EDUCATION FINANCIAL SERVICES
Finance Manual
Chapter 28
End of financial year procedures
Contents
End of year procedures
Section
Page
1
Introduction
3
2
Checking transactions
3
3
Procedures
4
4
Schedules
4
5
General guidance
5
6
Local bank account schools
5
7
Unofficial accounts
6
8
SIO codes
7
2
End of year procedures
1
Introduction
1.1
One of the main requirements of the year end process is to ensure that goods and
services that have been received or issued during 2014/2015 are charged or credited
to that year’s accounts regardless of when they were budgeted for or paid for. The
requirements are not optional and apply to all schools cost centres. Should you
have any queries related to these procedures please contact your local EFS finance
adviser.
2
Checking transactions
2.1
The Actual Line Items report provides you with a detailed list of transactions within a
specified date range (using layout /SCHOOLS or /WEEKLY). You may find it useful
to check this report for transactions during the year end period.
2.2
The GR/IR Balances report provides you with details of goods receipted but not yet
fully invoiced for purchase orders. It is important that this report is checked regularly
to ensure that the charges are correct and completed orders are closed. Once an
order is goods receipted it becomes a charge against the school budget. Please run
this on your cost centre(s) rather than on purchasing organisation to ensure all
relevant details are returned. All establishments must ensure that goods and invoice
receipting is correct as at 31 March 2015 in order to maintain the correct charging in
the accounts.
2.3
Both the Revenue Monitoring by Cost Centre (drill down) and Commitment Line
Items reports provide you with outstanding commitments. It is good practice to run
the Commitment Line Items report for ALL cost centres, using a start date of 1 April
2003, ensuring that you tick the ‘open items only’ box before executing, to show all
old outstanding commitments. If any of these relate to County Supplies please refer
to section 3.6. To clear commitments relating to other vendors you should goods
receipt with a quantity of zero and tick the final delivery box.
2.4
The Customer Invoices Outstanding report provides you with a list of outstanding
debts (see section 5.1). If ‘display all invoices’ is selected the report will show the
customer, amount of invoice raised, any payments made and amount outstanding. To
put the report in customer order click on the customer name column heading and
then click on subtotals. This will add each customer’s balances up for you. This report
should be run regularly on all org units using a start date of 1 April 2008 to ensure
that all outstanding debts are reported.
2.5
Please ensure that all invoices for goods/services provided in 2014/15 to external
customers are raised in SAP by 31 March 2015.
2.6
The Energy Transactional Data report gives a breakdown of the units and charges
for utilities used by a school.
3
3
Procedures
3.1
SAP orders
3.1.1
An order must be raised via the IBC Portal eStore for all external orders where
goods or services have been received by 31 March. The receipt should then be
recorded via the ‘Receive goods’ tile within the eStore. If entering the goods receipt
after 31 March, the delivery date must be set to 31 March (or previous date if
goods received earlier). This process in all establishments must be completed by
14 April. SAP period 12 will then be closed and no further goods receipting in
2014/15 will be possible.
3.1.2
This process creates the correct accounting entries and therefore no other action is
necessary. This is the best practice approach for all to follow and raising an order
and timely goods receipting removes the need to submit a schedule (see section 4).
3.1.3
Conversely, where goods have been returned, the goods receipt must be reversed
before the end of Period 12 ie. by 14 April. Please note that if the ‘final delivery’ field
was ticked when the items were originally goods receipted then you will need to email VIMenquiries@hants.gov.uk with all relevant details asking for the final delivery
flag to be re-set before you can reverse the goods receipt.
3.1.4
Where SAP orders have been placed on other parts of the County Council the
accounts will be completed by either journal or internal trading, no other action should
be necessary. Please do not raise schedules in respect of dealings with other parts of
the County Council as this is internal trading and not permitted. Please note that
academies are external.
3.1.5
Schools that have chosen Model 1 should not raise annual/multiple call-off orders
for 2015/16 until after 1 April otherwise they will have to continue to goods receipt
them.
3.2
SAP invoicing
3.2.1
Invoicing external customers
The last date for raising 2014/15 invoices will be 31 March. All invoices must be
raised via the ‘Create customer invoice or credit note’ tile IBC Portal (instructions on
how to raise an invoice can be found via the Help Tile on the IBC Portal Home page).
Where a school has not raised an invoice for goods/services supplied or provided up
to 31 March within the timetable an electronic debtors proforma should be completed.
3.2.2
Invoicing internal customers
All internal trading is accounted for via the IBC Portal ‘Internal trading’ tile. The last
date for raising ‘Internal customer or supplier requests’ for 2014/15 internal services
is 31 March. These requests must be accepted by 14 April otherwise they will be
deleted centrally. Please note that academies are external customers.
4
3.3
Petty cash payments
3.3.1
Recording
All petty cash vouchers for payments made up to 31 March must be recorded via the
IBC Portal ‘Petty cash’ tile by 14 April.
Please note: When posting to Period 12 between 1 – 14 April you must always set
the Posting Date to 31.03.2015. The Document Date stays as ‘today’s date’.
Petty cash vouchers dated 1 April onwards must be recorded in the new financial
year.
3.3.2
Reimbursing
It is not necessary for you to submit a final petty cash reimbursement claim as part of
the year end procedures. If you need to process a claim please ensure it is raised
and authorised by 31 March.
3.4
Cash income
3.4.1
Specific dates apply to banking over a financial year end. Dates can be found in the
timetable.
3.5
Cluster funds
3.5.1
Schools which hold funds on behalf of a group of schools for cluster activities etc.
should be able to clearly identify these funds. In most cases we would expect C code
balances to be nil after year end schedules have been completed.
3.5.2
The lead school should distribute all funds that are due to cluster schools by the 31
March.
3.5.3
The lead school should, where possible, return to source any funds that the cluster
are no longer eligible to spend under the terms of the cluster funding, in line with the
published year end timetable. If this cannot be achieved, a creditor should be raised
for funds that the cluster is no longer eligible to spend.
3.5.4
An income in advance should be raised for all external funding that has not been
spent and that is eligible to be spent in the next financial year. This should ensure
that all funds sit with the appropriate school at year end. HCC (including HCC
schools) is not external, so income in advance schedules must not be raised for
money received from HCC (including schools).
3.5.5
In the cluster, it is recommended that schools make use of the ‘C code’ facility to help
manage funds on behalf of other schools. Further details are available at via the
general Advice & Guidance area of the EFS website at www.hants.gov.uk/efs.
3.5.6
Please liaise with your local EFS Finance Adviser where the above applies so that
appropriate action may be taken.
5
3.6
County Supplies
3.6.1
If you have any outstanding commitments which should have been cleared by County
Supplies please e-mail cpsa01@hants.gov.uk with the purchase order number and
line details concerned by Wednesday 25 March. Users should see commitments
cleared within three days of receipt.
3.6.2
Orders processed by the final receipt dates and delivered by the last scheduled day
shown in the timetable will be charged to the old financial year. Transactions will be
included in SAP reports for the month of March.
3.6.3
Orders processed or delivered after these dates will be charged to the new financial
year.
3.7
HC3S – School meals
3.7.1
Your meal charges for the period to 2 April 2015 will be processed against the
2014/15 financial year so you do not need to raise creditors. To enable accurate
recharges to be processed in the old financial year it is essential that you ensure
prompt submission of meal returns for the period up to 2 April 2015 (together with
any returns outstanding from previous weeks). Recharges will be estimated for
periods for which no returns have been received and any necessary adjustments will
be made in the new financial year.
3.7.2
Meals income collected by school should be banked in accordance with the
deadlines given in the year end timetable.
3.7.3
A recharge schedule for 2015/16 will be circulated to schools separately.
3.7.4
For further advice please contact the Finance Team on tel. 023 8062 7710 or
7738 or e-mail catering.support@hants.gov.uk.
3.8
Purchasing card
3.8.1
Purchases made on the card will be available to review and approve within two-three
days of transaction. They must be approved by 5th of the following month, or
transactions will automatically default to GL and VAT codes based on the merchant
used.
3.8.2
Purchases made on the card before 28 February will be uploaded to SAP in March
(depending on the supplier making the claim to the bank in time). As this will be
completed before the end of March this will be accounted for in the current financial
year.
3.8.3
Any purchases made on the card after 28 February will not be uploaded into SAP
until April and will therefore be attributed to period one of the new financial year.
Therefore, where there are individual amounts above £250 in March’s transactions
that you wish to be accounted for in the previous financial year you will need to raise
a scheduled creditor.
6
4
Schedules
4.1
Set out below are the key points that must be followed in respect of schedules:
 Schools are not required to raise schedules for individual amounts less than
£1,000. However, whilst schools may choose to do this they should note that any
schedules for individual amounts less than £250 will not be processed.
 It is expected that schedules in respect of creditors will be minimal, and only
raised where a SAP order cannot be raised. These are likely to be for gas or
electricity.
 Good practice is for an order to be raised (see section 3).
 Under no circumstances should schedules be raised relating to Hampshire
County Council transactions, e.g. HCC schools, HCC IT, County Supplies,
Grounds Maintenance, Mathematics Advisory Centre, Calshot Activities Centre,
Stubbington and Minstead Study Centres, HIAS, Grant funds, SLA charges.
Queries need to be resolved before the financial year end with the appropriate
internal provider.
 It is essential that sufficient details are entered on the schedules as to payees,
goods details, etc. Under no circumstances should the payee be left blank.
 Please do not record HCC as the payee for gas or electricity. The payee is
the energy supplier.
 There is no need to submit nil returns.
4.2
Please do not use any of the following GL codes on your schedules
3900
3905
3915
3920
4010
4015
4020
4025
Electricity - use 3951
Gas – use 3950
Gas Oil – use 3953
LPG Gas – use 3954
Water – Metered - use 3956
Water – Rated – use 3955
Sewerage – Metered – use 3958
Sewerage – Rated – use 3957
4.3
Funding for rates: The current funding formula allows schools to be funded for rates
based on an actuals basis. The rates charge for the financial year is estimated for
each school when the budget shares are prepared and funding at this level included
(see 2014/15 budget share). If the actual charge for rates during the year is different
then an adjustment will be made by the School Funding Team.
4.4
It is necessary for scheduled debtors to be raised in respect of SEN top-up funding
(special schools and SEN resourced provision schools) which is owed by other
authorities, and for which an invoice has not yet been raised. The same applies in
respect of the funding for LSA hours from other authorities in all schools.
For those schools which subscribe to the top-up funding SLA, the Operational
Finance Team will try to collect as much of the income as possible before the end of
the year, and will centrally raise schedules for those schools where it was not
possible to collect it. These schools should not raise such schedules themselves (to
avoid double counting).
7
Those schools which are not a part of the SLA will need to raise the schedules
themselves. The schedules must break down the income between authorities, and
give the name (or initials) of the children concerned.
4.5
Schedule proformas must be completed electronically and are available via the EFS
website at www.hants.gov.uk/efs.
4.6
All schedules must be e-mailed to efs.help@hants.gov.uk by 27 March.
If you have any additions or amendments to already submitted schedules
please contact EFS on 01962 847549 before resubmitting.
Proformas submitted after the deadline will not be processed.
4.7
Please be prepared to produce documentation to support any schedules and retain
your documentation at least until 31 March 2016 in order for the Audit Commission to
carry out any selective checking that they may require.
4.8
Please submit the appropriate schedule as follows:
Creditor: A creditor proforma should only be completed where an order and goods
receipt cannot be entered on SAP in respect of goods and services received up to
31 March.
Income in advance: An income in advance proforma should be completed for any
income received in this financial year which relates to services provided in the
following year. An example could be for education visit money received from parents
for visits which take place in the new financial year.
Debtor: A debtor proforma should be completed where an invoice has not been
raised on SAP and you have not been reimbursed for income due in respect of
services provided in the financial year ending 31 March. Please note any income
received following submission of the debtors proforma must be processed in
the new year.
Payments in advance: A payments in advance proforma should be completed for
any external payments made in this financial year relating to goods/services that will
be received in the following year. For example, school visits trips which will not take
place until the new financial year but perhaps a deposit has already been paid in the
old financial year (although payments to HCC establishments such as Stubbington
and Minstead Study Centres and Calshot Activities Centre are internal, so schedules
should not be raised).
8
5
General guidance
5.1
Debt control
5.1.1
Where you raise invoices for external customers using the IBC Portal ‘Create invoice’
tile it is important that the accounts reflect the true income position.
5.1.2
When an external invoice is raised, your budget is automatically credited – even
though at this point no income has actually been received. Once the invoice is paid, it
should be matched against the invoice number and this simply clears the outstanding
debt in the control accounts. Do not code the income via local banking against a GL
code, the invoice number only should be entered on the Portal form.
5.1.3
It is recommended that at the end of each term you run a ‘Customer invoices
outstanding’ report, via the IBC Portal ‘Finance reports’ file. It is good practice to run
it more frequently to ensure all invoices are followed up and paid promptly and to
report to governors regularly on outstanding debt.
5.1.4
The ‘Customer invoices outstanding’ report will show any outstanding debt. If there
are items on the report which are shown as outstanding but you know have been
paid you will need to establish:
 where the income was banked
 when it was banked.
5.1.5
If the income has been coded direct to a cost centre then it will be necessary to
cancel the outstanding debt by initiating and authorising a credit note via the IBC
Portal ‘Manage customer’ tile – do not send this to the debtor – simply file it for your
records.
5.1.6
If the income has been coded against the wrong invoice number you need to e-mail
remittances@hants.gov.uk.
5.1.7
Once you have assured yourself that all the debt on the ‘Customer invoices
outstanding’ report is truly outstanding you should then make an assessment of any
likely bad debts. Any invoice which remains unpaid will ultimately have to be debited
back to the income code on which it was raised. If you consider there are any debts
for which you have taken every available step to recover (including asking the IBC
Order to CashTeam to deal with) then:
a)
Obtain authority from the headteacher to write off the debt up to a maximum of
£1,000.
b)
Debts over £1,000 must be authorised by the headteacher in consultation with
the school governors and approved by the Director of Corporate Resources
before being written off.
c)
Write off approval in all cases should be sent to IBC Transactions (Order to
Cash) who will action the write off. Credit notes should not be raised by the
school.
9
It is also recommended that any debt write off is approved and minuted by the
governing body and this is considered essential for any debt of £500 or more.
Schools with regular/high levels of income are advised to report to Governors on
levels of debt on a regular basis.
For further advice please contact Vivienne Broadway, Order to Cash Manager, 0300
555 0223.
5.2
Claims for teachers’ long-term sickness supply cover reimbursement
5.2.1
Outstanding claims to be submitted electronically by 31 March. Please indicate in the
comments box the year in which expenditure is borne by the school in order for
the credit entry to be posted to the correct financial year. If no indication is made the
credit will be posted to 2014/15. For assistance, please contact the Education
Financial Services Support Team on 01962 847549 or e-mail efs.help@hants.gov.uk
5.2.2
If your school has a separate policy for the recovery of sick pay from third parties,
please remember to include debtor provision.
5.3
Payroll
5.3.1.1 Where payments arise from the submission of a claim, the charges against your
budget will, in general, reflect those arising from claims submitted for work done from
March to February provided that claims are submitted in accordance with the
published timetable. The accounts will therefore reflect a full year’s expenditure.
Claims submitted after these deadlines will be processed as a charge against the
new year’s budget.
5.3.2
A creditor on payroll costs will normally only be required for unactioned backdated
pay rises.
5.3.2 Please note Education Financial Services do not action corrections in relation to
payroll miscodings. Schools have access to the ‘Maintain HR data’ tile in the portal
and so should be able to make the changes to GL codes themselves. The ‘Maintain
HR data’ tile can be found under ‘Schools’, then ‘Staffing forms’. If you find that you
are unable to make these changes yourself, please raise an HR Enquiry via the Portal.
5.4
Community and adult education
5.4.1
Where schools are used for community and adult education purposes and costs
cannot be directly charged to T, X, Y etc. cost centres (eg. premised related costs)
these costs should be apportioned using the IBC Portal ‘Create journal’ tile.
5.4.2
To ensure accuracy of accounts at the end of the financial year please ensure that
best practice guidance, listed in the timetable, is followed and that transactions are
completed in line with the timetable. Community education staff are asked to pay
particular attention to the above section of debt control (5.1). Run the IBC Portal
10
‘Customer invoices outstanding’ report, in time for you to balance any invoices which
have been paid or to collect outstanding payments before the closure of accounts.
5.5
Payments made centrally – Public Utility Accounts (PUA)
5.5.1
The central systems for paying gas, electricity, water, fuel oil, rates and telephone
bills, are designed to ensure that, as far as possible, either four quarterly or 12
monthly bills are charged to each financial year. Our advice to you is to review
spending on these areas and if four quarterly or 12 monthly bills have not been made
raise a creditor (estimated provision) in line with previous spending or budget
provision level. If you are not satisfied that you have been properly charged for the
year, in accordance with your own meter readings, please contact Jane Abbott for
Energy Management (01962 826911) and Rocio Bates for telephone account queries
(01962 845339).
5.5.2
Please use the following non-PUA (public utility account) GL codes for utilities
creditors:
Non-PUA gas
3950
Non-PUA electricity
3951
Non-PUA solid fuel
3952
Non-PUA gas oil
3953
Non-PUA LPG gas
3954
Non-PUA water (rated)
3955
Non-PUA water (metered)
3956
Non-PUA sewerage (rated)
3957
Non-PUA sewerage (metered) 3958
5.6
Capital contributions and self-funded building projects
5.6.1
Where you have agreed to contribute to projects in the capital programme from your
revenue budget, the full cost of the contribution should have been deducted from
your budget using GL code 6061 when the contract was let. (Please do not move
these entries.) Where contributions are met from funds from outside sources such as
PTA, trust funds etc, you should ensure that you receive these monies into your
budget by 31 March 2015 or set up the appropriate debtor. Please check that
revenue contributions are in line with your expectations by checking against your
records and file copies of CF1’s.
5.6.2 When your devolved capital budget (C.E00xxxx.01) is making a contribution to a
project in the capital programme, your share of the contribution will be charged directly
to your devolved capital. Please check that this is in line with your expectations by
checking against your Devolved Formula capital (DFC) records and file copies of
CF1’s. Frequently asked questions (FAQ’s) on capital can be found here
http://www.education.hants.gov.uk/intranet/finance/dfc.php
11
5.7
Devolved formula capital (DFC) and internal order commitments
5.7.1
Schools are used to checking their revenue commitments using the IBC Portal
‘Commitment Line Items’ report. It is also important that schools check their capital
commitments and clear down those which are no longer valid or close them down if
the order is complete. The best way to do this is to run the IBC Portal ‘Project report’
and then drill down on commitments from there. Commitments can then be cleared in
the same way as revenue orders (see section 2.3).
5.7.2
Internal orders (revenue and capital) with IT Services no longer need to be raised via
the eStore and are instead raised using an online form. Therefore, any schools with
outstanding purchase orders should note that commitments are not cleared at the
point a journal transfer is actioned. To remove the balance you need to zero goods
receipt and tick the final delivery field on the purchase order. Work instructions to
assist you in this process are available at http://www3.hants.gov.uk/portal-help/estore/goods.htm#step-3.
5.8
Confirmation of carry forward balances
5.8.1
Revenue balances will be carried forward to the new financial year on all cost
centres, although entries will not be posted until some time after year end.
5.8.2
For guidance on attributing balances to SIO codes see 8.1.
5.8.3
Any balances on devolved formula capital will be carried forward to the new financial
year.
5.9
Annual financial statements
5.9.1
Following Committee approval of the accounts in June, you can run your annual
financial statement in CFR format via the IBC Portal ‘Revenue monitoring by cost
centre’ report. It is recommended that earlier figures are not used. It is also
recommended that schools also provide governors with a report identifying major
variances between budget and final figures.
6
Local bank account schools
6.1
To enable us to support entries in our balance sheet, your reconciled bank/cash
balances must be available. The following action is therefore required by 30 April:


for each bank/cash account provide a copy of the reconciliation statement, and
bank statement used in the reconciliation, and send to Operational Finance
School Funding Team school.fund@hants.gov.uk
complete the LBA schools monthly bank reconciliation form
12
7
Unofficial accounts
7.1
For those unofficial accounts managed outside of HCC official accounts the proforma
available via the Budget cycle area of the EFS website at www.hants.gov.uk/efs
should be completed and e-mailed to userid CTSSACCY by 30 April.
7.2
This will enable us to include unofficial account transactions, with your official
account transactions, to the DfE in line with consistent financial reporting (CFR).
7.3
It is important that the income and expenditure totals on the proforma agree with
each other.
7.4
There is no requirement for the accounts to be audited before submission, and the
proforma must not be delayed until after audit.
7.5
Where the unofficial fund is used as a holding account for trip income and all the
invoicing and arrangements are through the school official account with payment for
the trip being made from the official account, then it is important to note that all
monies collected in this way must be paid across to the official account after each trip
as the income belongs to Hampshire County Council, not the unofficial fund. Where a
profit of £5.00 or more per paying pupil on a trip is made it must be repaid to parents.
For amounts below this you may use this profit to subsidise the next trip as strictly
speaking any profit on a trip would mean we need to account for VAT on the income
collected.
7.6
A full set of audited unofficial accounts must be submitted to Education Financial
Services by 31 August 2015. This includes income account, expenditure account and
balance sheets.
8
SIO codes
8.1
For those of you wishing to re-instate balances carried forward in their activity
accounts (i.e. their SIO code), journals will need to be created via the IBC Portal
‘Create journal’ tile. You must action these journals in the new financial year and
should use the same GL code on both sides of the journal.
For activities/local cost centres in credit:
Posting key
Cost Centre GL code
40 (debit)
50 (credit)
XXXX0
XXXX0
7203
7203
For activities/local cost centres in debit:
40 (debit)
XXXX0
5394
50 (credit)
XXXX0
5394
Statistical Internal Order (SIO)
(unique to school)
e.g. 345678
e.g. 345678
Under no circumstances should a journal be raised against GL code 7698 (balance
brought forward).
13