BOARD OF GOVERNORS TRAINING

1. BOARD OF GOVERNORS TRAINING School Finances An Introduction November 2011

2. Facilitators • Neil Craig • Elizabeth Fraser • Lisa Cross • Alan Brannagan

3. Finance Strategic Unit Accounts Payable and Cashiers Local Management of Schools LMS Financial Services Payroll Procurement Catering Grounds Maintenance Cleaning

4. Context • Chief Executive as Accounting Officer - personally responsible for all resources • Local Management of Schools (LMS) – delegation of financial and managerial responsibilities to Governors • Boards of Governors must: - Ensure robust 3 year financial plan linked with school priorities - Must monitor actual and projected expenditure - Must ensure value for money at all times - Responsible for proper financial management of all school resources (e.g. staffing, cash, equipment etc)

5. To raise awareness of the role of Boards of Governors in managing the school budget Objectives • To provide an overview of the School Funding Process

6. Objectives • Explain the Financial Planning Process • Provide an example of a 1 year and 3 year plan • Make you aware of resources and support available to schools to assist in the financial planning process

7. Role of the Governors • Plan and control use of resources • Contain expenditure within approved budget • Manage resources economically, effectively and efficiently • Establish proper financial controls • Participate in the financial management: planning, reviewing, monitoring and forecasting • AFFORDABILITY

8. Role of the Principal • Keep all governors informed on a regular basis • Have finance on the agenda for each BoG meeting • Work closely with finance committee • Manage the responsibilities that have been delegated to them by the BoG

9. SCHOOL FUNDING OBJECTIVE OF COMMON FUNDING FORMULA (CFF) “To ensure that schools with similar characteristics receive similar levels of funding regardless of the area or sector in which they are located.”

10. SCHOOL FUNDING Non Delegated Delegated Funding

11. Examples of Non Delegated Expenditure Costs paid for out of centre budget on schools behalf: • Rates • Redundancy Payments • Transport Costs • Certain Special Educational Costs • Sub cover for staff on long term sickness • Cost of staff on Maternity • Other £

12. Sources of Funding Schools delegated budget is determined by LMS Common Formula Funding – DE MAIN DRIVERS • Pupils Nos • Premises Factor • Targeting Social Need • Small Schools Support • Teacher Salary Protection • Foundation Stage • Primary Principals Release Time • Others £

13. 2011/12 Financial Cycle • October 2011 School forwards census Information to DE via C2k - generates funding for 2012-13 • November 2011 LMS send out Staffing lists. School amends and returns details to Board • January 2012 LMS send Validated census data to DE • February/March 2012 DE run Common Funding Formula. LMS forwards Budget Statement to Schools along with final Staff costs and estimated running costs. Schools asked to complete three year plan

14. 2011/12 Financial Cycle • March 2012 provisional LMS reports available on Board website. • April/May School completes, signs and returns one year and three year plan to SEELB • June 2012 Final LMS reports available on Board website. • August 2012 Plans are assessed by SEELB and letters forwarded to schools

15. Elements of Planning Two elements that need to be closely linked: • School Development Plan • School Financial Plan

16. PLANNING THE ANNUAL BUDGET One Year Plan • Total Resources Available 2010-11 • Total Projected Spend 2010-11 • Projected End Of Year Balance March 2011 • 2011-12 CFF = Total 2011-12 Resources • Amendments Made if appropriate • Signed by Chairman of BoG and returned

17. 3 YEAR PLAN • Year 1 - As per One Year Plan • 2 & 3 - Amend pupil nos. Increase/Decrease budget by rise/fall in pupils x per capita or by use of DE template • Expenditure assumed constant • Review Outcome • Amend expenditure as appropriate

18. Coffee Break

19. DE WORKBOOK • Requirement from Department of Education • Surplus 5% or £75,000 of delegated budget (whichever is the lesser) • Deficit not allowed unless agreed by Board • Re- assessment throughout the year by Department of Education • School Performance Review Group

20. Budget Monitoring • Reports issued monthly Budget & Expenditure Report Staff Report Detailed Transaction Report • Available on Website • Access from home if desired • Review every month

21. POINTS TO CONSIDER • Is there a strong link between the school development plan and the financial plan? • Are you familiar with your school’s budget setting and monitoring arrangements? • Do proper financial controls exist? • Do you receive timely financial information?

22. EXPECTING THE UNEXPECTED • What is the future enrolment trend? • Has your school any outstanding commitments? • What options do you have to reduce expenditure in your school?

23. Review • To raise awareness of the role of Boards of Governors in managing the school budget • To provide an overview of the School Funding Process

24. Explain the Financial Planning Process Provide an example of a 1 year and 3 year plan Make you aware of resources and support available to schools to assist in the financial planning process Review

25. Sources of Information • Three Year Financial Plans • Budget Allocation Forms • Budget Statements • Outturn Statements www.seelb.org.uk • Monthly Financial Reports lms.nielb.com • Common Formula Funding Scheme www.deni.gov.uk • Lisa Cross/George Blackam/Alan Brannagan028 9056 6531 • C2k/FMS Kathleen Dobbin 028 9027 9029

26. Open Forum • Questions • Evaluation • Close Questions