FMSiS TRAINING FOR PRIMARY AND SPECIAL SCHOOLS Presented by: NCC Schools Finance

Content The background and policy. The Northamptonshire approach. What we have learned so far. The 5 Key Elements of the Standard. Coffee Discussion workshop Top Tips for meeting the Standard. The support you can expect. Questions.

FMSiS Background Aspirational standard for schools financial management introduced by DfES in June Supported by an online toolkit. Confirmed in statute in 2006 and contained in NCC Scheme for Financing Schools wef 1 st Jan annual phases for primary, nursery and special schools.

FMSiS – the Policy The Financial Management Standard and toolkit was developed by the DfEs and the Institute of Public Finance (IPF) and released to schools as a self management package. The Standard itself is a simple statement of what a school that is managed well financially would look like. It provides a benchmark that schools can use to encourage self-improvement. It helps schools in evaluating the quality of their financial management and supports in training staff to become better financial managers. It is intended to cover standards and processes that should already be in place in schools, rather than introduce a new, higher standard.

Who does what? NCC Audit issue the policy. Schools Finance will provide training and support. All schools are required to complete the self assessment and gather their portfolio of evidence (even if they are opting for external assessment). Schools will submit their completed self assessment to NCC audit via the FMSiS website, where we have access. Audit will incorporate the Standard into the Northamptonshire “thematic” audit strategy for primary schools. Schools will be offered best practice feed back through the thematic audit process.

FMSiS – the Policy There is a requirement for the Director for Business Support to sign a declaration attached to the Outturn Statement each year to the effect that relevant schools either meet the Standard or are taking appropriate action to ensure they meet the Standard over the next 12 months. It is up to Local Authorities to decide how compliance with the Standard is assessed. External assessments are not mandatory. External assessments can only be carried out by DCSF accredited External assessors (list on the FMSiS website). Schools meeting the Standard following external assessment will receive a certificate from the DCSF bearing the new FMSiS logo. The Standard will require renewal every 3 years.

Significance of meeting the Standard Meeting the Standard is now statutory. The DCSF have agreed with OFSTED that the Financial Management Standard is now part of their inspection process. Part of our grading process for monitoring financial management in schools is based on whether the school meets the Standard or not – this could affect the overall NCC grading for the school (used by the School Intervention Group).

The Northamptonshire Approach The Director Business Support has decided that: Schools do not have to complete an external assessment but may opt to do so at their own expense. Primary schools roll-out will be over a 3 year programme: - 40% by 31 Mar % plus all Special schools 31 Mar remaining Primary plus all Nursery schools by 31 Mar 10. Schools may start the process earlier if they wish.

What we have learned so far? Start early! Assign responsibility such as informing the Clerk to the Governors. Schedule governors meetings. Create a timetabled action plan. The creation of an evidence based portfolio.

Engagement in the Process Achieving the Standard is a collective objective. It is the responsibility of the Governing Body to ensure that this is completed and on going. Experience has shown that the best approach is for a small working group to be established with the Head Teacher/Deputy, the Bursar and one or two Governors who would then provide feedback to the Governing Body on progress made. This will enable the Governing Body to make a judgement at the end of the year as to whether or not the Standard has been achieved in all key areas and “sign off” and approve the school’s self assessment. For any areas where the School does not meet the Standard the School will need to submit what they have done so far and have an action plan in place to achieve this within a further twelve month period.

The 5 Key Elements 1. Leadership and Governance 2. People Management 3. Policy and Strategy 4. Partnerships and Resources 5. Processes

1. Leadership and Governance “Good financial management requires clear leadership and effective governance” Documented, up to date and approved Roles and Responsibilities for the Governing Body, Committees, Head teacher & Bursar(FMS1.1). An approved Scheme of Financial Delegation (FMS1.1). Meetings are properly minuted and signed by the chair of Governors & Committees (FMS1.2). A Register of Business Interests of Governors and staff with influence over purchasing and the budget is maintained and is up to date. (FMS1.5). Governors are given the opportunity to declare a business interest at the beginning of each meeting (FMS1.5). Completed Statement of Internal Control (SIC) in the format prescribed by the DCSF confirming that resources have been properly managed (FMS1.4)

2. People Management ”The Staff who are responsible for financial management must be well trained and ably led” Completed self-evaluation of Governing Body competencies to help identify the skills the Governors have and those that they collectively need to acquire & an action plan to address any gaps identified (FMS2.1). Completed self-evaluation of the staff financial management competencies & an action plan to address any gaps identified (FMS2.2). Ensure that the school is not over-reliant on any one individual Governor or member of staff (FMS21./2).

3. Policy and Strategy “Resources are deployed carefully to ensure the school meets its objectives, achieves Best Value, and undertakes activities that it can afford” The Annual Budget reflects the School Development Plan(FMS3.1). The Annual Budget is approved by Governors on a timely basis(FMS3.1). Reports to Governors on the Budget explain the basis for the planned level of unspent balances or recovery of deficits. Cash flow is monitored and bank does not become overdrawn. The Schools performance is compared with that of others – Benchmarking website usage (FMS3.2)

4. Partnerships and Resources “ The School uses its resources efficiently and effectively and seeks to access additional resources through partnerships and other arrangements” Relationship with Local Authority - Scheme for Financing Schools is available within the School (FMS4.1). School’s Financial Regulations and procedures require quotations and tenders at appropriate levels to encourage value for money (FMS4.2). Completed Best Value Statement - evidence to support it. (FMS4.2).

5. Processes “Financial management includes effective processes for budgeting, monitoring, control and reporting to ensure that financial plans are achieved, loss and waste are minimal, and that safeguards against fraudulent practice are robust” Financial management information is relevant, accurate timely and useful (FMS5.1). The School has up to date Financial regulations (FMS5.4). The School has up to date Financial procedures (FMS5.5). Primary accounting documents are properly authorised and processed correctly ( e.g. virements). School complies with Consistent Financial Reporting(FMS5.3). Bank Account Reconciliations are prepared promptly, accurately and are independently reviewed (FMS5.6).

Group Discussions

Top Tips for meeting the Standard 1.The role of the Clerk to Governors is a vital link between Governing Body, Local Authority and the School so they need to be on board! 2.Read the standard and make sure that you understand how to evidence it. 3.Prepare your submission well in advance and engage all appropriate school parties, including governors. 4.Organise your submission well, cross-reference the documentation to the self-assessment and highlight any key parts of long documents. 5.Make sure you have an up-to-date finance policy, which clearly identifies roles and responsibilities.

Top Tips (continued) 6. Ensure that discussion and decisions are clearly minuted at governors’ meetings. 7. Take action to deal with any weaknesses identified in an internal audit plan. 8. Cost out the school development plan and link it clearly to the budget – you will not pass the Standard if this is not evidenced. 9. If the school has a surplus or deficit inform leadership team and governors and have a costed action plan to deal with it. 10. Meet the requirements of the local authority scheme of finance, particularly on timely financial returns. 11. Evidence and review your procurement arrangements and programme those reviews in a best value statement.

October 2008 Chair of Governors, Head and Bursar review the Standard to discuss which approach they will follow (i.e. who will complete the self assessment and gather the evidence/external assessment required?). Governors meet to agree approach. School to notify NCC Internal Audit if they have opted for external assessment. November 2008 to January 2010 Nominated individuals start programme of self assessment process and gather evidence (suggest that one of the five sections of the Standard are completed each month). Progress reports are provided at governor meetings. February 2010 Final completed version of self assessment and evidence portfolio presented and agreed at governor meeting or plan agreed for further work. March 2010 Self assessment submitted formally on line to NCC via FMSiS website (note – this still needs to be submitted even if Standard is not complete). A suggested plan

The support you can expect Support each other in your clusters by sharing best practice/feedback to Finance on any difficult area. Finance Seminars. Bursar Meetings. Feedback from Audit following Thematic Audits. Steve Thatcher or Tier Abbass. The FMSiS and Schools Finance website. Follow up half day training/progress workshops in July 2009 and January 2010.

1. Leadership and Governance 1.1 to 1.5Note that these form part of the requirements of the Financial Management Standard in Schools and are in document G3A 1.6 School staff and governors have a shared understanding of, and commitment to, the aims, objectives and priorities of the school 1.The aims, objectives and priorities of the school have been: 1.Developed by the staff and governors in a collaborative way 2.Formally agreed 3.Made available to all concerned 4.Stated as specific and, where possible, measurable actions with a clear time frame for achievement 5.Reviewed on a regular basis  S1.1 Role of the Head Teacher S1.1 Role of the Head Teacher  S1.2 Role of the Governing Body and its Committees S1.2 Role of the Governing Body and its Committees  S1.5 The School Development Plan S1.5 The School Development Plan 1.7 The Governing body has considered what financial information should be provided to parents to augment the school profile and has put this plan into action 1.The Governing body has considered the financial information needs of the parents: 1.What information about the school’s finances they need to know 2.How the information will be conveyed to parents (eg school website or newsletter) 3.These plans have been put into action 4.The information provided is clear and easy to understand 5.Provides an opportunity for parents to raise questions on the financial information presented  S1.4 Governance and Accountability S1.4 Governance and Accountability

A Summary The Standard should be considered as a quality assurance tool which will allow a school to assess the soundness of their own financial management systems and identify what they need to do to improve them. The work to carry out the self assessment and gathering of the portfolio of evidence should be planned well in advance with responsibilities identified and progress monitored by the Governing Body. If you cannot fully complete and meet the Standard by 31 March 2010 don’t worry – you will need to submit what you have done so far by then and have an action plan to fully meet the Standard by 31 March 2011 – NCC Audit will monitor progress. We are here to help but we will not complete the Standard for you!

Any Questions?