Effective Financial Management Strategies for Educational Institutions

Finance Administrators and Bursars Group 17thJune 2021

Welcome & Introductions Rustum Setna

Agenda Year End Kim George Best Practice Paula Field Month End Documentation Jaspreet Raju Grants Updates Shirley Chin Revenue & Capital Monitoring Rustum Setna Questions & Close Rustum Setna

Year End Highs & Lows Kim George

Bank Claims What went well Bank claims submitted in a timely manner Reconciliations completed within an acceptable timescale What went less well There was some confusion over when it is permissible to start using the bank in the new year to pay invoices

CFR What went well The majority of the CFR returns were relatively problem-free What went less well We had the usual problems with B05 and B03 balances in capital We also had the added hindrance of period 14 not being closed

Year-End Paperwork If you still have any outstanding paperwork, please send it to your adviser as soon as possible Mid-year advance transactions in period 2

Best Practice Paula Field

VAT Claims Submit all VAT claims electronically to shamim.miah@luton.gov.uk by the 10thof the month (PDF & Excel version) Copies of the summary VAT report should be sent to the LMS team with your monthly bank claim. Reconcile your VAT control account every month/ quarter in order to identify any reimbursements that have not been paid to school. Contact Shamim regarding any VAT claim outstanding more than 3 months

Documents Scan and send separately if sending a number of different type of documents, Check the page number order Check the quality

RATES With the covid most schools didn t receive their rates bills in the April and therefore paid them very late, some still hadn t paid at year end. Register on the Luton Council website for the e-billing so that you are emailed the bills as soon as it is produced. Register for the direct debit option DO NOT pay in instalments Any cash flow issues please contact the LMS team

Unreconciled Items On a quarterly basis review the unreconciled items on the bank reconciliation clear unreconciled cheques over 6 months old and debts that remain irrecoverable after one year. if unreconciled cheques relate to an invoice that was processed in a previous financial year please reverse these with a cash book journal

Coding - Mapping When setting up new codes please ensure that you map to the correct CFR code if you are unsure please ask LMS team I01 Funds Delegated by the LA I02 Funding for Sixth Form Students I03 High Needs Top-up Funding I04 Funding for Minority Ethnic Pupils I05 Pupil Premium I06 Other Government Grants I07 Other Grants and payments Received I08a Income from Lettings Premises I08b Other Income from Facilities and Services I09 Income from Catering I10 Receipts from Supply Teacher Insurance Claims I11 Receipts from Other Insurance Claims I12 Income from Contributions to Visits etc. I13 Donations and / or Voluntary Funds I15 Pupil-focus Extended School Funding and / or Grants I16 Community-focused School Funding and / or Grants I17 Community-focused School Facilities Income I18 Additional Grant for School I18a Income form the Coronavirus (COVID-19) job retention scheme I18b Income from any grant provided in relation to coronavirus (COVID-19) I18c Income from coronavirus (COVID-19) Catch-up Funding I18d Income from Other Additional Grants CI01 Capital Income CI03 Voluntary or Private Capital CI04 Direct Revenue Financing E01 Teaching Staff E02 - Supply Teaching Staff E03 - Educational Support Staff E04 - Premises Staff E05 Administrative and Clerical Staff E06 Catering Staff E07 Cost of Other Staff E08 Indirect Employee Expenses E09 Staff Development & Training E10 - Supply Teacher Insurance E11 Staff-related Insurance E12 Building Maintenance and Improvement E13 Grounds Maintenance and Improvement E14 Cleaning and Caretaking E15 Water and Sewerage E16 Energy E17 Rates E18 Other Occupation Costs E19 Learning Resources E20 ICT Learning Resources E21 Examination Fees E22 Administrative Supplies E23- Other Insurance Premiums E24 Special Facilities E25 Catering Supplies E26 Agency Supply Teaching Staff E27 Bought-in Professional Services Curr E28 - Bought-in Professional Services Other E29 Loan Interest E30 Direct Revenue Financing E31 Community-focused School Staff E32 Community-focused School Costs CE01 Acquisition of land and existing Buildings CE02 New constructions, conversion and renovations CE03 Vehicles, plant, equipment and machinery CE04 Information and Communication Technology

Coding Capital Purchasing items that will be used over more than one financial year, i.e. IT equipment, playground equipment etc. Maintain or improve a fixed asset therefore extending the life of the fixed asset, i.e repairing the roof of a building, installing new boiler. If some of the funding for a capital project is coming from private donations or grants, then BOTH income and the cost needs to put to capital codes.

75 Codes 7500 & 7501 please use the codes beginning 09 in E10 and E11 to pay for recompense insurance 7502 please use; 3959 for licences 3071 for curriculum subscriptions, 3701 for administrative subscriptions 3702 for school membership subscriptions 7503 -please code insurance for the site agent s house to 1900 RPA insurance charges can be charged to 7503 7504 DO NOT USE, please code to 3901 7505 DO NOT USE, please code to 4073 7506 DO NOT USE, please code to 4073 7507 DO NOT USE, please code to 4085

BANKLINE CHARGES Current charge to schools for the Bankline services (NatWest accounts only) = 95 for the year, Bank Charges Jan Feb March April May TOTAL TOTAL ( ) Future dated or next day payments @ 0.42 567 550 811 282 985 3,195 1,342 Immediate payments @ 2.40 47 80 92 21 177 417 1,001 TOTAL 614 630 903 303 1,162 3,612 2,343

PAYMENTS BACS are more cost effective and quicker that using cheques, only one report for signatories to sign and then authorising the BACS run on bankline. Luton Council is trying to move away from receiving cheques -please make payment to Luton Borough Council via BACS and send remittances to Accountancyfundtrans@luton.gov.uk If you need assistance with setting up BACS payments, please contact the LMS team

QR card readers NatWest have introduced a higher level of security for using Bankline Users can request an activation code themselves via the website, If users make more than 3 incorrect attempts then they will be locked and this will need the LMS team to unlock and request a new card and pin. The pin number you receive through the post direct is card related and DOES NOT CHANGE. The pin which you chose yourself when you first set up bankline as a new user, is for registering and IS NOT TO BE USED with the card and card reader.

RBS PURCHASING CARDS Updated purchasing cards and users database. Any changes to card numbers or card holders should be notified to the LMS team as soon as possible. It is the school s responsibility to cancel any recurring payments on the card, by contacting the provider. Any new purchasing card applications need to be sent to the LMS team for processing

LMS buyback/ bursary service Core service from the LMS this includes, 12 hours of your school financial advisor s time. The SFA s can help with month end processes including processing invoices and payments runs, year end processes. Budget setting, budget monitoring, FIS reconciliations, deficit recovery advise and support, can cover absence (i.e. finance officer, bursar, school business mgr) to ensure the school s finance s processes are not affected by absences. Additional hours can be brought in advance, please contact Rustum Setna for details.

Questions?

Month End Documentation Jaspreet Raju

Scheme 2 - FMS 1. Bank Statement 2. Bank Claim report 3. Balances & reserve sheet 4. Unreconciled bank statement report 5. Bank reconciliation report 6. Bank History up to the date of bank claim 7. Petty Cash Report 8. Vat Submittal report 9. Vat long, short, Full, MTAB Excel report & Vat submittal to Shamim.Miah@luton.gov.uk

Scheme 1 FMS 1. Bank Statement 2. Summary Trial Balance 0-Current Month or Period 13 3. Bank Reconciliation Reports 4. Unreconciled Bank Statement Report 5. Balances & Reserves Sheet 6. Income & Expenditure Report 7. Vat Submittal Report 8. Vat long, short, Full, MTAB Excel report & Vat submittal to Shamim.Miah@luton.gov.uk.

Scheme 2 HCSS 1. Luton bank report 2. Bank Statement 3. Trial Balance 0-Current Month or Period 13 4. Trial Balance Current month Current Month eg :- 1-1 5. Petty cash Transaction listing report showing ledger codes eg:- 3012 6. Bank Reconciliation Reports 7. Unreconciled Bank Statement Report 8. Vat Submittal 9. Vat Full Report & Submittal to Shamim.Miah@luton.gov.uk

Scheme 1 HCSS1 1. Bank Statement 2. Trial Balance 0-Current Month or Period 13 3. Bank Reconciliation Reports 4. Unreconciled Bank Statement Report 5. Vat Submittal 6. Vat Full Report & VAT Submittal to Shamim.Miah@luton.gov.uk

All Schools need to send us their FIS reconciliation TO LA every month Quarterly outturns before the deadline Summary Budget Monitoring sheet every month For any finance documents or guidance notes, you can always visit:- https://m.luton.gov.uk/Page/Show/Education_and_learning/Schools_an d_colleges/schools-staff/finance- documents-for- schools/Pages/default.aspx For any assistance email us on LMS@luton.gov.uk

Grants Update Shirley Chin

Pupil premium update Timing of grants and name of grants that should be expected to come in Cheque payments

Pupil Premium Update Allocation changes from 2021-2022 Based on October 2020 census Per pupil funding rates will be the same as 2020 to 2021 PP used to be based on the January census , changed to October the prior year, likely to lead to reduced income but offset slightly by more pupils becoming eligible for FSM as a result of the pandemic For 2021 to 2022 this means pupils that have been recorded as having free schools meals at any point between Jan 2015 and Oct 2020

The EEF Guide to pupil premium

Pupil premium strategy statements These can be downloaded from https://www.gov.uk/guidance/pupil-premium-strategy- statements#template There is an example along with the blank template Once completed they should be published on your schools website Schools must show they are using their pupil premium effectively

Timing of Grants Pupil premium In this transitional year allocations will be confirmed to the usual timeline in June 2021, as of next year allocations will be published earlier in the year giving schools greater certainty around future funding levels, it will continue to be paid in quarterly instalments When will the funds be expected to come in ?

Early years pupil premium Based on census figures given Spring term January Summer- May/June Autumn term October Any adjustments after later in year Nursery and nursery units will get separate funding for teachers pay & pension grants Maintained and special schools will get the grants with the formula funding

Cheque payments You have to buy cheques in bulk Why use them ? Cost Postage Open to Fraud Administration on both sides Is it easier ? Cost is more Can get mislaid Easy for fraudulent use Not easy to reconcile

How cheques get reconciled at LBC How we have to allocate Cheque comes in post , has to be sorted . The cheque is often for a large amount for a lot of different departments , may be one cheque that includes i.e rates and various other invoices ,but because of any payment system the narrative/reference is often limited there is not enough room for the correct reference to be used so people think the reference that can be used when paying by bacs is ok on a cheque . The reference given on the i.e rates bill is ok when paying by bacs as it identifies the customer number but on a cheque , means nothing We need a creditor number Creditor details Invoice number Cost centre code Vat rate number

Most suppliers dont want cheques Hence why the invoices usually say, payment by direct debit , bank transfer (bacs) online or telephone. They don t give you the details to send a cheque because its time consuming admin. When you send a cheque to us it means our treasury team in order to allocate your payment has to track down all those details needed as well as entering the payment and matching it with the relevant double entry on the system If they can t the payment sits in suspense

A lot of suppliers will now charge an Admin Fee for cheque payments, or not accept cheques at all Cheques are too time consuming If you need help setting up bacs please let us know

Shirley Chin Schools Financial Advisor Address change to Town Hall extension, Town hall LU1 2BQ Lms Team 01582 546095

Any questions?

Revenue and Capital Monitoring Rustum Setna

Revenue Budget Monitoring How often should monthly budget monitoring be submitted? a) b) c) Quarterly? Monthly? Whenever you feel like it? Your forecasts are submitted to a number of meetings including the School s Forum and Schools Monitoring Panel and if we receive it monthly then we will always have the latest data to present Please also submit your summary sheet

Capital Budget Monitoring Fortunately most schools have credit balances for capital The monitoring here is; a) Have you received your DFC? b) Have you received any other grants/contributions that you are expecting? c) What has the grant/contribution been spent on? d) If more than one item/project, what is the split? e) Which grant/contribution funded the item/project? f) Has the grant/contribution been spent on a capital item? I hope that you have all seen capital monitoring spreadsheet.

Capital Monitoring Template Capital expenditure incurred by schools during 2021/22 and in some cases reimbursed by other grants. School Condition Allocation Expenditure Devolved Formula Capital Expenditure Healthy Pupil Capital Fund Expenditure Completed by 31.03.22 (Y/N) Total Cost of project Name of School Item Purchased or Work Done 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Deficit Recovery As soon as a school identifies that they will be in a deficit position they must inform the LMS team. LMS Team will provide a template for a Deficit Recovery Plan which the school will need to complete to obtain a licence to make the deficit legal. Must complete the template and obtain the licence before going into a deficit

Deficit Recovery New LMS Deficit Recovery Plan (DRP) template. First tab explanation on how to complete the DRP Second tab what actions will be taken Third tab what assumptions have been made Fourth tab - shows the 3 year plan (copy from HCSS) with a surplus in the third year (or second year would be even better) Optional tabs risks & opportunities other factors that may affect the deficit recovery Other support is available from the School s Improvement team, Admission s team, and HR

Questions & Close Rustum Setna