2011 Operations Policy Review: Finance - 30 November 2020

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 policies are restated here for board members' 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:

    • Its assets are protected,

    • Financial procedures are monitored and there is no possibility of fraud or inappropriate financial practices,

    • The reports the board receives 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 2019 financial year.

  • Extracts from auditor's Management Letter for the 2019 year:

Improvement in Your Financial Position 

We would like to congratulate the school for the surplus achieved in the 2019 year in spite of your deficit budget. It is a tribute to the efforts of your team in terms of budget monitoring and control and the focus placed on the financial health of your school. 


The Day-to-Day Accounting System 

Overall, based on our knowledge of your school and the results of our audit procedures, we again found the financial control environment in place 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. 


Our Sincere Thanks 

We would like to take this opportunity to thank the Principal and Financial Administrator for their assistance and co-operation during our audit. The assistance from the school team greatly influences the efficiency of the whole audit process, 

We would also like to thank the trustees for selecting Bennett & Associates as your auditors. We appreciate our relationship with your school and look forward to continuing to provide a valuable service to you. 


  • The auditor made two recommendations to improve our financial practice:

Auditor’s Management Letter Recommendations

Action/Comment

Inventory Cost

When reviewing stock at balance day it was noted that stock costs did not agree with prices on the December invoices from supplies. Our view is that at balance day stock needs to be valued at what the stock currently costs the School. 

It is recommended that inventory costs are updated in late December to ensure that the stock value at year end is more accurate and that prices are GST exclusive. 


  • Noted for action, shared with Administration Officer


Receipting Audit Trail 

We noted a weakness in your controls over incoming cash and cheques. Cash and cheques received and related receipts were not able to be reconciled back to the bank deposit and it was unclear which deposit the receipts related to. We would like to acknowledge that the school has improved its procedures by ruling off the receipt book but those receipts were not added up and reconciled with the cash banked also unfortunately there were a few minor discrepancies. 

We recommend that the receipt book is ruled off and that the deposit total is written on the last receipt of the deposit book to provide a clear audit trail. The total of the receipts since the last deposit should agree to the amount to be deposited. 


  • Noted for action, shared with Administration Officer


  • As part of my review in preparation for this report I have reviewed the board's financial policy statements point by point - follow this link.


Chicky Rudkin

Principal


Comments