LMS Doc 200711 - Limit on School Balances

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					                                                           Children and Young People’s Services
                                                           _________________________________________________

                                                           Paul Finbow
                                                           CYP Finance Business Partner
                                                           Endeavour House
                                                           8 Russell Road
Headteachers of all LMS Suffolk Schools,                   Ipswich
PRUs and Highfield Nursery                                 Suffolk
                                                           IP1 2BX


                                                          Enquiries to: DSG Schools Finance Team
                                                          Fax: 01473 253660
  LMS Document                                            Email: finance.Dsg@csduk.com
  No. 2007/11                                             Date: 20th November 2007



Dear Colleague

LIMIT ON SCHOOL BALANCES

As you are aware in Suffolk there is a limit on school balances of £20,000 plus 5% of the delegated
budget.

The only exception to this is monies being held for the purposes of an agreed planned revenue
contribution to a capital project. Schools cannot assume that any projects can count automatically;
there must be prior agreement with the LA.

Full details of how to gain such agreement were set out in the 8 October 2004 Consultation
document (LMS Doc 38/04), and are reproduced in the Appendix to this letter. The deadline for
submission for 2007/08 is 31st December 2007.

Gaining approval in this way is also recommended even where the limit is not expected to be
breached. Doing so will cover you if, unexpectedly, other events conspire to raise your year-end
balance in a totally unplanned way. It also helps us to quantify for DCSF the extent to which
schools’ balances are committed to capital schemes, to dispel any impression of excess balances.

There may be other “commitments” that a school considers explain their higher balances. Most of
those that have been raised with us to date should be covered by existing guidance on legitimate
year-end accounting arrangements that allow adjustments for receipts in advance and unpaid
creditors.

There is no other category of exception. Any school that believes it will be holding a significant
sum at the year-end that is committed but not covered by the above guidance should discuss it
with the School Support Finance Team in the first instance.

Yours sincerely




Paul Finbow
CYP Finance Business Partner




                  We are working towards making Suffolk the Greenest County.
              This paper is 100% recycled and made using a chlorine free process.
                                                                                         APPENDIX

EXTRACT FROM LMS DOC 38/04 CONSULTATION

ALLOWABLE EXCEPTIONS TO THE LIMIT – SUMS EARMARKED FOR CAPITAL SCHEMES

It is proposed that the only exception to any balance limit would be funds being held which are
earmarked for the school’s contribution to capital projects, providing prior agreement has been
reached with the LA. It should however be remembered that a school’s devolved capital allocation
would be the usual source of such contributions.

Such additional balances must be used either:

•      as the school’s contribution to AMP condition, suitability or sufficiency projects instigated by
       the LA; or

•      to fund school instigated projects, which meet objectives set out in the current School
       Building Development Plan and which have been specifically approved by the Area Senior
       Education Officer (Access and Admissions).

It should be noted that separate (DfES) rules apply to the carry forward of devolved formula
capital (dfc). Permission is not required to carry forward dfc for up to three years.

Where a school is intending to seek approval to carry forward additional revenue balances
for a specific project, it should discuss the project at an early stage with the Senior
Education Officer (Access and Admissions). In any case details of the project must be
submitted using FORM 13 to the Senior Education Officer (Access and Admissions) by the
31 December so that appropriate consideration can be given before the financial year-end
when exemption is sought. A letter making it clear that the school is seeking an additional
revenue carry forward should accompany the FORM 13.

In some circumstances it may not be possible to complete all the FORM 13 project information at
that stage and it may therefore be necessary to submit a second, completed FORM 13 later.

EXTRACT FROM LMS DOC 2005/02 – (CONFIRMING OUTCOME OF CONSULTATION)

Building projects agreed in advance by the LA will be exempt from any applied limit. Any school
that expects to rely on an exemption for a building project, to be able to retain a higher balance
after 31 March 2008 should refer again to Section 5 of the consultation document [as reproduced
above] to ensure they follow the procedure for gaining LA approval well in advance of the year-
end. Exemptions will not be agreed for new project proposals that first emerge in March 2008. No
other exemptions will be included in the scheme initially, although this will be subject to review.




                  We are working towards making Suffolk the Greenest County.
              This paper is 100% recycled and made using a chlorine free process.

				
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