GUIDANCE FOR SCHOOLS ON INTERNAL AUDIT VISITS

This guidance is intended to provide schools with information on the coverage of internal
audit visits. The auditor will expect to see supporting evidence for all the areas listed below.
Please note that this is only intended as a guide to the standard audit coverage and other
information may be requested during the audit visit.

This guidance should also be viewed only as a guide to the coverage and the controls we
would expect to see. This is not necessarily a comprehensive or prescriptive list of the
controls required in each area.

1. Governance
1.1. Instrument of Government
1.1.1. Chairs of the Governing Body and Finance Committee should be
separate individuals.
1.2. Meeting minutes
1.2.1. Governing Body and Committee meetings are held in line with their
terms of reference. The Governing Body should meet at least once a
term.
1.2.2. Timings of meetings are reasonable taking into account financial
deadlines such as setting the budget.
1.2.3. Meeting minutes are agreed and signed as an accurate record by the
chair at the following meeting. These should be made available for the
auditor to review
1.2.4. Governing Body meeting minutes demonstrate that actions to address
any issues are being monitored and regular updates are being provided
by Committees.
1.2.5. Declarations of interest are a standing agenda item in Governing Body
and all Committee agendas.
1.3. Committees
1.3.1. A terms of reference is held for each committee, defining the
responsibilities delegated to the committee, financial authorisation
limits, quorum and frequency of meetings. Each committee should
report to the Governing Body. Terms of reference should be available
for the auditor to review.
1.3.2. The terms of reference for the Finance Committee (or equivalent)
should include:
 Frequency of meetings
 Expenditure authorities delegated to head teacher
 Reference to budget setting and reporting requirements
 Budget Virements
 Disposal of assets
 Tendering / quotations needed

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 Contract approval
1.3.3. Meetings of the Finance Committee or equivalent are in line with terms
of reference.
1.4. Register of Certifying Officers
1.4.1. The governing body should formally delegate financial authority. The
delegations should be up to date reflecting delegations for current staff
and have been formally approved. The Register of Certifying Officers
should include the roles and responsibilities of the governors,
committees, head teacher and other relevant members of staff in
relation to financial decision making in respect of capital expenditure,
revenue expenditure and payroll.
1.4.2. Financial limits are clearly specified and are reasonable for the size of
the school. It should be clear what these limits relate to e.g. raising
orders, approving invoices for payment, signing contracts.
1.5. Financial Procedures
1.5.1. Schools should have written financial procedures covering the key
financial activities in that school e.g. ordering & payment, authorisation
of free school meals, petty cash use, maintaining inventories, lettings,
procurement cards, expenses.
1.5.2. Procedures should be approved by governors and this should be
evidenced in minutes. Procedures should be reviewed periodically. And
this should be evidenced so that the auditor can verify this.
1.5.3. Schools should be able to access the Council’s intranet, BORIS for
access to key documents such as the Procurement Manual.
1.6. Other Key Documents
1.6.1. A record of all policies should be maintained showing when they were
adopted and when they are next due for review.
1.6.2. The following documents should be approved by the Governing Body
(or committee where this has been delegated) on an annual basis, and
this recorded clearly in the meeting minutes:
 Register of Certifying Officers
 Finance policy/manual
 Other key policies
 School Development Plan
 Staffing Structure
 Annual Budget (and three year budget where one is prepared)
 Terms of Reference for Committees
 Completed SFVS or detailed report from delegated Committee
who have reviewed this prior to signature by the Chair of
Governors

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1.6.3. Internal Audit reports should be reviewed by the Governing Body which
should also monitor implementation of any agreed actions.

1.7. Declaration of Interests

1.7.1. A declaration of interests form is completed by all governors and staff
with financial decision making responsibilities and these are reviewed
annually and counter-signed by the Chair of Governors (for Governors
and Head Teacher) or Head Teacher (for teachers and Chair Of
Governors).
1.8. Whistleblowing Policy
1.8.1. The School should have adopted a whistleblowing policy (this may be
the Council Policy). The whistle blowing policy should cover:
 How to raise concerns
 Independent point of disclosure
 Guarantee of anonymity
1.8.2. The whistleblowing policy should be approved by the governing body
and be made available to staff.
2. Financial Management
2.1. Budgetary Control
2.1.1. Budgeting is essential to good financial management. It provides
the school with a clear view of how it intends to use its resources
and sets out in clear terms how the school apply its financial
resources to implement its development plan. Regular monitoring
of the budget by the Head Teacher, governors and staff is
essential to effective financial control. Regular monitoring enables
potential overspends to be identified promptly so that remedial
action can be taken.
2.1.2. There should be an adequate timetable that would ensure that the
budget is prepared and formally approved by the whole governing body
in time to be sent to the LA by 31 May. The auditor will need to see
evidence in minutes of approval of the budget by the governing body
together with evidence that the budget has been submitted by the
deadline. Budgeted income should be realistic and not overstated to
make budget plans balance. Schools should also produce a three year
budget forecast in addition to their annual budget.
2.1.3. The budget is prepared in parallel with the school development plan
and considers long term objectives.
2.1.4. If a prior year deficit existed or a deficit budget is set, a plan is put in
place to eliminate this and this plan should be agreed by the local
authority.

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2.1.5. If the School are carrying a significant level of reserves, a plan is in
place that defines how these reserves will be used.
2.1.6. Any earmarked / ring-fenced funds can be identified within the budget.
2.1.7. The school FMS and LA Agresso records should be reconciled monthly
and any errors identified. The auditor will need to see evidence of this.
2.1.8. The budget should be entered on FMS and fixed. The auditor will check
that the budget has been entered on FMS and test that the figures
agree with those notified to the LA as seen on the AGRESSO reports.
They will do this by obtaining report Annual Budget Listing – Ledger
Code Summary from FMS and comparing it with a sample of codes in
AGRESSO for both expenditure and income. The original approved
budget entered on FMS should be fixed. Any virements should be
formally approved before being posted on FMS.
2.1.9. There should be documented evidence that progress against the
budget including income, both actual and committed expenditure and
year end forecasts of income and expenditure is monitored on a
frequent basis by
 The Headteacher (monthly)
 The Governors (Finance Cttee & FGB) (at least termly)
 Key budget holders (as appropriate)
2.1.10. Variances against the budget should be clearly shown in any budget
reports together with explanations of any significant variations and
notes of remedial action to be taken where appropriate. The auditor will
want access to reports and minutes see evidence that this monitoring is
taking place regularly and promptly and that appropriate action is being
taken to address budgeting/expenditure issues. The auditor will need to
identify explanations for any expenditure with no budget allocation.
2.1.11. In addition to the budget position, the school should monitor cash flow
and ensure bank balances are not overdrawn.
2.2. Pupil Premium
2.2.1. The auditor will want to ascertain how the pupil premium funding is
being utilised to check that in the first instance this is being used for the
benefit of vulnerable pupils.

3. Bank Account
3.1.1. Please note that the auditor will need to obtain the bank account
history report from FMS for the 12 months period up leading up to
the audit.
3.1.2. Schools should provide timely notification to Finance on changes to
signatories so that Finance can inform the bank promptly of any
individuals who have left the School who need to be removed from the

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signatory list or add new signatories where required. The school should
keep a record of notifications to Finance.
3.1.3. Bank reconciliations to the latest bank statement should be undertaken
on a monthly basis.
3.1.4. Imprest returns should be submitted to Education Finance on a monthly
basis. Bank statements should be submitted with the imprest.
3.1.5. Schools should not allow their bank accounts to go overdrawn at any
point without obtaining an approval for an overdraft via Education
Finance.
3.1.6. Bank reconciliations are signed and dated by the officer conducting the
reconciliation and reviewed and signed by a second officer (usually the
School Business Manager or the Head Teacher). No long standing
unreconciled items are listed (over six months).
3.1.7. Unreconciled items listing reports should be produced as part of the
bank reconciliation process and any remedial action to clear long
standing items retained
4. Procurement
There should be clear segregation of duties in place so that an
individual cannot order, receipt and authorise payment for any
single transaction.
4.1. Quotations
4.1.1. Because schools use public funds, it is important that they get the
best value for money they can for all purchases. This includes
both goods and services, and is especially important for higher
value purchases. Without comparative quotes being sought for
higher value purchases, there is a risk that the School may be
unable to demonstrate that value for money has been sought. This
area is also important to prevent waste, reputational damage and
fraud.
4.1.2. Quote requirements should be followed in accordance with Contract
Standing Orders or the School’s own procedures where these are more
restrictive and evidence of this should be retained. Where the
cheapest quote is not selected, justification should be recorded.
4.1.3. Where quotes are not obtained in accordance with Contract Standing
Orders or the School’s own procedures where these are more
restrictive, a waiver form should be completed and approved.

4.2. Purchase orders

4.2.1. The auditor will look to ensure purchase orders have been raised
and authorised by an individual with the relevant delegated
authority to verify there is control over the spending decisions.

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The purpose of a purchase order is to:
 Demonstrate authorisation to incur the expenditure (i.e.
confirming that there is sufficient budget, the proposed
expenditure is needed and that the required number of
quotations have been obtained) prior to contacting the
supplier
 Commit the expenditure on the system for budget
monitoring purposes
 Clearly define the goods/services being purchased for future
reference (for example when checking goods/services
received)
4.2.2. Exceptions to raising purchase orders would include:
 Items where the cost can only be determined on receipt of the
invoice such as utility payments, book fair invoices and phone
bills
 Contract payments where same amount is paid to the contractor
on a regular basis (e.g. monthly payments for photocopier leases)
 Emergency orders such as emergency repairs and supply staff to
cover sickness (long term supply and non-emergency repairs
could be subject to purchase orders).
4.2.3. Many of the standards relating to purchasing are there to protect
individuals and to ensure that public money is spent without personal
gain. The Governing Body needs to know whom it has delegated to
authorise purchases and be confident that they are carrying out the
task effectively. Without official orders being appropriately authorised
prior to purchases being made, there is a risk that the authorisation and
commitment processes are by-passed which could result in
inappropriate purchases and poor budgetary control.
4.2.4. Therefore all orders must be signed by an approved member of staff.
Schools must maintain a register of staff authorised to sign off orders.
This authorisation must be evidenced by signature. The signatory of the
order should be satisfied that the goods or services ordered are
appropriate and needed, that there is adequate budgetary provision,
and that the required quotations have been obtained, prior to
authorising the order.
4.2.5. The order should be recorded on FMS (thus raising a commitment
entry), an official order should be sent to the supplier and a copy should
be retained on file.

4.3. Goods/ Services Received Check

4.3.1. Upon receiving purchased goods or services from a supplier, it is
important to make sure that the correct quantity and quality was

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received. Without goods/services received checks, there is a risk
that payments are made for goods and services that are not
received.
4.3.2. Deliveries of goods and services should be checked against the original
order and invoice, and evidenced as such by signature before the
invoice is paid. The person checking the goods/services received
should be independent of the person responsible for the administration
of orders and payments.

4.4. Authorisation Of Invoices

4.4.1. It is important that adequate arrangements are made at schools
for proper control to be exercised over the payment of invoices.
There needs to be a consistent procedure for the certification of
and payment of invoices for goods and services received. As far
as possible/practical, different people should be involved in
authorising orders, checking deliveries, and checking and
authorising invoices, in order to reduce the risk of fraud. Without
approval and certification of invoices, there is risk that
authorisation requirements may be bypassed, duplicate payments
may be made, payments may be made for goods and services that
have not been received and/or inappropriate expenditure may be
incurred.
4.4.2. The original invoice should be signed by the authoriser (in line with the
Register of Certifying Officers), and retained on file. Where VAT is
paid, a VAT invoice should be retained.
4.4.3. Before passing an invoice for payment, documented checks should
confirm:
 receipt of goods or services, cross-referenced and checked with
the order
 expenditure has been properly incurred and payment has not
already been made
 prices accord with quotations/tenders, contracts or catalogue
prices, and calculations are correct
 correct accounting treatment of VAT
 the invoice is correctly coded and includes the School’s name
and address
 discounts have, where appropriate, been applied
4.4.4. In addition, making sure that invoices are valid for VAT purposes (i.e.
show at least minimum information required by HMRC) helps ensure
that the school is not at risk of failing to meet HMRC requirements and
will be able to reclaim VAT on eligible purchases.
4.4.5. Schools should never make payment on the basis of a photocopied

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invoice or a statement from a supplier. If an invoice goes missing, the
school should request a certified copy from the supplier before
processing it.
4.4.6. Copy invoices should only be requested if the original has gone astray.
Upon receipt of a copy invoice, FMS order records should be checked
to ensure that payment has not been made. Only when these checks
have been carried out should arrangements be made to authorise and
pay the invoice in the normal manner
4.4.7. The school should maintain a list of staff authorised to certify invoices
for payment. A list of names and sample signatures of authorised
signatories must be held by the school.
4.4.8. All cheque payments require any two of the authorised bank
signatories. Certified invoices should be shown to the signatories at the
stage when the cheque is to be signed.
4.4.9. Once paid, all invoices should be easily identifiable as paid, dated and
stored securely with the purchase orders, quotations and delivery
notes, where applicable.
4.4.10. Schools are required to retain invoices for six years from the date of
payment, for audit and HMRC purposes.
4.4.11. Invoices should be paid within the payment term (usually 30 days) and
where any queries or disputes are raised, the relevant invoice should
be annotated to indicate the reason for withholding the payment and
the status of the query/disputes.

4.5. High Value Purchases and Contracts

4.5.1. Procurement Plans including advice from Legal and Finance must be
prepared and approved by the Governing Body in accordance with the
Procurement Manual which is available on BORIS.
4.5.2. Quotes/tender requirements must be followed in accordance with the
Contract standing Orders and Procurement Manual which are available
on BORIS. In exceptional cases a waiver may be completed but this
will need to include advice from Legal and Procurement for contracts
expected to be in excess of £35k and must be approved by the
Governing Body.
4.5.3. Evidence of all stages of the procurement process must be retained.
Where the cheapest quote is not selected, justification should be
recorded. For expenditure over the advertising/ tendering thresholds,
the evaluation must be in accordance with the evaluation model in the
advertisement and evidence of the evaluation must be retained.
4.5.4. There should be evidence of approval of the expenditure/contract
award by the Governing Body and evidence of approval should be
recorded in the relevant meeting minutes.

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4.5.5. Contracts are subject to the Governing Body or delegated Committee’s
approval and evidence of the approval should be recorded in the
relevant meeting minutes. As part of the approval, the Governing Body
(or Committee) must be satisfied that alternative options have been
considered and that the selected option provides value for money.
4.5.6. The signed contract should be retained and the contract published
where appropriate.
4.5.7. There should be contract management arrangements in place to
monitor performance against the contract and review this with the
contractor. Where performance issues are identified, remedial action
should be agreed with the contractor and this should be evidenced.
4.5.8. Invoices must be subject to the same checks prior to payment as noted
in 4.4.
4.6. Payments to Self Employed Individuals
4.6.1. Where payments are made to individuals, who are deemed to be
employees by HMRC, without NI and PAYE deductions being
made, there is a risk that the School will be held liable for the
PAYE and NI for these payments and may be fined.
4.6.2. Steps should be taken to verify the tax status of these individuals prior
to making direct payments to them without deduction of tax. The
HMRC 'view' of the employment status of the individual should be
obtained by using the Employment Status Indicator (ESI) tool
http://www.hmrc.gov.uk/calcs/esi.htm and NI and PAYE deductions,
where appropriate, should be made from future payments.
4.7. Advance Payments
4.7.1. Payments to suppliers should not be made in advance except for
exceptional circumstances. For example, a deposit or initial down
payment may be required or payment may be required at point of sale
before goods are delivered if goods are purchased online. This gives
the School some bargaining power if goods or services provided are
not to the required standards and to protect the School from suppliers
not providing the goods or services paid for. (Note, this may not apply
to contracts with the Council as the risk is reduced).
4.8. Appropriate Expenditure
4.8.1. Under the Scheme of Financing Schools, monies should only be spent
for the purposes of the school. In light of increased economic
pressures, Schools should consider whether any proposed expenditure
is an appropriate use of public money and is reasonable, prior to
committing to this expenditure. Examples of expenditure which might
be considered inappropriate include monies spent on items such as

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staff parties, staff lunches, alcohol, gifts and flowers.
5. Staff Expenses & Petty Cash
5.1. Expenses
5.1.1. The expense policy should be reviewed and approved by the
Governing Body and should be subject to regular review. As minimum,
the policy should set out the types of allowable expenses, time limits for
submitting claims, approval requirement, and the need to submit the
relevant form and valid receipts.
5.1.2. All claims should be:
 Within the allowable expenses set out in the policy;
 Submitted promptly within the time limits;
 Be supported with a completed form (setting out the
reason for the expense and signed by the claimant) and
valid receipts; and
 Be approved in line with the policy.

5.2. Petty Cash

5.2.1. All claims should be:
 Reasonable and relate to the School;
 Submitted promptly;
 Supported with a completed claim form (setting out the reason for
the spend and signed by the claimant) and valid receipts;
 Approved by an authorised officer who is independent of (and
preferably more senior than) the claimant; and
 Signed by the claimant to confirm receipt of the money.
5.2.2. Petty cash reconciliations should be carried out regularly to confirm that
the balance recorded on FMS matches the cash held. The
reconciliation should be reviewed by an independent senior officer and
evidence of the reconciliation. Both the officer completing the
reconciliation and the officer reviewing should sign and date the
reconciliation as evidence.

6. Leasing
6.1. Leasing
6.1.1. Schools should not enter into any finance leases as these are
considered to be borrowing. Whilst schools may enter into operating
leases, schools should not enter into any leasing arrangements without
obtaining formal advice from the Borough Solicitor and formal approval
from the Borough Treasurer as required by the Council’s Contract

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Standing Orders and Procurement Manual. Evidence of this must be
retained.
6.1.2. As noted above, evidence of all stages of the procurement process for
any lease should be retained.
6.1.3. Where the School has any leasing agreements in place, any
documents such as the leasing agreement, payment summary, balance
statement, and any other correspondence must be retained.
7. Income
7.1. Lettings
7.1.1. Every school should have a lettings policy approved by the Governing
body, which sets out a charging policy.
7.1.2. Each hirer should have an agreement with the school which is updated
annually. The agreement should include details of insurance
arrangements
7.1.3. Caretakers’ overtime sheets should be signed by the hirer to certify
attendance and entitlement or there should be some other means to
confirm this e.g. signing in books.
7.1.4. There should be a procedure in place for issuing invoices for both one
off and recurring lets. Invoices should be raised on a timely basis and
where monies are not received within 30 days steps should be taken to
follow this up with the hirer.

7.2. Income
7.2.1. All income received by the School should be recorded at the point of
receipt (through issuing receipts or maintaining cash collection
records).
7.2.2. All income should be identified, collected and banked in full into the
imprest account on a prompt basis with adequate records being
maintained. Regular banking should be taking place.
7.2.3. Transfers of money between staff should be recorded and signed for by
both parties involved in the transfer... A copy of the signed record
should be held with other banking records to provide an audit trail for
the income
7.2.4. FMS (or equivalent) should be updated promptly with the income to
facilitate effective bank reconciliation process. FMS (or equivalent)
should never be updated on the basis of the bank statement as any
discrepancies will not be identified. Exceptions to this may be where
income is received directly into the bank account which will require a
journal entry.
7.2.5. There should be adequate segregation of duties. For example, one
officer should not be responsible for collecting, recording, carrying out

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daily reconciliation, preparing paying in slips, and recording onto FMS
(or equivalent).
7.2.6. A clear audit trail should be maintained from income collection through
to banking.
8. Staffing and Safeguarding
8.1. Starters, Supply Cover and Leavers
8.1.1. Staff costs make up a substantial proportion of total expenditure in
schools. A Single Central Record of Staff should be maintained.
8.1.2. Auditors will look at changes in staffing in particular starters and
leavers. Control over safeguarding risks will also be addressed through
review of pre-employment checks. The Children, Young People &
Learning Safeguarding Children – Safer Recruitment and Selection in
Schools must be adhered to. Personnel records for new starters should
include the following and sample checking of starters will be
undertaken to verify this:
 Pre-employment check list
 Completed application form
 Letter of appointment
 References (2)
 Evidence of qualifications if appropriate
 Evidence of right to work in UK
 DBS
 Where a DBS clearance is not obtained prior to start date, a
manual check to the Vetting and Barring List should have been
completed via BFC Education HR and evidence that this has
been done should be held on file. In addition, the Headteacher
must have completed and documented a risk assessment and
taken all practical steps to ensure that no unsupervised contact
with children is allowed. This should be documented and held on
file.
 Signed notification to Payroll
8.1.3. Auditors will need to see the above documentation for the samples
tested.
8.1.4. PLEASE NOTE THAT PRE-EMPLOYMENT CHECKS ARE VIEWED
AS A FUNDAMENTAL SAFEGUARDING CONTROL. WE NOTE
THAT THE INTRODUCTION OF DBS CHECKS TO REPLACE CRB
HAS CAUSED CONFUSION IN REQUIREMENTS. FOR ALL NEW
STARTERS WITH A START DATE AFTER 31ST MAY 2014, A
PRIORITY 1 RECOMMENDATION WILL BE RAISED WHERE THE
DBS CHECKS HAS NOT BEEN RECEIVED BACK AND NO MANUAL
CHECK TO THE CHILDREN’S BARRED LIST (PREVIOUSLY LIST 99)

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HAS BEEN DONE VIA BFC EDUCATION HR PRIOR TO THE
EMPLOYEE’S START DATE (EVEN WHERE A RISK ASSESSMENT
HAS BEEN COMPLETED AND DOCUMENTED). THIS WILL
AUTOMATICALLY LEAD TO A LIMITED ASSURANCE OPINION
OVERALL (SEE APPENDIX A FOR DEFINITIONS). FOR STARTERS
PRIOR TO 1ST JUNE 2014, A PRIORITY 1 RECOMMENDATION
WILL BE RAISED WHERE THE DBS CHECKS HAS NOT BEEN
RECEIVED BACK AND IN ADDITION NO RISK ASSESSMENT HAS
BEEN COMPLETED AND DOCUMENTED PRIOR TO START DATE.
8.1.5. All supply teachers must have been subject to DBS checks. Auditors
will look for evidence of this and evidence as above on checks to
manual vetting and barring lists and risk assessments where DBS
clearance is not obtained prior to start date
8.1.6. All leavers should have notification made to the relevant payroll
provider with sufficient notice to allow this to be processed prior to the
leave date. The notification should include details of any additions or
deductions necessary with regards to final pay.
8.2. Additional Payments, Honorarium and Other Payments
8.2.1. Advice from Legal and HR should be sought in respect of anyone at the
school undertaking additional roles and responsibilities within the
school outside their contract of employment with the school or where
the Head teacher or any member of staff is carrying out work outside of
the school e.g. Ofsted inspections, delivering training. Evidence of this
should be retained for the auditor to review.
8.2.2. Any such additional work or work outside of the school should be
approved by the Governing Body to ensure that this does not
compromise or impact upon the role and responsibilities of the
individual. In taking this decision, Governors should be provided with
details of the full cost implications for the school to enable them to
make an informed decision. This detailed costing of loss of staff time for
staff working outside the school should take into account remuneration,
employers NIC, pension contributions, etc. Supporting reports to
governors should be retained so that the auditors can review this.
8.2.3. The auditors will need to ascertain what payment arrangements are in
place. Evidence of payments made and supporting documentation
should be retained for testing.
8.3. DBS Checks for Governors
8.3.1. Where a governor has been elected or appointed before 1st April 2016
and does not hold an enhanced DBS certificate, the governing body
must apply for such a certificate in respect of that governor by 1st
September 2016. Where a governor is elected or appointed on or after

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1st April 2016 and does not hold an enhanced DBS certificate, the
governing body must apply for such a certificate in respect of that
governor within 21 days after his or her appointment or election.”.

9. Assets and Inventory

9.1. Asset Inventory
9.1.1. Schools often have attractive and portable items of equipment such as
computers, televisions, and cameras. These assets need to be kept
securely and recorded as an inventory,
9.1.2. The inventory should include attractive, valuable and portable items.
Schools may keep the record manually or electronically and should
include the following details:
 Date of acquisition
 Serial number
 Description of item
 Location
 Cost/estimated replacement value
 On Loan/Disposed of.
9.1.3. Records should be updated as and when assets are purchased or
disposed of;
9.1.4. An asset check should be carried out annually, by an officer
independent of the person maintaining the inventory. This check
should be evidenced, and the outcome of the check should be reported
to the Governing Body. Where any discrepancies are identified (for
example if there are some assets on the record which cannot be
physically located), these should be investigated promptly and also
reported to the Governing Body.
9.2. Laptops for Teachers
9.2.1. “Laptops for teachers” forms should be completed and signed on issue
of laptops to verify receipt of the laptop and understanding of the terms
and conditions of use.
9.2.2. When the laptop is returned, this should be recorded on the laptop form
which should be signed to evidence that asset has been returned to
stock.
10. Private Funds
10.1. Private Funds
10.1.1. Where the School has private fund(s), separate income and
expenditure records should be maintained and supporting documents
such as invoices and receipts should be retained.

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10.1.2. Income should be recorded on receipt and there should be clear
records of how much cash is held at any time. Banking of monies
received should be regular and prompt.
10.1.3. Accounts should be reconciled regularly throughout the year and
signed off by the officer completing the reconciliation. The
reconciliation should be reviewed and signed off by the Head Teacher.
10.1.4. The accounts should be independently audited annually within six
months of the year end of the accounts and the audit report should be
presented to the Governing Body. Audit report should be retained and
evidence of the Governing Body receiving the audited accounts should
be recorded in the relevant meeting minutes. Private Funds should be
self-sufficient and balances should not be transferred from the School’s
main budget share to subsidise the fund
11. Procurement Cards
11.1. Procurement Cards
11.1.1. Schools need to agree relevant processes and procedures in
accordance with the model statement produced by BFC which schools
can amend, but it must retain the Council’s key controls and conditions.
The relevant committee of governors needs to approve these.
11.1.2. Issue of cards to card holders should be approved by governors.
Schools should be able to evidence that all card holders have been
provided with a copy of the conditions. The auditor will need to see this.
Where card holders leave the school, the card must be cut up and
returned to the Procurement Card Administrator. The auditor will need
evidence that where card holders have left the school or cease to be
card holders, their cards have been returned to the Procurement Card
Administrator.
11.1.3. Cards must only be used for the purposes as set out in the Council’s
Government Procurement Cards - Conditions for Schools. Statements
and receipts for expenditure should be retained and made available to
the auditor for review. The auditors will undertake testing of expenditure
on purchase cards to confirm compliance with conditions and ensure
cards have only been used for bone fide School expenditure.

12. Bursary Scheme (Sixth Forms only)

12.1. Bursary Scheme
12.1.1. Bursary scheme funding is ring fenced and should be reflected as such
in the school budget. It must not be used for any other purpose.
12.1.2. Where bursaries are applied for, schools should check that the pupil
satisfies the general eligibility criteria as follows:
 To be eligible to receive a 16-19 Bursary the young person must

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be aged under 19 at the start of the academic year in which they
start their programme of study. Where a young person turns 19
during their programme of study, they can continue to be
supported to the end of the academic year in which they turn 19,
or to the end of the programme of study, whichever is sooner.1 In
general, bursaries should be paid only to young people who have
reached the statutory school leaving age.
 Young people should satisfy the residency criteria in the EFA
Funding Guidance
 Young people should be participating in provision that is subject
to inspection by a public body that assures quality (e.g. Ofsted).
That provision must also be:
 funded by the EFA (either directly or via a local authority); or
 funded or co-financed by the European Social Fund; or
 otherwise publicly funded and Lead to a qualification (up
to level 3) that is accredited by Ofqual or is pursuant to
Section 98 of the Learning and Skills Act 2000.
12.1.3. There should be appropriate evidence of eligibility from those students
in receipt of the £1,200 Bursary for vulnerable groups (e.g. a letter
setting out the benefit to which the young person is entitled or written
confirmation from the local authority of the student’s current or previous
looked-after status). There should be controls in place to ensure that
vulnerable student payments have been drawn down correctly from the
Learner Support Service, i.e. duplicate or non-existent students have
not been claimed for ).
12.1.4. Controls should ensure that the discretionary element of Bursary
funding is only paid to students facing financial barriers to participation
(e.g. the costs of transport, meals, books and equipment, and other
course-related items), that actual financial need has been appropriately
assessed and documented (NB - making ‘blanket’ or ‘flat-rate’
payments, i.e. payments of identical amounts to large numbers of
students in receipt of a discretionary bursary, is therefore not
recommended) and any allowances or other sources of financial
support have been taken into account. Auditors will check a small
sample of bursaries awarded to ensure compliance with the above,
confirm there is a copy of the standards agreed by the school with the
Learner and check that the bursary has been paid as agreed.
Evidence that the student has confirmed they accept the terms and
conditions of the bursary should be retained for review by the auditor.
13. Fraud Risks
13.1.1. Schools should identify their fraud risks by considering what potential
internal or external frauds could in their school e.g. claim for bogus

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expenses (internal) or supplier bank mandate fraud (external) and put
controls in place to mitigate against these risks. The School Fraud Risk
Health Check may be used to inform this.
14. Previously Agreed Recommendations
14.1.1. Previous audit recommendations should be addressed - either
implemented or BFBC audit informed if cannot or will not implement.
Auditors will look at the recommendations in the previous report and
through testing and discussion ascertain if these have been
implemented. The audit report will specifically report on implementation
and flag up any agreed recommendations that have not been
implemented

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DEFINITIONS OF AUDIT OPINIONS

In order to assist management in using our reports:
a) We categorise our audit opinion according to our assessment of the controls in place and the level of compliance with these controls:

Significant There is a sound system of internal controls to meet the system objectives and testing performed
Assurance indicates that controls tested are consistently complied with.

Satisfactory There is basically a sound system of internal controls although there are some minor
Assurance weaknesses in controls and/or there is evidence that the level of non-compliance may put some
minor systems objectives at risk.

Limited There are some weaknesses in the adequacy of the internal control system which put the
Assurance systems objectives at risk and/or the level of compliance or non compliance puts some of the
systems objectives at risk.

No Assurance Control is weak leaving the system open to significant error or abuse and/or there is significant
non-compliance with basic controls.
b) We categorise our recommendations according to their level of priority.
Fundamental weakness in the design of controls or consistent non-compliance with controls that
High Priority 1 puts the achievement of systems objectives at risk
Weakness in the design of controls or inconsistency in compliance with controls puts the
Medium Priority 2 achievement of systems objectives at risk

Low Priority 3 Recommended best practice to improve overall control.

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