The use of school rubber stamps, especially where the school has a long name (e.g. ”The Scott Brownlow Sixth Form and Specialist Sports College”).

Efficiency gains – a rubber stamp of the school’s name could be used in numerous situations. For example, a stamp could be used to endorse the school’s name on duplicate receipts, saving school staff from having to write out the school’s name on 200 receipts per book.

There are clearly certain circumstances where the use of a school stamp would be forbidden (e.g. a stamp of the Headteacher’s signature).

Efficiency gains – although often not feasible in smaller schools, it is recommended that more than one person is able to undertake basic financial procedures in the event of the absence of key staff. Examples might be raising orders, processing payments, bank reconciliations, posting income etc. The wheels shouldn’t fall off the financial wagon if a key member of staff is absent.

Cash savings - This might in turn reduce the level of external support (e.g. Group Bursar Service, LEAMIS) that the school may need to buy into in cases of emergency (e.g. long-term absence of school bursar). Any external support bought into can then be directed towards more complex issues (e.g. budget monitoring).

Insurance of Risks (e.g. staff sickness insurance, LMS Property Contents Insurance, Structural Repairs Buy-Back Scheme etc.).

C&YP Administration Section

C&YP Finance

For example, a supplier might (in good faith) offer to sell an item of equipment and, for an extra charge, arrange for that item to be insured against theft (i.e. it would be replaced by the company at no additional cost to the school in the event of it being stolen). However, this ‘cover’ may simply duplicate cover that the school may already have (e.g. LMS Property Contents Insurance Scheme) and thus to ‘double-insure’ is effectively superfluous and a waste of money.

Be fully aware of what services schools are entitled to under Service Level Agreements (e.g. LEAMIS, Legal Services, Structural Repairs buy-back etc.).

Efficiency gains. For example, take a vending machine. A school could choose to have its own machines and be responsible for replenishing stock, emptying the machines, banking the income etc., or simply choose to let a company operate machines on its premises, for which the school would receive commission. The company would take over all responsibility for emptying machines, replenishing stock etc. The former may generate more ‘profit’ than the latter, but would the latter actually be far more efficient for the school (i.e. considering savings in staff time)?

Commission schemes are very low risk and are essentially money for nothing.

Reserving only higher valued items.

Efficiency gains – less time and effort required in completing year-end reserved debtor / creditor forms if only higher valued items are reserved (in accordance with Finance’s recommended advice).

Also efficiency gains in sending details of reserves into the Finance Service electronically.

Having a well-defined set of cost centres on SIMS (e.g. putting related cost centres into one cost centre group, such as consumables).

Efficiency gains – financial analysis and reporting is streamlined if information provided is meaningful. Examples might be having separate cost centres for lettings, music, swimming etc., rather than just one generic cost centre called ‘Income’.

Take school trips, a separate cost centre for each residential trip will aid schools to quickly ascertain the profitability (or otherwise) of a particular trip, and compute easily any refunds due (simply the cost centre residual balance divided by the number of participating pupils).

LEAMIS

The LA Bursar Service can provide consultancy advice on a traded basis on setting up an effective range of SIMS cost centres.

Efficiency gains – financial reporting should be as easy as pressing a button and generating a report. The SIMS User-Defined reporting facility enables schools to create their own bespoke reports in a format that they (and their Governors) want.

Furthermore, SIMS generated reports can be automatically exported in Excel spreadsheets for those schools who wish to add extra information (e.g. explanation of variances).

Creating financial reports by manually typing figures from a number of sources into spreadsheets is both inefficient and risky (e.g. unintentional misrepresentation of data).

LEAMIS

C&YP Finance

Making supplier payments by BACS.   

Cash savings re. postage, envelopes, cheque stationery.

Efficiency gains for staff (e.g. not having to envelope cheques etc.).

Efficiency gains in having a “smoother” bank reconciliation process.

Maximisation of bank interest by having a better ability to pay invoices on due-dates (i.e. effective cash-flow management).

Reduction in level of unpresented cheques?

C&YP Finance

LEAMIS

Maximisation of bank interest – careful cash-flow management through not paying invoices too early will optimise bank balances and consequently bank interest received.

Also, by minimising the number of cheque runs should lead to less cheques being issued (i.e. a cheque issued may pay a number of invoices).

(Schools are reminded though of the legal requirement to pay invoices by supplier due dates).

Recurring payments are ideal for paying by direct debit.

Cash savings – postage, cheques. Also sometimes supplier discounts may be available as a result of paying by direct debit (some energy companies?).

Efficiency gains – staff not having to process cheque payments.

Other benefits – e.g. Data Protection registration not allowed to lapse as a result of continuous registration.

Additionally, cash-flow benefits as paying monthly by direct debit is often an alternative to paying the whole amount at the beginning of the financial year (e.g. Council Tax).

Efficiency gains – negates the need to handwrite cheques if SIMS generates cheque runs using continuous cheque stationary.

Reduces risk of cheques being inadvertently made out for different amounts to what was processed on SIMS (e.g. transposition of figures) if cheque is produced directly from SIMS.

(However, we wouldn’t advise computer cheques to have pre-printed signatures).

How much of a typical Bursar’s time is wasted chasing this information?

Efficiency gains. Two of the more common ones are (a) local garages for fuel (schools with minibuses), and (b) local supermarkets for home economics ingredients etc.

Rather than having to process numerous petty cash transactions, say for minibus fuel, the garage would simply issue a monthly invoice to the school.

We would advise that this facility be simply one to minimise administration, and that schools look to settle all subsequent invoices in full each month (i.e. rather than take extended credit and incur interest charges).

Efficiency gains – if, say, your cheques have to be dual signed, it is not ideal to have just two signatories set up on the mandate. Schools should seek to have sufficient signatories established to enable cheques to still be signed in the absence of normal signatories.

(Cheque signatories, however, should not be people with full SIMS access, and ideally should be independent of the main finance function of the school).

Efficiency gains. Whilst several schools choose not to use petty cash, consider whether introducing it to fund minor purchases might actually make things easier? For example, if a teacher buys something out of their own money for, say, £4.99, is it really reasonable to expect him/her to receive reimbursement by cheque? Allied to this, reimbursing small items by cash reduces the amount of suppliers that need to be set up on SIMS (for cheque payments to be made to).

Beware however; the availability of petty cash, if not controlled adequately, can lead to staff over-relying on petty cash and avoiding official ordering / invoicing channels. This may in turn lead to value for money not always being achieved if an avenue for ‘on the spot’ purchases is opened.

Efficiency gains – whereas generally, all cheques over £5,000 are required to be countersigned by a designated Governor, the LA has agreed to a dispensation for Upper Schools who are at liberty with the agreement of Governors to increase this limit up to £10,000. This would help those larger schools who typically have a relatively large number of cheques over £5,000 that have to be countersigned by a Governor.

Schools typically make this ‘designated Governor’ the Chair or the Chair of the Finance Committee. Are there potential efficiency gains to be made by making the designated Governor a school-based person, such as a teacher Governor, or alternatively a Governor who lives in close proximity to the school?

Returning inspection copies (i.e. books).

Efficiency gains – facilitates internet ordering or cashless procurement (e.g. some of our Children’s Centres use payment cards to buy food from the local supermarket).

A monthly statement is received, leading to just one transaction processed on SIMS.

Certainly more efficient than relying on a member of staff to make an on-line purchase with their own debit/credit card and then have to seek reimbursement from the school. There have also been VAT recovery difficulties in these instances where the transaction in law is then not seen to be between the supplier and the school.

Cash savings – facilitates internet ordering and the possible achievement of on-line discounts.

Schools are advised to periodically benchmark their costs against ‘similar’ schools using the DfES’s Benchmarking Tool.   Schools can select one or more key criteria to find matches with similar types of school country-wide.   The tool gives the school the ability to contact other ‘comparator’ schools to follow-up cost areas where it appears that the school is spending more that the comparator schools in its group.

Teachernet website:-

https://sfb.teachernet.gov.uk/login.aspx

Joint procurement (e.g. by family of schools, by Development Group).

Could goods and services be acquired cheaper if bought as a consortium (e.g. two or more schools on the same campus commissioning window cleaning, or even the sharing of a joint member of staff)?

Of course, ESPO itself is the prime consortium that seeks to achieve value-for-money on behalf of the Authority’s schools. The more it is used, the better it can work. Schools are encouraged to routinely benchmark against ESPO when procuring goods, and tell ESPO when they appear to be uncompetitive. Where ESPO does not provide a service, ask if they can add to their contacts list.

Evidence shows that some schools may achieve substantial savings by being part of LA Managed Contracts to provide major services (e.g. Grounds Maintenance).

It is always worth emphasising that achieving best value is not always choosing the cheapest option, but is a trade-off between cost and quality. You also need to add in the cost in staff time when searching for a ‘bargain’.

Development Groups.

ESPO

Possible cash savings of getting work done ‘in house’

.Are schools fully aware of the wide range of jobs that these Sections are able to undertake (e.g. CTSS Sites Development work, Electrical PAT testing and repairs by CTSS, CTSS yellow buses to provide transport for swimming lessons, school trips etc.)?

LCC Departments:-

Central Print Service
CTSS
ESPO
etc. etc.

Cash savings – does the school buy anything where the unit cost reduces, the more items are bought?

(However, beware overstocking for the sake of it)

Considering what services the school might be able to provide in-house (e.g. printing annual reports etc.).

Cash savings - some schools may have the technical capacity to undertake ‘professional’ work such as duplicating, printing, basic IT repairs etc., without the need to procure such services externally.

Any scope for, say, smaller schools to procure such work through the larger schools in their area or via the LCC Central Print Service, as opposed to commissioning work from the private sector?

Perhaps a role for Families of Schools / Development Groups here?

LCC Central Print Service.

Other schools.

Mobile phones can be expensive. If the school has mobile phones are they warranted and all used (i.e. not paying unnecessary contract charges on phones seldom used)?

Cash savings - has the school appraised the best way to ‘fund’ its mobile phones (i.e. monthly contract, or pay-as-you-go)? There are numerous comparable tariffs on the market and schools should ensure that tariffs are selected which best suit their needs (broadly speaking, pay-as-you-go tariffs offer better value-for-money where the phone is used infrequently, whereas an unlimited use contract may suit better where usage is typically high.

Efficiency gains – some schools still make ad hoc orders to ESPO for relatively low valued purchases. Is there scope to have a bulk ESPO order (e.g. weekly, fortnightly)?

Cash savings – reduction in postage and packaging charges if goods are bulk delivered.

D11

E-ordering / E-procurement through SIMS.

This functionality in SIMS FMS6 enables the processing and exporting of purchase orders in XML format by email as a file attachment.

Saving on postage, printing etc.

Speed of goods being received in school.

LEAMIS

ESPO are already geared up to receiving XML orders. Other suppliers may well be to.

D12

Cash savings – on-line discounts (e.g. PC world offer prices more competitive than the ‘in store’ price) and recognised ‘cheap’ providers (e.g. Amazon for books).

Ordering via the Internet does have some risks attached to it. We have provided advice to schools on how to control these risks.

Retaining excess funds on deposit / building society accounts (e.g. private funds, non-Nat. West Local Cheque accounts).   

N.B. Schools with Nat. West Local Cheque accounts already receive bank interest at deposit rate.

Maximisation of bank interest - Are the school’s bank balances – both official and private – invested at their most optimum? I.e. does the school have deposit accounts and / or building society accounts in addition to their current accounts?

Are the majority of funds typically held on deposit? Is there scope for the school’s bankers to automatically transfer funds from accounts on the school’s behalf to ensure that funds held in the current account are at a minimum? Is there scope for funds to be transferred easily from one bank account to another via, say, internet banking?

Is the rate of interest received reasonable and competitive?

Banks

A detailed handout on this subject was distributed at the Autumn 2005 round of LA Bursar / Registrar / Secretary meetings.

Efficiency gains – schools should not fall into the habit of banking in a set pattern (e.g. every Tuesday and Friday), particularly if this means occasionally and unnecessarily banking very small amounts of income. Banking should be done as and when required, having regard to cash held and the establishment’s insurance limits (although at the very least, monthly).

Banking, say, fortnightly, wouldn’t preclude the school from still processing the income on SIMS on a weekly basis.

Cash savings – in mileage allowances (not) paid.

Efficiency gains – school staff not having to bank themselves.

Security aspects (less risk to the personal safety of staff).

Scope to put school money in the sealed bag along with dinner money – dinner money transfers to the bank by Kings are funded by CTSS. CTSS has no objections to schools putting their own money into the same sealed bag (separately accounted for of course), neither does the Nat. West. bank.

ESPO Contract

CTSS re. dinner money

Cash counting (weighing) machines.

A relatively large number of schools do not have safes. Would the acquisition of a safe (and the subsequent increase in the value of cash that schools can keep on their premises as insured) enable schools to bank less frequently, as well as the obvious security advantages?

Additionally, certain ‘high security’ safes and other security measurers (e.g. CCTV) are recognised by the Authority’s insurers as being so, with subsequent increases to individual schools’ insurance limits as a result.

ESPO

Resources Department’s Insurance Section.

Schools are free to select their own bankers.

Schools should consider whether their bankers give them a competitive rate of interest, especially where funds are held on deposit. However, from an efficiency viewpoint, schools should consider just more than interest rates when choosing their bankers:-

Efficiency of counter service

Efficiency gains – is the effort of keeping a postage book of any significant value to the school?

Would a monthly summary suffice thus enabling usage to be monitored in total (to ensure that usage remains pretty constant month on month)?

Efficiency gains - no necessity to frank or put stamps on mail if envelopes are ordered ‘pre-franked’. Also, opportunity for things such as school name and address to be pre-printed on the reverse.

(Schools are then invoiced periodically by the Royal Mail for postage use).

Purchasing stamps from Royal Mail Direct (Edinburgh).

F9

Efficiency gains – documents can simply be received (sent) electronically.

Cash savings – reduced printing costs, postage costs etc.

Since 21st August, 2006 the Royal Mail has changed the way post is priced. Previously, the system was based only on the weight of your items, the new system will be based on both size and weight.

Although some things will cost more to send, over 80% of all mail will cost the same or less to send.

Cash savings – postage costs can be minimised through using optimum sized envelopes.

Scope to rely on the (external) annual Portable Appliance Test (PAT) to negate the need to check electrical items on the inventory at annual inventory check stage.

Efficiency gains – possible scope to schedule annual inventory check at same time as PAT test and rely on PAT testing results re. electrical items?

(There would still be a need to check non-electrical items (i.e. items not subject to PAT testing)).

CTSS can provide to schools a PAT testing service on a traded basis. This may offer potential for efficiencies. Additionally, this service would include on-the-spot repairs to equipment, where relevant.

PAT testing record.

CTSS

Possible cash savings by having the work undertaken by an internal LCC trading unit.

CTSS can also undertake repairs on ‘failed’ items at the same time.

Cash savings – PAT testing is a costly exercise. There may be significant cash savings to be made by doing PAT tests in-house.

Income generation opportunities – could a larger school become accredited to do PAT testing and sell its services to do the PAT testing at, say, its feeder primaries?

ESPO (purchase of testing equipment).

Burleigh College, Loughborough – offer a PAT testing accreditation course for individuals as part of their community class programme.

H4

Ask Departments to check their own inventories (or, perhaps even better, each other’s)

Energy Management Section

ESPO

Energy Management Section

ESPO

If the school shares an electricity / water meter with another establishment on its campus, then prompt recharging of costs is important.   The earlier income is invoiced for, the earlier the income is in the school’s bank account gaining interest.

Efficiency gains - any organisation will work more efficiently and effectively if staff are fully aware of their respective roles and responsibilities, and of the organisation’s policies and procedures (e.g. on procurement).

A fully documented Finance Policy can facilitate the training / learning of new Finance Staff.

The Finance Service is able to share a model Finance Policy with schools.

Additionally, the DfES Financial Management Standard & Toolkit document R31 contains an excellent example of a model school Finance Policy.

The school intranet (or restricted areas of the school internet) can be useful areas to post information to such as the school’s Finance policy, procurement policy etc.

Cost savings in posting large documents electronically, rather than having to print off x copies for circulation.

Closing down private fund (or minimising the number and type of transactions passing through it).

Some schools already have. Most activities can nowadays be processed through official funds (SIMS).

Efficiency gains for staff - closing the school fund is one less account to physically administer, bank income into etc.

Potential saving in bank charges?

Potential for deregistration as a Charity (if registered), deregistration of VAT (if VAT registered).

Charitable donations – operating the ‘Gift Aid’ scheme.

Available for schools (or school private funds) with charitable status.

Maximisation of income - for sponsorship events, donations etc., charitable schools may qualify for ‘gift aid’ under the HM Revenue & Customs (Inland Revenue) tax relief on donations scheme whereby, for every £1 received, the school is able to claim back a further 28p in income tax from HMR&C?

Additionally, HMR&C can give advice to charitable schools on the conditions necessary to operate ‘gift aid’ on trip voluntary contributions.

Retaining excess funds on deposit / building society accounts (e.g. private funds, non-Nat. West Local Cheque accounts).   N.B. Schools holding Nat. West Local Cheque accounts already receive bank interest at deposit rate.

Maximisation of bank interest - Are the school’s bank balances – both official and private – invested at their most optimum? I.e. does the school have deposit accounts and / or building society accounts in addition to their current accounts?

Are the majority of funds typically held on deposit? Is there scope for the school’s bankers to automatically transfer funds from accounts on the school’s behalf to ensure that funds held in the current account are at a minimum?

Is the rate of interest received reasonable and competitive.

Having sufficient cheque signatories established on the bank mandate (official and unofficial funds).

Efficiency gains – if, say, your cheques have to be dual signed, it is not ideal to have just two signatories set up on the mandate. Schools should seek to have sufficient signatories established to enable cheques to still be signed in the absence of normal signatories.

(Cheque signatories, however, should not be people with full SIMS access, and ideally should be independent of the main finance function of the school).

Private fund audit – are schools incurring unnecessary audit costs?

Cash savings – are schools paying unnecessarily for their annual private fund audit when a financially astute volunteer might be willing to undertake the audit for nothing (or a box of chocolates!)?

The LA advises that only the larger funds (i.e. annual turnover > £15,000 or with PAYE / VAT complexities) need to be professionally audited.

The key words are ‘financial astuteness’ and ‘independence’ when selecting an auditor. The auditor chosen should have the knowledge and ability to do the work, having regard to the size and complexity of the fund, and be independent of the day-to-day running of the fund (or of any person involved in the fund).

Several schools find, say, a Teacher and a Governor, to be appropriate auditors of their private funds.

Efficiency gains – by taking the turnover below the limit for VAT registration (taxable turnover in excess of £60k), schools with VAT registered private funds can seek de-registration. The result of this would be no need to submit complex VAT returns to HM Revenue & Customs etc.

Cash savings – there would be no need to account for output VAT on sales (however, conversely, no opportunity to reclaim input VAT on purchases).

Efficiency gains – a computerised package may streamline the administration of the fund, reduce the scope for accounting errors, and automatically produce a statement of accounts the end of each year.

Alternatively, a well designed simple Excel spreadsheet can assist greatly in the administration of the school fund (e.g. computerised ledgers).

Selling obsolete equipment that schools may consider worthless but others might not (e.g. IT equipment, furniture).

Income generation opportunity - what may be seen as worthless by schools may have a nominal value to others (e.g. for spare parts).

Consider recycling (e.g. printer cartridges), where this can give rise to a resale value.

Networking with other schools by offering surplus items for sale (e.g. through Development groups, generic e-mails etc.).

Additionally, we have suggested to the LA that the C&YP web-site could have an ‘Exchange and Mart’ section for schools to trade unwanted items between themselves -watch this space....

Conversely, collecting debts promptly can also maximise bank interest received (e.g. by raising invoices within 30 days, routine following-up of unpaid debts etc.).

Not a common practice, but there are schools that offer a prompt payment discount. Theory is, bills are paid earlier, bank balances are optimised and there are efficiency gains to be made in debt chasing / reducing the level of bad debts.

Annual review of charges – are charges commensurate with market conditions?   Scope to deviate from LA recommended charges?

Having a preference for pupil payments to be made by cheque (e.g. dinner monies, trip contributions).

Efficiency gains – less need to count, bag-up cash etc. No urgency to bank (i.e. no need to get large sums of cash off the premises).

Security issues – less risk of cash being lost, stolen.

Introduction of a till (to replace manual receipting).

Efficiency gains – a programmable till in the Finance Office still enables income to be receipted (via the till) and cashing-up of the till will analyse takings by type and identify VAT payable.

Saves manually receipting income, adding-up receipt books etc.

Consider using the SIMS Accounts Receivable module for raising invoices.

Efficiency gains – the benefits might include:-

Automated reminder letters

Recommended practice, particularly for one-off lettings (e.g. parties).

Efficiency gains – less risk of bad debts arising, and the subsequent following-up of unpaid debts.

Cash-flow / bank interest benefits if income is collected earlier.

M12

The internet is a valuable source of advice on what forms of external grant funding are available.

Additionally, the DfES Financial Management Standard and Toolkit has a useful section on income sources (section R38).

Efficiency gains for staff – automatic addition and balancing of registers. Scope to do away with monthly summaries that some schools have to reconcile with IRSs.

Also, the SIMS Dinner Money module can automatically generate letters to parents who owe money.

N2.

Efficiency gains – pupils pay by swipe card at the tills; no physical transfer of money between pupils and kitchen staff.

Security benefits – no cash generated during lunch time (but alternatively through secure revaluator machines).

‘Moral’ benefits – eliminates any stigma attached to ‘free meal’ pupils, who use the same swipe-card method as all other pupils.

Recovery of VAT on school trip expenditure (trips of an educational nature only).

Cash savings – for parents, if standard-rated trips are operated through official funds, VAT can legitimately be reclaimed provided the trip ‘encompasses part of the National Curriculum’ (i.e. isn’t wholly recreational).

Is there scope to build in a curriculum element to recreational trips to enable VAT recovery (e.g. could a trip to Alton Towers be deemed to be partly-curriculum based if pupils are expected to do some work during the day)?

Consider alternatives to individually receipting pupils for, say, trip contributions.   Would class collection lists suffice?

Costing out of a school trip prior to its commencement can ensure that contributions collected from parents are sufficient to cover all of the costs of the trip, and thus ensure that the trip does not run at a loss.  

Potential costs to consider include:-

Accommodation
Travel
Admission Fees
Supply Costs
Incidentals (e.g. photograph developing)
Internal Recharges (e.g. photocopying)
Insurance
Etc.

Some schools have devised a standard pro-forma for trip leaders to complete to enable an accurate trip contribution per person to be calculated.   Remember to disregard recoverable VAT from calculations.

Schools with vehicles – scope for routine servicing / repairs / MOTs to be undertaken by the DLO (who do the main Education and Social Services transport fleets)?

Q5

Q6

Cashless kitchens / smart cards (Secondary schools running their own cash-cafeteria kitchens).