1

Schools financial value standard

Welcome

2

Aims

The aims of the day are to:

• provide guidance on the requirements of the Schools Financial Value standard (SFVS)

• outline the respective roles and responsibilities of the governors and the school’s senior leadership with regard to the financial management of the school

• provide opportunities for governors and school business managers to discuss practice within their own schools

• encourage sharing practice across schools

• promote a value for money in schools

3

Organisation of the day

• Work through each section of the standards

• Use a light touch on some standards

• Focus on the evidence that might be provided by the school

• Be flexible and focus on the areas of greatest interest to you

4

Challenges of SFVS

With a partner:

• working in pairs of schools briefly the biggest challenge the SFVS presents to governors

• write this on a Post-it note and place it on the flip chart

5

Overview of SFVS

• Completion is a requirement for all maintained schools

• Its purpose is to ensure ‘money is spent wisely and properly, and allows schools to optimise their resources to provide high-quality teaching and learning’

• It provides a framework for a structured conversation between the governing body and the senior leadership team (SLT)

6

SFVS - Roles and responsibilities

• Governors – formal responsibility for the school’s finances

• Governors and SLT – shared responsibility for strategic financial planning

• School managers – day-to-day management of the school’s finances

• Local authority – should use schools’ SFVS returns to inform their programme of financial assessment and audit

Table discussionWhat do you understand to be the difference between ‘strategic’ and ‘operational’ activities?

Are there any grey areas?

7

Detail of SFVS

• The SFVS consists of 23 questions which governing bodies should formally discuss annually with the headteacher and SLT

• Each question requires an answer of ‘yes’, ‘in part’ or ‘no’

– If the answer is ‘yes’, the comments column is used to list the main evidence on which the governing body based its answer

– If the answer is ‘no’ or ‘in part’, the comments column should contain a summary of the position and proposed remedial action

• When complete - summarise the remedial actions and the timetable for reporting back

• The governing body may delegate this to a finance committee, but the chair of governors must sign the form

• The school sends a copy of the signed standard to the local authority

8

SFVS: Section A

The governing body and school staff

9

SFVS 1-3: Governing body skills

1. In the view of the governing body itself and of senior staff, does the governing body have adequate financial skills among its members to fulfill its role of challenge and support in the field of budget management and value for money?

2. Does the governing body have a finance committee (or equivalent) with clear terms of reference and a knowledgeable and experienced chair?

3. Is there a clear definition of the relative responsibilities of the governing body and the school staff in the financial field?

10

Governing body’s financial skills

• How do you establish the level of competence on the governing body?

• What will do you do to develop the necessary skills in key governors?

11

Tool created October 2010 – all links to external websites and information cannot be guaranteed after this time.

Governing body value for money health check

Why would you use it? How does it work?

Are you getting the most out of your governors? Do you think your governing body is helping the delivery of value for money?

This checklist will allow you to review the role of governors in your school against best practice and help you identify areas for improvement. Suggestions on how to make simple improvements to the governing body, as well as how to increase support for governors, are included.

12

Governing body value for money health check Your governing body and value for money

This tool provides general guidance on the financial role of governors. It focuses on key areas, including:

The legal frameworkWorking strategically with your

governorsGenerating incomeSchool mealsRepairs and maintenance

There is also a link to our governing body health check (a separate Excel tool) which can help you assess the capabilities of your governors.

What is this tool?

October 2010

13

The School Standards and Framework Act 'The governing body shall exercise their functions with a view to fulfilling a largely strategic role in the running of the school.’

A strong governance structure acknowledges that the governors’ role is strategic rather than operational.

Governors must be prepared to challenge custom and practice.

The checklist will help you to support your governors and ensure they are working at a strategic, rather than operational, level.

 

Checklist Have you put in place a sensible committee structure with clear

terms of reference and standing orders?

Do you understand the skills and experience of your governors? Do you ensure their skills and experience are used effectively within the governing structure?

Do you develop meeting agendas and supporting papers that focus on strategic issues and use hard evidence upon which to base an evaluation of progress?

Do your governors understand what is required of them? Have your governors attended governor training?

Does your school have a governors’ induction programme?

Do your governors understand their role and value for money? See the governing body health check tool on slide 13 for help with this. You may wish to establish a finance and resources committee for your school.

Working with your governorsGovernors operate at a strategic level

14

Governing body health check tool

This practical tool helps you assess the capabilities of your governors in key areas:

Have the governors developed an agreed vision? Are VfM principles recognised in the school development plan? Has a finance and resources committee been set up?

The tool asks you to assess whether the key areas are embedded, improving or not in place. Once you have assessed these areas in your school, you are asked to put in place key actions

to help progress effective governance in the key area.

You can access the tool here!

Top Tip!

Governing Body Health Check

15

Professional development for governors

Possible sources are:

• governor services department of the local authority

• external advice:

– National Governors Association: www.nga.org.uk

– Education Act 2005 www.education.gov.uk/schools/adminandfinance/financialmanagement/schoolsrevenuefunding/financeregulations/a0014217/education-act-2005

– DfE leadership and governance www.education.gov.uk/schools/leadership/governance

• internal training/development provided by SBM

16

Activity 1: Governor training

How will you train your governors? Identify the pros and cons of the

strategy allocated to your group and record on the flip chart:

• governors’ away day

• online training course

• training by SBM (2 hours on the job, once a month for example)

• governors’ manual

• local authority training programme

17

Developing governors’ capacity to ask the right questions

Working in pairs:Identify one question it would be

appropriate for a chair of governors to ask and one question it would

not be appropriate to ask.

18

SFVS 4: Clear and concise monitoring reports

A clear and concise monitoring report will enable the governing body to review income and expenditure against the agreed budget...it should be in an easy to understand format that can be automatically generated from base financial records.

19

SFVS 5: Register of interests

• Does everyone have one?

• Are there any problems in getting staff or governors to complete the register of interests?

20

SFVS 6: Financial expertise

Does the school have access to an adequate level of financial expertise, including when specialist finance staff are absent,

e.g. on sick leave?

Discuss with a ‘pair’ from another school:

• What do you do in the case of absence?

• What could you do?

21

SFVS 7: Staffing structure

SFVS 7 suggests that schools should regularly review their:

• staffing structure – balance between teachers, teaching assistants, admin staff, site staff etc

• roles and responsibilities of different members of staff

• staff skills

Governors should ask the headteacher to provide them with appropriate information on the school’s staffing structure

whensignificant changes are proposed.

22

SFVS 7: Staffing structure – good practice

When should the structure be reviewed?

• Significant changes to curriculum, pupil numbers, budget

What information should be provided?

• The staffing structure should identify key roles and responsibilities

Who should it be available to?

• This should be an open document, available to staff, governors and parents via notice boards or websites.

23

School expenditure

Audit Commission, 2011:4

24

Teacher utilisation

Ensuring that teachers spend the greatest amount of time in the classroom, where they add most value, helps schools to achieve value for money. It also helps pupils, with research demonstrating that outstanding teaching has the greatest

impact on pupils’ outcomes ... Over half of the secondary school business managers we surveyed believed that

schools had scope to improve the utilisation of teachers.

Audit Commission, 2011:3

25

Improving teacher utilisation

26

Teaching assistants

27

Activity 2: Staffing structures

The SFVS suggests that schools should regularly review their:

• staffing structure – balance between teachers, teaching assistants, admin staff, site staff etc

• roles and responsibilities of different members of staff

• staff skills

Working in groups of four:

• draw up a list of the types of strategic evidence schools could use to show that they meet this standard

• record each suggestion on a Post-it note and place it on the flip chart (5 minutes)

28

SFVS: Section B

Setting the budget

29

SFVS 8: Budget and SDP links

• Timetables for devising the school development plan (SDP) for raising attainment and standards and the budget should be integrated

• Decisions made on budgets and improving pupils’ education outcomes are made in tandem

• The same group of staff has responsibility for setting educational priorities for the school and setting the budget

30

SFVS 9: Forward planning

Do you possess up-to-date information about:

• future numbers of pupils and their characteristics?

• class and group sizes?

• staffing profiles and increments?

• pay and price increases?

• changes in revenue and capital income?

• procurement and maintenance (eg, fabric and fittings, ICT equipment, whiteboards)?

31

Activity 3: Crystal ball

Working in pairs, complete Resource 3 (10 minutes).

32

SFVS 10 & 11: Budget planning and reporting

• Does the school set a well-informed and balanced budget each year (with an agreed and timed plan for eliminating any deficit)?

• Is the end-year out-turn in line with budget projections, or if not, is the governing body alerted to significant variations in a timely manner, and do these variations result from explicitly planned changes or from genuinely unforeseeable circumstances?

33

SFVS: Section C

Value for money

34

Best Value

Best value schemes require governing bodies to demonstrate, in their

annual budget plan, that they have followed Best Value principles in

drawing up that plan by:

• Keeping under review the quality of services being provided by external agencies

• Comparing the overall cost and offer with that of other providers

• Challenging existing assumptions about the range, value and necessity of existing services

• Being prepared to negotiate hard over contractual conditions

(DfE: Governing Body Health Check, 2010)

35

The three components of value for money

Definition Example

Economy Minimising the costs of resources used for a good, service or activity

Are school supplies purchased at the best available price?

Efficiency The relationship between outputs and the resources used to produce them

Do the school timetable arrangements make best use of teachers?

Effectiveness The extent to which objectives have been achieved

To what extent has the deployment of staff raised attainment?

36

How can your school improve its VfM?

The SFVS identifies six potential areas:

• Benchmarking, i.e. using data and information to support better decision-making (SFVS 12)

• procedures for purchasing good and services (SFVS 13)

• financial plans for balances or deficits (SFVS 14)

• management of buildings and assets (SFVS 15)

• collaborating with other schools (SFVS 16)

• reporting on impact and improvements resources have made (SFVS 17)

37

SFVS 12: Does the school benchmark its income and expenditure against that of similar schools ?

What is benchmarking?

Benchmarking is the process of comparing income and expenditure in detail with that of similar schools to consider whether and how your school can use resources better and identify where changes can be made.

Compare.com

www.education.gov.uk/establishments/compare/performance

38

Activity 4: Benchmarking

Working in small groups, study the information on Resource 4 and

decide:

• what questions you might ask if you were a parent at your designated school

• which school is providing the best value for money

39

Activity 5: Sharing good practice

Schools should use benchmarking as a contributing factor to:

• planning and managing the budget

• identifying areas and setting targets to improve the use of resources

• achieving VfM in expenditure and improving its effectiveness to raise performance

• delivering educational services to a defined standard

In groups of 3 schools, take one of the factors and discuss how your

schools are currently using benchmarking.

Prepare a flip chart with examples of good practice.

40

SFVS 13: Procurement

Does the school understand and follow all legal requirements?

‘£400m savings are possible from improved procurement of goods and

services’ (Audit Commission, 2009, Valuable Lessons)

Do the school’s procurement processes ensure they achieve VfM?

41

The legal framework

European rules

UK rules

Contract (LA)

standing orders

School standin

g orders

www.education.gov.uk/schools/adminandfinance/procurement/b0069810/how-should-i-buy/procurement-thresholds

42

Purchasing process

DfE has developed guidelines for schools according to the value of

transaction:

• low value – e.g. under £10,000

• medium value – e.g. £10,000 to £40,000

• high value – e.g. over £40,000 but below EU threshold

• purchases with a value above the EU thresholds (above £156,442 for goods and services, above £3,927,260 for works) must use the OJEU tendering process

NB: The figures for low/medium/high are typical values that might be

found in standing orders etc.

43

Activity 6: How effective are your procurement processes?

• Working in pairs evaluate your school’s current practice against that recommended by the DfE. Using Resources 5a and 5b.

• Then complete Resource 6 and use this to determine the strengths and weaknesses of your school’s procurement processes.

• Share your findings with a pair from another school and discuss how you might improve the areas of weakness.

44

Key issues related to procurement

Achieving savings from procurement requires a thorough understanding

of four elements:

• how well the goods or services meet the needs of the school

• the market for the particular goods or service

• the purchasing process

• how to use goods and services efficiently

45

What governors should expect their SBM to be doing!

• shopping around – use competition to encourage established suppliers to offer better value deals

• doing the research – knowing about the products as well as the suppliers helps you make informed choices

• getting expert advice for specialist purchases – it may be good value to pay for professional help with complex procurement (e.g. ICT)

• using frameworks – lists of suppliers who have overarching agreements with public bodies

• reviewing existing contracts and lease arrangements to make sure they are in line with DfE policy and guidance

• thinking creatively – is there a better way of meeting the objective than buying outright?

46

SFVS 14: The level of balances

Are balances at a reasonable level and does the school have a clear plan

for using the money it plans to hold in balances at the end of each year?

£530m could be released nationally from schools’ excess balances.

Audit Commission, 2009

47

SFVS 15: Maintenance of school premises and assets

48

Asset management plans

Asset management plans are key elements in ensuring that capital

funding and existing assets are used as efficiently and effectively

as possible in raising educational standards. (SFVS 15)

An asset management plan should include:

• a strategy for developing, adapting and eventually replacing buildings, which is part of the school’s overall planning for the delivery of education

• a costed maintenance programme

49

Asset management planning in schools

Key message in the standards: Asset management is a skilled, professional activity.

...there is anecdotal evidence that suggests many schools adopt, at best, a reactive maintenance approach rather than

investing more in planned, preventative maintenance James Review,

2011:67

50

Asset management planning

• Condition surveys focus on the physical state of building elements and provide a basis for developing planned maintenance programmes

• Suitability surveys how well the existing premises meet the needs of pupils, teachers, and other users

• Sufficiency surveys assessments focus on total areas and on the quantity and organisation of pupil places within and across schools in relation to demand

Question: Does your school have an asset management plan which

is updated annually and provided to governors for their approval?

51

Activity 7: Asset management planning

• Working in pairs from the same school, complete the table in Resource 7: Condition surveys (5 minutes).

• How difficult did you find Activity 7?

52

SFVS 16: Collaboration with others

Collaboration is:

• sharing resources – expertise, advice and knowledge as well as tangible resources such as equipment or staff

• buying goods, works or services together

53

Collaboration in schools takes different forms

• Informal networks

• Geographical clusters

• Sharing personnel

• Soft/hard federation

54

Activity 8: Collaboration

In table groups, take one of the following questions:

• To what extent has your school considered buying goods and services, or carrying out joint training with other schools?

• Has your school reviewed opportunities to share teaching or non-teaching staff with other schools to save money?

• Has your school reviewed opportunities to share specialist staff skills between local schools?

• Has your school reviewed the costs and benefits of federation or clustering with other schools to achieve possible economies of scale?

Discuss experiences you have had in this area and also the implications and

consequences of your school moving forward within this area. Be prepared to

feed back key messages to the whole group.

55

SFVS 17: Can the school give examples of where

it has improved the use of resources during the

past year?

Examples could be:

• buying goods or services more cheaply without any loss of quality

• reorganising an area of work within the school to improve productivity

• switching resources towards a particular school priority such as improving attainment in a subject

• using staff time more effectively by having support staff take over appropriate tasks from teachers

• gaining extra income from additional lettings of the school buildings

• sharing services with another school or schools

56

Activity 9: The four Ps of improvement

Reflect on improvements in the use of resources in your school last year.

Write down each improvement on a Post-it note and estimate the

value of the improvement (eg, monetary or pupil outcomes).

Decide which of the four categories your improvement comes under

and place your Post-it note on the appropriate flip chart.

– purchasing

– productivity

– personnel

– property

57

SFVS: Section D

Protecting public money

58

How can your school demonstrate effectiveguardianship of public monies?

The SFVS identifies six areas to help you reflect on your effectiveness

in this area:

• responding to audit reports

• arrangements to guard against fraud

• implementation of a whistle-blowing policy

• consistent financial reporting (CFR) and accurate reporting to governors

• arrangements for the audit of voluntary funds

• business continuity planning

59

SFVS 18: Responding to audit reports

Is the governing body sure there are no outstanding matters from

audit reports or from previous consideration of weaknesses by the

governing body?

Good practice

• Schools should have a clear system for recording outstanding matters

• Schools should establish a list of issues to be addressed and a timetable for addressing them

• Each action should be assigned to a named person

60

SFVS 19: Safeguards against fraud, theft

Are there adequate arrangements in place to guard against fraud or theft by staff, contractors and suppliers (please note any instances of fraud or theft detected in the last 12 months)?

61

It does happen

www.dailymail.co.uk/news/article-494227/Headteacher-stole-90-000-special-school-fraud-fund-extravagant-lifestyle.html

62

Activity 10: Protecting against fraud

• What types of fraud might occur in your school?

• Working in pairs, spend 5 minutes completing Resource 8 Guarding against the fraudulent use of funds

63

Good practice in fraud prevention

Features of good control systems are:

• financial management checks

• separation of duties

• strictly limited access to systems

• spot checks on systems and transactions

• investigation of every incident of irregularity

• careful pre-employment checks

• staff responsibilities made clear

64

SFVS 20: Whistle-blowing

Are all staff aware of the school’s whistle-blowing policy and to whom they should report their concerns?

The official definition of whistle-blowing is ‘making a disclosure in the public interest’.

www.direct.gov.uk

65

Good practice

• The school must have a whistle-blowing policy in place

• Staff must have someone trustworthy to report their concerns to

• All staff must be aware of the whistle-blowing policy

66

SFVS 21: Accounting systems

Does the school have an accounting system that is adequate and

properly run and delivers accurate reports, including the annual

consistent financial reporting (CFR) return?

67

SFVS 22: Voluntary funds

Does the school have adequate arrangements for the audit of voluntary

funds?

• Voluntary funds should be audited annually

• Funds should be audited by a qualified accountant; very small funds could be audited by a suitable individual familiar with the principles of accountancy rather than necessarily a qualified accountant

68

SFVS 23: Business Continuity Plans

It’s a typical Monday morning. The site manager calls to say two-thirds of the school burnt down over the weekend, 67 per cent of the staff report sick with swine flu and the ICT manager tells you that all of the school’s systems, curriculum and administration, are down with a mystery virus ... send for the BCP.

69

http://www.manchester.gov.uk/downloads/download/4156/school_business_continuity_plan_template

Reproduced by kind permission of Manchester City Council

Responding to incidents

70

In groups of four, draw up a BCP for onemember of the group’s school in one of

these areas:

• Major fire that renders over half the school’s classrooms unusable for the foreseeable future

• Loss of ICT resources for minimum one week

• Flu epidemic resulting in over 40 per cent of staff unable to attend

• Snow that prevents staff but not pupils getting to school (assume the number of staff affected has gone beyond the critical mass)

Activity 11: It’s a red alert so we need…

71

SFVS: Plenary

72

Key questions

• What do governors need to do next?

• What does the school’s management team need to do next?

Spend 5 minutes discussing the actions you need to take when you

return to school.