Transcript View strand 3 slides - Independent Academies Association
Strand 3: Great Financial Leadership Optimising your resources
Strategic financial planning and accountability – costing your curriculum Val Andrew, ASCL Business Management Specialist Sam Ellis, ASCL Funding Specialist
The process for internal audit and how it adds value Stephanie Mason, Head of Academies, Further Education and Skills, Baker Tilly UK Audit LLP Alan Evans, Finance Director and Company Secretary, CWA Academy Trust
Internal Audit – Adding Value-
March 2014 www.bakertilly.co.uk
Agenda
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Introductions
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Academy Assurance Requirements
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Board Assurance Framework
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Assurance Mapping
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How does it work in practice?
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Introductions
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Stephanie Mason – Head of Academies, Further Education and Skills, Baker Tilly UK Audit LLP
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Alan Evans – Finance Director and Company Secretary, CWA Academy Trust
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Academy Assurance Requirements
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Academies Financial Handbook
Every Academy Trust must have in place a process for independent checking of financial controls, systems, transactions and risks • •
Accounts Direction
Governance Statement •
As trustees we acknowledge we have overall responsibility for ensuring that ABC Academy Trust has an effective and appropriate system of control, financial and otherwise
• Compliance Statement •
As Accounting Officer of ABC Academy Trust I have considered my responsibility to notify the academy trust board of trustees and the EFA of material irregularity, impropriety and non compliance with EFA terms and conditions of funding under the funding agreement in place between the academy trust and the Secretary of State.
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Kings Science Academy free school founder arrested over alleged fraud
THE FOUNDER AND PRINCIPAL OF A FLAGSHIP FREE SCHOOL PRAISED BY DAVID CAMERON HAS BEEN ARRESTED BY POLICE INVESTIGATING AN ALLEGED FRAUD.
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Richard Gilliland Lincoln Priory Academy probe findings handed to CPS
Lincolnshire Police has handed a file to the Crown Prosecution Service after a 20-month investigation into the financial scandal surrounding Lincoln’s Priory Federation of Academies.
Richard Gilliland, the £206,000-a-year chief executive who quit the federation on March 30, 2012, employed his wife, daughter and son in well paid jobs, which included some expenses for a fact-finding mission to Bali.
He used a school credit card to buy sex games and Christmas dinners and school funds to pay for his son’s training at an equestrian centre.
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The Telegraph Academies paying millions to businesses linked to their directors
Taxpayer-funded Academy chains have paid millions of pounds to businesses with personal links to their directors and trustees, it has been revealed. The payments – including for consultancy fees, IT advice and legal services – have led to fears that the Department of Education is not monitoring the books closely enough. There is no suggestion that the nine trusts involved or their directors have broken any rules, and they all maintain that they have been properly audited.
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Board Assurance Framework What is a board assurance framework?
A structure within which the Academy identifies the principle risks of not delivering on its vision and values and not achieving its strategic goals; establishes the systems and controls necessary to manage and mitigate those risks; and receives adequate assurances about the effectiveness of those systems and controls
What is meant by ‘assurance’?
Assurance Definition
Provides: Confidence / Evidence / Certainty To: That: Managers / Head Teacher (as Accounting Officer ) / Governors That which needs to be done (operationally and strategically) is being done 12
Assurance Mapping What is an assurance map?
An assurance map (AMAP) is a tool to ensure assurance of controls over key risks within the organisation. The assurance mapping process drives out gaps and overlaps in the overall assurance jigsaw.
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Why is it useful to academies?
Increases understanding of sources of assurance
• Management accounts • Risk management reports • Performance management reports • Ofsted • External Audit • Internal Audit • EFA •
Clear, matrix based
• Shows gaps and overlaps •
Compliance with Academies Financial Handbook
• Programme of independent checks of financial controls, systems, transactions and risks 14
How does it work in practice?
Principle objectives Key risks Key controls Assurances Evaluation Action plan 15
‘Three lines of defence’
1st • Departmental level – operational managers and staff • Day to day responsibility for managing and controlling risk • Implementation and compliance with polices and procedures 2nd • Corporate Governance Framework – Governing Body and sub committees • Monitoring of outcomes from the first line of defence 3rd • Independent review – overall compliance and risk management • Regulators (EFA), OFSTED, External Audit, Internal Audit, Other 3 rd parties 16
For example Example risk areas Risk Assessment Gross Net 1. Management Operations Reporting Risk Management Sources of Assurance 2. Governance Oversight Self Assessment Governing Body Finance committee EFA 3. Independent Assurances OFSTED External Audit Internal Audit
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Common pitfalls
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Risk register
• Incomplete or not up to date • Only shows net risk scores •
Independent assurance
• Not fully understood • Frequency of review?
• Depth and detail of review?
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End result … Focussed, value added internal audit plan: Review Area
Core Financial Areas Corporate Governance Risk Management
Rationale
To ensure that key processes and procedures are operating efficiently and effectively throughout the period under review To ensure that appropriate procedures are in place in relation to Corporate Governance, for example: • Governor Training • Conflicts of interest • Gifts and Hospitality To ensure that risk management procedures are sufficient to identify all key risks to which the Academy Trust is exposed, to assess the impact and likelihood of those risks arising and to implement action plans to address risks identified 19
Internal Audit
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CWA Academy Trust
• Sponsored by local FE College • Based in West Norfolk • Area of low education aspiration • First academy in 2010 • Became MAT July 2013 • Taking on four further academies 2013 – 2014 20
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Trust Ethos
• Allow academies to retain local ‘feel’ • Support services Finance and HR managed at Trust level • Highly professional Board of Directors – adopted strategic approach • Always wished to demonstrate high standards of governance 21
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Internal Audit 2010
• RO governor option • Reciprocal arrangement • Retaining Local Authority audit • Preferred choice was to use internal auditors in RO role 22
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Rationale
• Wanted the external assurance • Professional credibility • Wanted more than simply the RO functions • Integral part of internal control framework • Looking ahead 23
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Impressions – does it add value?
• There are cheaper options • Audit work has been of a consistently high quality • Clear understanding of academies governance • Reports to Board of Directors well presented – Audit Manager present • Risk Management workshop particularly successful and achieved buy in from Directors • Risk management workshop being re-run • Conclusion of Board to retain current arrangements 24
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The Future
• Currently developing audit plan • Focus will be on ensuring internal controls in all academies • Dialogue to ensure relationship between Sponsors / trust are clear 25
Reviewing and improving your procurement practices Steve Archer, Team Leader, Schools Commercial Team, Department for Education Will Jordan, Education Sector Manager, PS Financials Limited
Improving your procurement and achieving value for money
Steve Archer Schools Commercial Team Commercial Division
How can
improved procurement
you….
help
save money get better value for money be accountable for what you spend follow the law
Public Sector Procurement – what does it mean for Academies
EU Procurement Directives – Financial Thresholds
From 1 st January 2014 EU Procurement Directives and The Public Contracts Regulations 2006
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For Schools & Local Authorities thresholds
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are: £172,514 Goods & Services (£111,676 for DfE) £4,332,012 Works (i.e. Buildings) Regulations do not apply in full when the estimated value of contract is below threshold
but Treaty principles do
New EC Procurement Directives
Revised directives agreed by EC June 2013. Anticipated to be UK law by August 2014.
Changes to UK public sector procurement regulations will be highlighted to schools in BuyWays this summer
The current climate
Importance of efficiency and financial management
What can
you
do?
• Analyse expenditure • Review your contracts • Identify opportunities for rationalisation • Deliver admin savings • Collaborate across key strategic spend areas • Benchmark and compare
Collaborate?
• What have we found?
• Top tips • Key considerations
3 primary Academies located within 6 miles of each other. “Now we can negotiate outside of the constraints of the LA and work to get better services, based on what we know works for our schools. The bar has been raised and prices are much more competitive”.
We’ve taken the work out of finding good deals in key spend areas…
Energy efficiency projects
What the project aims to achieve: • To increase energy efficiency within schools • Deliver long term energy savings • ACMF – heating replacement programme announced by EFA through
Schools ICT
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Schools ICT Services Framework – expires Oct 2014
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Information Management & Learning Services (IMLS) Framework – expires March 2016
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Microsoft MoU for UK Schools
Don’t be headline news…
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Crown Commercial Service framework
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3,600 schools
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£11m spend and case studies evidencing 49% savings.
Build your procurement skills…
www.buyways.co.uk
Academies Zone
Useful links
Procurement deals and information www.education.gov.uk/procurement Effective buying for your school Publications - GOV.UK
Academy Procurement Resource www.education.gov.uk/schools/leaders hip/typesofschools/academies/open
[email protected]
Sweating your assets/making the most of and developing your buildings and facilities Julia Green, Solicitor, Browne Jacobson Keith German, Director, AA Projects
Getting the most from your assets …… Julia Green – Partner Browne Jacobson
Facts and figures….
• What do you predominantly use your site for?
• What do you do with it for the rest of the time?
The first steps ………..
• Why would you look to generate income?
• What is your strength?
IAA Spring National Conference
'Sweating your assets: Making the most of and developing your buildings and facilities'?
Do you know what you have got?
• • • • A familiar Picture Due diligence Liabilities and responsibilities What is the future?
How can the future be delivered?
Basic Need DSG Salix – Energy Conservation Local sources and fund raising Academies Capital Maintenance Fund Sport England
ACMF
• What is it for?
• £442m across two funding rounds • R1 - 3000 applications from 2000 Academies • 200 applications • Regular liaison • Exchange
What do Academies need?
• Understanding • Capital • Reduced running costs • Maximise income • A strategic action plan
Is there a better approach
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Determining whether or not to apply
Understanding the key building issues on your site • • and your legal responsibilities as an academy • Understanding the criteria for the programme
Preparing the bid
Securing up to date information •
Preparing to deliver the project
Putting the right team and governance in place Solid Evidence Base Clear Priorities
Strategic Estate Planning
Why?
– Support and deliver the school’s vision – Understand (and manage) legal responsibilities – More cost effective than crisis management – Good governance Why not?
– Too difficult – Perception that requires costly consultant support – Other priorities
Is there a solution?
• Up to date condition survey • Asbestos survey • Statutory compliance • Planned maintenance programme • Facilities Management?
• Property Strategy and Masterplan – 5 year plan to address condition – Growth strategy – Coherent masterplan – Financial strategy for delivery – Support for funding – Demonstration of commitment
Case Studies
Secondary Academy – 11-18
Midlands Issues Site constraints Successful Oversubscribed Dilapidated buildings Backlog maintenance Strategic goals Expansion Fit-for-purpose facilities AA Projects have worked with this Academy for two and a half years, and have secured funding for an 8 classroom extension to provide additional capacity. This was the first phase of a 5 year plan to increase capacity and address major condition issues.
The Academy have an up to date condition survey which replaces the previous LA survey.
They have a new planned maintenance programme. They have a 5-year plan and the recent application to the EFA for ACMF funding is the next identified priority, which is another significant new-build at around £3m, which stands a good chance of being approved.
Strand 3: Great Financial Leadership Optimising your resources
Reputation and Revenue Dean Blake, Communications Manager Cabot Learning Federation. Mat Harnan, Trust Leader: Communications and Development, Torch Academy Gateway Trust
Welcome
Overview
Retention and Recruitment
Student numbers and the type of students your school attracts have a decisive impact on financial budgets and educational outcomes.
For a school to be viable and sustainable it must ensure consistent or increasing student numbers.
pupils being supplied by ‘catchment’ primary schools.
by pupils, parents, the local community and the wider educational These choices are only as considered as the information parents have access to. establishment.
Therefore, the more a school takes control and ownership of its reputation, the more have a significant medium and long-term impact on the reputation of a school.
Wider Reputational Profile Student Recruitment And Retention Managing Reputational Risk Stakeholder Engagement
Wider Reputational Profile Direct engagement with future school users • • • • KS2 English and Maths Support Creative Arts Sports coaching Student Ambassadors Direct engagement with local community • • • Student and school involvement in local council Events to bring community into school Students working in local community projects Direct engagement with wider educational community • • • Involvement in collegiate development projects Partnership working with other schools Local, regional, national and international exchanges
Stakeholder Engagement Improved direct engagement with parents • • • • • High quality and professional print materials High standards of telephone and reception engagement Consistent and professional teacher-parent communication Regular dissemination of information and events High quality newsletter/annual Direct engagement with students • • • • Student council Strong focus on student wellbeing Internal promotion of extra-curricular opportunities Student magazines/newspapers/radio stations Direct engagement with other stakeholders • • Ensuring stakeholders are kept informed of work in the school Inviting stakeholders in to experience life in the school
Managing Reputational Risk In School • • • Managing complaints in a consistent and effective manner Proactive dissemination of preventative information Clear guidelines on staff conduct Press Contact • • • • • Good press relations Proactive responses to local or national stories Clear hierarchy of responsibility in the event of a press contact Contingency for negative press contact Training for staff involved in press contact Knowing what is coming • • Anticipating possible media scrutiny Offering alternative or counter-intuitive stories to trending issue
Funding - a forward look Mike Pettifer, Director of Funding for Academies, Education Funding Agency
Funding
A Forward Look… Mike Pettifer Deputy Director Academies Funding Division EFA
Introduced a Stage Gate Process for project and programme delivery
In brief I will be talking about…
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What we have done already in funding
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How the sector is consulted and involved in developing policy
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Governance framework for working with academies and free schools
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Move to more contemporary funding agreements
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Emerging views on VFM statements
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Post 16 Funding
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Working with customers in the future
What we have done already in funding
New approach to communications Pre-16 Funding Pre-16 Funding Update High needs for LA High needs for Academies Introduction Sixth Form Funding Sixth Form Funding Update Free Schools/UTC/Studio School Total Last updated 25 Feb Filmed presentations Slide packs downloaded Webinar participants (on the day) Webinar views (after the event) 1415 2923 676 636 427 2478 8555 1629 4056 665 780 1635 3172 11937 158 308 132 598 1639 1601 824 4064
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2014/15 – over 25,000 downloads and viewings
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2013/14 - 32 briefings covering about 1300 academies
Our service is improving but needs to continue to do so
Governance Structure & Consultation Funding & Finance
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Formal consultation on large scale reform
- e.g. 2013 funding reform, post 16 simplifications, etc. •
Formal governance structure for feedback/communication/consultation
- EFA Advisory Board (All EFA business) - EFA/SFA Advisory Forum (Post 16 focus) - Technical Advisory Group (Post 16 focus) - School & Academy Funding Group (pre & post 16) - Academies Finance and Assurance Group (pre and post 16) •
Informal customer feedback/networks/representative bodies
- informal consultation ASCL, FASNA, SSAT, IAA, NABSM (pre & post 16) - customer focus groups – (pre 16) e.g. funding statement, funding guidance, pre & post 16 split, payment profiles, PNA, free schools, High Needs providers
Move to contemporary funding agreements
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Negotiations with existing trusts and sponsors
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New simpler and clearer language
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Consistency balanced with flexibility
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Plain English
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More robust dialogue on estimated pupil numbers
Emerging views on VFM statements in context of wider financial duties
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Accounting Officer is personally accountable both to the Secretary of State and Parliament for the propriety and regularity with which public money is used
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A requirement to produce company accounts every year and have them independently audited and published
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The trust’s Accounting Officer is required to account for the use of public funds through an annually published Value for Money statement
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An independent auditor’s annual ‘regularity report’ about the proper use of funds, also published
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Trusts face sanctions when things go wrong under robust intervention arrangements set out in the financial handbook
Post 16 update
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Letter from Peter Mucklow in December setting out the overall approach and timeline, along with any policy changes, included a reduction in funding for 18 year old on full-time programmes
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Student number statements have been sent out to academies to check headline figures (Jan/Feb)
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Any cases for changes following those statements are currently being reviewed (Feb/Mar)
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Final decisions by ministers on the rate expected in the first part of March
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Final funding statements including post 16 funding will be sent out by the end of March
Post 16 - continued There are a lot of detailed issues which FDs will need to understand re data capture which will affect funding, for example:
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Need to put planned hours for academic year 2013/14 in the 2014/15 autumn census as well the planned hours for academic year 2014/15
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Need for students in sixth form without either Maths or English at GCSE Grade C to be enrolled on maths or English otherwise the school will lose funding the next year
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Work experience can only be recorded as such if it is with an external employer – otherwise it has to be recorded as non qualification activity It is really important for FDs and other MI/data literate staff to access the film and webinars.
Working with YOU into the future
Customer Exchange – Key Principles
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Customer Exchange will transform the way both you and we do our business
of new governance boards to ensure strong internal
For the first time we will also information together in one place. This will make it easier for you and us to access and interact in one digital view, at a time that suits
Why now?
NAO Report Need for More Efficiency
The Agency is implementing plans to allow customers to do more for themselves.
boards to ensure strong internal governance (Programme Delivery Accelerated Transformation Board, CAB)
Need for Greater Accuracy
Maintain accuracy whilst significantly increasing Gate Process for project and programme delivery
Dealing with Increased Demand
50% increase to 12,000 institutions over 3 years
Enhanced IT Delivery Capability
Investing in IT and People Expertise but using models that are tried and tested
Need for Better Customer Service
Need to improve feedback and levels of satisfaction from our customers
Customer Exchange – The benefits Business Planning Calendar Knowledge Base Digital by Default Benefits for our customers 1.
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Online web base access to EFA information and submissions One sign in password to access all information relevant to the EFA, through DfE Secure Access portal. Ability to reset own password Collections will be digitised with on line forms Online planner clearly showing what information and actions are required by day/month or task Knowledge base to allow providers to search for the information they require Ability to be able to update their own key contact details One stop shop for EFA and DfE news Links to other relevant websites such as DfE and .gov.co.uk
Digital Collection Forms Document Exchange Portal Online Collections
In Summary… “Looking outwards not upwards.”
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You are seizing the challenge of innovation with responsibility
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You are seizing the challenge of driving up standards with accountability
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We are demonstrably getting better at what we do year on year
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We are listening to you and trying to make our approach centre around you as often as possible
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We are ALL becoming more efficient and continually offering better value for money for the tax payer ARE WE MOVING QUICKLY ENOUGH AND GETTING IT RIGHT OFTEN ENOUGH FOR YOU?
The FDs perspective: a short response from the FDs Forum Chris Hutton, Director of Finance, City of London Academy Jim Cook, Deputy Principal Finance and Resources, The Samworth Enterprise Academy