Budget monitoring

The schools financial procedures provides maintained schools with guidance on a range of financial management processes that are set out as individual sections.

Regular monitoring of income and expenditure against the agreed budget is central to effective school financial management. It allows governors, the headteacher and staff to maintain financial control by continually reviewing the school’s financial position and taking remedial action where necessary.

Effective financial management will ensure the school’s development/improvement plan objectives are being met and financial resources are effectively deployed against these local, region and national objectives raising attainment and narrowing the educational gap.

Budget monitoring regulations

Schools must monitor income and expenditure against their delegated budget. The headteacher is to monitor the budget monthly, throughout the year. This function cannot be delegated to finance staff or a bursar service.

Budget monitoring reports should be prepared and presented periodically, at least six times a year, as stated as a requirement in the DfE SFVS Guidance issued in April 2019 and updated in June 2021 to the full governing board (GB) for review. Governors may request more frequent reports, and these must also be presented to appropriate committees.

Each school’s GB’s may determine the form and contents of financial reports, but the following basic information should be considered as the minimum for inclusion:

A - The original and any revised budget
B - Current actual income and expenditure plus commitments
C - An estimate of income and expenditure to the Year-End
D - A total projecting year end position for both income and expenditure
E A comparison of the latest (A) and (B) figures
F - Explanations for significant variances
G - Reports should cover the total revenue budget and capital budget of the school
H - An estimate of the in-year balance
I - The balances brought forward from previous years and to be carried forward to next including (H) above
J - Any explanation as to future use of any balances held or what steps are to be taken to bring any overspends back into balance

Where schools hold monies on behalf of others (for example, partnership, and other specifically identified income stream, other than the dedicated schools grant) a separate report is to be provided for these monies using the reporting approach outlined above. This report is to be presented to both the school’s GB and the party or parties for whom the school is holding the monies.

Budget monitoring is to be carried out monthly at all levels and should include all devolved budget cost centres. Expenditure on individual initiatives is to be tracked to enable the school to assess cost and effectiveness against the criteria set out in the school’s development/improvement plan and conditions associated with any specific funding.

It is important when considering actions to tackle any significant variances that these are not just concentrated on overspends. Underspends must also be considered as it is important to deploy all available resources to meet the school development plan and other externally set priorities.


School bursarial service, BursarialServices@ealing.gov.uk

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Last updated: 11 Jul 2023

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