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					GUIDANCE NOTES TO BUDGETING




             Produced by
  Children Services Finance - Schools
              March 2011




                    1

       GUIDANCE NOTES TO BUDGETING
COMPLETING THE SCHOOL’S TWO YEAR BUDGET PLAN

The school’s two year budget plan for 2011/2012 and 2012/2013 should be
completed and returned to your School Financial Adviser, no later than 15th
June 2011. Back-up documentation must be submitted with the budget. Fully
Funded Schools will follow the requirements of the existing Fully Funded
Bank Account Scheme.
In order to determine the total funds available to the school, the actual
balance to be brought forward from the previous financial year is applied to
the formula allocation. Where this is not available, a best estimate of the
balance to be brought forward should be used for budget planning purpose.
Earmarked Funds should be accounted for in the relevant heading.
The format of the budget plan reflects the format required by Consistent
Financial Reporting (CFR), and furthermore is split between revenue,
Extended Services and Capital providing additional clarity over budgetary use.
The budget template can be found on the schools website;
http://www.forms.bedford.gov.uk/schoolfinance/bulletins.htm .
Care should be taken therefore when considering which elements are
included under each budget heading.
The Chart of Accounts list identifies which income and expenditure codes
relate to each budget heading within the annual budget plan.
All budget headings should be used except where budget provision is not
applicable for the year. In this case insert a zero.
When completing your budget plan the total of all income budget headings
should equate to the total of all expenditure budget headings.

1.    BROUGHT FORWARD BALANCES

The school must reflect its balance brought forward from the previous year in
the correct areas. This should match the closing balancing figures as
submitted on the schools CFR report for 2010/2011. The balance brought
forward codes are:

B01   Committed Revenue Balance
B02   Uncommitted Revenue Balance
B03   Devolved Formula Capital Balance
B04   Other Standards Fund Capital Balance (ICT / Travel Plan)
B05   Other Capital Balance
B06   Extended School Balance (revenue)
2.    INCOME
2.1   GENERAL BUDGET ADVICE
The school must only budget for income where it can confidently be
anticipated. It is best practice if there is any uncertainty over income being
achieved then this should not be included within the budget plan.

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                       GUIDANCE NOTES TO BUDGETING
The school must ensure that it keeps details of the income that it has
anticipated that it will receive. This will ensure that income is treated correctly
when it is received.

2.2       FORMULA ALLOCATION

The schools formula allocation should be split out as follows:

         I01 Funds Delegated by the Local Authority (LA) – formula less
          statementing, SEN and Post 16 funding (rent, rates and threshold (pre
          16 and Post 16 threshold) should be recorded on their separate lines
          on the budget plan)
         I02 Funding for 6th Form Students – Post 16 funding
         I03 Special Educational Needs (SEN) Funding – Statementing plus
          SEN (notional 5% from formula)

The annual rent, rates allocations equate to those included in the formula
allocation. Upper Schools will need to allow an additional 40% to the rates for
the Post 16 element i.e. rates are only funded 60% by the LA.

Where a pupil has been permanently excluded, arrangements exist for a pro-
rata element of the Age Weighted Pupil Unit (AWPU) to follow the pupil.
Budgetary adjustments will be made during the year.

The LA has a statutory duty to remove, with effect from the 'relevant date'
which we deem to be the sixth school day following the head teacher's
decision to exclude the pupil, the proportion of the AWPU remaining in the
financial year from the school's budget share.
Where a pupil is recorded on the January School Census but is subsequently
excluded after the School Census date the remaining AWPU will be removed
from the current financial year as well as the excluded pupils’ equivalent full
year AWPU from the following year's school budget share.

E.g.

Pupil A is on School XYZ's January 2011 School Census which will be used
to determine the 2011/2012 Formula Budget for the school.
Pupil A is then excluded on 28/01/2011 (6th Day) and comes 'off School
XYZ's roll’.
The AWPU that will be removed for Pupil A will be from the 6th Day to the
end of the current 2010/2011 financial year (i.e. 28/01/2011 to 31/03/2011) as
well as the AWPU from 01/04/2011 to 31/03/2012. In this instance the
removal of Pupil A's AWPU will span two financial years.

Where a pupil is reinstated by the governing body or an independent appeal
panel after the relevant date or reintegrated to another school the remaining
proportion of funding would be returned to the school or passported to the
new school with effect from the date of the pupil's reinstatement or
reintegration.

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                          GUIDANCE NOTES TO BUDGETING
The removal or provision of funding for an excluded or 'enrolled' pupil forms
part of the school's Individual School Budget Share (ISB) and will be reflected
against I01 - Funds Delegated by the L.A.


2.3     CONSISTENT FINANCIAL REPORTING FRAMEWORK

The framework provides a national picture of how schools spend their
budgets. A Consistent Financial Reporting (CFR) return is required for ALL
schools maintained by the LA at the end of each financial year.

Schools must set their budgets based on the CFR framework, with more
detailed breakdown of headings available through the school’s financial
management system.

Please refer to the February 2007, Consistent Financial Reporting
Guidance V 5.0 (CFR Framework) – This can be found on the Schools
website at http://www.forms.bedford.gov.uk/schoolfinance/bulletins.htm


INCOME HEADINGS
I01 FUNDS DELEGATED BY THE LA
I02 FUNDING FOR SIXTH FORM STUDENTS
I03 SEN FUNDING
I04 FUNDING FOR ETHNIC MINORITY PUPILS
I05 PUPIL PREMIUM –
      Pupil Premium income is notified to you at the start of the financial year
      and should be recorded on your budget plan in I05. From 2011/2012 the
      money allocated for the Standards Fund (formerly coded to I05) will be
      included within I01 Funds Delegated by the LA.

I06 OTHER GOVERNMENT GRANTS
I07 OTHER GRANTS AND PAYMENTS RECEIVED –
      Schools must ensure they maintain records of the awarding body for all
      grants (I06 and I07) as a declaration will be required at the end of the
      financial year.
I08 INCOME FROM FACILITIES AND SERVICES

      The anticipated level of Sales must be assessed against the school’s
      charging policy. Past trends may provide a good guide to the most
      appropriate level of sales income.
      The school must consider anticipated levels of Lettings within the school.
      Schools should establish charging policies through assessment of cost
      recovery, profit and market forces.



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                         GUIDANCE NOTES TO BUDGETING
   Schools should analyse the associated costs of letting school premises
   dependent on local circumstances. This policy must be evaluated in
   order that any potential change in the level of income from lettings can be
   reflected in the school budget plan.

   Fluctuations in the level of Lettings will impact upon expenditure as well
   as income budgets.
   Included in Lettings is the rent deducted from the Site Agents or
   Caretakers salary for rental of the house that they live in if they live on
   site.
I09 INCOME FROM CATERING
I10 RECEIPTS FROM SUPPLY TEACHERS INSURANCE CLAIMS
I11 RECEIPTS FROM OTHER INSURANCE CLAIMS
I12 INCOME FROM CONTRIBUTIONS TO VISITS ETC

   The school must only budget for Contributions for which a strong
   commitment exists. In accordance with CFR, Contributions must be split
   between income collected for school visits and other Contributions.
   The basis of the Contribution budget should be available for inspection.
I13 DONATIONS AND/OR PRIVATE FUNDS
I14 KEEP AS A BLANK CODE BUT DO NOT USE
   This code should no longer be used. From 2011/2012 the money
   allocated for the School Standards Grant and School Standards Grant
   (Personalisation) – formerly coded to I14 - will be included within I01
   Funds Delegated by the LA
I15 PUPIL FOCUSED EXTENDED SCHOOL FUNDING AND/OR GRANTS
I16 COMMUNITY FOCUSED EXTENDED SCHOOL FUNDING AND/OR
    GRANTS
I17 COMMUNITY FOCUSED EXTENDED SCHOOL FACILITIES INCOME

For guidance on Extended Schools please refer to Annex A: Use of
delegated budgets to support extended school activities – this can be
found at the back of the CFR Framework - page 60


Schools must adhere to the VAT guidance available on the schools
website.




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                      GUIDANCE NOTES TO BUDGETING
3.    EXPENDITURE

3.1   GENERAL EMPLOYEE BUDGET ADVICE

Make reference to past, current and expected staffing levels through
evaluation of existing establishment lists and contractual obligations.

Do not calculate the current years budget allocation by adopting an
incremental approach i.e. by simply adding an element for inflation to the
previous years total budget allocation.

Evaluate each member of staff individually, consideration should be given to:

         incremental dates/entitlement
         minimum and maximum points on the salary scale
         additional points for either Management Responsibility, Special
          Needs or TLR
         threshold payments
         part time proportions
         on-cost implications
         the phasing of pay award dates and levels

Where new staff are likely to be recruited it is best practice to assume the
maximum point on the salary scale when, at the time of budget preparation,
the post holders salary scale is not known.

Consideration should be given to how the level of budget may be
influenced by the entitlement to recompense in respect of staff absence.

The pay award and increment dates are:

                           PAY AWARD           INCREMENT
                                                  DATE

TEACHING

Heads, Deputies            September           Governor’s
and Assistant Heads                            Discretion

Teaching Staff             September           September

Unqualified Staff          September           September

Supply Staff               September           September




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                       GUIDANCE NOTES TO BUDGETING
3.2    NON TEACHING

All NJC staff                      April                April

Note: NJC staff starting between 1 April and 30 September are due an
increment from the following April as usual. NJC staff starting between 1
October and 31 March receive an increment after 6 months and then every
April from the following year.


CALCULATION OF PART TIME PROPORTIONS

TEACHING

Teaching Staff       Number of hours             Divide by      Total school
                     worked per week                            hours per week

Unqualified Staff    Number of hours             Divide by      Total school
hours                worked per week                            hours per week


NON TEACHING

NJC Full Year        Number of hours             Divide by      37 hours
                     worked per week

Nursery Nurse        Number of hours             Divide by      32.5 hours
                     worked per week

To calculate Term Time Only:

NJC    < 5 years     Full Year Calculation       Multiplied by 0.8745
NJC    ≥ 5 years     Full Year Calculation       Multiplied by 0.8899

This includes training days.

The part time proportion table for term time only staff is available on the
Schools website along with the salary scales -

3.3    LONG TERM ABSENCE DUE TO SICKNESS & MATERNITY LEAVE

The LA no longer makes contributions to the cost of supply cover for long
term absence due to sickness. All sectors have had these funds delegated to
them. The Lower and Nursery Schools have an independent pooling
arrangement, which is self funding. This means the scheme relies upon the
premiums collected from schools to pay for the claims made against the
scheme. The scheme runs for three financial years after which time schools
can again decide to opt in or out of the scheme for the following three years.



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                        GUIDANCE NOTES TO BUDGETING
Lower and Nursery schools can make claims against their respective pooling
schemes for the following categories of staff:

              Teaching Staff
              Site Agents/Caretakers

No contributions are made in respect of other categories of staff.

The contribution is made on an individual basis where the level of absence
exceeds a predetermined threshold within a financial year.

The level of recompense is adjusted in line with the level of pay the member
of staff is receiving, i.e. if the member of staff is receiving half pay due to the
length of sick leave, the recompense contribution is also halved. This
currently applies to teachers only.

Central Bedfordshire Council administers the scheme but it is managed by an
elected panel drawn from each participating council and sector.

A uniform contribution to the cost of supply cover is made.

Details of Terms and Conditions of the scheme can be obtained from Central
Bedfordshire Council’s Schools’ Traded Services Team.

MATERNITY LEAVE

Maternity leave scheme runs in conjunction with the long-term absence
pooling scheme. The scheme will bear the cost of maternity pay for teaching
staff, site agents, caretakers and other non teaching staff. Details of this are
available from Central Bedfordshire Council’s Schools’ Traded Services
Team.

Schools will be expected to meet in full the cost of the cover.


3.4    OFFICIAL DUTIES

Regardless of the school sector, the school will receive recompense to cover
absence by teachers for the following circumstances:

          Public Service
          Government/Local Authority Duties
          Trade Union/Professional Association representation (including
           Health and Safety)
          Attendance at court (Magistrates Duties)
          Contribution to broadcasting
          Preparation and marking of examination papers and other duties of
           a similar nature.

The recompense rates apply to teachers only and are available to all sectors.
The recompense rates can be obtained from your School Financial Adviser.
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                         GUIDANCE NOTES TO BUDGETING
3.5    CALCULATION OF THE STAFFING BUDGETS

The DfE has published salary scales for Teachers’ and NJC staff. There is no
inflationary increase in the current settlement. Incremental progression should
be taken into account when calculating budgets.

Heads, Deputies and Assistant Heads are not entitled to automatic annual
incremental progression through their salary scale. The schools Governing
Body decides upon increases in Heads, Deputies and Assistant Heads
salaries.

All staff salary scales including annual, termly and April-August/September-
March splits and on-cost calculations can be obtained from the Schools
website at http://www.forms.bedford.gov.uk/schoolfinance/bulletins.htm.
These will be updated when new scales are published.

Please note that the rates of on-costs to be added to management
allowances are those that apply to the relevant management point level.

3.6    EXPENDITURE HEADINGS

Please refer to the CFR Framework for further detail

E01 TEACHING STAFF

      STATEMENTING - Costs relating to statementing are to be separately
      identified within the appropriate budget heading i.e. Teaching Staff,
      though schools may want to make a note where their statementing
      monies have been allocated. Such action will avoid potential errors in
      budgeting for statemented provision.

      CALCULATION OF TEACHING STAFF

       The Teachers salary scales are provided on the school website at
       http://www.forms.bedford.gov.uk/schoolfinance/bulletins.htm .

      02 SUPPLY STAFF

      CALCULATION OF THE SUPPLY STAFF BUDGET

      Reference should be made to the rules regarding entitlement to the
      recompense of short and long term absence.

      Supply teachers employed through an agency should be provided for
      within the Agency Supply Staff heading under code E26. This is
      because the government needs to be able to identify directly employed
      public sector staff in its calculation of Gross Domestic Product.




                                       9

                        GUIDANCE NOTES TO BUDGETING
      The school may wish to evaluate the anticipated levels of supply staff
      expenditure against the supply hourly rates detailed in the staff salary
      scales.

      The school must make budgetary provision for other types of supply
      cover within the appropriate budget heading.

E03 EDUCATION SUPPORT STAFF

      CALCULATION OF SUPPORT STAFF

      The NJC salary scales relating to all school support staff for 2011/2012
      are available on the school website and have assumed a 0% inflation
      rise for April 2011.

      The Part Time Proportion table is also available on the website. To
      establish the cost of an individual who works term time only, this factor
      must be applied to the pay and on-cost levels.

E04   PREMISES STAFF
E05   ADMINISTRATIVE STAFF
E06   CATERING STAFF
E07   COST OF OTHER STAFF

E08 INDIRECT EMPLOYEE EXPENSES

       Consideration must be given to local circumstances, for example the
       level of staff turnover will impact on advertising costs and interview
       expenses. CRB clearance checks should be accounted for in E08.
       Redundancy costs should also be budgeted in E08.

E09 TRAINING AND DEVELOPMENT COSTS
E10 SUPPLY TEACHER INSURANCE
E11 OTHER STAFF RELATED INSURANCE

E12 BUILDINGS MAINTENANCE

      It is necessary for the school to anticipate, and be aware of, appropriate
      scales of charges relating to contract arrangement fees.

      Consideration should be given to the distinct separation of on-going
      maintenance requirements against identification of major building/repair
      works.

      Schools should be aware that in recent years more and more
      responsibility for building works and repairs and maintenance has been
      delegated to schools. Schools should also be aware that this money is
      separately identified in the formula allocation and should be spent in line
      with areas identified by their condition survey.

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                        GUIDANCE NOTES TO BUDGETING
      A change in the school's circumstances, for example an increase in
      lettings, will have an effect on the general wear and tear of the premises
      and, therefore, this must be reflected in the schools level of anticipated
      expenditure.

      For benchmarking purposes, you should look at this expense heading
      alongside the capital expenditure headings CE01 and CE02 to ensure
      you get a full picture that takes account of different de minimis levels.
      In the event that buildings and grounds maintenance and improvement
      are performed under one contract, please ask your supplier to identify
      the costs separately.

      Schools’ capital allocations for 2011/2012 are much lower than in
      previous years and this will mean additional strain on the revenue
      budget, as expenditure formerly covered by capital income will now need
      to be budgeted from E12.

E13   GROUNDS MAINTENANCE
E14   CLEANING AND CARETAKING
E15   WATER AND SEWERAGE
E16   ENERGY

      CALCULATION OF THE ENERGY BUDGET

      The school is recommended to assess general trends of energy
      expenditure over previous financial years.

      The school should consider any change in circumstances at the school
      which may affect the price and levels of consumption within the school.
      Examples of which are follows:
       The introduction of energy saving measures.
       An increase or reduction in school and non-school use of premises.
       A reduction or increase in permanent or temporary accommodation.
       Where there is a change of contract and/or supplier.
       Where shared site metering or joint user agreements are in place,
          any similar change in circumstance of the counterpart must be
          assessed.

      Where billing is not conducted on a consistent periodic basis e.g. Fuel
      Oil it will be necessary to establish consumption patterns to ascertain
      budget requirement for the year.

E17 RATES

      The rates budget allocations must equate to the sum provided within the
      formula allocation, except for Upper Schools who should include the
      Young Peoples Learning Agency (YPLA) element for Rent and Rates.
      Upper schools are funded 60% LA, from formula allocation and 40%
      YPLA, included within YLPA I02 funding. Rent and rates are funded on
                                       11

                        GUIDANCE NOTES TO BUDGETING
       a pound for pound basis in that the budget allocation will be matched to
       the actual cost incurred by the school within the financial year (except
       for Upper Schools who are funded partly by the YPLA for Rent and
       Rates).

E18 OTHER OCCUPATIONAL COSTS

Note: Planning Application Fees - The initial planning permission
application fee for temporary classrooms is incurred centrally by the L.A. with
no cost to the school. You should be informed by the School Planning Team
how the first application is funded.

Subsequent applications, i.e. renewal planning application fees, will be
invoiced to you by the Planning Team and must be paid by the school, in the
first instance, coded to E18 - Other Occupation Costs. This fee can then be
reimbursed to the school by making a formal request in writing to the Finance
Manager-Schools providing evidence of payment (copy invoice and copy of
the Agresso report / I&E statement / ledger code report). The reimbursement
will be reflected against I07 - Payments Received

3.7      GENERAL BUDGETING ADVICE

In determining the school budget it is recommended that schools examine
historical expenditure trends and patterns, such as;

      1. Movement in Pupil numbers

      2. Changes in lettings of school premises.

      3. Consideration should also be given to the method of budgeting for
         supplies and services. Budgets must be compiled net of VAT. If your
         school allows budget holders to carry forward any surpluses or deficits
         then these should be taken into account where budget constraints
         allow.

      4. It is recommended that the school evaluates and quantifies routine
         expenditure within this category and separates this from major one-off
         items of expenditure.

      5. The school must account for gross expenditure of supplies and
         services. Any relating anticipated income must be reflected within the
         income budgets. (Except rent, rates and joint uses which are equalised
         at year end.)

      6. Expenditure budgets must, therefore, not be netted off by the
         corresponding amount of income anticipated.

Other judgements which will influence your budget:


                                        12

                          GUIDANCE NOTES TO BUDGETING
     A. Levels of expenditure will be influenced by the School Improvement
        Plan.
     B. The school must establish curriculum needs for the following financial
        year.

Careful consideration must be given to the matching of budget provision to
the expenditure codes within each budget heading.

E19 LEARNING RESOURCES (NOT ICT EQUIPMENT)
E20 ICT LEARNING RESOURCES
E21 EXAM FEES
E22 ADMINISTRATIVE SUPPLIES
E23 OTHER INSURANCE PREMIUMS
E24 SPECIAL FACILITIES
E25 CATERING
E26 AGENCY STAFF

E27 BOUGHT IN PROFESSIONAL SERVICES - CURRICULUM

Budget for items where contract prices are known at the agreed actual price.

Where the contract price is not known at the time of budget preparation revisit
the basis of the contract price (e.g. pupil numbers) and apply the relevant
inflation factor.

E28 BOUGHT IN PROFESSIONAL SERVICES - OTHER
E29 LOAN INTEREST
E30 DIRECT REVENUE FINANCING (REVENUE CONTRIBUTIONS TO
CAPITAL)

4.      EXTENDED SCHOOLS – EXPENDITURE

For further guidance on Extended Schools please refer to Annex A: Use
of delegated budgets to support extended school activities – this can be
found at the back of the CFR Framework – page 60

E31 COMMUNITY FOCUSED EXTENDED SCHOOL STAFF
E32 COMMUNITY FOCUSED EXTENDED SCHOOL COSTS

5.      CONTINGENCY

For a variety of reasons, the school will withhold from committing sums of
money to budget headings at the start of the financial year. It is important that
the school is aware of the nature and purpose of its contingency budget. This
will influence when the contingency sum can be utilised or reduced during the
year.

The contingency should represent any anticipated carry forward for the
forthcoming year end PLUS the element set aside for unforeseen


                                       13

                         GUIDANCE NOTES TO BUDGETING
circumstances arising during the year which is recommended at 2% of the
formula budget.

DO NOT POST ACTUALS TO THE CONTINGENCY ACCOUNT CODE.


6.     CAPITAL

Please refer to the CFR Framework for further detail.

6.1    CI01 CAPITAL INCOME

Devolved Formula Capital – Account Code 8016 (DFC) has been
delegated to schools. Schools must account for DFC Income separately in
this heading to any other Capital Income. EXPENDITURE RELATING TO
THIS MUST BE ACCOUNTED FOR IN CE02 (9550) or CE04 (9553)

CI02 - No Longer collected
CI03 VOLUNTARY OR PRIVATE INCOME
CI04 DIRECT REVENUE FINANCING (Must equal budget entry in E30)
Guidance on Capital Expenditure can be found on the schools website,
http://www.forms.bedford.gov.uk/schoolfinance/bulletins.htm

6.2   CAPITAL EXPENDITURE

CE01 ACQUISITION OF LAND AND BUILDINGS

CE02 NEW CONSTRUCTION CONVERSION AND RENOVATION
Capital projects funded by DFC must be accounted for separately to those
funded by other means.

CE03 VEHICLES, PLANT, EQUIPMENT AND MACHINERY

CE04 INFORMATION AND COMMUNICATIONS TECHNOLOGY
ICT projects funded by DFC must be accounted for separately to those
funded by other means

6.3   CAPITAL CONTINGENCY

For a variety of reasons, the school will withhold from committing sums of
money to budget headings at the start of the financial year. It is important that
the school is aware of the nature and purpose of its contingency budget. This
will influence when the contingency sum can be utilised or reduced during the
year. Projects not planned for the current financial year must be accounted
for in the Capital Contingency line.

DO NOT POST ACTUALS TO THE CAPITAL CONTINGENCY ACCOUNT
CODE.

7.     LICENSED DEFICITS

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                        GUIDANCE NOTES TO BUDGETING
Where the school has been formally authorised to overspend its available
funds by an agreed sum with the LA, it must reflect this sum against the
Licensed Deficit Income heading. By including the licensed deficit amount as
“anticipated income” you are in effect able to reflect the correct budgets
against expenditure headings whilst still balancing your overall plan to your
formula allocation plus or minus your previous years carry forward.

If Fully Funded Schools require a loan facility – please refer to the Fully
Funded Bank Account Scheme for details, which can be found on the schools
website at http://www.forms.bedford.gov.uk/schoolfinance/bulletins.htm.

Unless written authorisation has been received from the LA the school will not
be permitted to overspend its available funds for the financial year and is
required to submit a balanced budget.

If you think your school is in a position where it is likely to need a licensed
deficit/loan please contact, in the first instance, your School Financial Adviser.




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                        GUIDANCE NOTES TO BUDGETING

				
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