Maintained school governing bodies are responsible for completing the Schools Financial Value Standard (SFVS) checklist annually and submitting it before 31st March each year. For the 2019/20 financial year, there have been some major changes to the content of the SFVS. There have been 6 new questions added, calling for more detailed monitoring on related party transactions, more regular financial monitoring, and greater scrutiny of spend on leadership staff. There has also been a dashboard added, that governing bodies are expected to use to benchmark their expenditure in key areas. These changes will come into force for next year’s completion deadline of 31 March 2020, but some of the changes will rely on more immediate action from governing bodies.
Here is a list of the new questions that have been added to the checklist:
‘Does the governing body receive clear & concise monitoring reports of the school’s budget position at least 6 times a year?’ (point A3)
Finance reports must now be received six times per year by the governing body.
Under the ‘Good Practice’ section, the guidance states, ’the governing body should review the income and expenditure against the budget at a meeting at least 6 times a year’.
Therefore, ‘meetings 6 times per year’ are EES’ recommended best practice. If schools choose not to do this, the frequency of actual meetings and the schedule for governors receiving the information 6 times per year should be agreed and minuted at a full governing body meeting, with the rationale for this decision being noted as well.
‘Does the budget setting process allow sufficient time for the governing body to scrutinise & challenge information?’ (point C10)
This question emphasises the importance of arranging a budget approval meeting in plenty of time before the budget submission deadline (1st May). The school should also be providing the budget information in good time prior to committee meetings to allow governors time to read the information thoroughly and formulate queries. Leaving time after the initial budget meeting but before the deadline also allows changes to be made so that governors are happy with the budget that is finally submitted to the local authority.
‘Is the governing body realistic in its pupil number projections and can it move quickly to recast the budget if the projections and the reality are materially different?’ (point C11)
Pupil numbers have the biggest influence on the funding that schools receive through the year, so in the budget and forward plan it is really important to have the pupil numbers as accurate as possible. Update the forward financial plan (FFP) and complete scenario planning as soon as any changes in pupil numbers are known.
‘Does the school benchmark the size of its senior leadership team annually against that of similar schools?’ (point D16)
Benchmarking can be completed as part of the dashboard exercise in the SFVS. On the benchmarking website, the senior leadership team is defined as Headteacher, Deputy Headteacher & Assistant Headteacher.
‘Are there adequate arrangements in place to manage conflicts of interest or any related party transaction?’ (point F24)
To have arrangements in place to manage related parties, you first need to know who the related parties are, so it is essential that all governors are completing declaration of pecuniary interests forms and updating them at least annually. The agenda for every committee meeting should also have the opportunity to declare an interest at the start of the meeting. The Finance Officer/Business Manager should have access to the up to date register so that related parties can be monitored.
‘Have the results of the dashboard been carefully considered and potential follow-up actions identified?’ (point G29)
The dashboard should be completed with the 18/19 actual figures from the consistent financial reporting framework (CFR). Any issues should be discussed and investigated using either further benchmarking, review of staffing structures, or any other relevant method.