Introduction
Financial management in schools and academies is more than just balancing budgets - it’s about ensuring public funds are used effectively, transparently, and in the best interest of pupils. With the Governing body and Headteacher holding overall responsibility for effective financial management, financial regulations are an effective document that comes into play.
What are the financial regulations for schools?
Financial regulations are a set of internal policies and procedures designed to govern how a school or academy manages its finances. They are based on the LA Scheme for Financing Schools or the Academy Trust Handbook and follow the DfE guidelines and recommended best practice. They provide clear school/trust specific operational guidance on everything from procurement and budgeting to accounting, reporting, and audit processes. These regulations ensure that staff at all levels understand their responsibilities and follow a consistent and compliant approach to financial management.
Why are financial regulations important?
There are several key reasons why every school or academy should have robust financial regulations:- Accountability: Schools are publicly funded and must demonstrate that they use funds responsibly.
- Compliance: Financial regulations help schools meet legal and regulatory requirements, including those set by the Department for Education (DfE).
- Risk reduction: Proper financial controls reduce the risk of fraud, mismanagement, and errors.
- Efficiency: Clear guidelines streamline financial operations, allowing schools to make better use of their resources.
- Transparency: Financial regulations promote openness in financial decision-making, improving stakeholder trust.
What should financial regulations cover?
Your finance regulations should be personalised to your school or trust and provide a comprehensive set of procedures covering all critical aspects of a school’s financial operations. It will set out full details on the internal controls within your school/academy trust, providing clarification on key accountabilities, duties and responsibilities relating to financial administration.
This typically includes:- Budgeting and financial planning: How budgets are set, approved, and monitored.
- Procurement and purchasing: Rules for buying goods and services, including tendering and value-for-money assessments.
- Income: Procedures for handling money received.
- Banking and cash handling: Controls over banking, petty cash, and investments.
- Payroll and staffing costs: Guidelines on payroll administration and staff-related expenditure.
- Financial reporting: Timelines and standards for internal and external reporting.
- Asset management: How physical assets are recorded, monitored, and disposed of.
- Audit and assurance: Processes for internal checks and external audits.
- Fraud prevention: Measures to detect and prevent fraud or financial irregularity.
- Scheme of delegation: Authorisation limits for financial transactions. (This can be a separate document, but it still forms part of the financial regulations.)
How often should financial regulations be updated?
Financial regulations should be reviewed and updated at least annually to ensure they remain current and reflect any changes in legislation, funding agreements, or internal school policies. Changes in leadership, structure (such as conversion to academy status), or major financial events are also valid triggers for a review.
Updating of the regulations is normally delegated to the Finance Manager, School Business Manager, or Chief Financial Officer. Once reviewed, the regulations will need to be adopted by the governors and minuted at a full governing body or board meeting.
It is good practice for all governors, trustees, budget holders, and key finance personnel to have easy access to a copy to ensure they are being adhered to. Compliance to these regulations will need to be demonstrated in audits and through the SFVS or SRMSAC.
Need support?
Juniper Education understands that creating or updating financial regulations can be a daunting task. That’s why we provide templates for schools and academies in our ‘Knowledge Hub’ to help you stay compliant and confident in your financial practices.
Contact Juniper Education Finance Support for further information - we’re here to help you, so you can look after our children.
