Management Information Sheet

Over recent months Norfolk Audit Services (NAS) and Education Finance have been working together and considering their offers to schools. This MI Sheet outlines the outcomes of this collaborative work.

Traded Full School audits:-

Headteachers are responsible for ensuring that sound financial systems and internal controls are in place within their School. The Chair of Governors also has a key role in the leadership and management of the School and should be aware that it their responsibility to oversee the financial performance of the School and confirm that sound internal controls are in place. A sound system of internal financial controls is one way to demonstrates good governance and helps schools ensure that resource allocations and grants are used for the purposes intended and helps to safeguard against fraud. Traded full audits are also part of our assurance to the Council's Audit Committee and the Council's Executive Director of Finance and Commercial Services (the statutory Section 151 Officer) that maintained schools have an adequate and effective system of internal controls.

Traded full school audits focus on the key finance systems at schools covering areas such as, purchasing and payments, receipting goods and services, payments to individual, bank accounts, BACS payments, purchasing cards, assets (register, independent annual check and security marking) and income, and provide the Section 151 Officer with assurance that schools' financial internal controls are adequate and effective. These audits will continue to focus on the key finance systems.

In recent years, the audits undertaken have been completed with the support of the Education Quality Assurance, Intervention & Regulation Service in schools primarily where a Lead Officer has been assigned. This will continue in the future.

We are also now selecting schools for an audit where one has not been completed for over ten years. There are still circa 50 schools who have not had an audit within the last ten years. We would hope to complete an audit at all these schools within the next few years.

Once this has been completed, we will be completing an audit at schools every five years. There are circa 50 schools currently (outside of those above) who have not had an audit within the last five years, which will increase year on year.

Thematic audits: - Up to two of thematic audits take place annually and the subjects vary from sickness monitoring to cyber security; this will continue in the future.

Education Finance Health Check: - This health check has been redesigned to cover areas such as governance, budget plans, lettings and financial records to avoid any duplication with the scope of the traded audits.

This health check is important because not all schools which are being supported by Education Quality Assurance, Intervention & Regulation Service are due to finance related risks, many are due to other areas relating to governance weaknesses or budget related matters.

We are expecting, in conjunction with Traded Full School Audits that a health check is completed every five years

All schools should ensure they have a robust framework in place for managing risk. As part of the annual Schools Financial Value Standard (SFVS) return there is a key section on 'Protecting Public Money' which includes two specific questions relating to audit:

'Is the governing body sure that there are no outstanding matters from audit reports or from previous consideration of weaknesses by the governing body?'

And

'Are adequate arrangements in place to guard against fraud and theft by staff, contractors and suppliers?'

Governors will be re-assured that if their school has undertaken a health check and a Traded Full School Audit every 5 years, then steps will have been taken to mitigate risk and this will help to confirm, via recommendations, that effective internal controls are in place.

The Traded Full School Audit and health check can be purchased via SLA online, however if you wish to use another supplier to engage in the process then please let us know and we will ensure that your selected supplier has received a terms of reference so they obtain a specification for the audit.

RAG Rating for Schools Financial Management

Section 7 on the RAG matrix has a specific question relating to audits and health checks but we removed the red and amber categories to just include the type and date of the school's last audit.

In conjunction with the Finance Consultative Group and to ensure risks are mitigated in schools we will be re-introducing this category from 1st April 2023. The relevant section has been included below.