1307 Operations Policy Review - Finance - 1 July 2013

Financial Policies

  • The Kaikohe East Board's Financial Policies are part of the board's Operations Policy and are published on the school website.
  • The polices are restated here for board member's convenience:

Financial Planning

Budgeting shall not fail to reflect the school’s strategic results, risk financial jeopardy nor fail to show a generally acceptable level of foresight. Thus financial processes must: 
  • Reflect the results sought by the school
  • Reflect the priorities as established by the board
  • Comply with the requirement for a balanced budget
  • Ensure adequate working capital
  • Demonstrate an appropriate degree of conservatism in all estimates

Financial Condition

The financial viability of the organisation must be protected at all times. Therefore, 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
  • 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 that no one person has complete authority over the school’s financial transactions
  • Make any purchases or financial commitment of over $1,000 without obtaining competitive process and quality information
  • Make any purchases or financial commitment of over $1,000 without an adequate review of ongoing cost, value and reliability

Asset Management

Assets may not be unprotected, inadequately maintained or unnecessarily risked. Accordingly, the principal may not:
  • Fail to insure assets
  • Allow unauthorised personnel to handle funds or school property
  • Subject plant and equipment to improper wear and tear or insufficient maintenance or inappropriate use
  • Fail to protect intellectual property, information and files from loss or significant damage or unauthorised access or duplication
  • Receive, process or disburse funds under controls that are insufficient to meet the auditor’s standards
  • Invest or hold operating capital in insecure accounts, or in non-interest bearing accounts except where necessary to facilitate ease in operational transactions

Principal's Interpretation

  • My interpretation of the board's requirements in this area is that the board wants to be assured that:
    • It's assets are protected,
    • Financial procedures are monitored and there is no possibility of fraud or inappropriate financial practices,
    • The reports the board receive fairly reflect the school's financial position and financial performance.

Data to Verify that the Policy Interpretation is Being Fulfilled

  • The board receives regular Financial Reports from Education Services that show income and expenditure against budgets and highlight any areas of concern.
  • The board received an unqualified audit (i.e. no major concerns) for the 2011 and 2012 financial years.
  • The auditor's Management Letter for the 2012 year noted that.
 "Overall, based on our knowledge of your school and the results of our audit procedures, we again found that the financial control environment at your school to be good. The attitude towards controls and ensuring your school is being governed effectively is very positive. We were also impressed that your board appears concerned about planning and performance monitoring."
  • The auditor made two suggestions to improve our financial practice.
    • That we are more diligent in ensuring that all invoices are initialled as approved for payment.
    • That we do not make advances to staff by cheque when there are payroll errors.
  • These suggestions have already been implemented.
  • As part of my review in preparation for this report I have reviewed the board's financial policy statements point by point (below).

Chicky Rudkin
Principal


Policy Review

Financial Planning

Budgeting shall not fail to reflect the school’s strategic results, risk financial jeopardy nor fail to show a generally acceptable level of foresight. Thus financial processes must:
1. Reflect the results sought by the school
Not okay
Okay
1 -
Not okay
00%
200%
300%
400%
5 -
Okay
1100%
2. Reflect the priorities as established by the board
Not okay
Okay
1 -
Not okay
00%
200%
300%
400%
5 -
Okay
1100%
3. Comply with the requirement for a balanced budget
Not okay
Okay
1 -
Not okay
00%
200%
300%
400%
5 -
Okay
1100%
4. Ensure adequate working capital
Not okay
Okay
1 -
Not okay
00%
200%
300%
400%
5 -
Okay
1100%
5. Demonstrate an appropriate degree of conservatism in all estimates
Not okay
Okay
1 -
Not okay
00%
200%
300%
400%
5 -
Okay
1100%
Comment/Evidence
Some codes missed due to ?? new system??
We finished 2012 with a working capital of $583,382 and although we have a deficit budget for 2013 we expect to finish the year with a Working Capital of $365,123

Financial Condition

The financial viability of the organisation must be protected at all times. Therefore, the principal shall not:
1. Incur unauthorised debt
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
2. Violate generally accepted accounting practices or principles
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
41100%
5 -
Okay
00%
3. Use tagged funds for purposes other than those approved
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
4. Spend more funds than have been allocated in the fiscal year
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
5. Fail to ensure all money owed to the school is collected in a timely manner
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
Comment/Evidence
Re (2) above - the auditor noted that we need to ensure that all invoices are initialled as approved, and that we should not make advances from school funds to staff who do not receive the correct pay.
Novopay overpayments still of concern
6. Fail to make timely payment to staff and other creditors
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
7. Sell or purchase unauthorised property
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
8. Fail to ensure that all relevant government returns are completed on time
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
9. Fail to ensure that no one person has complete authority over the school’s financial transactions
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
10. Make any purchases or financial commitment of over $1,000 without obtaining competitive process and quality information
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
11. Make any purchases or financial commitment of over $1,000 without an adequate review of ongoing cost, value and reliability
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
Comment/Evidence
no comment

Asset Management

Assets may not be unprotected, inadequately maintained or unnecessarily risked. Accordingly, the principal may not:
1. Fail to insure assets
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
2. Allow unauthorised personnel to handle funds or school property
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
3. Subject plant and equipment to improper wear and tear or insufficient maintenance or inappropriate use
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
4. Fail to protect intellectual property, information and files from loss or significant damage or unauthorised access or duplication
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
5. Receive, process or disburse funds under controls that are insufficient to meet the auditor’s standards
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
6. Invest or hold operating capital in insecure accounts, or in non-interest bearing accounts except where necessary to facilitate ease in operational transactions
Not Okay
Okay
1 -
Not Okay
00%
200%
300%
400%
5 -
Okay
1100%
Comment/Evidence
no comment