1. FMSiS and benchmarking a seminar at the bursars conference 05 July 2010 Presented by Simon Maddocks Dave Phillips David Dilling

2. What we intend to do in this session? Not training about either FMSiS or benchmarking - if you want this then please look at our offer on http://www.croydonlwb.org/ or contact us schools.finance@croydon.gov.uk http://www.croydonlwb.org/ schools.finance@croydon.gov.uk We will - briefly look at what FMSiS is - look at the context of FMSiS and the issues that arise in Croydon around audit - look in a little more detail about FMSiS and benchmarking

3. What is FMSiS and benchmarking? FMSiS is a finance standard that aims to set a national standard across all schools In Croydon it is assessed as part of the internal audit process, this being assessed every 3 years Schools get an audit assurance level (full, satisfactory, limited or no) and also get a pass or fail for FMSiS. The FMSiS standard requires schools to carry out a range of activities and benchmarking is one of the key activities that are now expected

4. FMSiS – a brief outline The standard is broken down into 5 areas - leadership and governance - people management - policy & strategy - partnerships & resources - processes Schools have to pass in all areas to get the standard and at a national level, schools are expected to pass the standard

5. Croydon context and issues Simon Maddocks

6. School audit results first no assurance audit report issued in 2009/10 +50% schools had no or limited assurance audit reports Resulting in schools being highlighted as a significant risk in the Councils Annual Governance Statement

7. Results per year: FMSiS passLimited or no Assurance 2006/0795% (20 out of 21)22% (7 out of 32) 2007/0885% (29 out of 34)18% (6 out of 34) 2008/0975% (38 out of 51)27% (14 out of 51) 2009/1058% (19 out of 33)55% (18 out of 33)

8. Other aspects Whistleblowing Fraud

9. How do we know how well schools are doing? Dave Phillips

10. How do we know how well schools are doing? Finance returns to the CYPL finance schools team 3 year cycle of school audits which - consists of a full audit and FMSiS assessment - based on FMSiS standards, legislation and Croydon Scheme for Financing Schools

11. Audit Key audit topics covered: - governance - school development plan and Ofsted - financial planning, budgetary control and monitoring - HR and payroll - procurement - income A full copy of schools test program is available on the Finance Matters website

12. Common audit recommendations Governance issues –Annual Approval of Scheme of Delegation and Committee TOR –Approval and completion of SIC –Governing Body Competencies Safeguarding and HR issues –CRB checks and central CRB records –Signed employment contracts –School Pay Policy Financial controls –Official Orders –Goods received checks –Authorisation of invoices (most of the above relate to evidencing of these controls)

13. Poor or Failing Schools Head or Chair may be requested to attend Audit Committee Subsequent visit and training by members of CYPL/finance Automatic re-assessment of FMSiS, which carries a cost

14. Discussion in groups - What is stopping schools doing better? - What support do schools need to improve?

15. What is FMSiS and benchmarking? David Dilling

16. The five areas of FMSiS The standard is broken down into 5 areas - leadership and governance - people management - policy & strategy - partnerships & resources - processes Each area has a number of sub statements that are assessed separately

17. 1. Leadership and Governance 1.1 The staff and Governors have a shared understanding of their own financial management roles, responsibilities and accountabilities, and those of others. 1.2 School governance arrangements ensure that Governors are able to fulfill their financial management roles, responsibilities and accountabilities properly. 1.3 The Head teacher and School Business Manager (if in post) or equivalent operate with financial integrity setting an example to Governors and staff alike. 1.4 The Governing Body has considered and signed a Statement of Internal Control (SIC) confirming that resources have been properly managed. 1.5 The School has effective governance arrangements covering issues which include conflicts of interest and whistle blowing.

18. 5. Processes 5.1 The financial management information provided to Governors and staff meets their needs by being: Relevant Accurate Timely User friendly 5.2 The school provides the Local Authority with accurate and up to date information in accordance with the Local Authority ’ s needs. 5.3 The school complies with Consistent Financial Reporting requirements on a timely basis. 5.4 The school has up to date, documented and approved financial regulations that are implemented consistently. 5.5 The school has up to date, documented and approved detailed financial procedures that are tailored to the school ’ s needs and implemented consistently. 5.6 The school maintains proper accounting records throughout the year. 5.7 The Governors and staff have evidence that there is effective control over: Financial management system Income received Payroll Purchasing The banking system Petty cash holdings and payments Taxation system Voluntary funds The School ’ s assets

19. Key Benefits 1.A school well-managed financially is likely to be well-managed in other respects, and therefore a better all-round school. 2.FMSiS encourages schools to learn from and apply best practice. 3.It helps schools to make better use of their resources, to improve value for money and allow a greater focus on children’s outcomes and learning. 4.It provides a clear and consistent benchmark which schools can use to encourage self improvement. FMSiS helps school leaders and Governing Bodies to better understand their roles and responsibilities in relation to effective financial management, and how decisions on expenditure are linked to educational priorities. 6.It helps key groups and individuals to reflect and ask questions about processes in a systematic way, widening out overall knowledge of school financial management.

20. How do schools know what is expected? Finance Matters (old site but moving to the new site shortly) has a range of information Best support is to do the self assessment on the national FMSiS website http://www.fmsis.info/http://www.fmsis.info/ This leads the reader through the 5 areas and the many subdivisions and provides links to other reference material on the site.

26. Some requirements of FMSiS Assess competencies of governors and budget holders Statement of internal control Carry out benchmarking

27. Benchmarking This is where financial (and other) data from all schools is compared https://sfb.teachernet.gov.uk/login.aspx?action=logout https://sfb.teachernet.gov.uk/login.aspx?action=logout Why compare? - to check whether your school has any differences with other similar schools? - to check a hypothesis that the school is different In order to make better use of resources What can be compared? All the various CFR income and expenditure headings by actual values and as a percentage of the total across a range of similar schools.

33. What next?

34. Some possibilities The expectations will continue to rise More technology is being introduced and so there is a need for appropriate and different controls Requirement for all schools to do the self evaluation and submit to LA annually More challenge and support from finance team where audit is limited or FMSiS is a fail, but possibly at some charge Continue with the 3 year cycle Certificates now quicker as we print them!

35. Any questions?

36. Contacts CYPL finance 020 8760 5610