8 Financial Control & Monitoring Flashcards
Profile the budget
Profiling involves entering commitments to spend in each month as we are likely to occur
Discrepancies can then be examined between planned and actual expenditure.
Could add discrepancies p104
Evaluation
How resource use meets the overall objectives for the organisation
Focuses on the impact of the plans that the resource use has fulfilled
Prompts thinking about the quality of the outcomes arising from resource use
Hope (2006)
Evaluation should be concerned with five areas of excellence
- Strategy execution
- Resource management
- Operational effectiveness
- People management
- Risk management
Cuttance (1994) three reasons why accountability for resource use should be maintained
- Responsibility for the use of public funds
- The need for assessment of client feedback on service provided
- The need for review of quality in the development, production and delivery of educational services
Economy
Acquiring resources in the appropriate quality and quantity at the lowest possible cost
Robustness to ensure no better quality
Centralised perching systems
Services put out to tender
Efficiency
Entails securing minimum cost for any given quality and quantity of service
Cost efficiency and the social value of the output is not part of the equation
Use page 108 as example
Ofsted 4 criteria for efficiency of school
- Quality of financial management and decision making
- Efficiency and effectiveness that resources are used to meet aims and objectives
- Efficiency of financial control
- Assessment of any steps taken to evaluate its cost effectiveness
Effectiveness
Very subjective concept
Makes an assumption about the social values of the output
Standard definition of effectiveness is the extent to which a program or activity is achieving its established goals
And activity can be effective but not doing so in an efficient way
Becomes more subjective and concerned with teaching and learning, the nature of support, pedagogy
Effectiveness of schools often refers to good practice rather than specific outcomes
Value for money
It focuses attention on how to get the best outcomes from a given expenditure and prompts consideration of whether increase spending per pupil will increase educational outcomes
Highly subjective
Can be statistical, local employment levels, teacher quality, resource quality, outcomes and examinations, attendance rates, truancy levels
Operational financial controls
For purchasing of goods and contracting of services
Banking of funds paid into an out of the school
Management of payroll
Security of assets
Petty cash accounts
Insurance matters
Auditors suggest five essential practices to overcome the potential fitness management
- Separation of powers within the system same person should not place the order for goods and check their arrival and make payment
- Contract should include full specifications
- Payment should be made by authorise signatories
- All sections of the school should maintain stock inventories
- Firm guidelines for the financial practice and procedures
Audit
An official examination of the book as of account
Internal and external audit
Internal - specialist member of the organisation looking and checking the detail
External- independent auditors to come in
System space approach to internal review is achieved by:
- Documentation of systems
- Evaluation of systems
- Testing of Controls by tracking orders, payments and transaction
- Making conclusions about effectiveness of Systems
- RePorting and making recommendations
- Checking that recommendations have been implemented
Cuttance
Effective management requires a well-developed statement of outcomes, clear responsibility structures and quality assurance systems designed to assess progress in meeting these outcomes’ (Cuttance, 1994, p103).
