New and Growing Sponsors Programme Jennifer Jewitt FCCA CPFA The Education Alliance (formally the Hunsley Trust)

Agenda Budgets and best practice – what to report and where/when Understanding pensions and your FRS17 report Finance Director/School Business Manager – expectations and requirements Appointment of internal auditors/Responsible Officers and external auditors – cost and expectations Capital funding – preparation is key Scheme of delegation – who and how much Top slice – services and cost, standardised or tailored approach

What to report Budget to actual reports Management accounts Annual budget 3 or 5 year budgets When to report it EFA say monthly EFA say monthly but full management accounts termly can still be best practice if the monthly budget to actual reports include a reconciled balance sheet. EFA say annually. Note that if you make any mid year changes the EFA will still bench-mark you against what you submitted in July each year. There is no guidance from the EFA but I believe best practice would be annually

Reporting to Board of Directors – Budget to actual reports (see handouts)

Reporting to Governors – Annual & 3/5 year budgets Reporting to SLTv’sReporting to Board of Governors (see handouts)

FRS 17 report Cost This is the cost of running the scheme and paying pensions. This is measured as the cost less contributions by the employer How the assets are performing When we pay money into the scheme that money is used to buy assets, such as buildings. Those assets generate an income, such as rent. When the scheme is in deficit we have to pay interest on the liability, as you would a loan or mortgage. The income from the assets is offset against the interest paid on the liability and hopefully this is a positive figure! The market changes Markets change for a variety of reasons, supply and demand, inflation etc. Actuarial gains and losses are to do with market forces beyond our control. The net of the two yellow figures shows the impact that market forces have

School Business Manager Lower cost Usually progressed within a maintained school rather then professionally trained Often requires additional support for preparation of management accounts/key reconciliations and year end file for auditors Often gives more information than necessary to the Board of Directors Limited knowledge of company structure, VAT, pensions and taxation Finance Director v’s School Business manager Finance Director Higher cost Usually holds professional qualifications Usually has a minimum of 5 years professional accountancy experience Able to prepare full and detailed management accounts and perform all key reconciliations Able to prepare full audit file for auditors (usually including draft financial statements) Good working knowledge of company structures, VAT, pensions and taxation

Internal auditors/Responsible officer/External auditors Cost Dependant on what FD/SBM can prepare and quality of record-keeping Dependant on effectiveness of controls and segregation of duties Minimum £8,000 pa external/£3,500 internal Expectations External usually at least a week on site Internal usually one day per quarter Will look at more than just numbers i.e. meeting minutes, risk register, HR systems Most external reports will have at least one auditor recommendation that will be sent to the EFA. You do get chance to respond to the recommendation. The Finance Committee/Audit committee can set the programme of work for the internal auditors – this should be tailored to risk.

Capital funding – preparation is key CIF CIF window usually Sept – Dec Condition survey - 2 months Planning permission – 8 weeks Architects plans – 6 weeks QS costings or fully tendered proposal (OJEU compliant?) – 8 to 10 weeks Writing of the bid - 1 month Gathering of additional data for the bid – 1 month

How much Overall budget Average value of transactions Levels of responsibility Separate rules for regular, high value transactions i.e. monthly wages Fit with tendering and approval procedures Scheme of delegation Who Availability Segregation of duties Review capabilities Fraud prevention

Top slice %? Variable but based on what? Fair? Fixed for all but do they all get the same services? Transparent? To make profit or cover costs? Shopping list for additional services? Stand up to challenge?