Finance and Budget

Went on an excellent training course. This discussed how to stay out of jail as a head…

Key ideas and jargon:

Key is that finance should be open and transparent, accessible to everyone e.g. not using acronyms/NPQH.

• AWPU (Age Weighted Pupil Unit – forms about 86% of the budget)
• CFR (consistent financial reporting – a standard list of account codes that schools must use for financial returns)
• Devolved Formula Capital
• FTE – full time equivalent
• STPCD – school teachers pay and conditions document
• LACSEG –local authority central equivalent grant, paid to academies in recognition of the services that the LA no longer provides
• MFG – minimum funding gtee
• SLASC 0 School level annual school census
• PTR – pupil teacher ratio
• BCM – balance control mechanism
• Virement – in year budget adjustment between cost centres

A to Z of finance

Accountability

• Role of governors and head teacher
  • One of key features is openness. Staff parents and other stakeholders should know why key decisions are made and how they will benefit the children
  • IT MUST BE SURE:
    • The allocation of resources promotes the aims and values of the school
    • Resources are targeted in improving standards and the quality of provision
    • Resources are used to support the varied educational needs of all pupils
  • The governing body controls the finance and decides the strategic direction of the school
  • Gov/HT have considerable delegated budget
  • The Head teacher is responsible for implementing it decisions and the operational management of school
    • They make decisions about the allocation of financial resources and often to decide between competing priorities
  • Public money must be spent wisely and to best effect

Budgeting

• Need to understand the process of setting a budget
• Know how human and material resources transform into school outputs
• Types of budget models can be used
• Take a fresh look periodically at how resoures are allocated to avoid waste
• Understand cycle Review Planning Implementation Monitoring Evaluation

Compliance

• LA has to ensure schools manage finance properly
• External audit regime (ESSENTIAL)
• Compliance in respect of schools delivered through deficits and compliance team visits (all schools over a two year period) with focus on financial standards H&S, CRB

Delegation

• Governing body are required by LA to:
  • Keep prescribed accounts and records in relation to school accounts
  • Prepare prescribed financial statements/reports
  • Comply with prescribed conditions with respect to an audit
  • Send copies of the accounts together with financial statements or reports as may be prescribed by the LA
• Headteacher will have
  • role similar to ceo responsible to company board
  • delegated powers from their govn board have agreed the budget
  • undertake key duties detailed in school teachers pay and conditions dept

REAL CUT IN EDUCATION FUNDING (5% cut in real terms)

• mimimum gtee (reduced by -1.5)
• 5/12ths of the teachers pay has not been funded
• 80% reduction in formula capital allocations to schools; the inclusion of a range of grants within DSG which has the effect of reducing base allocations
• Removal of grants such as training schools
• Removal of double counting for pupils in PRU
• Incremental drift and the reduction in 6th form funding
• UNLESS schools have a high proportion of pupils eligible for FSM these will not be compensated for by pupil premium
• THIS MAY/WILL GET WORSE!!!

Evaluation

• Provides an overall check on whether objectives are achieved
• Focus on success and areas for improvement
• SEF provides the key to improvement (Does SEF, or schools evaluation tool, reflect budget priorities?)
• Functional budget evaluation (end of March) , end of year, should involve all stakeholders (KEY Q: are we in budget)
• Strategic budget evaluation (Sep ish) relates directly to school improvement plan evaluation (cost – benefit analysis) (looking at year including exam results)
• http://www.audit-commission.gov.uk/localgov/nationalstudies/Pages/valuablelessons_copy.aspx

Future:

• New govn with 156bn debt
• Changing labour market, static housing market
• Commitment to reduces deficit 2015/16
• Less funding
• Increase in demand (more pupils)
• Keeping your balance is a whole team task
• You do not need spreadsheets to work things out
• Protecting the frontline means cuts for many from this april in excess of 5%
• The only new money will be the pupil premium but…
• Disproptionate between secondary/primary
• Probably not increase in multiples of £430
• Appears that some sort of accountability measure although schools can use how they think best
• Can be rolled over

Strategies
Save as much as possible in back office

• Procurement
  • Bid for contract (bid blind)
• Federation
• Changing MO
  • TAs employed FT?
  • Office staff employed FT?
  • Caretakers? Change to site manager – with bonus rather than time and a half etc
  • Doing less with fewer staff

Saving as much as possible in front office

• Larger groups with fewer options
• Fewer teachers with increased contact time and less management
• Cheaper structures e.g. joint provision, non-chronological organization
• Removal of non essential activity

Financial Value Standard(Schools Financial value Standard)

• Standard 23 questions
• Comes in March 2012 (LA schools)
• Comes in March 2013 (academies)

Governance

• Governing body is collectively responsible for the overall direction of the school and its strategic management.
• Effective governance stems from corporate decision making based on comprehensive and accurate information about the school
• Effective governance also results in clear public accountability for the performance of the school. Weak governance reduces accountability removes checks and balances and denies a potentially valuable source of guidance

REMEMBER

• THE ALLOCATION OF RESOURCES PROMOTES THE AIMS AND VALUES OF THE SCHOOL
• RESOURCES ARE TARGETED IN IMPROVING STANDAREDS AND THE QUALITY OF PROVISION
• RESOURCES ARE USED TO SUPPORT THE VARIED EDUCATIONAL NEEDS OF ALL PUPILS