Why do we have financial regulations?
Financial regulations are a fundamental part of any business and schools, academies and MATs are no exception.
The document sets out the key accountabilities, duties and responsibilities relating to financial administration, as well as delegated authority levels that must be followed. It is good practice to include a Scheme of Delegation for ease of reference on authorisation levels. There should be an annual review of the whole content, or whenever there is a significant change, to ensure that the document remains current and fit for purpose. Once reviewed, the governing body must minute their discussions and acceptance of the content, the Chair must sign the document as proof of validation.
Whilst there are standard templates, every school, academy and MAT must have their own personalised version that suits the circumstances in their own establishment. Every staff member should have access to a copy so they can see who is responsible for what.
What updates are needed to your financial regulations?
1. In the light of recent events, it is important to check that the financial regulations contain some simple wording relating to business continuity planning; suggested wording would be:
The [insert job title] must prepare a disaster recovery/ business continuity plan to cover any actual loss of, or loss of access to, accounting facilities or financial data, which should then form part of the school’s overall business continuity plan. This should link in with the annual assessment made by governors of the major risks to which the school is exposed and the systems that have been put in place to mitigate those risks.
The school must hold an up to date Operational Procedures Manual to cover the absence of key personnel in the finance/administration team. The manual should be accessible to all staff members.
2. Refunds – many schools have had to issue refunds to parents for cancelled events/ provision. Once again simple wording can be added at the end of the income section giving reference to the Charges, Refunds and Remissions policy.
3. As we move to more automated systems, the payment procedure section must be updated for BACS and Faster Payments, along with the scheme of delegation. There should also be information relating to online banking arrangements.
For academies only:
4. There must be a section relating to Internal Transfers to cover why and how they are processed and authorised; the authority limits must be added to the Scheme of Delegation.
5. Updates for changes in the AFH, especially use of Integrated Curriculum Financial Planning and completion of SRMSAT.
Quick fix for COVID-19
If there are any changes to procedures due to COVID-19 risk management restrictions, these should also be clearly defined and can be added as an appendix which could be entitled ‘Appendix – Pandemic’, and have the introductory wording: ‘In the event of a pandemic the following instructions supersede those in the main body of this document.’
References can then be made within the body of the document, rather than changing the wording throughout.
The Scheme of Delegation should also have a note to refer to the Pandemic Appendix if there are alternative instructions to follow.