notification from the trust

itself or as the result of other information received. ESFA may involve other

authorities, including the police, as appropriate. ESFA will publish reports

about its investigations and about financial management and governance

reviews at academy trusts in line with its own policy on publishing

information.

ESFA also publishes guidance on reducing the risk of financial

irregularities. Trusts should refer to this information, and to the findings

from ESFA’s investigation reports, as part of its risk management approach.

~ 42 ~

Financial planning, monitoring and reporting

Must prepare and monitor financial plans to ensure ongoing financial health.

Must have the full board of trustees approve a balanced budget for the financial year

and must minute their approval [2.2.2]

Must submit the budget forecast to ESFA [2.2.3]

Must ensure the board of trustees and any separate finance committee are

responsible for:

ensuring good financial management and effective internal controls

compliance with the funding agreement and this handbook

ensuring sufficient rigour and scrutiny in the budget management process to

understand and address variances between the budget forecast and actual

income and expenditure

receiving and considering information on the financial performance of the trust at

least three times a year, taking action to ensure ongoing viability [2.2.4]

Must notify ESFA if the board of trustees formally proposes to set a deficit revenue

budget for the current financial year which it is unable to address, after unspent funds

from previous years are taken into account [2.2.5]

Must have a cautious approach to investments in line with the principles set out in this

handbook [2.2.9]

Must charge for boarding provision in line with this handbook [2.2.12]

Must refer any novel and/or contentious transaction to ESFA for explicit prior

authorisation [3.3.1, 2.2.10, 3.1.15 and 3.8.3]

Must obtain ESFA’s prior approval before borrowing, including finance leases and

overdraft facilities, of any duration [3.4.1, 2.2.7 and 3.9.3]

Must obtain ESFA’s prior approval for writing off debts and losses, and entering into

guarantees, letters of comfort and indemnities beyond limits specified in this handbook

[3.6.1 to 3.6.4]

Must, in respect of staff severance payments, consider the following before making a

binding commitment:

whether the proposed payment to be in the interests of the trust;

whether a payment is justified and value for money, based on a legal

assessment of the case; and

review the level of settlement, which must be less than the legal assessment of

what the relevant body (e.g. an employment tribunal) is likely to award in the

circumstances [3.7.4]

Must obtain ESFA’s prior approval for the non-contractual/non-statutory element of a

staff severance payment, or compensation payment, of £50,000 or more before making

a binding settlement offer [3.7.6 and 3.7.10]

~ 43 ~

Must not accept a settlement for a staff severance payment unless it satisfies the

conditions in this handbook [3.7.7]

Must consider, when making a compensation payment, whether the proposed payment is

based on a careful appraisal of the facts, including legal advice, and that value for money

will be achieved [3.7.9]

Must obtain ESFA’s prior approval for ex gratia payments of any value [3.7.15]

Must obtain ESFA’s prior approval, before entering into the acquisition and disposal of

fixed assets beyond limits specified by this handbook [3.8.1]

Must ensure a lease arrangement, or disposal, achieves the best price that can

reasonably be obtained, and maintains the principles of regularity, propriety and value for

money [3.8.2 and 3.9.4]

Must obtain ESFA’s prior approval before entering into lease arrangements beyond limits

specified in this handbook [3.9.3]

~ 44 ~

Internal control and internal scrutiny

Must have in place sound internal control and risk management and assurance processes

Must establish a control framework that recognises public expectations about

governance, standards and openness [2.3.2]

Must include, in the trust’s internal control framework:

coordinating the planning and budgeting processes

applying discipline in financial management, including managing banking, debt

and cash flow, with appropriate segregation of duties

preparation of monthly budget monitoring reports

ensuring that delegated financial authorities are respected

selection, planning and oversight of any capital projects

the propriety and regularity of financial transactions

the management and oversight of assets

ensuring efficiency and value for money in the organisation’s activities

a process for independent checking of financial controls, systems, transactions and

risks [2.3.3]

Must have appropriate procedures in place for whistleblowing [2.3.5]

Must recognise and manage present and future risks, including contingency and business

continuity planning, to ensure the academy trust’s continued and effective operation [2.3.7

and 2.3.8]

Must have adequate insurance cover in compliance with its legal obligations and funding

agreement, or has opted into DfE’s risk protection arrangement [2.3.10]

Must implement reasonable risk management audit recommendations made to the trust by

risk auditors [2.3.12]

Must establish an audit committee, or a committee which fulfils the functions of an audit

committee, dependent on the risk, complexity and annual income of the trust [2.4.2]

Must have the relevant committee provide assurances to the board of trustees by

reviewing the risks to internal financial control at the academy trust and agreeing a

programme of work to address those risks [2.4.4]

Must oversee the controls and risks at constituent academies [2.4.5]

Must ensure that information submitted to DfE and ESFA that affects funding is

accurate and compliant [2.4.6]

Must be aware of the risk of fraud, theft and irregularity and address it through their internal

control and assurance arrangements by putting in place proportionate controls [4.8.1 and

2.3.3]

~ 45 ~

Proper and regular use of funds

Must be able to show that public funds have been used as intended by Parliament.

Must ensure the following principles are applied:

seeking ESFA’s prior approval on all proposed transactions beyond the trust’s

delegated authority limits

spending has been for the purpose intended and there is probity in the use of

public funds

spending decisions represent value for money

internal delegation levels exist and are applied within the trust

a competitive tendering policy is in place and applied, and OJEU procurement

thresholds are observed

relevant professional advice is obtained where appropriate, including that of an

external auditor where necessary [3.1.1 and 3.1.3]

Must be even-handed in relationships with connected parties, and ensure goods or services

provided by individuals or organisations connected to the trust are provided at no more than

cost beyond the limits specified in this handbook [3.1.12 and 3.2.2 to 3.2.17]

Must ensure that no member, trustee, local governor, employee or related individual or

organisation uses their connection to the academy trust for personal gain [3.1.12]

Must ensure there are no payments to any trustee unless such payment is permitted by the

articles and complies with the terms of any relevant agreement with the Secretary of State

[3.1.12]

Must obtain the Charity Commission’s prior approval for paying a trustee for acting as a

trustee [3.1.12]

Must ensure that senior employees’ payroll arrangements fully meet HM Treasury’s tax

requirements [3.1.22]

Must ensure any gifts given by the academy trust have the reason fully documented and

have regard to propriety and regularity in the use of public funds [3.5.1]

Must not pool PFI funding across a multi-academy trust [3.10.5]

Must have due regard to the funding needs of their individual academies if multi-

academy trusts pool GAG, and to the appeals mechanism in place [3.10.6]

Must ensure the academy trust is eligible for the delegations and freedoms set out in this

handbook by virtue of its funding agreement [3.11.1 to 3.11.5]

Audit requirements

• Must be able to assure Parliament and the public that public funds have been used for

the purposes intended.

Must produce audited accounts in line with the ‘Statement of Recommended Practice’

(SORP) for charities [1.4.2, 1.4.3, 2.2.14 and 4.1.1]

Must submit audited accounts to ESFA by 31 December [1.4.2]

Must publish audited accounts on the trust’s website by the end of January following

~ 46 ~

the financial year to which the accounts relate, file their accounts with Companies

House and provide a copy to anyone who requests them [1.4.5]

Must approve a set of accounting policies [2.2.14]

Must appoint a statutory (external) auditor to certify whether the accounts are true and fair

[2.2.14 and 4.1.1]

Must put the external audit contract in writing as a letter of engagement [4.1.2]

Must put additionally purchased financial services from the external auditor in a separate

letter of engagement [4.1.2]

Must provide in the audit contract for the removal of external auditors before the expiry of

the term as set out in this handbook [4.1.4]

Must notify ESFA immediately of the removal or resignation of external auditors, and the

reasons [4.1.5]

Must prepare information, at the request of ESFA, to facilitate financial

consolidation [4.1.7]

Must make financial disclosures in their audited financial statements in line with this

handbook [3.1.8 and 3.1.9]

Must demonstrate how the trust has secured value for money via the governance

statement in the annual accounts [1.5.21]

Must include a statement on regularity, propriety and compliance, signed by the academy

trust’s accounting officer, in the audited accounts [1.5.21 and 4.2.2]

Must include a review of the accounting officer’s statement on regularity,

propriety and compliance within the external auditor’s remit [4.2.5]

Must address, jointly to the trust and the Secretary of State through ESFA, the

auditor’s conclusions on regularity [4.2.5]

Must cooperate with NAO officials and their contractors and provide such help,

information and explanation as is reasonable and necessary [4.5.1]

Must provide ESFA with access to all books, records, information, explanations, assets

and premises to assist ESFA with its audits [4.6.1]

Must retain all records necessary for at least six years after the end of the period to which

funding relates [4.6.2]

Must provide ESFA or its agents with information of sufficient quality to meet the

purposes for which it has been requested [4.7.1]

ESFA’s Accounting Officer is required to provide assurance that the bodies ESFA

funds are in sound financial health. For this reason, the academy trust must submit to

ESFA budget forecast information in a form specified by ESFA to a timescale to be

notified. [2.2.3]

Executive Pay

The board of trustees must ensure that their decisions about levels of executive pay

~ 47 ~

follow a robust evidence-based process and are reflective of the individual’s role and

responsibilities.

Statutory Audit In accordance with the Companies Act 2006, academy trusts must:

appoint an auditor, to certify whether the accounts present a true and fair view of the

trust’s financial performance and position (appointment being by the members, other

than where the Companies Act permits the trustees to appoint- for example for the

trust’s first period of account)

produce audited accounts [4.1.1]

Group auditors and sector account

DfE will consolidate the annual accounts of each academy trust into a sector

annual report and accounts (SARA). DfE will use audited ‘accounts returns’

and other information to generate the SARA, which will be audited by the

National Audit Office (NAO) on behalf of the Comptroller and Auditor General

(C&AG). The NAO will audit the SARA in accordance with HM Treasury’s

Financial Reporting Manual, which largely follows International Standards on

Auditing, and will

undertake appropriate procedures in accordance with that framework to

satisfy the C&AG that these accounts are true and fair. To this end, each trust

is a component of the SARA and the trust must prepare the financial

information requested by DfE for this purpose.

Academy trusts’ auditors will be required by DfE to audit certain information,

and this requirement should be incorporated within the terms of engagement.

The C&AG must reach an opinion on regularity for ESFA’s own accounts,

and for this will draw on the regularity opinions expressed by trusts’

auditors

~ 48 ~

Appendix 5

Cost Centre

Budget Title Budget Holder Budget

21 Agency Staff Nick Cooper 193,027

26 Staff Transport Nick Cooper 100

41 Maintenance Buildings Nick Cooper 45,000

42 Maintenance Grounds Nick Cooper 12,000

43 Major Repairs Nick Cooper 90,476

C9 The Lodge January O’Donnell 1,000

D13 Residential Education Anchalee Lim-Chawalit 8,000

29 Other Staff Costs Nick Cooper 101,000

55 CPD Anastasia Iaokeimidou 17,000

45 Cleaning Materials Meeta Kadiwar 10,000

72 School Meals Contract Doreen Davis 40,000

C1 Curriculum General Donna Humphreys 44,000

C2 Students Vicki Snowden 35,500

C3 Examinations Ritu Malhotra 7,000

C9 The Lodge January O’Donnell 1,000

C10 Year 7 Catch Up Exp January O’Donnell 13,500

D09 Mathematics Nick Cooper 3,700

D21 SLD January O’Donnell 1,100

D01 Arts Deepa Vekaria 2,400

D16 Technology Construction Deepa Vekaria 1,400

D02 English Pam Ash 2,400

D03 Drama Jo Emmerson 900

D04 French Imola Crosbie 480

D05 Humanities Joan Moore 250

D06 ICT Dave Phillips 25,000

D07 Language Development Deborah Maycock 1,100

D10 Music Tim Hunt 480

D11 Physical Education Mike Mellor 13,000

D12 PHSE Suneeta Deorukhkar 15,000

D14 Library Pam Ash 1,400

D15 Science Lucy Brophy 1,400

D17 Technology Food Lucy Cole 4,800

D18 Autistic Unit January O'Donnell 3,500

D19 Sixth Form Paul Talbot 36,759

D25 Voc. Ed. KS5 Paul Talbot 2,000

D22 Voc. Ed. KS4 Chetna Nardani 800

D26 Voc. Ed. KS3 Suneeta Deorukhkar 500

D23 WTSA - Expenditure Anastasia Iaokeimidou 149,362

D23I WTSA - Income Anastasia Iaokeimidou -264,374

~ 49 ~

Appendix 6

Academic year The ‘school year’ starting 1 September and ending 31 August.

Academy trust The company which has entered into a funding agreement with the

Secretary of State to run one or more academies.

Accounting officer The senior executive leader of the academy trust, designated as

accountable for value for money, regularity and propriety. In single

academy trusts this should be the principal. In multi-academy trusts it

should be the chief executive, or equivalent, of the overall trust.

Accounting officer’s

statement on

regularity, propriety

and compliance

The academy trust’s accounting officer must complete and sign a

statement on regularity, propriety and compliance each year. This

statement must be included in the trust’s annual report and submitted to

ESFA at the same time as the annual accounts.

Accounts direction ESFA’s annually published guide for academies on preparing their

annual report and accounts.

Accounts return A return of key financial information based on academy trusts’ annual

accounts, but incorporating additional data required for consolidating

trusts’ accounts into ESFA’s accounts, and for the collection of

benchmarking data. ESFA will collect these returns from those academy

trusts in scope in a format, and by a date, to be notified. The accounts

return replaces the Consistent Financial Reporting (CFR) return for

maintained schools.

Articles of

Association

The articles set out the trust’s charitable object(s) and governance

arrangements.

Asset Anything that is capable of being owned or controlled to produce value

and that is held to have positive economic value. Can be ‘revenue’

(e.g. cash) or ‘capital’ (e.g. a building).

Balanced budget A formal budget plan setting out projected income and expenditure

drawing on unspent funds from previous years as necessary.

Trusts do not have to balance income and expenditure in each year

to zero and can carry forward unspent GAG (if eligible).

Capital Capital assets or funding are those from which an academy trust can

expect to derive a benefit for more than one year: typically land,

buildings, vehicles, information technology etc. Capital assets are usually

referred to as fixed assets.

Chief executive The senior executive leader and head of the management team of a

multi-academy trust. Trusts may use alternative descriptions for this

post such as executive principal.

~ 50 ~

Chief financial

officer

The individual who leads the finance department, such as the

finance director, business manager or equivalent.

Companies House Is the UK’s Registrar of Companies whose main functions are to

incorporate and dissolve limited companies, examine and store

company information and accounts, and making this publicly

available.

De facto trustee A person not validly appointed as a trustee but exercising the functions

that could only be properly discharged by a trustee. See also shadow

directors.

Economy Obtaining an outcome for the least possible input of resources.

Education Funding

Agency

ESFA is an executive agency of the DfE that acts as the agent of the

Secretary of State.

Effectiveness Obtaining the desired outcome.

Efficiency Obtaining the best possible outcome for the resources input.

Exempt charity An exempt charity does not have to register with the Charity Commission.

The principal regulator of exempt trusts is DfE. Exempt trusts will still

need Charity Commission’s prior approval for some transactions e.g.

trustee payment for work as trustee.

Ex officio trustee By virtue of the office or position held, an individual who

automatically becomes a trustee of the academy trust.

Financial

Management and

Governance Self-

assessment

(FMGS)

A submission for completion and return to ESFA by a notified date, by

new academy trusts that are not yet preparing financial statements and

not yet subject to a regularity audit. The return asks trusts to self-

assess their financial management arrangements in several specified

areas.

Financial year For academy trusts, this is usually the same as the academic year, from

1 September to 31 August. For most other public sector bodies (e.g.

ESFA) it means the period from 1 April to 31 March.

Funding agreement The agreement between the academy trust and the Secretary of

State, which includes funding arrangements, obligations of both

parties and termination provisions.

General Annual

Grant

GAG is the main source of revenue funding for academy trusts.

Principal The head teacher of an academy and the senior executive leader of a

single academy trust.

Private Finance

Initiative (PFI)

PFI is a way of funding public infrastructure projects using private

capital.

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Propriety The requirement to deal with expenditure and receipts in accordance

with Parliament’s intentions and the principles of parliamentary control.

This covers standards of conduct, behaviour and corporate governance.

Public funds Funds which, ultimately, derive from parliamentary authority. All

academy trusts’ income, expenditure, assets and liabilities are

consolidated into the accounts of DfE and will be considered by

Parliament to be public unless otherwise demonstrated.

Regularity The requirement to deal with all items of income and expenditure in

accordance with legislation, the terms of the trust’s funding agreement

and this handbook, and compliance with internal trust procedures. This

includes spending public money for the purpose intended by Parliament.

Risk protection

arrangement

The RPA is an alternative to insurance for academy trusts that opt- in

where losses that arise are covered by UK government funds.

Secretary of State The Secretary of State for the Department for Education.

Shadow director A person in accordance with whose directions or instructions the

directors of a company are accustomed to act. See also de facto

trustee.

Special payments Payments outside the normal range of activities approved by Parliament

and therefore requiring greater control. They include ex gratia

payments, staff severance payments, compensation payments and

other extra-statutory or extra-contractual payments. See annex 4.13 of

HM Treasury's Managing Public Money.

Statement of

Recommended

Practice

The Charity Commission’s document describing the form and

content of charity accounts.

Value for money Achieving the best possible educational and wider societal outcomes

through the economic, efficient and effective use of all the resources

in the trust’s charge, the avoidance of waste and extravagance, and

prudent and economical administration.

Whistleblowing When an employee reports suspected wrongdoing at work and

makes a disclosure in the public interest, under the protection of the

Public Interest Disclosure Act 1998.