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G5D - Guidance on FMSiS re-assessments by
Local Authority and External Assessors
This paper clarifies DCSF expectations about FMSiS re-assessments. It outlines
the procedure for schools to receive an external re-assessment for formal
recognition of continuing to achieve the Standard. We would welcome Authorities
informing their schools of:
o the expectations and the process for receiving a re-assessment;
o the availability of external assessors, if required (Click Here for G5B in the
Toolkit, which lists those approved by the DCSF);
o the differences in approach and the links between FMSiS assessments
and probity audits, as they are increasingly being carried out in parallel;
o the distinction between self-assessment and external assessment.
2. Background and Context
2.1 FMSiS is a mandatory requirement to provide assurance to the
Department, HM Treasury, National Audit Office and Local Authorities that
schools have adequate arrangements in place to manage their resources
effectively. The Section 151 Officer (Chief Finance Officer/ CFO) is required
to sign a declaration, to the effect that relevant schools either continue to
meet the FMSiS or are subject to appropriate action to ensure they meet
2.2 The Standard is awarded to the school for good financial management
practices, rather than to any individual, and requires renewal every three
years. The renewal date commences from the date of the assessment that
the school has met the requirements of the Standard. The re-assessment
can be carried out at any time during the relevant financial year, to allow
flexibility when planning audit and assessment timetables.
2.3 This guidance is issued to support the Hedra evaluation report
recommendations (Click Here for R144) that:
a. DCSF should issue guidance, in order to provide greater clarity about
the assessment process and best practice, which can be used by
external assessors to minimise the burden of evidence collection for
b. In conjunction with issuing guidance on best practice, DCSF should also
issue guidance on re-assessment: in particular, how a more risk-based,
face-to-face approach could be incorporated, changing the current
approach to the assessment, which is largely based upon a detailed
review of documents.
2.4 The guidance also takes account of lessons learned and feedback obtained
during the first year of re-assessments by Assessors.
2.5 We are aware of some very good practice that is being used, and the
Department appreciates the efforts made in all areas to implement the
Standard, assess schools, and continue to maintain the Standard.
However, some schools have questioned the approach taken by their
Assessor and what they see as the imposition of reporting burdens in terms
of the records and processes needed to meet the Standard. It is only right
that we work together to ensure that these concerns are addressed as the
FMSiS re-assessment process continues.
2.6 The principle behind FMSiS is to ensure that schools have, at the very least,
the minimum acceptable level of financial management. Colleagues should
be wary of turning the process of external re-assessment into a tick-box
exercise. Schools are expected to be able to provide evidence to
demonstrate how they meet the Standard, but as a considered risk-based
assurance exercise to establish that appropriate systems and processes
are in place. The Standard provides recognition of where good practice
exists and a tool for those schools that need to address issues around their
financial management. A light touch and supportive approach will help to
engage school leaders and Governors in schools being re-assessed.
2.7 Sound financial management and controls are essential because they
provide an effective framework for financial planning and accountability, and
safeguard the use of public funds. Although the primary responsibility of the
school is to provide the best education possible for its pupils, control over a
delegated budget brings with it financial stewardship responsibilities.
2.8 Keeping Your Balance (Click Here for R1) sets out the principal elements of
a sound approach to the administration and control of a school's funds.
Many of the standards are based on legislation, others are based on
accepted audit practice. The main purpose of the standards is to set out a
framework of good practice to help schools establish and maintain robust
financial systems. It also provides a framework for auditors and inspectors
when they evaluate these arrangements.
2.9 The principles of financial management are summarised in fourteen key
areas in the Keeping Your Balance report. The way in which these
principles are implemented depends on two key factors:
The size and organisation of the school.
Specific financial regulations with which the school must comply.
2.10 FMSiS was developed to assess financial management in schools against
standard criteria covering five key areas. The areas are:
Leadership and Governance.
Policy and Strategy.
Partnership and Resources.
The Standard must be interpreted within the context of the school, and the
school must assess whether the controls in place are sufficient to meet the
principles, i.e. the spirit and intent, behind the Standard.
2.11 The FMSiS website has been designed to be user friendly for school staff
and governors. It includes a comprehensive toolkit and a progressive search
facility, to enable users to focus on the parts of the toolkit that are likely to
be of most use. Useful starting points are to focus on general documents G2
and G7, which provide a summary of the Standard, explain its purpose and
key benefits, and help users to drill down to whatever level of detail is
needed. (Click Here for G2, and Click Here for G7).
2.12 The DCSF is encouraging authorities to synchronise audit and assessment
arrangements wherever practical, and to make efforts to minimise any
additional burdens for schools. After the initial assessment and the
implementation of any recommendations to improve financial management,
FMSiS good practice is expected to become embedded in the day-to-day
business of the school.
2.13 The school is expected to complete a self assessment, to give assurance to
the management of the school that it complies with and meets the
requirements of the Standard, and to ensure that all relevant documents are
agreed and signed off by the Governing Body where appropriate.
2.14 FMSiS brings a consistency to the control environment and provides a
baseline for the school to assess itself against, but it does not take into
account all the risk areas confronting individual schools in any detail. A
probity audit will provide a more focused audit, tailored to the school’s risk
2.15 The risk areas will be ascertained from various sources of information (both
internally and externally) and will help the auditor to risk assess the school.
Examples of the sources are:
Previous assessment findings, such as audit and Ofsted.
Investigations taken place.
The FMSiS self-assessment.
Financial position and projections.
Size (budget and pupil numbers).
Staffing, including key staff changes that have been taking place.
Any Local Authority (LA) areas of concern.
Any other indicators of financial problems.
2.16 Examples of areas of potential risk can typically include:
Expenditure - failure to raise orders or obtain quotes, orders raised after
receipt of invoices, weaknesses in authorisation / certification controls
and segregation of duties, and late payment of invoices.
Collection of income - delay in collection of debts, no scale of letting
charges, audit trail weaknesses, reconciliations resulting in deficits.
Asset control - inventory not updated, loan book not maintained /
updated, annual stock take overdue.
Cash handling, recording, banking, petty cash - lack of receipts,
weaknesses in VAT reclamation, poor authorisation processes.
Accountability - register of business and financial interests not up to
date, financial procedure manual not up to date, gifts and hospitality
book not maintained.
2.17 When the probity audit is carried out, which is expected to increasingly be at
the same time as the FMSiS re-assessment, auditor expectations will
The Governing Body and school staff giving access to premises, documents
and assets, and providing any explanations considered necessary.
The Head considering and responding promptly to recommendations in the
audit report, and reporting the audit results and any action to be taken by
the school to the Governing Body.
The Head will also be expected to immediately notify the auditor(s) of any
2.18 The efficiency of the school will be judged by reference to:
The efficiency and effectiveness with which the available resources (money,
staff, time, accommodation and learning resources) are managed.
The extent to which budget-setting relates to the school's educational
objectives and its priorities expressed through the School Development
Plan, and the steps taken to evaluate the effects of major spending
decisions to ensure best value for money.
The school's reasons for any significant deficit or surplus in its budget.
2.19 Assurance ratings given by auditors will normally be categorised as follows:
Full Assurance: There is a sound system of internal control designed to
meet the system objectives, and the controls are being consistently applied.
Satisfactory Assurance: There is basically a sound system of internal
control, although there are some minor weaknesses and/or there is
evidence that the level of non-compliance may put some minor system
objectives at risk.
Limited Assurance: There are some weaknesses in the adequacy of the
internal control system which put the system objectives at risk, and/or the
level of non-compliance puts some of the system objectives at risk.
Nil Assurance: Control is weak leaving the system open to significant error
or abuse, and/or there is significant non-compliance with basic controls.
2.20 It is important to note that the FMSiS external re-assessment process
is not intended to replace the school audit, given the role of FMSiS in
exploring wider financial management issues, compared to the audit’s
focus upon processes, systems and controls.
3. Good Practice and Key Principles
The Department has been seeking and reviewing feedback since the Standard
was introduced. This has included a series of Value for Money and Financial
Management events since 2006 to encourage the sharing of good practice
between Local Authorities about the implementation of the FMSiS, the
commissioning of Hedra in 2008 to evaluate the impact of FMSiS, and reviewing
feedback received from training workshops and regular direct contact by phone
and mail. The following is a summary of good practice and key principles that we
would wish to see replicated or adapted in all Authorities.
3.1 A key issue is the importance of effective communication between LAs
and their schools, particularly any wanting more evidence that FMSiS has
the potential to offer significant benefits. It is therefore important that LAs
and Assessors communicate such benefits effectively from the start of the
process. In this respect, the existing relationship between the LA and the
school is fundamental to the building of trust and ensuring that the process
runs smoothly. Schools should be provided with LA contact details so that
schools can have an open dialogue about requirements and expectations.
Methods to engage with schools and inform them about FMSiS include:
a) Consultation with the Schools Forum.
b) Written guidance circulated to schools.
c) Intranet – some LAs have specific pages on FMSiS.
d) School Business Manager meetings.
e) Area meetings, particularly for Primary schools.
f) Finance/admin officer conferences, to engage a larger number of schools.
g) Workshops/training/briefing sessions, including specific briefings for
h) Newsletters, including updates on FMSiS.
i) Involving schools to act as ‘advocates’ on FMSiS for other schools e.g.
presenting a training session, or mentoring on how to prepare evidence for
their feeder schools. Smaller schools are very much encouraged to work
with other schools and to share resources where possible.
3.2 LAs and Assessors should continue supporting their schools through the
provision of appropriate local guidance, including addressing any
perceptions from schools that the Standard is unduly demanding and taking
effective action to reduce any burdens identified.
Ways in which LAs have provided additional FMSiS support to schools include:
a) Provision of a 10 step simple guide on FMSiS.
b) Providing schools with a local view on priority ratings within the Standard i.e.
those areas which are ‘musts’ in order to pass, and those which relate more
to good practice.
c) Provision of a local evidence list.
d) Development of standard pro-formas for schools.
e) Workshops/drop-in sessions on how to undertake the self-assessment.
f) Inclusion of FMSiS as a standard item within Governors’ induction.
g) Adapting good practice developed for Secondary schools, for example, the
use of web-based tools and portfolios of evidence, for Primary schools.
h) Identifying LA wide policies and information that may help all schools to
automatically meet parts of the Standard, such as procurement policies and
processes, so that bureaucracy is kept to a minimum and individual schools
are not required to source and provide evidence in those areas.
i) Integrating the Standard into school self-evaluation to ease the workload
and to integrate financial and school improvement planning, providing an
opportunity to review school support services and integrate the Standard
into the school improvement model with a greater role for SIPs, so that
schools only complete one self-evaluation document.
j) Using federations or clusters of schools to reduce the demands on
Governors and offer an opportunity to share financial expertise across
schools through a shared or peripatetic School Business Manager (or
equivalent). The term ‘federation’ is used to describe many different types of
collaborative groups, partnerships and clusters of schools. Federations can
increase capacity within groups of schools to achieve even higher
standards, providing a structured way for schools to collaborate, learn from
each other, and share best practice and expertise.
3.3 LAs continue to have some discretion over their local interpretation and
application of the assessment framework, provided the spirit and intent of
the FMSiS is being consistently adhered to. This reflects the aim of avoiding
making the re-assessment process too prescriptive or bureaucratic and the
fact that flexibility is needed, to allow for known variables across all of the
schools in England. A flexible approach can also result in greater
engagement from schools.
A number of different approaches have been taken by Authorities, and some
good practice examples are outlined below:
a) All LAs are expected to require some form of evidence portfolio, but in order
to reduce the burden for schools the degree of detail needed should be
carefully considered to ensure a focus on adding value.
b) LAs can minimise burdens on schools by accepting evidence in various
forms, such as CDs/DVDs, memory sticks, win zip files on LA shared drives
and e-mail attachments.
c) The burden on schools can be further reduced by not requiring evidence to
be provided that is already held centrally or directly accessible to the LA,
e.g. Ofsted reports, school audits, Local Authority finance policies etc.
d) For logistical and environmental reasons, requirements for paper copies to
be provided should be kept to a minimum, and alternative approaches such
as e-mails, disks and on-site re-assessments should be adopted, wherever
practical and cost effective.
e) While the re-assessment process will often be focused around evidence
gathering, the added value of formal or informal interviews with key
stakeholders such as Head Teachers, Governors and School Business
Managers (or equivalents) should be considered. An exit meeting to provide
feedback on the re-assessment can also be beneficial, although it is
recognised that Assessors will generally not be able to provide an
immediate view as to whether or not the school meets the Standard
f) Approaches taken can include requesting self-assessments of
competencies for key Governors, individual self-assessments from all
Governors, a joint self-assessment for the Governing Body as a whole, or
only members of the finance committee (where applicable) completing the
self assessment matrix. LAs must decide on the most appropriate approach
for each school.
g) The self assessment matrix can be a useful means of identifying Governor
training needs. It can be beneficial for awareness of financial issues to be
diffused more widely, and it is good practice to avoid a high level of reliance
being placed upon a limited number of key individuals.
Follow-up support and actions
h) LAs and Assessors should work with schools to develop action plans.
i) LAs should advise schools of the requirement for core documents to be
completed on an annual basis and provided to the external Assessor when
re-assessments are carried out, e.g. the Statement of Internal Control (Click
Here for R15) and Best Value Statement (Click Here for R37).
j) LAs should have some form of quality assurance/review process in place,
prior to the submission of reports to schools. This can include informal
checking of other Assessors’ reports, internal audit reviewing school finance
team assessments, the use of moderation panels, and issuing satisfaction
surveys to schools undergoing re-assessment.
k) LAs and Assessors should avoid taking a totally inflexible approach where a
‘conditional pass’ has been awarded, as the suggested 20 day period for
follow-up may not always be practical, e.g. where a Governors’ meeting is
not scheduled until after this period.
3.4 LAs are responsible for deciding and communicating who carries out
external re-assessments, and need to do this at the outset when
identifying the schools to be re-assessed. It is up to CFOs to decide whether
they are comfortable for external assessors to make FMSiS judgements on
their behalf. Schools should ideally be given the choice of access to external
assessors approved by the Department, if they wish to receive such an
assessment. LAs should therefore ensure that the DCSF Approved External
Assessors' List (G5B in the Toolkit) is made available to provide choice,
unless there are justified reasons not to do so.
3.5 Local Authorities can make use of nationally accredited Assessors if they:
do not have adequate resources;
have not ensured that Assessors have received initial and refresher
training to perform re-assessments themselves, provided by LA officials,
CIPFA (IPF) or the NASBM and to make use of the LA training funds
provided by the DCSF for such training; or
do not wish to make local accreditation arrangements.
3.6 If DCSF approved external Assessors are used, the LA needs to identify a
named contact to co-ordinate the assessments and to provide information
on the process and available Assessors to schools. LAs can charge schools
for these external re-assessments. The Department will always accept a
positive assessment by one of the nationally accredited Assessors as
evidence that a school meets the Standard.
3.7 Nationally accredited Assessors are expected to have at least 4 years audit
or accounting experience in the public or private sector, and to have
received initial and refresher FMSiS training. The DCSF will make regular
quality assurance checks where nationally accredited Assessors carry out
assessments, provide the companies with feedback from these checks, and
ask them to resolve any issues directly with the school / LA.
3.8 Schools should ensure that they check the Provider’s service credentials
before entering into a contract with them to carry out the FMSiS re-
External assessment approaches adopted include:
a) Solely using internal audit.
b) Solely using the schools’ finance team.
c) Joint assessments by both schools’ finance and internal audit.
d) Joint assessments by LA finance staff from outside the schools’
e) Using other external assessors, including the Capita Bursary Service (LA
education partners) and Secondary School Business Managers (to assist in
assessing Primary schools).
f) Ensuring that schools have access to the DCSF Approved External
Assessors’ List (G5B).
3.9 Everything possible should be done to ensure that re-assessments are seen
as providing added value. LAs are responsible for making effective links
between audits and re-assessments. In order to minimise burdens on
schools and to allow evidence from the latest audit to be used as part of the
assessment process, LAs should try to synchronise audit / assessment
processes, wherever possible.
Decisions about making links between audit and re-assessment processes
a) Existing knowledge / information, in terms of the previous school audit or the
school finance team’s knowledge of the school.
b) Combining the audit / assessment process, if possible, so that both the audit
and assessment are undertaken at the same time (where internal audit has
responsibility for both areas).
c) If not combined, trying to undertake the audit before the assessment.
d) Considering using internal audit to ‘quality assure’ any re-assessments
undertaken by schools’ finance staff.
e) Considering whether to include an audit of any financial support to schools
that is bought-in from the LA, as part of the re-assessment process.
f) Recognising that the audit and the FMSiS assessment serve different
purposes. The audit provides a more detailed examination of processes and
controls to give assurance that appropriate systems are in place, while the
FMSiS explores strategic financial management issues.
3.10 LAs need to be aware of time and cost implications, to be able to
demonstrate the added value of re-assessments. The duration of initial
assessments was reported to vary from between 1 to 4 days, with the
average time being around 3 days. It is reasonable to expect that less time
will be needed in which to carry out sufficiently robust re-assessments, due
Lessons learned from the first assessment at each school and
Evidence having been previously collated and assessed.
Efforts being made to minimise burdens and maximise added value.
3.11 While an on-site visit to the school is mandatory for DCSF approved
external assessors, LAs should use their discretion to decide when face-to-
face meetings will add value. LAs are also expected to agree pricing
mechanisms on a local basis, where charges are to be made for re-
assessments, and to give clear charging advice to schools.
a) It is a mandatory requirement for approved external Assessors to visit
schools when carrying out re-assessments, to review evidence with key
school players, such as the Head, Chair of the Governing Body and School
Business Manager (or equivalent).
b) Visits to schools by LAs are advisable and highly desirable, in preference
to reviewing documentary evidence remotely and relying on a desktop
assessment. Visits enable documents to be seen, using the school intranet
for example, without having to print everything off, which takes time and
c) Where charges are made, either by LAs or external Assessors (where
approved by the S151 Officer), schools should receive clear information in
advance on the cost of the re-assessment, and what this will cover,
particularly where differential charges are made.
d) If the LA performs the re-assessment it may be able to absorb the cost by
re-arranging the priorities of its staff, or it may charge the school. LAs may
wish to add these costs to existing Service Level Agreements (SLAs).
3.12 LAs need to ensure effective liaison with Assessors who are external to
LAs (and vice versa) when schools directly contract with them, to promote
an open and transparent system with an on-going honest dialogue. DCSF
approved external assessors will be expected to:
work closely with LAs and establish a working relationship with a single
notify LAs of external assessments performed and provide school FMSiS
achievement details directly to the LA (not the DCSF). This is to maintain
accurate statistics, keep LAs in the loop, and enable accurate CFO
Assurance Statements to be completed.
3.13 There is a need for transparency if S151 Officers amend decisions taken
by external Assessors on the achievement of the Standard.
3.14 The Standard can be withdrawn from a school if its financial management
arrangements are considered to have fallen below the required standards.
There is no set process for this scenario, and LAs will need to establish their
own local procedures if required.
3.15 It is important for LAs to ensure that the Standard is not ignored during the
intervening period between re-assessments. In order to ensure that they
continue to follow good practice with regards to financial management,
schools should be mindful of any updates to the Standard (currently on an
annual basis) and any changes to their own arrangements that may have
financial management implications, e.g. a staff restructure, changes to key
posts, or the expansion or amalgamation of a school. Keeping up to date
with changes, both to the Standard and being mindful of internal changes,
should mean that schools will meet the Standard during future external re-
a) Any school that does not meet the required criteria must receive a written
report on what they need to do to meet the requirements. The summary
provided to the school post re-assessment should clarify areas in need of
b) If a school narrowly fails the Standard, for example by one sub-section only,
the school can be given a total of 20 working days grace in order to provide
the additional evidence required to meet that criterion, before a final
decision is made, without additional charge (see 3.3.k above about
flexibility). Assessors are allowed flexibility in their own judgment as to what
constitutes a narrow failure.
c) There is no right of appeal beyond this process.
3.16 In line with the Government sharing information agenda, LAs are required
to publish FMSiS school achievements on their intranet site for all
schools to see, and to make this information available for parents and the
general public through their external website, i.e. the name of the school
and the date of achievement following re-assessment.
3.17 There must be no relaxation of the Standard for schools that are newly
opened, scheduled to close or amalgamate, in special measures, or just out
of special measures. FMSiS is a mandatory requirement to provide
assurance that adequate arrangements are in place to manage public
resources effectively. LAs and Assessors are allowed some flexibility when
planning audit and assessment timetables, and a risk based approach and
recognition of the need to demonstrate added value will enable decisions to
be taken about whether any deferral of an assessment is justified.
3.18 If a school has the special measures status applied by Ofsted, e.g. for
poor governance and lacking the leadership capacity necessary to secure
improvements, additional support will be needed as part of action planning
to address areas in need of improvement This support will also need to
include for any actions identified as being needed to achieve the
3.19 There is no mandatory requirement to apply the Standard to Nursery
schools, Early Years Centres and PRUs at present. However, the option
exists for Schools Forum consultation to enable a decision to be agreed to
extend its application to these school sectors.
4. Further Guidance
4.1 General document G7 (Click Here for G7) lists changes made to the Toolkit
as part of the annual update, which Assessors are expected to be aware
of. The following are of particular relevance to LAs and Assessors.
An archives tab button facility has been added to the ‘LA access to
completed assessments’ screen. LAs can now archive any schools
completed assessment by selecting the appropriate date from a drop-
A certificate template facility has also been added to the ‘LA access’
screen. LAs are no longer required to obtain FMSiS certificates from
the DCSF. Instead, the template should be downloaded for completion
and the certificate issued to schools achieving the Standard through
A facility has been added for LAs to print / save each assessment form
in landscape orientation in Word or Excel rather than download the
entire data. The submission date should be clicked on to be able to view
and save the assessment.
The Toolkit search facility has been enhanced to enable a progressive
search of key words that have been tagged in various documents, rather
than just searching for words in document titles, to make it easier to find
4.2 The following guidance is included in the Toolkit (Click Here for G5A). It is
worth repeating to reinforce DCSF expectations relating to schools that
undergo full external re-assessments.
During the first round of assessments schools, sometimes, found it difficult
to provide evidence that demonstrated the assessment criteria were being
met. Three of the main factors that contributed to this were:
(i) It was sometimes difficult to find appropriate evidence sources for
criteria within the assessment tool
(ii) Existing processes did not always provide documentary evidence of
good financial management (despite it being embedded)
(iii) Schools that were required to alter existing arrangements in order to
meet the criteria did not have the revised arrangements embedded within
These factors led to assessors providing greater latitude with regard to the
meeting of the assessment criteria, in order not to over burden schools with
providing evidence and/or delaying the assessment process. The second
round of assessments, which began with secondary schools in 2009/10,
should not encounter such problems.
In relation to (i), due to ongoing feedback from stakeholders the assessment
criteria have been refined and updated each year in order to remove
subjective and hard to evidence areas. Local Authorities are also providing
clearer guidance to schools regarding what evidence is required through
local versions of document G5C. Schools have also been able to refine
existing processes to ensure evidence is available thereby reducing issues
regarding (ii). For (iii), schools that amended arrangements in order to meet
the Standard should have up to 3 years worth of evidence that the new
arrangements are embedded within the school.
Schools therefore should be aware that for the second round of
assessments (which began with the Secondary schools in 2009/2010)
assessors will no longer be providing latitude regarding the evidence
presented by schools. In addition, where recommendations were
made during the initial assessment, assessors will be expecting these
to have been applied and in good time to provide evidence that the
changes made are embedded within the school.
4.3 It is also worth reinforcing that the DCSF wants to avoid being over
prescriptive about re-assessments. A light touch, supportive and
consistent approach is expected that is sufficiently robust to provide
assurance that appropriate systems and processes are in place, without
creating unnecessary burdens or bureaucratic processes. LAs are expected
to adopt a risk-based, added value approach when applying local
interpretations of the Standard to ensure that a light touch approach will
address essential requirements on a school by school basis, while
recognising that some schools will require more attention and support than
others. A light touch approach will only apply to schools that are self
4.4 Light touch approaches are usually based on a risk assessment, using the
self-assessment and factors such as the date of last audit, size of school,
staff turnover, deficits, etc. Assessors are expected to use their discretion
when taking account of Ofsted reports, and the leadership and management
element, as there is no direct link with the FMSiS. If self assessments are
used as the re-assessment process then for sufficient robustness LAs may
wish to check a sample of these to make sure that judgments are valid.
Depending upon the results the sample may need to be expanded.
4.5 If the risk assessment is satisfactory, subsequent external re-assessment
may not required, or only a minimum number of documents may need to be
requested, with no on-site visit taking place. However, as stated earlier,
visits to schools are advisable and highly desirable for LA Assessors and
are a mandatory requirement for approved external Assessors.
4.6 The spirit and intent of the FMSiS has never been to impose a ‘tickbox’
exercise. The aims have always been to ensure that any real issues are
being identified and addressed, to establish how effectively good financial
management practices are being embedded in schools, and to be light
where we can be but tough where we have to be. For further clarity, there is
only one level / version of the Standard itself, i.e. there may be a ‘light touch
assessment approach’, but there is no ‘light touch Standard’.
4.7 It is important to make clear what is meant by the term ‘embedded’. The
Standard is not intended to be a discrete approach grafted onto a school. It
is an array of characteristics, behaviours and processes that need to
permeate the length and breadth of financial management activities,
becoming an integral part of the day-to-day management of public
resources in schools. It is about maximising the use of financial resources in
order to achieve desired outcomes, and adopting sufficiently robust and
accountable approaches to be able to stand up to public scrutiny.
4.8 The Hedra evaluation report identified that stakeholders have seen the
Standard widening out awareness of financial management, and it is
recognised that it will take longer for the full range of potential benefits to
become embedded in schools. The key is to ensure management
participation in financial management rather than having it done for them
or to them, and that participation needs to be in co-operation with finance
The CIPFA Financial Management Model is being increasingly used in
public sector organisations to assess how effective their financial
management arrangements are. The extracts below outline examples of
approaches being taken to embed good practice elsewhere.
a) To secure effective stewardship and minimum good practice
standards, an organisation identifies its need for financial
competencies and puts arrangements in place to meet them. It also
has access to sufficient financial skills to meet its business needs.
b) To support performance, managers understand they are
responsible for delivering cost effectively and are held accountable for
doing so. Finance staff have the skills to analyse financial issues and
communicate solutions, options and advice.
c) To enable transformation, financial literacy is diffused throughout
the organisation so that decision takers understand and manage the
financial implications of their decisions.
4.9 Schools, particularly those that are smaller and in rural locations, need to
be aware of the White Paper on 21st Century Schools published in 2009
(Click Here for R155 in the Toolkit). It places emphasis on there being
more clusters, collaboration, sharing resources, and increased ‘buddying’
of larger schools with small ones, all of which will be beneficial when
preparing for FMSiS re-assessments.
4.10 The key is to ensure that the increasing emphasis on efficiency is fully
understood and acted on, to be able to keep finding ways to make more
effective use of public resources in schools.