Finance Policy

Finance Policy  

St Patrick’s Catholic School, Te Awamutu

“Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?” Luke 14:28

Rationale

The Board of St Patrick’s Catholic School aims to ensure that all the financial operations of the school are safeguarded and that all funding is appropriately used for the benefit of our students.

Guidelines

A: FINANCIAL PLANNING

The Board has overall responsibility for the financial management of the school but delegates the day-to-day management of the school’s finance and budget to the principal. It shall allow the principal to further delegate responsibilities of finance to other employed staff or contracted service providers.

Budget Priorities

1. Each year the Principal will seek input from staff and teaching teams in regard to suggested requirements and priorities. In preparing the final recommendations and list of priorities the Principal will give full consideration to staff suggestions, school priorities and resources need to meet the goals of the Strategic Plan

2. Budgeting shall not fail to reflect the annual plan, risk financial jeopardy nor fail to show a generally acceptable level of foresight.  

             Thus the budget should not neglect to:

·         reflect the results sought by the Board

·         reflect the priorities as established by the Board

·         comply with the board’s requirement of a balanced budget

·         ensure adequate working capital

·         demonstrate an appropriate level of conservatism in all estimates

3. The budget should seek to provide financial sustainability for the school and to ensure an adequate working capital base of assets.

4. The Board should ensure to prepare an annual balanced budget that should seek to provide growth to the school’s investments, and to provide the necessary fundamental learning resources and teaching environment as required by the Board

5. All curriculum areas and all general ledger accounts should be considered when preparing the budget. It is prudent to base the budget on current information, previous years spending patterns, expected roll changes and staffing issues.

Budget Timeline

1. The Budget Year is 1 January to 31 December. Budget surpluses or deficits do not roll over from year to year.

2. The annual budget will be drafted in November by the Principal. It is to be reviewed as draft by the Board in that month and then presented for discussion/ratification by the Board in the December meeting each year.

3. Following the completion of the previous year’s audit, in April/May the budget may then be revisited, reviewed and updated to allow for any over/under expenditure from this budget. The Board should then approve the final budget.

4. The Board must approve items sought that have not been budgeted for, before they are ordered, over the value of $1000.

Monitoring and Budget Holders

1. Once the budget is set it is the Principal’s responsibility to manage and supervise all allocated expenditure.

2. Staff may be delegated responsibility for curriculum management involving the spending of finances tagged to their area of control. Budget holders are expected to be aware of spending and ensure priorities are planned and met within budget. Budget holders can plan for expected purchases and the finalising of curriculum team goals, both short and long-term, for the current year. These are to be discussed with the Principal and are to improve the management and activities undertaken by the curriculum team.

3. The Principal must manage those staff whom are delegated as budget holders and report to the Board any over-run of costs.

4. The school will not sanction unauthorised spending.

5. New resources are to be shared with staff so all are informed of what is available for use in the classroom and where the resource will be stored.

B: SAFE FINANCIAL PRACTICES

1. The financial viability of the school must be protected at all times. 

2. The Board has a responsibility to protect the physical and financial resources of the school.

3. The Board understands the possibility of fraud or theft can not be entirely eliminated, however, procedures, internal controls, annual audits must be implemented to show that there are robust safeguards in place in order to minimise the risk of either event.

4. The Board requires the Principal to establish systems and procedures to guard against the actions of fraud and theft.

5. As part of this the Principal should monitor and control school expenditure on a monthly basis in order to protect the financial viability and sustainability of the school.  

6. The Board shall ensure that the annual accounts are prepared and audited as required by the Public Finance Act 1989 and the Education and Training Act 2020.   

7. It shall also comply with the requirements for record keeping as required by the Inland Revenue Department.  

Roles and Responsibilities

The Board will act to:

· approve the school’s finance policy

· review the school’s finance policy (at least triennially)

· approve delegation of financial management responsibilities to the Principal

· approve the annual budget

· monitor monthly finance reports and compare to the annual budget to ensure over-expenditure does not occur

· approve over-expenditure of the annual budget area or specific area.

The Principal will act to:

· manage the day-to-day requirements of the school’s finance and budget.

· implement and monitor the Financial Management policy and programme

· give advice to Board about the school’s financial position and management systems

· implement and maintain processes/procedures setting out financial responsibilities and authority

· prepare an annual budget as outlined in the Financial Planning Policy and have full financial authority to action the budget throughout the school year as approved by the Board

· report expenditure outside the budget over $1000 to the Board for consideration/approval

· ensure budget holders spend money budgeted to an area on agreed school priorities, goals and objectives.

· designate curriculum budgets to budget holders, with authority to spend money in their own areas up to an agreed level

· obtain a written proposal from their budget holders if over-expenditure of their budget is likely to occur

· liaise with the selected Financial Reporting Contractor to ensure that monthly and annual accounts are prepared as are required for the Board / Ministry in a timely manner, and within agreed deadlines.

· discuss financial procedures set out by the Ministry of Education or Proprietor and advise the Board on these

· deal with correspondence of a financial nature

· delegate some financial administration to staff members

In reference to policy 5.4 of the Financial Information for Schools Handbook (FISH), the principal shall not:

·         incur unauthorised debt

·         violate generally accepted accounting practices or principles

·         use tagged funds for purposes other than those approved

·         spend more funds than have been allocated in the fiscal year without prior board approval

·         fail to ensure all money owed to the school is collected in a timely manner

·         fail to make timely payment to staff and other creditors

·         sell or purchase unauthorised property

·         fail to ensure that all relevant government returns are completed on time

·         fail to ensure segregation of duties

Monthly Reporting

1. The Principal has the opportunity to contract out the financial reporting function for the school’s monthly and annual reporting requirements. They along with the Accounts Administrator are delegated as the liaison points between the school and the selected service providers.

2. Each month a Statement of Receipts and Payments showing totals for each budget code, the budget and the amount under or over budget must be provided to the Principal / Board. The purpose is for monitoring and controlling the Income and Expenditure on a monthly and year to date basis. 

3. This report is prepared as part of the Principal’s monthly report to the Board presentation and should highlight any main points for discussion at the following Board meeting.

Annual Accounts Preparation

1. All relevant information necessary for the completion of the Annual Financial Statements must be supplied to the selected service provider by the end of February. The Principal or Accounts Administrator will liaise with the service provider for the relevant information to be provided to them.

2. Draft accounts must be supplied to the auditor by 31 March. These should be presented to the Board as a draft set of Financials when they are sent to the auditors.

3. The auditors must then complete the audit within 30 days of receiving the draft accounts and the final signed accounts with the audit report attached must be filed with the Ministry by 31 May. The Board would then ratify the finalised and audited accounts prior to the due filing date to the Ministry of Education. These dates may vary annually.

SUER (Staff Usage and Expenditure Report)

1. The Principal checks the fortnightly Staff Usage and Expenditure Report (SUER) to ensure:

· staff employed in permanent, part-time and relieving capacities are being paid the correct amounts

· staff payments are being correctly debited. i.e. Ministry funded staff are not being paid from the operational grant and that staff employed from operational grant funds are not being charged to the Ministry.

2. The Principal is to sign and date each report to indicate that the above checks have been carried out and payments are in fact true and accurate.

3. A member of the Board (either the Finance Officer of the Presiding Member) should audit the Staff Usage and Expenditure Report on a regular basis (preferred monthly) and sign and date as checked. This is a strong internal control policy so that there is a recognised separation of duties

Theft and Fraud Prevention 

The Board has zero tolerance on theft and fraudulent behaviour.

All staff are expected to notify and/or act on suspicions of dishonest behaviours and activities, even in the absence of proof, reporting it promptly to the principal (or Board member if appropriate).

Any staff member who reports a suspicion of fraud regarding another individual or the school in good faith will in no circumstances be threatened, intimidated, or dismissed because they acted in accordance with our policy.

All instances of suspected fraud will be treated confidentially and investigated promptly to a natural conclusion.

The Principal will notify the Board of suspected fraud.

In the event of suspected theft or fraud, the principal (or presiding member/board if appropriate) shall ensure:

• an initial inquiry is carried out subject to due process, equity, and fairness. For support and guidance in this process, NZSTA should be contacted in the first instance.

• If the suspected theft or fraud involves a staff member, NZSTA employment advice will be sought to ensure the appropriate employment processes are adhered to through initial inquiry and further investigation as necessary. 

In addition there is guidance and expertise from our Ministry School Finance Adviser, auditor, forensic accountant, or a solicitor. 

If theft or fraud has been determined, the New Zealand Police will be notified, and the school will co-operate with their direction.

Any allegation concerning the principal should be made to the presiding member, who seeks NZSTA employment advice and notifies the board. The complaints policy will be referred to.

Any allegation concerning Board members should be made to the principal. The principal will then advise the Education Manager of the local office of the Ministry of Education and an investigation will commence.

Delegations

The Principal is empowered to delegate financial responsibilities to staff as prescribed below:

1. The Accounts Administrator:

• handling and banking all money collected in the school and keeping an accurate cash book (computerised using IES) and receipt book for this.

• creating individual students’ debt in the student account package from student lists supplied by staff responsible for EOTC/trips/sports activities as part of their EOTC/sports proposal already approved by the Principal. Where there is a need for a counter transaction because a debt has yet to be created but money is already received, the Accounts Administrator will discuss this with the Principal before authorising office staff to use a counter transaction.

• maintaining the school asset register.

• receiving and coding all accounts for payment.

• creating batch headers for the Principal to approve (with invoices attached) and forward approved batch headers to the contracted school financial service provider, and also to the selected Board members for review.

• writing cheques for payment of accounts.

• providing monthly financial reports to the Board.

• all Novopay actions including adding new staff, adjusting pay levels and recording sick leave. All of these actions must have signed approval from the Principal.

• proofing the SUER report before presentation to the Principal.

2. Office Staff

• ensuring that all money brought to the office is receipted against the debt already created in the student financial package. Counter transactions are only to be created after consultation with the bursar or principal. recording when payments are received (amount, initial, date) on the payment advice slip that accompanies the money. If there is no payment advice slip accompanying the money office staff will create one.

• ensuring that payment advice slips are returned to the organising teacher so that teachers can track the payment (or permission) information. Office staff are not responsible for tracking payments or permission status for trips or activities.

• balancing daily to ensure that the total receipts equal the amount of money received.

• ensuring that, at the end of each day, the day’s takings together with the summary of receipts report are enclosed in a bag (separate bag for each day’s takings) and locked in the safe.

3. Teachers

• ensuring that all money brought to school by students is taken to the office. 

• Teachers are not to hold onto any money in their classes under any circumstances.

4. Teachers with responsibility for organising EOTC events

Note: the school has opted into the Government’s Donations Scheme which means that donations may only be sought for overnight camps.

• Preparing a budget for the event and having this approved by the principal before notification about the event is sent home

• Seeking a donation, only in the event of a school camp, as agreed by the Principal

• tracking donations and liaising with the Accounts Administrator where donations may have come through the internet. The Accounts Administrator is able to print out, on request, an up to date record for individual activities that shows paid/not paid.

• communicating with the Team Leader/Principal where donations have not been received before the event occurs so that there is an opportunity, before the experience, to make a judgement about its viability

• once the event is finished and as part of the ‘post trip evaluation’ process, the teacher responsible is to advise actual costs as measured against the budget.

Financial Processes

The following procedures represent part of the school’s adaptation of internal control processes for office administrative and entry recording procedures.

Record Keeping:

The Board and School are responsible for maintaining and preserving documents that are essential to proving the school’s financial position each year. In line with Inland Revenue Department and Ministry of Education requirements, these records shall be retained for at least seven years as required by legislation.

Ordering School Resources:

All goods/resources must be pre-approved by the Principal and ordered by the budget holder. Full details must be requested to be placed on the invoice. i.e. school address, description, quantity and cost of goods/resources, curriculum area order is for, and budget code.

For the annual budget approved at the beginning of each year, the Principal has full authority for ordering or approving. For items outside the approved budgets, but within its limits, above $1000 approval must be sought from the Finance Committee. For items that will overspend a specific budget area, approval must be sought from the Board. 

Invoicing:

On the receipt of an invoice, items should be checked against the order book and given to the Bursar. The invoice is then stamped and approved for payment with the date, code, and signature of the Principal.

Payments:

Payment is made on approved invoices only. The total on a statement can only be paid if all invoices are present and approved for payment by the Principal.

Invoices/statements are prepared for payment by entering into a sorted batch header each month. This is prepared by the Accounts Administrator, reviewed and approved by the Principal and then signed by two of the designated signatories.

Receipting:

All money received is to be banked as practicable (at least weekly). The person responsible for banking will be the school Accounts Administrator. The amount of banking is reconciled against the total of receipts.

Petty Cash:

A sum of $50 shall be held in the office to allow for the purchase of sundry items. This will be reimbursed as required. An accurate record of expenditure with receipts is to be maintained.

Consumables:

Allocation: $320, $80 per teacher per year term. This allocation is not made in cash. Teachers can ‘spend’ this allocation through the order system or by reimbursement. Catalogues for resources (i.e. rewards and stickers) are available from the office, the staffroom or the Junior resource room.

Student Finances & Accounts:

The school operates an electronic accounting system for student finances (eTap Accounts). Money is receipted as received by office staff, receipts are issued at the end of the day and dispatched to students to take home. Students should have all money in an envelope clearly marked with name, room, reason for payment and amount enclosed. The debt will be raised by the school bursar from lists provided by teachers or the organiser of the particular event or activity.

Payments by Parents

St Patrick’s Catholic School is a member of the Government’s Donations Scheme (2019). This means that the school does not ask for fees or donations for any curriculum-related events with the exception of school camps, when a donation can be sought.

Fees may be charged for optional activities (e.g. Sports Camp, miniball competition) that are not related to the curriculum. If parents do not pay for these activities, the student may not participate.

Refunds of Payments or Donations

In the case where an event is cancelled, the school will only refund payments and donations from parents in the amount that is refunded to the school by the organisers of the event.

C: ASSET PROTECTION

1. The Board is responsible for the protection of its assets. 

2. Assets may not be unprotected, inadequately maintained or unnecessarily risked.  

3. The Board is responsible for over viewing the programming and funding of general maintenance of the school grounds, buildings, facilities and other assets to provide a clean, safe, tidy and hygienic work and learning environment for students and staff. 

4. As part of their integration agreement with the regional Catholic Diocese (Waikato), the school shall regularly report with the Diocesan representatives in relation to asset monitoring, additional asset stock requirements and management and maintenance.

Property

See the Property Policy for details of property protection and maintenance.

Asset Leasing

1. The Board allows leased asset acquisition so long as there is evidence of a clear budgeted cost structure and repayment plan that supports the investment.

2. Current leasing programmes are applied to staff laptops, teaching and Principals, school wide computers and office / administration photocopy equipment.

3. Leasing can be considered to be a good approach for electronic equipment that is highly likely to become dilapidated due to the advancement of technology. 

4. Within the annual budget, the lease costs are itemised and identified for the forthcoming year.

Asset Purchases

1. Taking into consideration the Board’s annual strategic plan, the essential identification of assets to be purchased in the forthcoming year, the Principal will discuss with staff any asset requirements to the school, and these will be prepared as part of the Capital Expenditure requirements within the School’s Budget.

D: FINANCIAL SUSTAINABILITY 

1. The Board is required to provide for the future viability of the school and thus should be responsible for identifying a revenue stream that is able to provide for its future financial sustainability.

2. The Board will provide annual direction through the strategic plan for this.

3.  It is recommended that at least a minimum cash reserve requirement to see the Board in a position to meet its immediate funding for at least one month and a half would be approximately $40,000.

4. This cash reserve needs to be reviewed annually and the Board should set in place procedures in which the asset is maintained and it is able to record growth as a bank term investment.

Ratified: 23 September 2020

Reviewed: 29th May 2024