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.