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Finance for New Headteachers Presented by David Dilling 19 November 2008


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Title: Finance for New Headteachers Presented by David Dilling 19 November 2008

Finance for New HeadteachersPresented by David
Dilling19 November 2008
How to Contact us.
  • CYPL finance (schools) team
  • 020 8760 5610
  • FAX 020 8633 9577
  • Local Finance Information can be found on
  • Website Finance Matters on Croydon EdNet (LGfL)
  • This presentation will be available on Finance

What do you want to find out?
  • ?
  • ?
  • ?
  • ?
  • Note I have prepared a presentation that will
    hopefully address most of what you want and need.
    Based on your wants I will race through some
    parts and concentrate on the areas that concern
    you most.
  • Please ask questions/ make comments at any time.

The things I would like to mention
  • Funding of Croydon Education and schools
  • The Schools Forum
  • Financial Standards - FMSiS and implications
  • Financial regulations and common problems
  • Setting and delivering a budget
  • Finance and extended schools/childrens centres
  • Above to include some aspect of roles of head
    teachers, governors, finance officers and others
  • Support available

What is your reaction towards finance?
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The reaction of some senior managers towards
  • Is to shy away because it is a difficult area
  • or they decide to leave it to the experts

The reaction of some senior managers towards
  • Is to shy away because it is a difficult area
  • or they decide to leave it to the experts
  • Unfortunately it is not an area that can be
    totally left to others
  • The fact you are here means that you are being
    positive about finance!

Funding of Croydon Education including
Why is this important?
  • Obviously because schools need funding to carry
    out their functions
  • BUT
  • Funding is one of the main mechanisms by which
    the National Government is exercising its powers
    to change the way we do things in order to
    achieve the changes such as the ECM agenda and
    this influences how the funding is developed
  • Hence the funding is doubly important.

Funding of LA Education
  • There are three main areas in terms of the
    funding of the LA and its schools- School Budget
    Shares (includes main funding from DSG and
    grants)- Centrally held (includes parts of DSG
    and grants that are to be deployed centrally)-
    LA Block (includes all other things but mainly
    centred around areas which do not relate to
    individual schools)

Department Children, Schools and Families
Department of Local Government and Communities
Local Authority
Learning and Skills Council
School Standards Grant
Standards Fund
Dedicated Schools Grant (DSG)
Area Based grants
Individual Schools Budget (ISB)
Local Authority (termed the LA Block)
School Budget Shares
Centrally Held
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What is the Dedicated Schools Grant DSG?
  • The DSG is determined by the DCSF and is
    calculated by DSG number of children x
  • Croydon Council has no ability to change the DSG
  • The DSG funds schools, PRUs, early years in PVIs,
    statemented pupils, pupils out of school.
  • The main implication of this is that the total
    funding for all these areas is FIXED by the DCSF
  • Any increase in the non schools areas leads to a
    decrease in the schools area.

Dedicated School Grant
Funding of Individual Schools
Significant areas that affect funding
  • A lot of recent extra funding in education
  • Results have improved but not enough
  • Certain groups still underperform
  • Treasury wanting more accountability for the
    money being put into education.
  • Some funding problems in 2003 due to expenditure
    going up faster than income
  • Extra funding now targeted to those in most need
    (eg deprivation, personalised learning)
  • Schools have ever increasing balances??

How is the funding formula changing?
  • Trying to become simpler but Schools Forum would
    like to see the full detail of the formula
  • We also need to add extra bits due to the new
    DCSF requirements.
  • Extra funding for personalised learning
  • Need for deprivation funding to be increased
  • Need to include funding for 14 to 16 diplomas
  • Need to adjust funding for early years across
    nursery classes, nursery schools and private,
    voluntary and independent providers.

How does the Formula change?
  • The LA proposes to the Schools Forum suggestions
    for change based on the DCSF requirements and
    local thoughts
  • The Schools Forum is able to support any
    proposals but is not able to make alternative
  • It is the Schools Forum that is involved in the
    decision making process and not the Council
  • Latest Schools Forum approved consultation is on
    Croydon EdNet together with other information
    related to funding over the next few years

Other Significant Changes
  • Funding Formula ideally fixed for 3 years
  • Funding identified for 3 years
  • Schools to plan 3 years ahead
  • Simplification of grants in time
  • Further changes in 2011/2012
  • The reduction in the need for statementing as
    schools receive a share of the pot
  • Funding in next few years very tight and there is
    an expectation from DCSF to make a 1, 0.8,0.8
    efficiency saving in each of the next 3 years.

Automatic Funding
  • The majority of funding is automatic- delegated
    through the funding formula- most large
    Standards Funds including School Standards
    GrantNote that school funding is part of
    Dedicated School Grant DSG
  • Some of these grants are restricted by phase,
    level of attainment or they rely on the school
    taking or agreeing action (eg specialist schools,
    training school, healthy schools, primary and key
    stage 3 strategies etc,)

Funding that is not automatic
National opportunities Often advertised with short timescales or very precise aims
Local opportunities As national but often smaller
Make own opportunities With parents, local firms, own school initiative
Need to keep eyes and ears ready at all
times Source of further information on the
Croydon EdNet Contact is Allan Nimmo
Key Funding Issues now
  • Accurate data in schools census(note need to
    check in 3 days early Feb and under 5s need EAL
    and ethnicity)
  • Extra funding for deprived pupils
  • Funding for highcost pupils- includes
    exclusions, statemented

Schools Forum
What does the Schools Forum do?
  • Provides a forum for discussions about various
    matters in the area of education in order that
    the LA can make proposals for future developments
  • The deciding body for many decisions- around
    the distribution of the DSG funding- the changes
    to the school and PVI funding formula

What is the Schools Forum?
  • 80 of the Schools Forum consisted of head
    teachers and governors but recent changes have
    decreased the proportion to around 66 by
    increasing the representation of non school 14 to
    19 and early years.
  • You need to know who represents you and also
    keep in touch with them.
  • The Schools Forum meets roughly monthly during
    term time for a 2 hour meeting
  • Minutes are circulated to head teachers and are
    available on the Croydon EdNet

Financial Standards
  • A National Standard
  • Is compulsory for ALL schools now that it is used
    as the basis for Internal Audit
  • A benchmark for all schools to aspire to and
    hopefully achieve
  • Now linked to Ofsted grading
  • Involves mainly the governors and senior managers
    with the finance admin in support.
  • Further information on Croydon EdNet
  • But the national website is on Teachernet.

FMSiS and Implications
  • Schools (head, governors and bursar) need to
    separately complete the self assessment proforma,
    meet to jointly review and then set up an action
    plan for school as needed.
  • The self assessment needs to be periodically
    reviewed in the same way as the SEF is reviewed
  • In some schools - the finance admin provision is
    unsuitable for the higher standards required.
    (often due to lack of training, insufficient time
    and/or poor office provision)- governance needs
    to be improved
  • Finance Matters has further examples of where
    many schools under achieve.

Key areas to get right
  • VAT claiming and charging
  • Paying individuals via payroll only
  • Large purchases including contracts
  • Legal management of private funds
  • Documenting and following procedures
  • Delivering the budget (see later)
  • Ensuring finance admin staff are supported in
    operating secure financial arrangements
  • Finance information needs to be regularly
    available to governors and LA (see later)

Finance Information to and from the LA
School Census January
Data check for funding 3 days in early February
Funding to schools Monthly (x 2)
Payment demand to schools monthly
Service agreement decision Late March
Budget Best Value statement 1st May
1st quarter July/ early August
2nd quarter October early November
3rd quarter January/ early February
4th quarter end of year End of April
Vat claims (bank reconciliations kept in school) monthly
Section 16 Late summer
Construction Industry payments (PRUs) As required
Funding Process
  • School Census return ensure it is accurate and
    it is returned promptly
  • Check data sheet in February you will only have
    3 days!
  • Note that pupil numbers are extremely important
    and also FSM, ethnicity, EAL, SEN, postcode, part
    time etc

Other adhoc returns
  • Training applications via INSET course book
  • Finance Admin meetings

Financial Regulationsand common problems

Financial documentation
  • The Scheme for Financing Schools - is the
    overarching document
  • Council Financial Regulations - apply to all
    schools but are not user friendly
  • Schools Finance Regulations need to be updated
  • Schools Finance Guidance need to be updated
  • Finance Policy and Procedures - template

Some resulting common issues
  • Payment of individuals through payroll
  • Contracts be careful (eg photocopier) - follow
    school procedure
  • Petty cash is it needed?
  • Other bank accounts are they needed?- if so
    are they operated correctly?
  • No non order invoices
  • Balances!!

Setting and Delivering a Budget
Setting and Delivering a Budget
  • Governors/managers need to agree WSDP
  • Budget should take account of historical
    information but should take account of the
    direction indicated by the Governors in the WSDP
  • Budget managers need to know how much they have
    and exactly what it is for
  • Each budget then needs to be monitored monthly
  • Spend outside of profile needs to be queried at
    an appropriate level (ie senior manager, head,
    finance committee, Governing Body)

Delivering the budget
  • Expectation that schools will produce and deliver
    balanced budgets.
  • Some schools may feel that it is impossible to
    achieve as it would mean making significant
    changes. Other schools have already made them.
    Unfortunately there is no choice
  • Schools need to continually develop to achieve
    the improvements needed(eg use of TAs to
    supervise a class)

Extended Schools/Children Centres
  • Various financial issues- how to record so that
    it is part of main FMS6 system but information
    can be separated.- when to charge and/or claim
    VAT- identifying true costs for use of part of
    the school building

Deficit recovery
  • Schools have a lot of autonomy and if they get
    into deficit, then the school has to manage a way
    back no handouts
  • Invariably deficit occurs when schools continue
    to spend historically and not recognising that
    income has reduced
  • Well managed schools recognise in advance when
    action is needed AND they take action

Some causes of the mismatch between income and
  • Pupil number changes
  • Unforeseen changes (staff, building etc)
  • Maintaining things (staff, contracts, etc) that
    cannot continue to be afforded
  • Poor decisions (eg promotions, new posts,
    contracts, etc)
  • Governors not being fully involved in decisions

New arrangements
New arrangements
  • Procurement card
  • E Procurement through OPEN
  • BACS transfers and not cheques

Support available to schools
Support for Schools
  • Most information is on Croydon EdNet- Finance
    Matters- Individual school information (need to
    login)- service agreements- Section 52
  • This leads to various national sites- National
    College of School Leadership NCSL- Teachernet-
    Audit Commission- Value for Money (DCSF)

Service Agreements
  • Services organised by Croydon Council but not
    always run by the CYPL Department
  • Co-ordinated so that the basic provision can be
    booked and paid for in a simple process
  • Additional services negotiated with service
  • Important that return is made on time as some
    services will be stopped if booking not received
    (includes fire insurance)
  • Information on website from mid January

Support - people
  • CYPL Finance (Schools)- funding including
    delegated, The Standards Fund, Schools Standards
    Grant, other grants etc- supporting budgeting,
    monitoring, end of year arrangements etc- budget
    plans, best value plans, quarterly returns-
    financial arrangements - cash into bank-
    payment demand- monthly VAT returns, bank
    reconciliation- service agreements, early years
    payments - financial software (FMS6 is main
    system used)
    020 8760 5610
  • and Schools Finance Advisers

Support Key resources
  • FMSiS
  • Croydon scheme, regulations and guidance
  • Schools finance policy and procedures
  • Latest audit report for your school
  • Service agreements for maintained schools
  • Keeping your balance
  • Getting the Best from Your Budget
  • School Finance Pack
  • And various tool kits on various websites

Final odds
  • Training activities in the QDI booklet
  • Information is not normally sent out by paper or
    email but will be found on the websites
  • Important that the finance admin person is ICT
    literate re internet and sees that this is not an
    extra but a fundamental part of the job
  • And Finally
  • Do not be afraid to email/phone CYPL FinanceNOT

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