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School Finances for Finance Subcommittees School Councils

School Finances for Finance Subcommittees School Councils. What are school council’s major responsibilities regarding finance?. To approve the school’s annual budget and monitor expenditure To ensure that proper records are kept of all the school’s financial operations

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School Finances for Finance Subcommittees School Councils

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  1. School Finances forFinance SubcommitteesSchool Councils

  2. What are school council’s major responsibilities regarding finance? • To approve the school’s annual budget and monitor expenditure • To ensure that proper records are kept of all the school’s financial operations • To ensure internal controls are maintained and monitored • To ensure that all money coming into the hands of the school council is expended for proper purposes relating to the school

  3. What sorts of things will a school finance subcommittee do? • Be involved in the development of the annual budget (… and present it for approval) • Ensure that the budget supports the School Strategic Plan • Meet regularly between council meetings to consider the school’s financial position • Ensure that appropriate reports and recommendations are prepared

  4. Link with the School Strategic Plan • Student outcomes: goals and targets  • What we have to do: key strategies  • How we will achieve the outcomes: people and money

  5. The school’s annual budget • The financial plan that makes sure that the school’s resources (people, programs, services, equipment etc) support its educational priorities and objectives • How it will use these resources to produce the results aimed for in the strategic plan and annual implementation plan • How it will maximise student outcomes through the most efficient and effective use of its resources

  6. What funds are available to the school each year? • Funds provided by the Government in the annual Student Resource Package (both credit and cash) • Funds held in all school council bank accounts • Funds raised locally each year (e.g. bank interest, donations, fundraising activities, etc)

  7. How is this money spent? SRP Credit SRP Cash Bank Accounts Local Funds Principal School Council Annual Budget Workforce Plan

  8. How is the annual budget created? • The School Strategic Plan is used as a starting point to determine the strategies to be funded • Program leaders work out what they need to do, and how much money will be required • This is balanced against estimates of the total funds available • Finance subcommittee produces its draft annual budget and submits it to school council for approval

  9. Six stages of annual budget preparation Develop Timeline Approve budget & implement Submit budget plan to Council Estimate Income Invite submissions Match resources with requests (Strategic Plan/AIP)

  10. More on the budget development timeline • July or August is a good time to start preparing program evaluation / program planning for the next year • Once collected, these reports can be put into a draft annual budget document ready for discussion – by October if possible • This allows for time to obtain feedback and make necessary changes • The final budget should be submitted to school council for approval no later than November if possible and be linked to the Annual Implementation Plan

  11. Typical annual budget considerations • What are expected expenses – staff, services, equipment, materials? • If expected income is not enough to fund all programs, which programs must be priorities? • How much can the school rely on from locally-raised funds? • Does council want to carry money forward to the next year – e.g. for an important new program or for a large equipment purchase? • What money is held on behalf of school community groups, school networks, clusters?

  12. More annual budget considerations … • What projects could, or should, be funded if more money becomes available later? • What is the school’s cash reserve benchmark? • Are any new grants available which could be applied for? • If reserves are higher than needed, what options should be considered?

  13. Monitoring budget targets • Once the budget is approved and begins operation, actual income and expenditure can be checked against the budget figures • Variances (differences) are to be expected • A variance shows that a program is not going ahead exactly as planned (in financial terms) • Large variances should be checked out immediately and appropriate action taken

  14. Making adjustments to the budget • Any significant changes made to the budget because of variances or for any other reason need to be approved by council • Finance subcommittee should include these suggested changes in its reports to council • The annual budget is updated throughout the year using this process • This flexibility can help the school manage its budget and deliver its programs in the most efficient and effective way

  15. Suggested reports for finance subcommittee

  16. Suggested Finance Reports for Council

  17. Other finance subcommittee roles • Monitor and report on budget progress • Help develop an adequate internal control system (minimise risk) • Create and have approved by council an annual investment policy • Make recommendations on fundraising activities, level of uncommitted reserves, auditor’s reports.

  18. More ideas on investment policy • DEECD has created a High Yield Investment Account (HYIA) for every school • Surplus funds can be kept in this account • Creating a cash flow budget helps • This allows the school to earn more interest without risk (…electronic banking too) • It can also simplify the investment policy

  19. School finance subcommittees • Use this year’s experience to get ideas about what will be required for the budget in later years • Work out what will be needed next year, and where the money will come from, based on evaluations of each program during this year • Have members who stay on the finance subcommittee for several years if possible - continuity adds to knowledge and effectiveness

  20. School finance subcommittees • Remember that the main aim is to fund the School Strategic Plan • Remember to keep track of the annual budget and look at it more than just once a year, not just at review time • Monitor actual income and expenditure against budget targets • Consider the risks involved in all of the school’s financial activities.

  21. For more information • http://www.education.vic.gov.au/management/governance/schoolcouncils/role.htm (What is a school council and what does it do?) • http://www.education.vic.gov.au/management/srp (Student Resource Package Information site) • http://www.education.vic.gov.au/management/financial/cases21.htm (for the internal control checklist) • http://www.education.vic.gov.au/management/financial/cases21.htm

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