Sound financial management and controls are essential to schools because they provide an effective framework for financial planning and accountability and safeguard the use of public funds. Although the primary responsibility of a school is to provide the best education possible for its pupils, control over a delegated budget brings with it a responsibility for financial stewardship.
In 1993, the Office for Standards in Education (OFSTED) and the Audit Commission jointly published a set of standards for the administration and control of school finances called Keeping Your Balance.
Keeping Your Balance had wide circulation and has been used extensively by schools, auditors and inspectors. This revised version of Keeping Your Balance has been prepared jointly by the Office for Standards in Education and the Audit Commission and has been adapted for use in Wales. It has been developed from the first edition, following wide consultation with interested groups. It takes account of changes in the funding of schools since the first edition, especially the increased levels of delegation to schools which have been introduced through the School Standards and Framework Act 1998.
Keeping your Balance sets out the principal elements of a sound approach to the administration and control of a school's funds. Many of the standards are based on legislation; others are based on accepted audit practice. The main purpose of the standards is to set out a framework of good practice to help schools establish and maintain robust financial systems. It also provides a framework for auditors and inspectors when they evaluate these arrangements.
Keeping Your Balance also provides schools with a revised self-evaluation questionnaire that can be used to identify strengths in financial administration and areas in which improvements are needed. This self-evaluation can be enhanced by the use of the new diagnostic software on the Internet which accompanies the standards. Controlling School Finances: A Self-evaluation Tool goes into greater detail than the questionnaire and uses responses to a series of questions to identify areas for improvement and produce an action plan for the school