FINANCE MANUAL FOR VICTORIAN GOVERNMENT SCHOOLS

Melbourne Jul-17

©State of Victoria (Department of Education and Training) 2016

The copyright in this document including sections 1 - 21, Appendix A, Version and revision control record and Comparison table of content is owned by the State of Victoria (Department of Education and Training), or in the case of some materials, by third parties (third party materials). No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968, the National Education Access Licence for Schools (NEALS) (see below) or with permission.

An educational institution situated in Australia which is not conducted for profit, or a body responsible for administering such an institution may copy and communicate the materials, other than third party materials, for the educational purposes of the institution.

Authorised by the Department of Education and Training,

2 Treasury Place, East Melbourne, Victoria, 3002

CONTENTS

Section 1: Introduction

1.1 Overview...................................................................................................................... 1

1.2 Using this manual ........................................................................................................ 1

Version and revision control record ......................................................................................... 1

Section 2: Governance

2.1 Overview...................................................................................................................... 1

2.2 The school council ....................................................................................................... 1

2.2.1 Mandatory policy (Must do): ................................................................................... 1

2.2.2 Prohibited policy (Must not): ................................................................................... 3

2.3 The principal ................................................................................................................ 3


2.4 Retention of financial records ....................................................................................... 4


2.5 Register of accountable documents ............................................................................. 4


Legislative requirements.......................................................................................................... 5

Definitions ............................................................................................................................... 5

Additional resources ................................................................................................................ 5


Section 3: Risk Management

3.1 Overview...................................................................................................................... 1

3.2 Risk framework ............................................................................................................ 1


3.3 Fraud and corruption ................................................................................................... 1


3.4 Conflict of interest/declaration of private interest .......................................................... 2



Definitions ............................................................................................................................... 3



Section 4: Internal Controls

4.1 Overview...................................................................................................................... 1

4.2 Preventative controls ................................................................................................... 1

4.2.1 Preventative controls including: (this is not an exhaustive list) ............................... 1

4.3 Detective controls ........................................................................................................ 2

4.3.1 Examples of detective controls (this is not an exhaustive list) ................................ 2

4.4 Corrective controls ....................................................................................................... 3

4.4.1 An example of corrective controls .......................................................................... 3


Definitions ............................................................................................................................... 4



Section 5: School Council Financial Assurance Program

5.1 Overview...................................................................................................................... 1

5.2 Agreed-Upon Procedures ............................................................................................ 1

5.2.1 Overview ................................................................................................................ 1

5.2.2 Why perform AUP? ................................................................................................ 1

5.2.3 Who is covered under the AUP program? .............................................................. 1


5.2.5 How does AUP reporting work? ............................................................................. 2


5.2.7 How to prepare for AUP? ....................................................................................... 3


5.2.9 What are schools’ responsibilities in the AUP ........................................................ 4


5.2.11 Prohibited policy (Must not do): .............................................................................. 4

5.2.12 What to expect on fieldwork day ............................................................................ 4


5.3 Topic Audits ................................................................................................................. 5

5.3.1 Overview ................................................................................................................ 5


5.4 Ad-hoc Audits/Reviews ................................................................................................ 5


5.5 Independent audit conducted by a School ................................................................... 6


Definitions ............................................................................................................................... 6



Section 6: Budget Management

6.1 Overview...................................................................................................................... 1

6.2 Budget development .................................................................................................... 1


6.3 Budget monitoring ........................................................................................................ 2



Definitions ............................................................................................................................... 2



Section 7: Chart of Accounts

7.1 Overview...................................................................................................................... 1

7.2 CASES21 Chart of accounts ........................................................................................ 1

7.2.1 Overview ................................................................................................................ 1



7.3 Goods and Services Tax (GST) and the Chart of Accounts ......................................... 3

7.3.1 Overview ................................................................................................................ 3


7.3.3 Additional resources and support ........................................................................... 3


Definitions ............................................................................................................................... 4

Additional resources and support ............................................................................................ 5


Section 8: Bank accounts and Investments

8.1 Overview...................................................................................................................... 1

8.2 School council responsibilities ..................................................................................... 1



8.3 Opening and closing bank accounts ............................................................................ 2



8.4 Bank accounts ............................................................................................................. 3


8.5 Official account ............................................................................................................ 4



8.6 High Yield Investment Account (HYIA) ......................................................................... 5



8.7 Building and Library funds ........................................................................................... 6


8.8 Investment of excess funds in other investments ......................................................... 6


8.9 Investment register ...................................................................................................... 7


8.10 School bank accounts signatories ................................................................................ 8



8.11 Information to be retained by schools .......................................................................... 8


8.12 Unclaimed money ........................................................................................................ 9



Definitions ............................................................................................................................. 10

Additional resources .............................................................................................................. 11

Version and revision control record ....................................................................................... 11

Section 9: Funding Sources

9.1 Overview...................................................................................................................... 1

9.2 Student Resource Package (SRP) ............................................................................... 1


9.3 Other Department funding ........................................................................................... 1


9.4 Government grants (commonwealth, state, local) ........................................................ 2


9.5 Locally Raised Funds – Parent payments .................................................................... 2



9.6 Locally Raised Funds - Fundraising ............................................................................. 3


9.7 Locally Raised Funds - Donations ............................................................................... 3



9.8 Locally Raised Funds - Other ....................................................................................... 4


9.9 Financial arrangements for parents’ clubs.................................................................... 4


9.10 Targeted Funding Programs ........................................................................................ 5



9.11 School Shared Programs ............................................................................................. 5




Definitions ............................................................................................................................... 6



Section 10: Receivables Management and Cash Handling

10.1 Overview...................................................................................................................... 1

10.2 Managing Receivables ................................................................................................ 1



10.3 Cash Handling ............................................................................................................. 2




Definitions ............................................................................................................................... 5



Section 11: Expenditure Management

11.1 Overview...................................................................................................................... 1

11.2 Procuring ..................................................................................................................... 1


11.3 Ordering ...................................................................................................................... 1



11.4 Taking delivery ............................................................................................................ 2


11.5 Being invoiced ............................................................................................................. 2


11.6 Payment ...................................................................................................................... 3



11.7 Purchasing Card .......................................................................................................... 4



11.8 Utilities ......................................................................................................................... 5


11.9 School local payroll ...................................................................................................... 5


11.10 Petty cash .................................................................................................................... 6



Definitions ............................................................................................................................... 7



Section 12: Trading Operations

12.1 Overview...................................................................................................................... 1

12.2 Trading Operations ...................................................................................................... 1




Definitions ............................................................................................................................... 4



Section 13: Asset and Inventory Management

13.1 Overview...................................................................................................................... 1

13.2 Asset acquisition, recognition and recording ................................................................ 1


13.3 Identification of assets ................................................................................................. 2


13.4 Repairs and maintenance ............................................................................................ 3


13.4.2 Examples that differentiate between capital assets and operating expenses ......... 3

13.4.3 Examples of common repairs and maintenance expenses ..................................... 4

13.5 Asset renewals and upgrades ...................................................................................... 4


13.5.2 Examples that differentiate between capital assets and operating expenses for asset renewals ....................................................................................................... 5

13.5.3 Examples of common asset upgrades ................................................................... 6

13.6 Fit out costs ................................................................................................................. 7

Building component of Initial Fit out costs ............................................................................. 7

Plant and Equipment component of Initial Fit out costs ......................................................... 7

13.6.1 Examples of Building Fit out costs and Plant and Equipment component of initial Fit out costs ................................................................................................................ 7

13.6.2 Case Studies of initial Fit Out of a school classroom .............................................. 8

13.7 Asset stocktake guidelines ........................................................................................... 9


Stocktake ............................................................................................................................. 9

Discrepancies in Stocktake or Loss of Assets..................................................................... 11

13.7.2 Stocktake of Library Materials .............................................................................. 12

13.7.3 Mandatory policy (Must do): ................................................................................. 12

Adjusting for duplicate entries in Asset register .................................................................. 13


13.8 Receipt of Donated Property, Equipment or Materials ............................................... 14


13.9 Hire/Leasing of Equipment ......................................................................................... 15


13.9.2 Prohibited policy (Must not do): ............................................................................ 15

13.10 Insurance on Stores ................................................................................................... 15

13.10.1 Overview .............................................................................................................. 15

13.10.2 Prohibited policy (Must not): ................................................................................. 15

13.10.3 Additional resources ............................................................................................ 15

13.11 Library Materials ........................................................................................................ 16


Identification and Recording Library Materials .................................................................... 16

The accession of Library Materials ..................................................................................... 16

Library Loan Records ......................................................................................................... 16

13.12 Other Assets and Textbooks ...................................................................................... 17


13.13 Inventory Control ....................................................................................................... 17



13.13.3 Hazardous Substances ........................................................................................ 17


13.13.5 Additional Resources ........................................................................................... 18

13.13.6 Class and Library Materials .................................................................................. 18


13.14 Loan of Equipment to Community Groups or Individuals ............................................ 18


13.15 Transfer of assets between schools ........................................................................... 19


13.16 Transfer of Materials or Equipment ............................................................................ 19


13.17 Disposal of Surplus or Unserviceable Assets of Materials .......................................... 20

13.17.1 Mandatory Policy (Must do): ................................................................................. 20

General Policy .................................................................................................................... 20

Board of Survey .................................................................................................................. 20

13.18 Delegated authority for disposal of assets (land and/or buildings) .............................. 21


13.19 Delegated authority for disposal of assets (Plant and Equipment and Intangibles) ..... 22


Legislative requirements........................................................................................................ 23

Definitions ............................................................................................................................. 23



Section 14: Liabilities Management

14.1 Overview...................................................................................................................... 1

14.2 Accounts Payable ........................................................................................................ 1


14.3 Revenue in Advance .................................................................................................... 1


14.4 Co-operative Loans ..................................................................................................... 2



14.4.3 Year-end requirements (30 June) .......................................................................... 3


Definitions ............................................................................................................................... 4



Section 15: Taxation

15.1 Income tax ................................................................................................................... 1

15.1.1 Overview ................................................................................................................ 1

15.2 Good and Services Tax (GST) ..................................................................................... 1

15.2.1 Overview ................................................................................................................ 1


15.2.3 Tax invoices ........................................................................................................... 2


15.2.5 An Example of a Tax invoice or invoice .................................................................. 4

15.2.6 Additional resources .............................................................................................. 4

15.3 Fringe Benefits Tax (FBT) ............................................................................................ 5

15.3.1 Overview ................................................................................................................ 5



15.3.4 Examples of school types of fringe benefits ........................................................... 6

15.3.5 Case Studies of school types of fringe benefits ...................................................... 6


15.4 Donations to schools – Deductible Gift Recipient (DGR) .............................................. 7

15.4.1 Overview ................................................................................................................ 7



15.5 Fuel Tax Credits (FTC) ................................................................................................ 8

15.5.1 Overview ................................................................................................................ 8





Definitions ............................................................................................................................. 10



Section 16: Reporting Performance

16.1 Overview...................................................................................................................... 1

16.2 Management reports .................................................................................................... 1


16.3 Reporting to School Council ........................................................................................ 1


16.4 School annual report .................................................................................................... 3


16.5 Financial Commitment Summary ................................................................................. 3




Definitions ............................................................................................................................... 4


Revision and version control record ........................................................................................ 5

Section 17: End of Year (31 December)

17.1 Overview...................................................................................................................... 1

17.2 Timing of CASES21 Finance End of Year (31 December) ........................................... 1



17.3 End of Year (31 December) process in CASES21 ....................................................... 1


17.4 Finalise Data Entry for End of Year (31 December) ..................................................... 2


17.5 End of Year Process .................................................................................................... 2

Creditors (Accounts Payable) ............................................................................................... 2


Accounts Receivables .......................................................................................................... 4


Families .............................................................................................................................. 5


Sundry Debtors .................................................................................................................... 7


Doubtful Debts ...................................................................................................................... 8


17.7 Balance Day Adjustments ............................................................................................ 8


17.8 Prepaid Expenses ........................................................................................................ 9


17.9 Revenue in Advance .................................................................................................... 9

17.9.1 Mandatory policy (Must do) ................................................................................... 9

17.10 Bank reconciliation and petty cash ............................................................................... 9

17.10.1 Mandatory policy (Must do): .................................................................................. 9

17.11 Investment and Commitment Details ......................................................................... 10


17.12 Financial Commitment Summary ............................................................................... 11

17.12.1 Mandatory policy (Must do): ................................................................................ 11

17.13 Preliminary GST/Business Activity Statement Reports ............................................... 12


17.14 Long Service Leave Provision .................................................................................... 13


17.15 Operating Leases ...................................................................................................... 13


17.16 Budget entry .............................................................................................................. 13


17.17 Print and check batch status report ............................................................................ 14



17.18 Reports for December End of Period ......................................................................... 14


17.19 End of Year Reports (31 December) .......................................................................... 15


17.20 Finance Committee/School Council reports ............................................................... 15


A list of Finance Committee/School Council reports to be run from CASES21: ................... 15

17.21 Other documents and files for the auditor .................................................................. 16


A list of reports schools must run before finalising the End of Year process ....................... 16

17.22 Run End of Year Task................................................................................................ 17


17.23 Start of Year Processes ............................................................................................. 18


Legislative requirements........................................................................................................ 18

Definitions ............................................................................................................................. 19


Version and revision record control ....................................................................................... 21

Section 18: End of Financial Year reporting (30 June)

18.1 Overview...................................................................................................................... 1

18.2 School investment accounts (Gross cashflows on investment – financial instruments) 1


18.3 Prepaid Expenses ........................................................................................................ 1


18.4 Accounts receivable and payable balances (ageing balances) .................................... 2

18.4.1 Overview ................................................................................................................ 2


Accounts Receivable balances ............................................................................................ 2

Accounts Payable balances.................................................................................................. 3

18.5 Operating Leases ........................................................................................................ 3


18.6 Internal Certification checklist ...................................................................................... 4

18.6.1 Overview ................................................................................................................ 4



Definitions ............................................................................................................................... 5



Section 19: Financial Handover

19.1 Overview...................................................................................................................... 1

19.2 The outgoing principal.................................................................................................. 1


19.3 The incoming principal ................................................................................................. 1


Financial handover statement ................................................................................................. 2


Definitions ............................................................................................................................... 4



Section 20: Opening, Closing and Merging Schools

20.1 Overview...................................................................................................................... 1

20.2 School Opening ........................................................................................................... 1



20.3 School Closing ............................................................................................................. 2


20.4 School Merging ............................................................................................................ 3

20.4.1 Mandatory policy (Must do) for schools closing as part of the merger .................... 3

20.4.2 Mandatory policy (Must do) for the new school (new school number) created from the merger ............................................................................................................. 5

20.5 School name change ................................................................................................... 5



Definitions ............................................................................................................................... 6



Section 21: Insurance Arrangements

21.1 Overview...................................................................................................................... 1


21.2 Property Insurance ...................................................................................................... 1

21.2.1 Overview ................................................................................................................ 1

21.2.2 Building Fixtures and Fittings ................................................................................. 1

21.2.3 School Equipment Coverage Scheme (SECS) ....................................................... 2


21.3 Public Liability .............................................................................................................. 2

21.3.1 Overview ................................................................................................................ 2


21.3.3 Use or Hire of Non-School Facilities ....................................................................... 3

21.3.4 Use of School Facilities by Third Parties ................................................................ 3


21.4 Construction Insurance ................................................................................................ 4

21.5 Travel Insurance .......................................................................................................... 4


Definitions ............................................................................................................................... 5



Appendix A: Glossary of terms and acronyms

A.1 Overview...................................................................................................................... 1

A.2 Glossary of terms and acronyms ................................................................................. 1



Version and revision control record

Overview ................................................................................................................................. 1

Version and revision control table ............................................................................................ 1


Comparison table of content

Overview ................................................................................................................................. 1

Comparison table of content .................................................................................................... 1



FINANCE MANUAL FOR VICTORIAN GOVERNMENT SCHOOLS · Page 3 CONTENTS Section 1: Introduction 1.1...

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