Strand 3: Great Financial Leadership Optimising your resources

2. Strand 3: Great Financial Leadership Optimising your resources

3. Strategic financial planning and accountability – costing your curriculum Val Andrew, ASCL Business Management Specialist Sam Ellis, ASCL Funding Specialist

4. 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

5. This uses a slide layout which has a fixed image. To see instructions to change slide layout see slide 5 Internal Audit – Adding Value- • March 2014

6. Agenda • Introductions • Academy Assurance Requirements • Board Assurance Framework • Assurance Mapping • How does it work in practice?

7. Introductions • Stephanie Mason – Head of Academies, Further Education and Skills, Baker Tilly UK Audit LLP • Alan Evans – Finance Director and Company Secretary, CWA Academy Trust

8. Academy Assurance Requirements • 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.

9. 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.

10. 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.

11. 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.

12. 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’?

13. 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.

14. 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

15. How does it work in practice?

16. ‘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 • Independent review – overall compliance and risk management • Regulators (EFA), OFSTED, External Audit, Internal Audit, Other 3rd parties 3rd

17. For example

18. Common pitfalls • 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?

19. End result … • Focussed, value added internal audit plan:

20. Internal Audit • 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

21. 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

22. Internal Audit 2010 • RO governor option • Reciprocal arrangement • Retaining Local Authority audit • Preferred choice was to use internal auditors in RO role

23. Rationale • Wanted the external assurance • Professional credibility • Wanted more than simply the RO functions • Integral part of internal control framework • Looking ahead

24. 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

25. 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

26. Reviewing and improving your procurement practices Steve Archer, Team Leader, Schools Commercial Team, Department for Education Will Jordan, Education Sector Manager, PS Financials Limited

27. Improving your procurement and achieving value for money Steve Archer Schools Commercial Team Commercial Division

28. How can improved procurement help you….

29. Public Sector Procurement – what does it mean for Academies

30. EU Procurement Directives – Financial Thresholds • From 1st January 2014 • EU Procurement Directives and • The Public Contracts Regulations 2006 • For Schools & Local Authorities thresholds 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

31. 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 New EC Procurement Directives

32. The current climate Importance of efficiency and financial management

33. 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

34. 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”.

35. We’ve taken the work out of finding good deals in key spend areas…

36. 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

37. Schools ICT • Schools ICT Services Framework – expires Oct 2014 • Information Management & Learning Services (IMLS) Framework – expires March 2016 • Microsoft MoU for UK Schools

38. Don’t be headline news… • Crown Commercial Service framework • 3,600 schools • £11m spend and case studies evidencing 49% savings.

39. Build your procurement skills… www.buyways.co.uk

41. Academies Zone

42. 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/leadership/typesofschools/academies/open

43. stephen.archer@education.gsi.gov.uk

44. Sweating your assets/making the most of and developing your buildings and facilities Julia Green, Solicitor, Browne Jacobson Keith German, Director, AA Projects

45. Getting the most from your assets …… • Julia Green – Partner Browne Jacobson

46. Facts and figures…. • What do you predominantly use your site for? • What do you do with it for the rest of the time?

47. The first steps ……….. • Why would you look to generate income? • What is your strength?

48. IAA Spring National Conference 'Sweating your assets: Making the most of and developing your buildings and facilities'?

49. Do you know what you have got? • A familiar Picture • Due diligence • Liabilities and responsibilities • What is the future?

50. How can the future be delivered? Basic Need Salix – Energy Conservation DSG Local sources and fund raising Academies Capital Maintenance Fund Sport England