School Financial Value Standards – A spotlight on software


What is School Financial Value Standards (SFVS)?

Schools manage many billions of pounds of public money each year. Effective financial management is vital to ensure the safeguarding of public funds and enable schools to optimise their resources to provide high-quality teaching and learning.

In September 2011 the Department of Education replaced the Financial Management Standard in Schools (FMSiS) with the SFVS. The aim of the standard is to improve the assistance and advice given to schools regarding best practice for financial management.

SFVS is made up of 23 questions, each of which requiring an answer of Yes, In Part, or No.

All maintained schools are required to complete the SFVS once a year, but unlike FMSiS, SFVS will not be externally assessed.

How does SFVS affect the accounting of School Fund?

SFVS highlights the importance of schools utilising the financial management solutions available to them for centralising and optimising the management of their funds. In particularly, Section D of the standard – which this article will focus on  – emphasises the advantages software solutions can have on improving accountability and protecting public money.

More specifically, question 21 requires that schools:

  • “Have an accounting system that is adequate and properly run and delivers accurate reports, including the annual Consistent Financial Reporting return”

School Financial Value Standard (April, 2012)

What is an ‘adequate’ accounting system?

By definition, the Department for Education characterises an adequate accountancy system as one that provides accurate records of income and expenditure. This means that the accounting system should record detailed information on income and expenditure, covering all of the school’s financial transactions. To meet the standard, an accounting system must also produce reliable and accurate management information, which includes providing decision makers with timely and accurate information relevant to their responsibilities and requirements.

Providing details of revenue income and expenditure along with capital income, expenditure and balances is vital for any adequate accountancy system, along with the ability to produce accurate and instant reports.

Why is this important?

A substantial percentage of schools in the UK still rely on Excel spreadsheets or ledgers to manage their funds. According to the standard, these antiquated methods are no longer considered adequate for the management of school funds, primarily due to their auditing and reporting limitations.  In comparison, accountancy systems enable schools to accurately monitor budgets, providing important information about spending patterns that help schools make realistic forecasts of year-end under or overspends. Producing the Continued Financial Reporting (CFR) return enables maintained schools to benchmark their spending against similar schools and consider in which areas they could achieve better value for money.

How is voluntary fund accounting specifically affected?

A school voluntary fund comprises any funding received by schools from non–public sources which exists for the purpose of a school and are established under the authority of the school governors. They are frequently referred to as ‘private’ funds.

Question 22 of the standard aims to address how voluntary funds should be accounted for:

  • “Does the school have adequate arrangements for audit of voluntary funds?”

School Financial Value Standard (April, 2012)

What does this mean and why is it important?

With an aim of ensuring schools maintain the highest possible level of auditability, the Department for Education has emphasised the importance of schools accounting for their voluntary funds separately to their delegated funds. By auditing these two funds separately, schools and local authorities can avoid and safeguard against any misuse of public funds. In order to comply with these standards, schools should use a financial package that can produce end of year reports, which in turn should be independently audited by a qualified accountant.

How can your school comply with Section D of SFVS?

There are various accountancy packages that are dedicated to helping schools not only comply with the criteria set by the Department for Education, but also save time and money while accounting for school funds. See one of these solutions for yourself today by calling 0845 310 1788.

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  • Contact Details

    T. 0845 310 1788

    E. info@mypebble.co.uk

    W. www.mypebble.co.uk

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