EXTENDED SCHOOLS ADVICE: ACCOUNTING FOR COMMUNITY SERVICES AND ACTIVITIES

An Extended School is the focus of a range of services and activities that can take place both during and outside school hours: these can be run directly by the school or by other organisations. Extended schools can therefore offer a variety of activities and service provision that are viewed as community services.

This letter provides guidance on some of the administrative issues around community services and school budgets.

Coding
The year-end income and expenditure figures provided to County Hall need to exclude community services transactions before being used for benchmarking. In order for the transactions to be tracked within the system Budget/Departmental codes should be used:

LM Accounts – Use a department code(s) to control the expenditure. A report is being written at County to provide a CFR breakdown of the Extended School transactions: this report will be required at year-end in order for us to remove these transactions from schools' budgets.

Cash Accounts – Use budget accounts to control the expenditure. A separate budget account will be required for each budget heading to be used. These budget accounts can be linked to a budget group from which various reports can be run (for further guidance see enclosed letter of 7.09.04 'Consistent Financial Reporting'). A report will be requested at year end in order for us to remove these transactions from the schools' budgets.

Costs
Any community use that has exclusive use of school property must have a formal agreement; the following advice applies to shared use or sessional use.

It is absolutely clear that a school should include within any hiring lease or transfer of control agreement the costs of heating and lighting, caretaking responsibilities etc, for community activities, even when these cannot be identified as an actual or metered amount. Where costs need to be recovered the following areas need to be covered:

• Heating and lighting
• Water costs
• Equipment and materials
• Refreshments
• Staffing
• Cleaning
• Maintenance (also include BMPP premium)
• Wear and tear
• Programme management and administrative support
• Contracts to Purchase Services

Once such costs have been covered by a hiring or transfer of control agreement, a school need not charge for these costs if a second activity is taking place in parallel and there are no additional costs incurred – eg any caretaker/keyholder responsibility or energy costs have been covered by the first hiring.

The annual income from community services and hiring activities must cover the overall additional costs to the school but an individual activity need not cover its full costs as it can be cross-subsidised from other activities. For example, a school could charge for the hiring out of its school hall for a private function at a higher rate than it charges for a local youth group to use its facilities. The latter group may be an activity the school specifically wishes to encourage and is, therefore, happy to offer its facilities at a reduced rate.

The following table is designed to clarify when a school should be aiming to charge for activity/services.

School organised activity that supports, extends and enhances national curriculum. e.g. Study Support Family Learning	No charge/no need for separate costings.
Activity contributing to the extended school run by school or 3rd party. e.g. childcare health clinics adult education	Apportioned costs should be covered by the community services budget or by the 3rd party.
School premises used by 3rd party for activity that does not directly contribute to the extended school e.g. private sports hire	Charge at real cost (rental)
Second activity run in parallel with an activity already covering any additional costs incurred by the school. e.g. Playgroup	No charge necessary

The school also does not need to charge if activities that support, enhance or extend the delivery of the national curriculum are delivered during the school day in a part of the school site that is already lit and heated, eg Family Learning in the school dining room during the afternoon session.

Where a charge is made, even though it may have been assessed by apportioning the costs above, a single charge described as “rent” should be made. Rent is exempt for VAT purposes and so those providing the community service do not have to be charged VAT. A journal should be completed to record the transaction using Expenditure Code 2452 “Extended Schools Rental Costs” and Income Code 9140 “Extended Schools Rental Income”. If a separate datafile is used to monitor the community services expenditure, then a cash transfer will be required using the above codes. It is recommended that the transfer is completed termly.

VAT
Some of the additional activities and services delivered through extended schools initiatives may be liable to VAT. This needs to be checked through your finance officer. If an activity/service is liable to VAT any transactions must be entered gross (ie the VAT should be included in the net total and the VAT field will be reported as nil) so a bill for equipment of £100 + VAT of £17.50 should all be coded to equipment as £117.50.

Maternity Leave/Supply Cover
If staff are employed by the school to deliver or support community services/activities there is currently no central provision to reimburse the school for the cost of maternity leave or cover costs for such things as jury duty. Currently these costs must be borne by the school's community services budget.