1. Finance Training for Governors
School Finance & Governance
Monitoring against the Key Priorities
Welcome

2. Aims
School Finance & Governance To improve governors’ understanding of school finance, and their role relating to strategic planning, monitoring expenditure and ensuring best value.
Schools Financial Value Standards To highlight the requirements of the SFVS (only for maintained schools - but the principles in the SFVS are a useful audit for all governing boards.)

3. The Core Responsibility is…
To oversee the financial performance of the school and make sure it is money well spent.

4. What does this mean?
Schools must be able to evidence – to their stakeholders and to the regulators - that they are spending their funds to achieve the best possible outcomes for the children, and that they are achieving value for money.
Every school has a delegated budget, to cover staff costs, running costs, maintenance and equipment. The governing board is responsible for this budget.

5. The budget - channels of income
The School’s Budget Share (Dedicated Schools’ Grant) Allocated by the local authority - for pupils aged (6th Form) funding is allocated according to a national formula.
Other grants Your school may receive funds or grants from the government to support specific initiatives and strategies (e.g. Primary PE and Sport Premium grant)
Other income Can be derived from a variety of sources, eg lettings, parental contributions, sponsorship, PTA fundraising

6. The school’s budget share:
Biggest influencing factor is head-count (number on roll)
October census data informs budget for next financial year

7. National changes to budgets
New national funding formula from April 2018.
Transitional arrangements ( and ) – your local authority will continue to allocate budget share to its schools and academies.
Pupil Premium Grant & Universal School Meals funding are unaffected.

8. Typical school expenditure breakdown

9. Governing board’s monitoring role
There is no ‘set process’ for doing this – it’s up to the governing board to decide; however…
Many boards have a finance / resources committee
If you have finance / resources committee, it should have delegated powers (scheme of delegation / terms of reference)

10. Monitoring the budget
How do you, as governors, monitor your school’s budget over time?

11. Monitoring the budget
Are your meetings aligned to receiving ‘year-to- date’ expenditure reports from the bursar / SBM?
Are your meetings scheduled for timely strategic discussion (budget planning, staffing, build works…)
Who else do you receive reports from?
How do you ensure the educational priorities of the school are being addressed through the budget?

12. Monitoring the budget How do you do this?
Governors need to ensure that resources are spent according to identified school priorities, such as those in the School Development Plan.
TRIANGULATION
How do you do this?

13. Evidence of budget monitoring
How do you document your monitoring activity?
How do you report back to the board?

14. Reporting on your monitoring
Minutes of finance / resources committee meetings
The headlines (progress towards meeting key priorities) reported at FGB (triangulation)
Copies of reports shared, eg - PP champion/governor (impact of PP grant spend) - SENCO report (impact of SEN expenditure)
Are there any next steps, from the resulting FGB discussion, to take forward?

15. Budget Planning
The governing board is responsible for producing and ratifying the annual budget plan (finance committee recommends… FGB ratifies)
The budget plan must have a clear link to the key educational priorities of the school (eg staffing and CPD; cost of strategies / interventions)
What else should the finance committee / governors consider during budget planning?

16. Budget Planning Appraising different expenditure options
Findings from benchmarking
Efficiency considerations. Value from SLAs.
Future staffing – upcoming changes and needs
Sustainability (3 year plan) .

17. Factors to consider in the 3 year plan:
Likely staff costs
Pupil numbers
Long term commitments
Budget changes
Continuous review
3 year plan and school priorities

18. Questions to ask during budget planning
Are resources being allocated in line with key priorities?
Does the budget plan identify spending opportunities… and risks?
Does the school have sufficient reserves to cover any major changes (eg restructuring) and any risks identified?
How can better value for money be achieved from the budget? .

19. Ensuring Financial Probity
What role do you think governors have in ensuring the school operates with probity and makes best use of public funds? .

20. Protecting public funds
Are there any outstanding issues from most recent external / local authority audit?
Do all the staff know the whistleblowing procedure?
Is there an adequate system for annual audit of the school’s private funds?
Is there an appropriate disaster recovery plan? .

21. Ensuring best value How robust are our procurement procedures?
How well does the school maintain its premises and assets (asset register / disposals procedure)?
How well do we collaborate with other schools (sharing best practice / economies of scale)
Could we improve the use of any of our resources? .

22. Schools Financial Value Standard
Maintained schools only.
25 questions to be completed – the options are ‘yes’ / ‘in part’ / ‘no’ with comments to be made against each answer, expanding on the school’s current position (including any weakness areas.)
Submitted annually to the local authority. Each school’s SFVS is used to inform the LA’s annual DSG CFO’s Assurance Form return to the DfE.
Areas for improvement go onto an action list, with each action having ownership and a timescale

23. SFVS Support Notes Detailed information on what each question means.
The SFVS Support Notes document should be consulted when completing the form. Much of the information in the Support Notes could also be used for by academy finance governors for self-evaluation against current best practice.
Detailed information on what each question means.
‘What’s good practice’ - guidance and advice.
What to do if things are not right in your school.

24. Contents of the SFVS Section A: Governing Body and School Staff
Section B: Setting the Budget
Section C: Value for Money
Section D: Protecting Public Money Outcome of self-assessment: Section E: Summary of agreed remedial action and timetable for reporting back. .

25. Section A: Governing Body & School Staff
Governing body and staff with adequate financial skills
Governing body’s finance committee (or equivalent)
Definition of responsibilities of governing body & school staff
Monitoring reports of the school’s budget position
Business interests of governing body members
Access to an adequate level of financial expertise
Review of staffing structure
Pay decisions reached in accordance with pay policy
Use of professional independent advice and Headteacher pay decisions

26. Section B: Setting the Budget
Link with school budget and its plan Clear and demonstrable link between budget and SDP
Forward projection of the budget 3 year forward planning
Well informed and balanced budget
Outturn in line with budget projections

27. Section C: Value for Money
Benchmarking
Procedures for purchasing goods and services
School balances
Maintenance of premises and assets
School collaboration with others
Improving the use of resources

28. Section D: Protecting Public Money
Outstanding matters from audit reports
Guard against fraud
Whistleblowing arrangements
Accounting systems
Arrangements for audit of voluntary funds
Continuity or disaster recovery plans

29. Section E: Outcome of self-assessment
Summary of agreed remedial action and timetable for reporting back.
Action points, their ownership and the timescale
SFVS must be agreed by the FGB and is signed by the chair of governors.

30. Use it for self-evaluation
Suggestion: take one section or a set of questions from the SFVS, and make this the focus of a governing board evaluation of how well the school is operating, in line with the good practice in the guidance notes. Report your findings back to the governing board. How would you go about doing this? .

31. Any questions? For school governance support: