Finance and SFVS for School Governors

Core Responsibility

Overseeing the financial performance of the school and making sure its money is well spent

To ensure children get the best outcomes. Schools must show parents, auditors and regulators that they are achieving value for money.

Schools have a delegated budget to cover salaries, running costs, maintenance and equipment.

The Governing Body is responsible for managing this budget.

Finance for School Governors

LA BudgetThe School Budget Share from your LA covers the majority of your budget for all pupils aged 3-16. This is your core budget.

GrantsYour school may receive funds or grants from the government to support specific initiatives and strategies

Other incomeOther income is income derived from a variety of sources, and may include:

- income from lettings - contributions from parents - parental fundraising - sponsorship

Three Channels of Income

Dedicated Schools Grant

The numbers of children used in this calculation are obtained from the schools census taken in January to give a figure for April. 

Pupil Premium

The Pupil Premium is additional funding given to schools so

that they can support their disadvantaged pupils and close

the attainment gap between them and their peers.

Possible School Budget Allocation

Your Governing Body

•Deploys resources in line with the school’s priorities

•Governing Body Approves the annual budget – May delegate this responsibility to a Finance or Resources Committee to review

•Works within the limits of the delegated budget

•Monitors expenditure against budget

•Safeguard public money (Best Value)

•Completes the Schools Financial Value Statement every year (SFVS) and submits it to your Local Authority.

Monitoring School Finances

The Governing Body oversees how the school budget is spent.

The Governing Body should be concerned with how money is being spent, rather than what is being spent. Governors need to ensure that resources are spent according to identified priorities, such as those set by the SDP.

It is best practice for the Governing Body to set up a finance committee.

The finance committee should have delegated powers. The committee should probably meet about 4-6 times a year

Budgetary Control

Activity One: How do you as governors monitor your budgets over time?

Budgetary Control

As part of your budgetary control measures your governing

body will:

•receive reports via Finance Committee (if applicable) at least termly

•conduct financial analysis and produce explanatory notes relating to the school’s budget;

•compare the budget against the actual expenditure to the year end

Do you monitor:

Expenditure on teaching staff, activates and learning resources

Medium Term Financial Plan

This represents in financial terms a plan for at least the next three years.  It anticipates and allocates resources in accordance with the School Improvement/Development Plan.  

It should:

•reflect school vision, aims and objectives;

•include all information sources of income projected over

the next three years together with detailed information

on costs,

particularly staffing;

Factors affecting Medium Term Financial Plan

Staff Cost

Pupil numbers

Long term commitments

Budget Changes

Continuous review

3 Year Plan and School Priorities

Financial Control

The Governing Body must be sure that the school maintains proper accounting records

For a school to manage its budget to the best of its ability and ensure that pupils gain the maximum from the expenditure, Governors must ensure effective control over

•payroll – (Effective workforce deployment)•purchasing (Procurement)•school assets •voluntary funds •income received •the banking system •financial management system •petty cash holdings and payments

The Governing Body must be sure that the LA is provided with accurate and up-to-date information on demand or when necessary.

Schools Financial Value Statements

The Financial Management Standard in Schools (FMSiS) was withdrawn by the Secretary of State with effect from 15 November 2010.

The Schools Financial Value Standard (SFVS) replaces the FMSiS.

The DfE worked with schools to design the SFVS. The SFVS will assist schools in managing their finances and help ensure that they have secure financial management in place. Unlike FMSiS, SFVS is not externally assessed.

Because Governing Bodies have formal responsibility for the financial management of their schools, the standard is primarily aimed at Governors.

How do Schools Complete SFVS

The SFVS contains 23 questions in four sections (A-D) which Governing Bodies should formally discuss annually with the head teacher and senior staff.

In the section E, Governors should summarise actions and the timetable for reporting back. Each action should have a specified deadline and an agreed owner.

The Governing Body may delegate the consideration of the questions to a finance or other relevant committee. However, a detailed report should be reviewed by the full Governing Body.

The Chair must sign the completed form. The school must send a copy of the signed standard to their LA's finance department.

Schools Financial Value Standard

What does this look like

Schools Financial Value Standard

A:  The Governing Body and School Staff

1. Governing body and staff have adequate financial skills

2. Governing body have a finance committee (or equivalent)

3. Definition of responsibilities of governing body and school staff

4. Monitoring reports of the school’s budget position

5. Business interests of governing body members

6. Access to an adequate level of financial expertise

7. Review of staffing structure

Schools Financial Value Standard

B:  Setting the Budget

8. Link with school budget and its plan

9. Forward projection of budget

10. Well-informed and balanced budget

11. Outturn in line with budget projections

Schools Financial Value Standard

C:  Value for Money

12. Benchmarking

13. Procedures for purchasing goods and services

14. School balances

15. Maintenance of premises and assets

16. School collaboration with others

17. Improved the use of resources

Schools Financial Value Standard

D:  Protecting Public Money

18. No outstanding matters from audit reports19. Guard against fraud20. School’s whistleblowing arrangements21. Accounting system that is adequate and properly

run22. Adequate arrangement for audit of voluntary funds23. Appropriate disaster recovery plan

Schools Financial Value Standard

C:  Value for Money

What does this look like for you?

12. Benchmarking

13. Procedures for purchasing goods and services

14. School balances

15. Maintenance of premises and assets

16. School collaboration with others

17. Improved the use of resources

Schools Financial Value Standard

The Year Planner for SFVS

Schools Financial Value Standard

Good Practice What can governors do to create an efficiency culture?

•Make the link between spending and pupil outcome to improve attainment •Ensure schools have access to effective finanical management •Establish efficiency as the a norm •Ensure the school use all the information available •Challenge the efficiency