DEVONPORT HIGH SCHOOL FOR BOYS ACADEMY TRUST

DEVONPORT HIGH SCHOOL
FOR BOYS
ACADEMY TRUST
FINANCIAL
PROCEDURES MANUAL and
RISK REGISTER
May 2014
To be reviewed triennially or before if required
Next scheduled review date May 2017
Page
No
Financial Conduct, Roles and Responsibilities
3
School Governance – Guiding Principles
4-5
Financial Conduct – Proper and regular use of public funds
6-8
Financial organisation and overview of roles and responsibilities
9 -10
Financial Planning, The Development Plan, The Annual Budget and Financial reporting
11
Financial controls – principles
11 - 15
Financial Delegation and authorities and Expenditure Procedures
14 - 15
Payroll
16 – 18
Business Continuity including Inventory, Asset Register, Finance Staffing, Insurance
19
Non Public Funds
20
Appd. 1
Duties of cheque signatories
21
Appd. 2
Bank Accounts for Public and Non Public Funds
22
Appd. 3
Financial Procedures and Responsibilities for Budget holders
23
Appd. 4
Accounting System description
24
Appd. 5
Credit / Debit / Purchase / Store Cards
25
Appd. 6
Role of responsible officer
26 -27
Appd. 7
Financial Risks
28 - 31
Appd. 8
Strategic and reputational risks
32 - 35
Appd. 9
Operational Risks
36 - 38
Appd. 10
Compliance Risks
2
School Governance
The Governing Body (under delegated authority from the Trustees) is collectively responsible for the
overall direction of the school and its strategic management and has a responsibility, not only to be
effective, but seen to be effective. Therefore, the School will manage and administer its affairs in
accordance with the seven principles of public life which are as follows:  Openness – an approach to all interested parties in the disclosure of information, that lends itself to
necessary scrutiny.
 Integrity – this is best described as both straightforward dealing and completeness.
 Accountability – the process whereby individuals are responsible for their actions and decisions.
 Selflessness – Governors should act solely in the public interest and not in a way that is likely to
confer financial benefits, preferential treatment or other advantage, on others.
 Objectivity– In carrying out public business, including making public appointments, awarding
contracts, or recommending individuals for rewards or benefits, decisions will be made on merit.
 Honesty – Governing Bodies have a duty to uphold the law, and to act on all occasions in
accordance with the trust placed in them.
 Leadership – those in leadership should promote and support the above principles by leadership and
example, always acting in such a way to preserve public confidence in the Governing Body.
The Governing Body is responsible for ensuring that high standards of corporate governance are
maintained and exercises a strategic role in addressing such matters as : policy development and strategic planning geared towards continuous school improvement
 ensuring sound management and administration and ensuring 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 financial, human and other resources.
 monitoring performance and the achievement of objectives
 ensuring accountability through consultation and reporting and responding to the needs of parents
and the community.
 setting standards of conduct and values
 assessing and managing risk.
The Governing Body’s responsibilities include: Ultimate responsibility for the proper stewardship of funds, ensuring value for money and compliance
with the Funding Agency, the Articles of Association and the Academies Financial Handbook.
 Approval of the Annual Budget
 Approval of the annual report and accounts
The Governors and School Management will comply with or have regard to: Standards of financial management and propriety recommended or prescribed in the Academies
Financial Handbook
 Advice and guidance relating to the financial performance of schools arising from the work of the
EFA, OFSTED, Audit and any other relevant third party.
3
Financial Conduct – Proper and regular use of public funds
The Academies Financial Handbook sets out the requirements of the school to put in place procedures to
ensure regularity and propriety in the use of public funds. To comply the school must:
 Establish controls to ensure that spending has been for the purpose intended (Section3).
 Maintain a register of trustees’ business interests – see below.
 Establish controls to ensure no payments are made to Governors or other related parties unless
permitted.
 Ensure payments made to senior employees comply with the DFE’s directions re avoidance of tax.
 Ensure a competitive tendering policy is in place and applied.
 Assets are not disposed of without appropriate consent.
Register of Business Interests
The Governing Body and school staff have a responsibility to avoid any conflict between their business and
personal interests and affairs and interests of the school. A register of business interest will be maintained
for both Governors and staff with an influence over spending decisions, and be freely available for
inspection by governors, staff and parents.
The register will include all business interests such as directorships, share holdings and other appointments
of influence within a business or other organisation, which may have dealings with the school. The
disclosures should also include business interests of relatives and other individuals who may exert influence.
The school will ensure that the register is up to date and complete, includes all governors and relevant staff
and in this regard is signed and dated.
Financial Malpractice including the reporting of suspected theft and fraud
This school believes that staff should be able to properly raise concerns, in confidence and without
prejudice to their personal position. Where appropriate this will include an opportunity to raise concerns
outside the line management structure, and an indication of the proper way in which concerns may be
raised outside the organisation if necessary.
The following person has been nominated as a contact point for queries of a confidential nature arising
from the financial work of the school.
Designated person: Chair of Governors
In the event that the concerns are such that it would be inappropriate to raise concerns either with the
Headteacher or Chair of Governors, the member of staff must contact the Education Funding Agency.
Goods and Services for Private Use including the receipts of gifts and hospitality
The school will avoid practices such as obtaining goods and services that may include an element of private
use for governors or staff. Governors and staff will also avoid accepting excessive hospitality,
entertainment, or other services from existing or prospective suppliers. A register should be maintained to
record hospitality and gifts received to include the donor, the date and the approximate value. The
Prevention of Corruption Act places the burden of proof on the recipient of favours.
Payments to Governors, employees or other related parties
Unless an individual has provided clear evidence of self employed status all payments to individuals will be
processed only through the payroll system. Payment for employment will not be made to staff or visiting
lecturers etc. through any other mechanism. It is illegal for Governors to receive any remuneration for
4
their work as trustees other than payment of reasonable out of pocket travel, accommodation or other
expenses incurred in connection with their attendance at meetings acting in the capacity of governor of the
academy.
Abnormal transactions and delegated authorities
The Academies Financial Handbook identifies the following non routine transactions and provides
guidance in sections 2.4 and 2.6 which must be followed:








Overpayments
Unrecoverable debts
Guarantees, letters of comfort and indemnities
Losses of stock and other assets.
Gifts or hospitality received or given
Gifts of surplus assets
Staff severance payments and compensation
Asset sales, leases and tenancy agreements
For all of the transactions above and any other transaction which falls outside the usual planned range of
activities, the school will obtain relevant professional advice where appropriate; ensure decisions reflect
value for money; agree internal delegation levels; and disclose the aggregate of such transactions in the
annual accounts, detailing each transaction greater than £5,000. All abnormal transactions will be reported
to the Governing Body, regardless of the internal approved delegated authorities.
Other Matters
Fees and charges
Fees for chargeable services should normally be set at full cost, but a higher amount may be used when in a
commercial environment.
Borrowing
EFA approval is rquired for borrowing and certain other similar liabilites (leases, tenancies, indemnities). In
the event that the school considers entering into any such transaction, full Governing Body approval is
required.
Credit Cards
Where a credit card is used, credit card limits will be set at appropriate levels and any balance will be
repaid monthly in full, to avoid any borrowing risk. Further information is given in Appendix 6.
5
Financial Organisation and overview of roles and responsibilities
The academy has defined the responsibilities of each person involved in the administration of academy
finances to avoid the duplication or omission of functions and to provide a framework of accountability for
governors and staff. The financial structure is illustrated below:
The Governing Body
The Governing Body (under delegated authority from the Trustees) has overall responsibility for the
administration of the academy’s finances. The main responsibilities of the governing body are prescribed in
the Funding Agreement between the academy and the DFE and in the academy’s scheme of government.
The main responsibilities include:
• ensuring that grant from the DFE 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 Headteacher and
• appointment of the Business Manager / Finance Director, in conjunction with the Headteacher.
 authority to approve expenditure at any level with due regard to the available funds
The Enterprise Committee
The Enterprise Committee is a committee of the governing body and meets at least once a term but more
frequent meetings can be arranged if necessary. The main responsibilities are detailed in written terms of
reference which have been authorised by the governing body and 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
and the DFE guidance issued to academies;
• authorising the award of contracts over £7,500
• 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.
 authority to approve disposal of assets between the values of £1,001 and £6,000 at any one time
 authority to approve capital expenditure provided it can be contained within the annual capital budget or
approved capital programme
The Headteacher (Accounting Officer)
Within the framework of the academy development plan as approved by the governing body the
Headteacher has overall executive responsibility for the academy’s activities including financial activities.
Much of the financial responsibility has been delegated to the Business Manager but the Headteacher still
retains responsibility for:
• approving new staff appointments within the authorised establishment, except for any senior staff posts
which the governing body have agreed should be approved by them;
• authorising contracts between £1,000 and £7,500 in conjunction with the Business Manager
 authority to approve disposal of assets with a residual value up to £1,000 at any one time, within an
annual amount of £10,000
• signing cheques in conjunction with the Business Manager or other authorised signatory.
6
The Business Manager (Principal Finance Officer)
The Business Manager works in close collaboration with the Headteacher through whom he or she is
responsible to the governors. The Business Manager also has direct access to the governors via the Finance
Committee. The main responsibilities of the Business Manager 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
• signing cheques in conjunction with the Headteacher or other authorised signatory and
• ensuring forms and returns are sent to the DFE in line with the timetable in the DFE guidance.
The Responsible Officer (see also Appendix 6)
The Responsible Officer (RO) is appointed by the governing body and provides governors with an
independent oversight of the academy’s financial affairs. The main duties of the RO are to provide the
governing body with independent assurance that:
• the financial responsibilities of the governing body are being properly discharged;
• resources are being managed in an efficient, economical and effective manner;
• sound systems of internal financial control are being maintained and
• financial considerations are fully taken into account in reaching decisions.
The Responsible Officer will undertake a quarterly programme of reviews to ensure that financial
transactions have been properly processed and that controls are operating as laid down by the governing
body. A report of the findings from each visit will be presented to the Finance Committee.
Other Staff
Other members of staff, primarily the Bursary Staff and budget holders will have financial responsibilities
and these are detailed below. 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.
Bursary Staff
Have delegated authority and responsibilities from the Governing Body:




keep the Petty Cash account and money,
advise budget holders on sources of supply, in order to obtain value for money
authorised to receive cash and issue school receipts and keep cash in school up to insured cash limits
Raise Orders in PSF in accordance with DHSB Order Forms signed by Authorised Cost Centre
Managers.
 Maintain custody of all paper work associated with the public accounts. To be kept for six years.
Resources Cashier
Has delegated authority and responsibilities from the Governing Body:
 authorised to receipt monies paid in for public and private funds and to hold up to £500 cash overnight in
the Resources safe
Departmental budget holders
Have delegated authority and responsibilities from the Finance Committee:
7
 to spend their allocations wisely and by obtaining value for money in accord with the School
Development Plan and the needs of the agreed curriculum. Heads of Department/Faculty may vire funds
between their cost centres except those funds allocated for Curriculum Development which can only be
vired with the Headteacher's agreement.
 to confirm goods received and that the invoice may be paid.
 to keep a running account of their cost centre balances, so that expenditure is planned and allocations
not exceeded.
The Estate Manager
Has delegated authority and responsibilities from the Governing Body:
 to keep the Asset Register and initiate the annual muster of Departmental Inventories each June.
 to review the Insurance cover, propose any necessary changes to the Headteacher and co-ordinate any
insurance claims
8
Financial Planning, The Development Plan, The Annual Budget and Financial
reporting
1. The School Development Plan for educational objectives is drafted by the LG after consideration of
Departmental Plans and is approved by the Governing Body.
2. The Annual Budget is drafted by the Headteacher and Business Manager, agreed by the Finance
Committee and approved by the Governing Body. The Budget Holder is the Headteacher. The Budget
Manager is the Business Manager. A final budget must be submitted to the EFE by 31 July for the
forthcoming academic year.
The budgeting process will include





Forecasts of likely pupil numbers and the latest estimate of GAG receivable
Latest estimates of other EFA / LA funding based on expected levels
Estimates for other income, based on prior years and known variations
Use of accumulated surpluses (GAG and unrestricted funds)
Review of past expenditure performance against budgets, identification of efficiency savings and
cnsideration of known changes (pay increases, inflation)
 The pay budget to be supported by a list of known and planned staff, fully costed
 A statement of principal assumptions, highlighting areas of vulnerability and outlining possible remedial
actions should a shortfall arise if the assumptions do not hold.
Setting the Budget - outline
Autumn Term - The LG will discuss outline priorities for budget allocations, which relate to the School
Development Plan. The Headteacher will seek endorsement of an outline plan by the Governing Body.
Spring Term - If not already accepted by the Governing Body, the outline budget will be agreed.
Summer Term - The Business Manager agrees the full draft budget with the Headteacher. This is to
include the outline plan agreed by the Governing Body and projections based on historical spending and
forecast capitation. This budget will be presented to the Governing Body for agreement and forwarded to
the EFA.
Internal Financial Monitoring
Monthly reports will be prepared by the PFO, detailing actual expenditure and income against budget for
review by the Headteacher and the Enterprise Committee
External Financial Reporting
Reports to the EFA are initiated by the Business Manager and submitted for signature by the Headteacher
(Accounting Officer).
At the time of writing the requirement for external reporting is as follows:By 31st July– Agreed Budget for forthcoming academic year reported to EFA using EFA budget forecast
spreadsheet
By 31st December (4 months after the end of the accounting year) full audited statutory accounts lodged
with the EFA and with the Companies Registrar by 30 June of the following year (10 months after the end
of the accounting year)
9
By 31st January – Accounts return consolidation exercise using EFA spreadsheet template and signed off by
external auditor.
Reports to the Governing Body, via the Enterprise Committee are to be initiated by the Business Manager,
discussed with the Headteacher and presented to the Governing Body by the chairman of the Enterprise
Committee. The cycle of meetings allows at least termly reports.
Cash Management
The PFO must prepare periodic cash flow forecasts to help ensure that the bank account is not overdrawn
and the school abides by its contractual obligations to pay on time. Any such forecast produced should
reflect:







Known opening balances
Known receipts from the EFA, LA and other grants
Estimates of pay costsincluding NIC and pension contributions
Estimates of routine non pay expenditure
Known / expected non routine expenditure
Receipts and payments re Capital schemes
VAT
Forecast closing balances for the following 12 month ends
In the event that these forecastsidentify any potential cash shortfalls, the PFO must notify the Principal and
report to the Enterprise Committee.
Capital Schemes
Capital schemes expose rhe school to substantial risks. Where the expertise required to oversee such
schemes is not be available from within the school the Enterprise Committee must decide whether to
engage external specialists to manage the prioject on behalf of the school.
If external mangers are not appointed, the PFO, in consultation with the Head and Estates Manager must
establishproject management procedures, in writing, for approval by the Enterprise Committee. Any such
procedures should include the following:






Plans and planning consents
VAT recovery
Contractor selection and contract structure
Project timetable with milestones
Monitoring construction progress / quality assessment
Payment profile and cash flow management (inc. VAT)
Final sign
10
Financial Controls
The following control principles will be encouraged and observed to ensure that transactions are properly
processed and errors detected promptly.
Segregation of Duties
The checking of one person's work by another provides a good safeguard against error or manipulation.
Effective separation of those duties which would, if combined, enable one individual to record and process
a complete transaction. In particular there is a need to separate the key functions of authorisation,
execution, custody, recording and the development and operation of systems. Effective segregation reduces
the risk of error or intentional manipulation.
Documentation of Systems
All operating procedures should be documented. Documentation helps to ensure a degree of formality,
consistency and structure, which is essential in financial management procedures. It can aid considerably
with continuity in the absence of key staff or during changes of staff. It will also reduce the chance of error,
assist in proper and timely accounting and reporting and ensure transactions are accounted for correctly.
• job descriptions, setting out clearly the key responsibilities of the job;
• desk instructions, giving step by step instructions on the execution of individual tasks and
• system procedures, giving step by step instructions on the operation of complete systems.
Authorisation and Supervision
Authorisation controls to certify that a transaction or event is acceptable for further processing. All
systems of control should include supervision by responsible officials of the day to day processing of
transactions. Supervisory controls should also include regular review of bank reconciliations and income
and expenditure trends against budget and previous periods.
Physical Security
All data, records and assets should be kept in a physically secure environment. This should cover safe
keeping of finance records such as official order forms and cheque books and bank details. In addition, any
petty cash should be kept securely. Financial data and other records should also be protected in the form
of back up procedures. All work should be regularly backed up and copy records stored securely off site.
Risk Management
The Governing Body must agree the main financial risks that the school faces and assess the likelihood of
occurrence and materiality of each risk. The risk register at Appendix 8 outines many of the financial risks
associated with delegated budgetary control and the school’s response to those risks.
Financial Authorities and Expenditure Procedures
Authorisation limits for financial transactions:
 Purchases over £1,000. Budget holder’s authority; prices are to be obtained from three suppliers
and evidence attached to the order for the Bursary.
 Purchases over £7,500. Budget holders are to obtain three written quotations which are to be
attached to the Order. The Enterprise Committee should minute approval of tender selection.
 The reason for not tendering a purchase in excess of £10,000 must be minuted by the Enterprise
Committee. The use of divisible contracts is expressly prohibited.
This instruction includes both Capital and Revenue Expenditure. Capital items are defined at paragraph 6 of
this Annex. For each academic year the school will have an agreed Capital Budget and agreed Revenue
Budget.
11
1. Authority to approve Revenue Expenditure (Goods and Services but excluding the engagement
and employment of teaching and support staff, staff training, travel and subsistence, which are dealt with in
paragraphs 3, 4 and 5 below)
a.
The Governing Body
According to the EFA
b.
The Chairman of the Enterprise Up to £10,000 provided it can be contained within overall
Committee together with the Headteacher
annual budget
c.
Headteacher
Up to £7,500 provided it can be contained within the
overall budget
d.
Business Manager
Up to £5,000 provided it can be contained within the
overall budget
e.
Authorised budget holders
Up to £5,000 provided it can be contained within 80% of
the cost centre revenue budget
Notes
1. Only the authorised budget holders may authorise a DHSB order form.
2. Petty cash is a sub account of the school budget and may be used as authorised by the Bursar for minor
purchases.
3. Items should only be ordered from approved suppliers, as advised by the bursary. The basis of approval
should be value for money including reliability of supply and delivery.
4. Items should be ordered via a requisition and generally the only non order invoices received should be
for utilities and other periodic billings on the cost centres managed by the Bursar and the Estates Manager.
Non order invoices are to be certifed by the authorised cost centre manager before payment.
2. Authority to Vire - *the transfer of monies between previously agreed budget headings
a. Headteacher and Governing Body
Unlimited except for development budgets
b. Enterprise Committee
Up to £6,000 within the budget as set
c. Authorised budget holders
Unlimited between the budgets they manage, except for
developmental budgets.
3. Authority for the Engagement and Payment of Staff (Teaching and Non Teaching)
a. Governing Body
Unlimited
b. Headteacher together with the Chairms of
Enterprise and Standards Committees
Unlimited within the agreed annual payroll budget
 All changes to the salaries of the Headteacher and Deputy Headteachers must be authorised by the
Chairman of the Governors.
4. Authority for Staff Training
The Asssitant Headteacher
Expenditure within the agreed staff development budget
5. Authority to certify Travelling and Subsistence claims
Travelling expenses will be paid at the Inland Revenue approved rate of 40p per mile and approved and
authorised as follows:Claimant
Headteacher
Authoriser
Chair of Govs or Deputy Head or Business Manager
12
Deputy Heads
All other staff
Headteacher / Business Manager
Deputy Heads and Business Manager
6. Authority to approve Capital Expenditure
a. The Governing Body
Unlimited
b. The Enterprise Committee
Unlimited provided it can be contained within the annual capital
budget or approved capital programme
Items within the annual capital budget or approved capital programme
Individual items up to £500, provided the amount can be contained
within the budget holder’s agreed capital programme
c. The Headteacher
d. Other budget holders
Definition of Capital Expenditure: Expenditure on, or in connection with:
a. The acquisition, reclamation, improvement or laying out of any land
b. The acquisition, construction, enlargement, improvement, repair or demolition of any building, wall,
fence or other structure, or any playground or other hard standing
c. The laying out of playing fields and other facilities for social activities and physical recreation, or
d. The provision of any furniture, plant, machinery, apparatus, vehicles and equipment, used or intended to
be used for the purposes of the school.
The authority for Capital Expenditure will be recorded by the Governing Body in the minutes of their
meetings and by Cost Centre Managers on Order Forms.
7. Authority to Approve Disposal of Assets
Asset
Land
Assets with residual value up to £6,000
Assets with a residual value in excess of £6,000
Authority Required
All disposals of land will be made in accordance with
the clauses 88 – 94 of the Funding agreement
Enterprise Committee
Governing Body
Disposal authority is restricted to school assets. The authority of the Local Authority must be obtained to
dispose of other assets vested in the school but subject to LA disposal authority by Acts of Parliament.
 Write-off of Losses: Including bad debts (any value) must be referred to the YPLA.
Debtor Policy: A reminder is to be sent six weeks after the original invoice. A second reminder is to be
sent after a further three weeks. Debtors outstanding over 10 weeks and £100 in value are to be reported
to the Finance Committee. The school's solicitor will usually be consulted at this stage.
8. Authority to Certify Invoices for Payment
Authorised budget holders
Invoices related to orders and commitments previously
certified by the budget holder.
Cash Flow Policy:
a. Payments to suppliers will be made to obtain any discounts offered and to derive full benefit from the
supplier's credit period.
b. Income due will be collected and banked as soon as possible.
c. Goods will not be ordered earlier than they are needed.
d. Cash kept in the safes or as Petty Cash should be minimal, so as not to lose interest.
9. Authority to Raise Cheques / BACS Payments
a. The Business Manager
13
b.
The Business Manager’s Assistant (in the absence of the Business Manager)
Cheques are only to be raised against a certified invoice or Petty Cash requisition signed by an authorised
budget holder or against a signed authority of the Headteacher.
Custody: The Business Manager has custody of the cheque forms, which are to be kept in a secure storage.
The Business Manager is to keep separately a record of the numerical sequence of the cheques supplied
by the bank and the actual cancelled/spoilt cheques. The Business Manager is responsible for accounting
and reconciliation of the bank accounts with the cash book (PSF). The Responsible Officer is to inspect and
sign the bank reconciliation monthly or whenever practicable. The resulting documentation is to be filed.
The order form to replenish cheques is to be kept by the Business Manager, who is to authorise
re-ordering.
10. Authority to Sign Cheques
Cheques / BACS payments are to be signed by two signatories, as follows
Headteacher
Deputy Headteacher
Business Manager
Kieran Earley
David Adams
Geoff Davis
The Business Manager is authorised to make transfers of money between bank accounts approved by the
Governing Body, to optimise cash flow.
11. Authority to Receive Cash
a. The Bursary
b. The Resources /
Assessment Trips
coordinator
Co-ordinates the banking of all moneys received in the school. The school
receipts are to be issued to all persons paying in any money, unless on a
school trip form, class paying in form or completed bank credit form (from
the Resources cashier)
School receipts are to be issued for any money paid in for school trips,
music tuition and from the teachers (against individual bills and class paying
in lists)
School Trips / Educational Visits: Should be run at cost price. The parents should be told if a significant
profit results, so that refunds can be made. A record is to be kept by the organiser of amounts paid in and
the date. A School Receipt should be obtained when money is handed over to one of the accounting staff
detailed above.
12. Authority to Open and Vary the approved Bank Accounts
The Governing Body.
 The bank accounts approved by the Governing Body for Public and Non Public funds are at Appendix
3. The Business Manager is to ensure that the bank accounts are not overdrawn.
 The appointment of auditors for all funds is to be approved by the Governing Body. The Non Public
fund accounts are to be closed annually for audit to date 31 August. The reports are presented to
the Finance Committee by the auditors during the Autumn Term.
13. Authority to Borrow
Governors must seek DFE / EFA approval for both short term borrowing (including overdraft facilities) and
medium/longer term loans from the private sector (including finance leases), where such borrowing is to be
14
paid from DFE / EFA grant or secured on assets funded from DFE grants. However DFE / EFA’s normal
policy is that academies should not be granted permission for medium and long term borrowing.
Specific DFE / EFA approval is required for:
Any guarantees, indemnities and letters of comfort entered into
Write off of debts or liabilities owed to the academy over a specified value as set out in the annual funding
letter issued by the DFE
Any ex-gratia payments
Any freehold sales or purchases
The grant or take up of any leasehold or tenancy agreement for more than 3 years.
14. Tendering – overview and limits
The Governing Body will follow the detailed guidance within the Academies Financial Handbook as they
relate to tendering and form of tender.
All goods/services with a value over £10,000, or for a series of contracts which in total exceed £10,000
must be subject to formal tendering procedures, including, where appropriate, advertising in the Official
Journal of the European Union for supplies that may fall under EU procurement rules.
Payroll - overview
1. The payroll is prepared by the Cornwall County Council under contract renewable on an annual basis.
The service includes advice on tax, National Insurance, superannuation and redundancy. The Business
Manager manages the payroll and is authorised to make detailed payroll changes consequent to decisions by
the relevant Committee and confirmed by the Headteacher in writing. All staff are to be paid through the
payroll. There are to be no cash payments. Monthly payments are to be reconciled against personnel
records by the Business Manager. The monthly payroll summary is to be signed by the Headteacher and
the Business Manager.
2. Individual pay is decided by the relevant Committee. The Business Manager drafts the contracts. The
Headteacher authorises all contract changes. The Governing Body is responsible for the appointment and
remuneration of the Headteacher and Deputy Head teachers.
3. All staff will be paid on the 25th of the month or on the last working day before that date. Amendments
to the Payroll have to be with the contractor 13 working days before pay day. Payments are made by
BACS and all those paid receive a pay slip from the contractor detailing the composition of monthly pay,
deductions and net pay.
Payroll administration
The academy payroll is administered on the Cornwall County Council. All staff are paid monthly and a
master file is created for each employee which records:
salary; bank account details; taxation status; personal details and any deductions or allowances payable.
Data is exchanged via a monthly spreadsheet which records Temporary Input and any permanent changes
to the payroll including new starters. The spreadsheet is prepared by the Bursary Team, reviewed by the
Business Manager and signed off by the Headteacher.
Each section head / line manager must complete a monthly staff return which provides details for all staff in
the section of sickness and other absences during the month and any new appointments or terminations.
The staff return must be authorised by the nominated budget holder. Authorised staff returns should be
sent to the Bursary Staff who then file the documents for payroll processing.
15
Payments
After the payroll has been processed but before payments are dispatched a print of salary payments by
individual and showing the amount payable in total should be obtained from the system. The print must be
reviewed and authorised together with authority to release payment by the Business Manager and the
Headteacher.
Bursary Staff should prepare a reconciliation between the current month’s and the previous month’s gross
salary payments showing adjustments made for new appointments, resignations, pay increases etc. This
reconciliation should be reviewed and signed by the Business Manager.
The payroll system 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 and cheques for these amounts should be prepared
by the Bursary Staff and authorised for payment by the Business Manager and the Headteacher (or other
authorised cheque signatory if one is unavailable) by the due date.
The Business Manager 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 Business Manager 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 Business Manager must check for each member of staff that the gross pay per the
payroll system agrees with the contract of employment held on the personnel file in the Headteacher’s
office.
Inventories
The school’s inventory will:  form an important part of the school's procedures for ensuring that staff take responsibility for the
safe custody of assets.
 enable school management to undertake independent checks on the safe custody of assets, as a
deterrent against theft or misuse.
 help the school to manage the effective utilisation of its assets and to plan for their replacement
 support insurance claims in the event of fire, theft or other losses.
Discrepancies between the physical count and the amount recorded in the inventory will be investigated
promptly and where significant, reported to the governing body
The Estates Manager is to initiate an annual muster of recorded items with current worth of more than
£100, by the holders, each June. Inventory custodians are responsible for updating their records to show
new acquisitions and for having them marked with stencil/branding iron.
Asset Register
The register is to be kept by the Estate Manager. The purpose is to promote accountability of publicly
funded assets. It is to include ground, buildings and other assets valued in excess of £1000. Information
technology equipment, other equipment, furniture, library, text books and stationery stock are to be
included, using block headings and average current value, to cope with replacement and short lived items.
16
When approving Orders, the Business Manager is to note acquisition of relevant items by departments.
These are to be checked against the muster of inventories in June and brought forward to the Asset
Register.
Insurance
The Governors have appointed Marsh as their insurance brokers. The Estate Manager is responsible for
review of the cover and for initiating necessary changes to the Finance Committee and for the
co-ordination of claims.
Summary of insurance Cover
Material Damage
The Buildings and Contents are insured against All Risks of loss or damage, including Theft on the
premises. This cover includes:
All buildings of DHSB, including boundary walls and fences
Contents of every description which belong to the school (included in Inventories) or for which individual
members of staff have assumed responsibility during their duties in the school. Limit of £10,000 per article.
There is a general excess of £500.
Contents are covered away from the premises anywhere in the world. Sum insured £25,000 at any one
time; limit of £1,500 for any one article.
Note: Personal effects of staff and their property on the premises for tuition purposes are insured against
All Risks up to £1,000 for any one item, with an excess of £30. Personal effects of visitors and pupils are
not insured against Theft or All Risks.
Loss of Money and Assault
Loss of money belonging to the school or for which the school has accepted responsibility:
Non negotiable instruments including crossed cheques, stamped National Insurance Cards, airline tickets,
phone cards and unused credit on franking machines:
£250,000 n Cash and negotiable instruments:
In the course of transit or in a bank night safe
On the premises during business hours (0800 - 2200)
On the premises in MLS safe outside business hours (unspecified)
In the Resources safe outside business hours
In any other circumstance
£1000
£1000
£1000
£500
£300
Annual Travel – arranged via Marsh Insurance Brokers
Covers all school trips undertaken during the policy year. There is no restriction on activities undertaken
within the UK, although certain activities are excluded eleswhere in the world. Skiing is included. Cover
applies to all members of a party and staff accompanying them. There is an excess of £30.
Medical and other expenses:
Loss of baggage/personal effects
Death/serious injury
Permanent total disablement
£2,000,000
£1,500
£5,000
£25,000
17
Staffing and training / development of the Finance Function
The appointment of staff should be made with due regard to the qualifications and capabilities
commensurate with their duties. Inevitably, the proper functioning of any system depends on the
competence and integrity of those operating it. The qualifications, experience and personal qualities of
those involved with financial arrangements are important features of a control system. Consequently, the
governing body should establish procedures to ensure that:  personnel are competent, suitably qualified and trained to perform at a level commensurate with
their responsibilities.
 clear statements of criteria for personnel selection and formal job descriptions are maintained.
 the finance staffing levels are adequate.
 there are effective arrangements to deal with the absence of key financial personnel
Training / development
For those with financial responsibilities, the Governing Body should keep under review any training needs
and opportunities. Training is available through a number of organisations both in relation to general
financial principles and procedures and more specifically in relation to the accounting requirements of
schools
Cover Arrangements
In the absence of a key member of staff arrangements will be made to ensure the effective operation of the
finance function and to ensure that financial control is maintained. This will be achieved through a
combination of: Work shadowing
 Documented financial procedures
 Specified cover responsibilities within job descriptions
Computer Systems / Data Protection
The Governors recognise the importance of protecting computerised financial management systems and
the data held within them. The Headteacher will ensure that the school is registered with the ICO in
accordance with the Data Protection Act and that effective backup procedures are in place and that all
back-up disks or tapes are stored securely off-site or in a fire-proof location
Access to school management computer systems will be limited to authorised staff. These staff will use
passwords that should not be disclosed and should be changed regularly. Only authorised software will be
used to prevent the import of computer viruses. Staff will only have access to those modules appropriate
to their duties.
Security of Stocks and Other Property
Safes and similar storage facilities will be kept locked and keys removed to be held by the key holder who
will be nominated by the Headteacher. Normally key holders will carry keys on their person and keys must
not be left on the premises overnight except in another safe. A list of key holders will be maintained by the
school and loss of any keys must be reported to the Headteacher.
Retention of Records
All paper work associated with the public accounts is to be retained for six years.
18
Non Public Restricted Funds
Generally

The Governing Body approve the operation of the Fund which will be administered in accordance
with recommended guidelines under the auspices of the Academy Trust.

The accounts are to be maintained within the constraints of the Fund’s objectives, which have been
approved by the Governing Body.

The Fund Auditors will be appointed annually by the Governing Body and it will be their responsibility
to conduct the annual audit in accordance with the Fund Objectives. The timescale for the preparation
and delivery of the audited report to the governing Body will be within six months of the Fund year
end.

Bank Accounts are to be maintained at HSBC, Plymouth
Operational Policy
Non Public funds will be administered in accordance with the following criteria: 
A minimum of two signatures is required on all fund cheques.

A formalised monthly reconciliation statement to all the cleared bank balances is required with a copy
presented for termly meeting of the Finance Committee. The Headteacher should sign the statement
as correct.

All income to be properly receipted.

Expenditure must be supported by proper invoices and/or vouchers, which must be retained for a
period of not less than 6 years.


Wages, honoraria, loans or ex-gratia payments will not be made from Unofficial Funds
Purpose of School Fund
The School Fund will be used to administer income and expenditure in the following areas:
i)
Educational Visits/Visitors
ii)
Residential Experiences
iii)
Fund-raising
iv)
Charity donations and collections
v)
Educational equipment
vi)
Donations to the School
vii)
Professional Fees (Membership, school registrations)
viii)
Trading Account: Photographs, Sweatshirts etc.
ix)
Hospitality and gratuities
19
Appendix 1
Duties of Cheque Signatories
1. Each cheque should be accompanied by either:
a. The DHSB Order or Cheque Requisition Form certified by the budget holder and the Business Manager or,
b. The original invoice, certified correct for payment by the budget holder.
2. The signatories are to verify that:
a. The cheque is supported by the certified documents
b. The payee is the same as the invoice name (except for factoring accounts) .
c. The amount agrees with the net total of the vouchers
d. The cheque is correctly dated
e. The payment is a correct charge to Public or Non Public funds, as appropriate
f. Documents should be initialled by the first signatory to certify verification
3. The cheques are to be returned to the Bursary, who will note the paid invoices with the cheque number
and date of payment. Cheques are then despatched and the documentation filed: Invoices in alphabetical
order and cheque counterfoils in numerical order.
20
Appendix 2
Bank & Credit Card Accounts authorised at DHSB
Custodian (Cheque Book)
Authorised Bank Accounts
Signatories
Academy Current Account
Business Manager (Bursary Staff)
HSBC 40-23-64 90012475
Any two of: KJE, DA, GD
Academy Donor Account
Business Manager (Bursary Staff)
HSBC 40-23-64 70009962
Any two of: KJE, DA, GD
Academy Money Market
Business Manager
HSBC 40-02-90
00613282
N/A
Ex DHSB Trust
Business Manager (Bursary Staff)
HSBC 40-36-22 32166070
Any two of: KJE, DA, GD
Commercial Card
Business Manager (Bursary Staff)
HSBC 4864831147342575
KJE
21
Appendix 3
Financial Authority and Responsibilities for Budget holders
Responsibilities
1. Authorised budget holders have delegated authority, from the Governing Body, to spend and monitor
their budgets. They are responsible for authorising their Orders and certifying subsequent invoices. The
Business Manager oversees the day to day budget processes, cheque payments against certified invoices and
Petty Cash reimbursements. The Bursary maintains a list of recommended suppliers to obtain value for
money. The Business Manager is responsible to the Headteacher for drafting the annual budget and
subsequent monitoring and reporting of significant deviations from the plan. Also for the reports that are
made to the to the YPLA, and general responsibility for audit and adherence to the framework set out in
the school's financial procedures, to prevent fraud.
Money collected from pupils
2. Large amounts of money are collected when preparing for school visits and collecting in school subs.
Records should be kept on the appropriate forms, especially when payments are fragmented. Money must
be kept securely and is the responsibility of the individual member of staff until a school receipt has been
obtained from the Resources Cashier or the Bursary. Money should generally be paid in daily so that it can
be kept in a safe. If cash or cheques are needed against Cost Centres or School Trip funds, a Petty Cash
form should be completed. The Resources Cashier will run a School Trips Costing Sheet in conjunction
with a member of staff organising any trip involving the collection of money from pupils.
Orders
3. The Governing Body has issued instructions about incurring expenditure, which are to be observed by
budget holders. They expect suppliers' prices to be compared. Prices are to be obtained from three
suppliers for Orders over £1,000. The Governors wish to consider all proposals to spend in excess of
£7,500, supported by three written quotes and to minute approval of purchases/contracts before
expenditure is made. All Orders for goods or services should be made on a DHSB Order form. Orders
must be signed by the Budget holder. The Bursary will generally print and despatch orders by the end of
each week. Cheques are similarly printed in one run. It is therefore necessary to plan ahead and give
Orders and Petty Cash requests to the Bursary by Tuesday. Orders are not to be made informally by
telephone, fax, e-mail or letter. If it is urgent, an order form must be completed as soon as possible. Goods
and Invoices should always be addressed to the school, for the attention of a Cost Centre, not to an
individual. Delivery notes should be checked and signed "Correct". All paper work concerning Orders
should be passed to the Bursary.
Invoices
5. If the correct ordering procedure has been followed, these will be received by the Bursary. The budget
holder will be asked to certify on the original or a photocopy of the invoice, that the goods or services
have been received and that the charge is correct.
Budget Monitoring
6. Budget holders will be told of budget allocations, additional allocations and carry forwards. They should
keep a record of these and deduct the cost of Orders as they are made. Periodic print outs of cost centre
transactions will be provided on request in addition to online access via the web portal to “live” budget
reports.
22
Appendix 4
Accounting System Description
1. The accounting system, PSF, has been purchased to support the move to Academy Status and is hosted
at school on a dedicated server which is backed up on a daily basis.
2. It is a full double entry book keeping system with a powerful reporting function tailored to the needs of
the Academy. Access rights restrict who is able to work on the budget and accounts. When the budget
has been agreed by the Governing Body, the Business Manager allocates it to the major cost centres,
including Headteacher's capitation.
3. Some 80% of the budget is spent on pay. After the Governors agree salary scales, these are entered in
the Personnel module, this process being necessary to form the pay budget and make the pay commitment
in PSF. Cornwall Payroll Services are our payroll contractor and make BACS payments on our behalf.
4. Departmental budget holders spend the remainder of the budget and the business manager monitors the
budget from month to month and makes reports to the Headteacher and the Governors.
5. When Orders are placed, invoices approved for payment and cheques printed, the transactions are
reflected in all parts of the accounts: Cash Book, school budget, the cost centre budget and audit trail.
6. Periodic returns are made to the EFA. These are specially generated reports and based on cost code
income and expenditure.
23
Appendix 5
Credit / Debit / Purchase Cards
The following arrangements will apply in respect of the use of the school’s credit card.
1. The Governing Body will approve any application for a corporate credit card including who should use
the card.
2. Credit cards should only be used by designated staff and must be kept securely in the safe at all times,
and must be signed out if taken off site.
3. Credit cards must not be used for personal use or for withdrawing cash without the express approval
the Headteacher or his nominated representative.
4. Statements must be received at the School and, to ensure effective separation of duties will be checked
and reconciled by a member of staff other than the staff member issued with the card. Statements will be
checked promptly to check if there are any signs of irregular activity.
5. Working securely on line – the following guidance should be observed

Anti-virus - It is very important to keep your anti-virus product up to date with the latest
signature files (this usually happens automatically in the background with most commercial antivirus products) and operating system updates from Microsoft. This reduces the likelihood of
malicious code or key-logging software running on your PC without your knowledge, transmitting
your details to fraudsters across the internet.

Personal Firewall - Never go online without ensuring you have your personal firewall enabled.
This personal firewall adds a layer of protection to the PC by stopping unknown connections to the
PC.

Passwords - Don't ever select the remember my password option when registering online as your
passwords are then stored on the PC, often in plain text, and are the first thing that a fraudster will
target.

Spam - Never shop from sites that you arrive at from clicking links in unsolicited marketing emails
(spam).

Know your vendor - The golden rule of commerce is still the same as it ever was - if the offer
looks too good to be true, it probably is!
.
24
Appendix 6
Responsible Officer
The governing body will need to consider how it monitors and checks the operation of the financial
management arrangements that have been established and are operated by officers of the academy. To
assist in this they should appoint a person who will have specific responsibility for overseeing the financial
arrangements on their behalf.
The RO post is intended to provide an independent oversight of the academy’s financial affairs. The main
duties of the RO are to provide the governing body with on-going independent assurance that:
the financial responsibilities of the governing body are being properly discharged; resources are being
managed in an efficient, economical and effective manner; sound systems of internal financial control are
being maintained; and financial considerations are fully taken into account in reaching decisions.
The programme of checks to be performed should be agreed with the Governing Body or Enterprise
Committee (as appropriate). After each checking session the RO should provide the governing body or the
Finance Committee with a written report. The RO should not be a member of the Finance Committee, as
he or she may find it necessary to criticise the workings of that Committee. Instead, the RO should report
to the Finance Committee in an advisory capacity.
The RO should be a governor (but not the chairman), or an appropriately qualified and experienced
individual not on the academy staff, with the necessary financial interest and skills to be able to perform the
role competently. A recognised professional qualification is not necessary. However, the person selected
must be able to show that the responsibilities being undertaken are fully understood and the importance of
the role is fully recognised. The RO should have sufficient understanding to recognise any irregularities
which may arise and sufficient authority to ensure they are addressed. The governing body should consider
carefully who would make the most appropriate RO and if they are unable to appoint an RO who complies
with the above guidelines they should discuss the appointment with the Department. Alternatively, the
governing body can engage a firm of auditors to aid the RO in this function.
The RO function could be carried out by an individual or body associated with a governor – for example a
business governor may arrange for his/her company’s internal auditors to carry out the reviews and
provide him/her (on behalf of the governors) with reports.
The RO will need to be sufficiently familiar with the finances of the academy to be able to provide the
governing body, and hence indirectly the DFE, with the required assurance. The RO is not expected to do
any detailed accountancy work, but will be required to check some transactions to ensure that the correct
procedures have been followed and the general areas for review should cover the following:
• Review that bank reconciliations have been carried out each month, including a review of validity of
reconciling items;
• Review of the monthly payroll to ensure that any changes have been appropriately authorised;
• Check of a sample of orders to delivery notes and invoices to ensure that the documentation is complete
and has been appropriately checked and authorised;
• Check of a sample of payments back to invoices, orders and delivery notes to confirm they are bona fide
purchases;
• Review of a sample of expense claims to ensure there is appropriate documentation to support the claim
and that the claim is appropriately authorised;
• Review the returns to the DFE to ensure the information supplied is consistent with the underlying
accounting records and internal management reports;
• Carry out spot checks of petty cash balances and supporting vouchers and
• Review all major contracts and ensure formal tendering procedures exist and are being
adhered to.
25
Devonport High School for Boys – Financial Risk Register
Risk
No
1.
Financial Risk
Likelihood Significance
H/M/L
H/M/L
L
H
4.
Overspend budget, caused by weak
expenditure management
Overspend budget, caused by poor
budgeting
Received less income than budgeted, caused
by poor budgeting
Overspend on capital schemes
5.
Short term cash shortages
L
H
6.
Long term cash shortages – insufficient
reserves
L
H
7.
Improper or irregular use of funds
L
H
2.
3.
L
H
L
H
H
H
Appendix 7
Key controls
Assessment of control
quality / Action needed
Annual budget / Regular financial reporting
/ Strong strategic plan of action
Strong
Project management plans prepared by
experienced local company – good
monitoring by EM
School currently enjoys a strong surplus
position and cash flow has not been an
issue in recent times.
Good level of reserves maintained based
on strategic plan and known factors
including diminishing Minimum Funding
Guarantee
Strong
Scheme of delegation in place
Strong
Strong
Internal controls subject to regular
scrutiny by RO
Expenditure authorisation process clear
8.
Errors in accounts caused by inadequately
skilled or experienced finance staff
L
L
9.
Loss caused by lack of security over assets
including cash
M
H
AO / PFO familiar with AFH
Good experienced Team in the Bursary –
strong culture of accountability
PFO reports to FC on annual inventory
check
26
Strong
Moderate
Risk
No
10.
Financial Risk
Fraudulent payments to suppliers
11.
Fraudulent payments to staff
12.
Insufficient insurance cover
Likelihood Significance
Key controls
H/M/L
H/M/L
L
H
Annual review of effectiveness of internal
controls
Expenditure authorisation procedures
Systems under constant review by RO and
PFO
L
H
Robust procedures for monthly payroll
sign off
Personnel establishment under regular
review
L
H
Annual review of insurance arrangements
by EM
27
Assessment of control
quality / Action needed
Strong
Strong
Strong
Strategic and reputational risks
Risk
Ref No
1
2
Sub Risk
Description
Failure of the school
to recruit sufficient
learners to make it
viable
Failure to ensure that
the objectives of the
school are met
3
Failure to monitor
and react accordingly
to the requirement of
our stakeholders
4
Failure to monitor
and react accordingly
to the risks
associated with
competitor
establishments
Risk Consequences
• Significant financial risk;
• Risk that the confidence of
beneficiaries is diminished;
• Risk that the confidence of
stakeholders is diminished
• Risk that the school fails to operate
within the strategic objectives agreed
by the Governing Body
• Risk that the school's strategic
objectives become out of date or no
longer appropriate;
• Risk that the school receives an
unfavourble OFSTED report;
• Risk that the objectives of the school
are seen as controversial
• Risk that stakeholders & beneficiaries
do not consider the school service to
be valuable and of high quality
• Risk that competitors make a more
attrative offer to beneficiaries;
• Risk that stakeholders fail to
differentiate between the school and its
competitors;
• Risk of competition for the same
share of the market
Appendix 8
Risk
H /M /
L
Existing Internal
Controls and
Evidence
Admissions Policy;
Parent and Carer Communication Policy;
Marketing Strategy;
Effective Networking
Experienced SMT;
Active and experienced Trustees and
Governing Body;
Stakeholders who take an active role in
the operation of the school
Low
Assessment of control quality /
Action needed
Strong
Strong
Low
Low
Reports to the Trustees;
Reports to the school Governing Body;
Parent and Carer Communication Policy
Marketing Strategy;
Effective Networking;
Designated Assistant Director with
responsibility for Business and
Community;
Low
28
Strong
Strong
5
Failure to assess and
review the alliances
and partnerships with
other organisations
6
Failure to ensure that
Information
Technology in the
school is maintained
to the highest
standard
• Risk that an alliance or partnership is
no longer appropriate;
• Risk to the integrity of the school
• IT security risk;
• Risk to the corruption or loss of data;
• Risk that IT equipment and services
are outdated and no longer fit for
purpose;
• Financial risk;
• Risk of litigation
Low
Networking;
Visits to other schools;
Head teacher meetings
IT Support contract;
IT strategy;
Access to school IT staff and policies
Part of the school insurance review
process organised by the Finance
Department;
Regular meetings with insurance
companies;
Buildings insurance held by the school;
Employee insurance held by the school
as employer;
Vehicles hired through the school;
Fixtures, Fittings, Employer, Public
Liability, Professional Indemnity held by
the school
Part of the school insurance review
process organised by the Finance
Department;
Regular meetings with insurance
companies;
Buildings insurance held by the school;
Fixtures, Fittings, Employer, Public
Liability, Professional Indemnity held by
the school
Low
Low
7
Failure to ensure that
the school had
adequate insurance
cover
8
Failure to monitor
the effect of risks
over which the
school has no or little
control such as
economic and natural
disaster
• Financial risk;
• Risk of litigation;
• Reputational risk
Low
• Financial risk;
• Risk of litigation;
• Reputational risk
29
Strong
Strong
Strong
Strong
9
Failure of the school
to recruit Governors
who have the correct
profile
10
Failure of the school
to produce open and
regular management
accounts
11
Failure of the school
to have financial
management systems
that prevent fraud
12
13
Failure of the school
to comply with
legislative
requirements
Failure of the
Academy and the
Governing Body to
ensure that the
school have a robust
organisational
approach in place to
deliver governance of
• Risk that a governor could attract
negative publicity;
• Risk that the stakeholders and
beneficiaries view governors as merely
an extension of the SMT;
• Risk that stakeholders and
beneficiaries lose confidence in the
governing body
• Management and admin costs are
perceived as too high by the
stakeholders;
• SMT salaries are perceived as being
too high;
• School reserves are seen to be too
high and not directed towards meeting
the school objectives
• Financial risk;
• Risk of litigation;
• Reputational risk;
• Risk to the future of the school
• Financial risk;
• Reputational risk;
• Risk of litigation;
• Risk of poor morale affecting staff and
beneficiaries;
• Risk to the future of the school
• Risk that committees fail to operate;
• Risk that committee delegation is
poor;
• Risk that the Governing Body do not
delegate or delegate too much to the
Head or SMT;
• Risk that terms of reference are
inadequate and unfit for purpose
Low
Head and Deputy Head profile of skills
required against those offered by
potential governors;
Independent Clerk to the Governing
Body;
Governor training and Induction
Strong
Low
Low
Monthly Management Accounts;
Reports to LG and Governing Body;
Budget Monitoring;
Awareness of Financial regulations;
Effective Internal and External Audit
Monthly Management Accounts;
Internal Controls;
Regular and timely reconciliations;
Robust Financial policies and procedures;
Financial Regulations;
Internal and External Audit
Low
Clear policies disseminated staff;
Risk assessment process;
Health and Safety Policy;
Guidance from school LEA on Data
Protection;
Low
Independent Clerk to the Governing
Body;
Governor training and induction;
Register of Governor Interests;
Internal audit;
Minutes of Governing Body
30
Strong
Strong
Strong
Strong
the school
14
Failure of the
Academy and the
Governing Body to
have procedures in
place to cover the
absence of the Head
of the School or
other members of
SMT
• Financial risk;
• Reputational risk;
• Risk of poor morale affecting staff and
beneficiaries;
• Risk to the day to day operation of
the school
Clear guidance of senior staff roles;
Clear cover arrangements;
Active Governing Body membership;
Access to school management for
guidance and support;
Crisis Management Policy
Low
31
Strong
Operational Risks
Risk
Ref No
1
2
3
Sub Risk
Description
Failure to ensure
that the quality of
Management
Information
produced by the
school is of a high
quality
Failure to ensure
that the Management
Information
produced by the
school is timely
Failure to ensure
that the quantity of
Management
Information
produced by the
school is good
enough to aid
decision making
Appendix 9
Risk Consequences
• Risk that financial and non-financial
performance can't be managed or
reviewed by SMT;
• Risk that financial and non-financial
performance can't be challenged or
reviewed by the Trust or Governing
Body;
• Risk to the school of receiving poor
audits and inspections
• Risk that financial and non-financial
performance can't be managed by SMT
because it is out of date;
• Risk that financial and non-financial
performance can't be challenged by
the Governing Body because it is out
of date;
• Risk to the school of receiving poor
audits and inspections
• Risk that the SMT can't make
informed decision making;
• Risk that the Governing Body can't
make informed strategic decisions
Risk
H /M /
L
Existing Internal
Controls and
Evidence
Low
Regular reporting and review of
performance against targets for
recruitment;
LG Review process;
Trustee and Governing Body reports
and minutes;
Support from the school Student
Records Department
Low
Regular reporting and review of
performance against targets for
recruitment;
LG Review process;
Trustee and Governing Body reports
and minutes;
Support from the school Student
Records Department
Low
Regular reporting and review of
performance against targets for
recruitment;
LG Review process;
Trustee and Governing Body reports
and minutes
32
Assessment of control quality
/ Action needed
Strong
Strong
Strong
4
Failure to ensure
that the Governors
who are recruited to
the Governing Body
possess the skills and
experience required
to run the school
5
Failure to ensure
that the Managers of
the school possess
the skills and
experience required
to manage the school
• Risk of insufficient educational
knowledge within the Governing
Body;
• Risk that the Governors do not have
the required experience;
• Risk that Governors fail to honour
their obligations leading to poor
availability and attendance at meetings;
• Risk that too much emphasis is
placed on entrepreneurial work and
the strategic objectives of the school
are then ignored;
• Risk that Governors become too
involved with management of the
school;
• Risk that Governors do not act
solely in the interest of the school but
for other interests eg business;
• Risk that the Governing Body has no
financial expertise;
• Risk that Governors play a "passive"
role on the Governing Body
• Risk that members of SMT do not
have the capability or experience
within the sector;
• Risk that SMT do not have the
integrity required;
• Risk that succession planning is
ignored;
• Risk that too much emphasis is
placed on entrepreneurial work and
the strategic objectives of the school
are ignored
Low
Head & Deputy Head profile of skills
required against those offered by
potential Governors;
Independent Clerk to the Governing
Body;
Governor training and induction;
Register of Governing Body interests
Low
School Recruitment and Selection
Policy and Procedures;
Continuing professional development;
Active Governing Body membership;
Performance management;
Staff development strategy
33
Strong
Strong
6
Failure to ensure
that staff recruited to
the school have the
required skills and
expertise to meet
the strategic
objectives of the
school
7
Failure to ensure
that the income due
to the school is
collected in a timely
and efficient manner
and fully reconciled
as per financial
regulations
• Risk to staff and beneficiaries of low
morale;
• Risk of poor recruitment of learners
to the school;
• Risk of poor retention and success
rates;
• Risk of recruiting unsuitable staff;
• Risk of poor appraisal, CPD
processes and the need to instigate
costly disciplinary procedures,
tribunals etc;
• Risk that school procedures and
processes are not undertaken in a
satisfactory manner;
• Risk that health and safety and
safeguarding could be compromised
amongst beneficiaries, staff and
stakeholders;
• Financial risk;
• Risk of litigation;
• Risk to the achievement of the
school's strategic objectives
• Financial risk;
• Risk to the achievement of the
school's strategic objectives;
• Risk of competitors competing for
donations and grants from the same
providers;
• Risk that grants may not be used for
the purposes they were intended;
• Risk of poor audit reports and the
claw back of funding
School Recruitment and Selection
Policy and Procedures;
Continuing professional development;
Active Governing Body membership;
Staff development strategy;
Strong
Low
Low
34
Monthly Management Accounts;
Effective use of the school Credit
Control system;
Performance Monitoring Reports
Strong
8
Failure to ensure
that Goods and
Services are
purchased in line
with financial
regulations and that
suppliers are paid in
a timely and efficient
manner
9
Failure to ensure
that a comprehensive
up to date list of
suppliers to the
school is maintained
10
Failure to implement
a risk management
strategy
• Financial risk;
• Reputational risk;
• Risk to the achievement of the
school's strategic objectives;
• Risk to the financial viability of
suppliers;
• Risk of breaking financial regulations;
• Risk of poor audit reports;
• Risk of breaking the Bribery Act
leading to litigation
• Risk that by using a key supplier,
supplies may not always be available;
• Risk that the quality of supplies could
be compromised;
• Risk that the availability of
competitive prices will be
compromised;
•Risk to the achievement of the
school's strategic objectives
• Failure to optimise educational
opportunities;
• Non-compliance with school funding
agency requirements;
• Exposure of the school to
unnecessary risk;
• Increased costs e.g. insurance
Low
Monthly Creditor control
Monthly reports from the school;
Financial Regulations awareness;
Internal controls operated by the
school;
BACs Payment system used by the
school;
Effective internal and external audit
Low
Financial Regulations awareness;
Internal controls operated by the
school Finance Department;
Effective internal and external audit
Low
Risk strategy;
Risk Register and Action Plans;
Risk Management Group;
Governing Body reporting mechanisms;
35
Strong
Strong
Strong
Compliance Risks
Risk
Ref No
1
2
Sub Risk
Description
Failure to ensure
that the school
comply with
employee legislation
Failure to ensure
that the school
comply with
environmental
legislation
Appendix 10
Risk Consequences
• Risk that legislative requirements are
not known or complied with;
• Risk that Equal Opportunities
legislation may not be complied with
or discrimination in the work place
may occur;
• Risk that Data Protection legislation
may not be complied with;
Risk that Human Rights legislation will
not be complied with;
• Risk that employee contract
legislation may not be complied with;
Risk that employee Pension legislative
requirements are not known or
complied with;
• Risk that Health and Safety legislative
requirements are not known or
complied with
• Risk that UK legislative requirements
are not known or complied with;
• Risk that EU legislative requirements
are not known or complied with
Risk
H /M /
L
Existing Internal
Controls and
Evidence
Low
Support of HR Advice and the
associated policies and procedures;
Support of school Data Protection
Officer and supporting policy and
procedure;
Health and Safety Policy;
First Aid Policy;
Fire Safety Policy;
Support from the school Health and
Safety Officer
Low
Reporting to LG and Governing Body;
Utilisation of school sustainability
policies (as Landlord of building);
Support of the school Estates Manager
36
Assessment of control quality
/ Action needed
Strong
Strong
3
4
5
6
Failure to ensure
that the Financial
Reporting
requirements of the
school are met
Failure to ensure
that up to date
information
regarding the
legislation relating to
charities is
maintained and kept
updated by senior
management in the
school
Failure to ensure
that the school
comply with
legislation regarding
Tax
Failure to ensure
that the school
ensures that Data
Protection systems,
procedures and
processes are
adequate
• Risk that the legislative requirements
relating to the production and
reporting of the Statutory Accounts
are not known or complied with;
• Risk that the legislative requirements
relating to Accounting Standards are
not known or complied with;
• Risk that the Charities Statement of
Recommended Practice (SORP)
legislative requirements are not
known or complied with
• Risk that legislative requirements are
not known or complied with;
• Financial risk;
• Risk that the Governing Body are
not aware of their legislative
obligations
• Risk that legislative requirements
relating to VAT, PAYE, National
Insurance etc is not known or
complied with;
• Financial risk;
• Litigation risk
• Risk that the legislative requirements
relating to the protection of data are
not known or complied with;
• Financial risk;
• Litigation risk
Low
Monthly Management Accounts;
Reports to Enterprise Committee and
the Governing Body;
Budget monitoring;
Awareness of Financial Regulations /
AFH;
Effective External Audit;
3 year financial forecasts
Support from the Responsible Officer
Low
Independent Clerk to the Governing
Body;
Networking Groups;
EFA Updates;
School website
Strong
Low
Support from school VAT consultant;
Support of Payroll Supplier and the
associated policies and procedures
Low
Support of school Data Protection
Officer and supporting policy and
procedure
Strong
37
Strong
Strong
7
Failure to ensure
that the school is
compliant in relation
to Welfare issues
8
Failure to ensure
that the school is
compliant in respect
of the requirements
of the school sector
• Risk that the legislative requirements
relating to disability are not known or
complied with;
• Risk that the legislative requirements
of the Child Protection Act are not
known of complied with
• Risk that the legislative requirements
relating to the National Curriculum
are not known or complied with;
• Risk that the legislative requirements
relating to mental health are not
known or complied with
9
Failure to ensure
that the school is
compliant in respect
of the requirements
of the Government
and other relevant
Authorities
• Risk that the terms and conditions
relating to the payment of grant is not
known of complied with;
• Risk that the legislative requirements
relating to licensing are not known or
complied with
Low
Low
Low
38
Support of HR Department and the
associated policies and procedures;
Parent and Carer Communication
Policy;
DBS Policy;
Citizenship Policy;
Personal, Social, Health and Economic
Education Policy;
Reporting mechanisms to the
Governing Body
Reporting mechanisms to the
Governing Body
Independent Clerk to the Governing
Body;
Reports to LG and the Governing Body;
Ofsted Inspections;
Internal and External Audit;
Networking;
Visits to other schools;
Head teacher meetings
Strong
Strong
Strong