Site Financial Resources Working together to ensure every child achieves their potential
Site Financial Resources Working together to ensure every child achieves their potential Updated January 2013 This handbook has been created to give Directors an overview of the financial processes, timelines, audit requirements and financial reports relating to financial management in a Preschool. Where applicable there will be a brief explanation of the roles and responsibilities of the Director and Finance Officer with links for further information where appropriate. Audit requirements dictate how and why specific procedures must be performed and these requirements make adherence to correct operational processes an essential component of financial management. Audits are conducted annually by contract auditors appointed by DECD Internal Audit. Required audit procedures, passwords etc. are forwarded to Directors each year. Directors must ensure compliance with the GST legislation and must establish procedures that ensure that the GST treatment of transactions is correct. GST Reference Manual for Preschools V3.01. Potential risks include under-claiming or over-claiming input tax credits; incorrect GST classification of supplies; miscalculating GST on supplies or acquisitions; failing to substantiate the election of activities as GST-free or input taxed and failing to submit the Business Activity Statement (BAS) by the due date. In order to minimise compliance risks Directors must ensure that staff and volunteers receive appropriate training. Staff need to be in-serviced formally regarding the GST documentation and substantiation that is required to comply with GST legislation e.g. what constitutes a compliant tax invoice (refer to Section 1.8). Staff also need to understand the implications of the GST when costing excursions (refer to Section 3.1). GST training is part of Day 1 of EDSAS Finance training and it is also appropriate for preschool finance officers who do not use EDSAS. On Leaders Desktop and you will find further information on training sessions offered in financial management as well as fact sheets and information sheets to support you with finance policies and processes. Further assistance in any of the areas discussed in the handbook is available by contacting the appropriate personnel in the How to Access Support section of the handbook. It is not anticipated that this document will be read from beginning to end but sections accessed as needed by going to the title in the contents page. If you access the document electronically you can go the relevant section by placing the cursor over the title and press Ctrl + click to follow the link. Page 2 TOPIC Page No. ` HOW TO ACCESS SUPPORT ...................................................................... 4 FINANCIAL MANAGEMENT FRAMEWORK ................................................. 6 THE BUDGETARY PROCESS ...................................................................... 7 Preschool Director...................................................................................... 7 Finance Officer ........................................................................................... 7 Governing Council/Finance Advisory Committee ....................................... 7 Site Budget Planning Tool (SBPT) ............................................................. 7 FABSnet ..................................................................................................... 8 A GUIDE TO KEY REPORTS FOR PRESCHOOL FINANCIAL MANAGEMENT ............................................................................................. 9 Accounting Software Finance Reports ....................................................... 9 Financial Records held in spread sheet or manual record ......................... 9 FABSnet Reports ....................................................................................... 9 CHECKLIST - BAS REQUIREMENTS ........................................................ 10 Preschool Director’s obligations in relation to: ............................................. 10 Monthly Business Activity Statement (BAS) ............................................. 10 Accurate reporting of GST........................................................................ 10 ESTABLISHING BEST PRACTICE ............................................................. 10 Receipting money .................................................................................... 11 Accounting for fees .................................................................................. 11 Banking .................................................................................................... 11 Expenditure .............................................................................................. 11 Petty Cash................................................................................................ 12 Purchase Orders ...................................................................................... 12 Payment Authorisation Vouchers ............................................................. 13 Processing Invoices for payment ............................................................. 13 Keeping documents ................................................................................. 13 Cheque payments .................................................................................... 14 Monitoring your expenditure ..................................................................... 14 End of Month ............................................................................................ 14 GST .......................................................................................................... 15 Bank and Investment Accounts ................................................................ 15 Annual Audit ............................................................................................. 16 Preparation of the Annual Budget ............................................................ 16 Data retention and backup ....................................................................... 16 GAINING AN UNDERSTANDING OF YOUR SITE’S FINANCIAL POSITION ..................................................................................................................... 17 PRESCHOOL DIRECTOR’S CHECKLIST .................................................. 19 Weekly ..................................................................................................... 19 Monthly..................................................................................................... 19 Page 3 HOW TO ACCESS SUPPORT SITE FINANCIAL RESOURCES TEAM Contact the Site Financial Support Consultants for support with all finance related issues including the Governing Council Report, Site Budget Plan Tool and Tax Compliance. 1800 100 191 Freecall 8226 2388 [email protected] Contact the Regional Finance Officer for support particularly if you are a new leader or have a new finance officer 1800 100 191 Contact our EDSAS Finance Training Team for details regarding information sessions and workshops. These are also advertised on Leaders Desktop and SSONet. Click on Site Finance/Training to register: 8226 6967 8226 2388 [email protected] FINANCIAL REPORTING & MONITORING TEAM Contact for support with the Monthly Financial Reports, Cash-flows and the Resource Entitlement Statement. 1800 671 157 Freecall [email protected] SITE FINANCIAL POLICY UNIT Contact Site Financial Policy with questions regarding site accounting policy and guideline issues. 8226 2427 8226 2388 [email protected] SASIF 8226 2440 For general SASIF enquiries 8410 2427 To send withdrawal or change of signatory forms Page 4 CUSTOMER SUPPORT CENTRE (CSC) Contact this group for questions regarding IT Hardware and software problems, printing problems, FABSnet Access (passwords etc.) & Preschool Administration System (PAS) 8204 1866 Metropolitan Sites 1300 363 227 Country Sites [email protected] Non Urgent Requests Only EARLY YEARS SYSTEM – ACCESSED THROUGH THE DECD EDUPORTAL Contact this group for questions regarding Early Years System. The Early Years System has been mandated and will replace the existing Preschool Administration System (PAS). It will also replace the use of EDSAS in CPCs for the administration of the Preschool Service. 8207 2162 Jasmin Lowcock, Business Manager. [email protected] SITE ASSET SERVICES First point of contact to Site Asset Services and for contact to Site Physical Resource Consultations 1800810076 PROCUREMENT UNIT Advice on DECD Procurement Policy and practice can be obtained from: 8226 1610 [email protected]. SSONet: https://ssonet.central.sa.edu.au/procurement/pages/Procurement/ Leaders Desktop: http://www.leadersdesktop.sa.edu.au/resource/pages/Procurement/ USEFUL WEBSITES SSONet http://ssonet.sa.edu.au/ This web site is used to disseminate information to sites. It is recommended that you spend some time familiarising yourself with this site and regularly check the What’s New and Financial Issues sections. Leaders Desktop http://www.leadersdesktop.sa.edu.au/ This web site is also used to disseminate information to sites. Updates and new information are displayed as a banner as you open up the site. Children’s Services http://www.DECD.sa.gov.au/childrensservices This web site provides early childhood information and fact sheets relevant to preschool sites. FINANCE INFORMATION & FACT SHEETS WEB LINK Page 5 FINANCIAL MANAGEMENT FRAMEWORK The Financial Management Framework within which preschools must operate can be accessed via the Gold Book website at www.DECD.sa.gov.au/goldbook The background and objectives of the Framework state “In accordance with Government objectives to improve performance and allocate resources more efficiently, the Department of Treasury and Finance has recognised the need to facilitate the introduction of modern concepts and principles in financial management across all Non-Commercial Sector Agencies including Government agencies, schools and preschools.” The Framework also sets out the responsibility of Preschool Directors in meeting the Government’s and Department’s objectives. It states “All site leaders are responsible to the Chief Executive for meeting the Government’s and Department’s objectives (including responsibility for site financial operations – refer to Regulation 37 under the Education Act 1972) and Principals/Directors Job and Person Specifications.” The Site Financial Management Framework requires site leaders (as delegates of the Chief Executive) to: take a leadership role in achieving and sustaining better management and improved performance continually evaluate and challenge the activities being undertaken within their agencies to ensure achievement of the best value for the taxpayer’s dollar take full responsibility for managing any risk exposures arising as a consequence of procedural, process or systems changes at the site The objectives of the Site Financial Management Framework are to: empower sites to establish internal procedures, policies, systems and processes which best suit their needs initiate better practice techniques in financial management describe the key attributes of financial management activity improve efficiency of the overall management process” The Director must comply with the reporting requirements which state that the following reports are presented to the Governing Council at least once per term: Accounting Software Package e.g. EDSAS/MYOB • Balance Sheet • Profit and Loss Spread sheet or manual financial record • Financial report detailing monthly and year to date totals for receipts and expenditure including State Office financial information. • Reconciliation to closing balances for the month and year to date including all bank accounts held (i.e. SASIF investment account). To ensure Directors are complying with DECD requirements it is highly recommended you access the Gold Book website to familiarise yourself with the requirements set out in the Financial Management Framework. Page 6 THE BUDGETARY PROCESS Preschool Director Meets with Finance Officer to prepare/review the budget process, proforma, timelines and cut-off date for purchasing against the current budget. It is recommended that this occur at the end of term 3 or early term 4. Works with the Finance Officer to ensure data is entered accurately into the Site Budget Planning Tool, in particular the Resource Entitlement Statement information Presents the draft budget to the Finance Advisory Committee (FAC), staff and preschool community for discussion Works with the Finance Officer to determine funds available as opening balance and anticipated income for new budget Collects and collates all budget submissions and prepares working papers for the Finance Advisory Committee/Governing Council Retains working papers for audit purposes Meets with Finance Officer to identify committed expenditure to be carried forward for the new budget Finance Officer Once the budget is approved by Governing Council enter all approved budgets against relevant account lines in finance records Produce a report which enables monitoring of the budget to occur Governing Council/Finance Advisory Committee The Finance Advisory Committee makes recommendations to Governing Council regarding fees and approvals within the budget framework The Governing Council ratifies the budget during Term 4 of the previous year or Term 1 of the current year The Governing Council establishes and documents guidelines to define major budget changes and operational limit Governing Council annually approves and minutes delegated approved signatories (other than the Director) If a major budget change is required during the budget year, the Finance Advisory Committee approve that a process be commenced to establish a revised budget using the SBPT. The revised budget must be ratified by the Governing Council Site Budget Planning Tool (SBPT) It is recommended that the Site Budget Planning Tool found in FABSnet is used to create the site’s budget each year The SBPT combines resources provided by DECD with those collected by Preschool Expenditure includes salaries, utilities and facilities costs as well as site based budgets Working copies should be clearly named (e.g. Draft 1, 2013, Draft 2, 2013) The budget needs to be ratified by the Governing Council – prepare the budget towards the end of the previous year and have it approved in draft form initially. Early in term 1 it can be finalised and ratified by Governing Council. After ratification by Governing Council (documented in the minutes of meeting), the SBPT budget name should be changed to ‘Approved Budget e.g. 2013’ and change ‘Status’ to ‘Approved’. No changes should be made to the copy of the budget once approved. Page 7 There is no requirement to retain superseded versions other than the approved budget for each year A copy of your budget can be made and used as a planning tool to enter ‘what if’ scenarios The SBPT generates a Resource Entitlement Statement (RES) as well as a Three Year Cash Flow Summary and other budget reports For sites using EDSAS, the budgets in EDSAS (and hence the Governing Council report) should match the budgets in the SBPT FABSnet FABSNET is accessed from www.eduportal.sa.edu.au and includes the Site Budget Planning Tool, Monthly Financial Reports, RES and Monthly Cash Flow Summary Reports A password is required for access to site data and is specific to a particular site. Passwords and support are available from the Customer Support Centre (CSC) on 8204 1866 or 1300 363 227 or by email to [email protected]. Each user should have an individual log-in and it is not recommended that they be shared. For sites using EDSAS o o o o The finance officer downloads the Site Financial Journal from http://ssonet.sa.edu.au/ then /Site Finance/Monthly Journal Download/2013 Journal Data once reports indicate they are available. If possible, it is preferable that the Site Financial Journal is downloaded prior to monthly reports being presented to Finance Advisory Committee/Governing Council Step-by-step instructions for downloading the journal are available on the web page Finance Officer edits the journal according to requirements of the budget to ensure transactions are reported against the appropriate account codes Balance Sheet, Profit and Loss Statement and Governing Council Report are provided to FAC prior to presenting to Governing Council, reprinted and filed with end of month reports For sites not using EDSAS o o o the finance officer enters financial transactions from the FABSnet monthly financial reports according to requirements of the budget to ensure transactions are reported against the appropriate budget lines. If possible, it is preferable that the transactions should be entered prior to monthly reports being presented to Finance Advisory Committee/Governing Council Finance Officer ensures budget reports are reprinted and filed with other end of month reports Page 8 A GUIDE TO KEY REPORTS FOR PRESCHOOL FINANCIAL MANAGEMENT Below is a list of reports that should be produced on a regular basis by the Finance Officer for the purpose of monitoring the preschool’s financial position as well as providing an overview of the site’s finances. The usual statutory reports such as the Balance Sheet and Profit and Loss Statement are accessed via your Accounting Software e.g. EDSAS/MYOB. For those using EDSAS the Governing Council Report is presented to Governing Council for the purpose of monitoring the budget. It is also important for Directors to ensure the information provided in the financial reports accessed via FABSnet are checked on a regular basis i.e. each month once they have been finalised (usually five working days after the end of the month). Information Sheets are available to provide a brief explanation of the components of each of the reports. (See How to Access Support for web link) Accounting Software Finance Reports Balance Sheet – Statement of Financial Position Profit and Loss Statement – Statement of Financial Performance Governing Council Report (GCR) – EDSAS only Financial Records held in spread sheet or manual record Financial Report detailing monthly and year to date totals for receipts and expenditure including State Office financial information and comparing with budgeted amount. FABSnet Reports Site Financial reports are available monthly detailing expenditure for staffing, facilities and maintenance paid by DECD on behalf of sites. The information supplied in the report can be accessed through FABSnet during the month. It is finalised by the 5th working day of each month. They need to be checked each month by checking teaching and ancillary salaries against the Bona Fide Certificate, breakdown maintenance charges against work completed and TRT charges against usage. Any discrepancies should be reported by: phoning 1800 671157 or emailing [email protected] Resource Entitlement Statement (RES) is a statement of entitlement from DECD which includes human resources, local management grants, utilities and maintenance entitlements and supplementations. RES provides the majority of funding available for the preschool’s budget. See RES Notes for details of funding entitlements. Cash flow Statement details recurrent funding in monthly instalments. Supplementations are reported to indicate when funding is either received or deducted. Total recurrent funding will match RES total for the same month. The reports are updated throughout the month. Until figures are final they appear on the report in italics. Page 9 CHECKLIST - BAS REQUIREMENTS Preschool Director’s obligations in relation to: Monthly Business Activity Statement (BAS) The BAS is due at the Australian Taxation Office (ATO) by the 21st of each month. The declaration on this statement must be signed by the Director as being true and correct. Each Claim should be reconciled. Accurate reporting of GST It is essential that the process of balancing and reconciling the GST Liability Holding Account is carried out at the end of each month. A Principal’s Checklist for GST reporting requirements is available by clicking on the link then to Information & Fact Sheets / Tax Compliance. This can be also used as a guide by Directors. ESTABLISHING BEST PRACTICE The way in which preschools manage their day-to-day financial tasks is quite diverse particularly around accounting systems used at sites. It is our aim to offer to you a range of best practice principles which will not only assist the finance officer to more effectively perform the required procedures, but also give a clearer understanding of the role of Directors in managing their site’s finances. Some of these practices and procedures are required as part of the audit process therefore the instructions will indicate that it must be processed in accordance with the information provided. Reference to the Gold book will provide detail for Transaction Processing Topics include Receipting Money Cheque Payments Accounting for Fees Monitoring your expenditure Banking GST Expenditure Bank and Investment Accounts Petty Cash State Office Reports Purchase Orders Site Generated Reports Payment Authorisation Vouchers Annual Audit Processing Invoices for Payment Preparation of the Annual Budget Keeping Documents Page 10 Receipting money Receipts must be written for all income including fees, fundraising, sale of clothing, sale of surplus equipment and excursions over $5 using a numbered duplicate receipt book. The official DECD receipt book (ED024) can be obtained from the Distribution Centre by faxing the request on the order form to 8234 0136. Order form is available from www.DECD.sa.gov.au and type ED024 in the search field. Each site must decide who is responsible for issuing the individual receipts for monies received. They should also decide the format of the receipts to be issued (e.g. receipt book or cash register receipt) If the preschool uses collection envelopes, it is desirable that the front of the envelope contains sufficient information to enable a receipt to be issued and the envelopes must be held in a secure container until receipted. Accounting for fees A copy of the Preschool Fees Policy is available on the Gold Book website. Each preschool must maintain a record of fees. This should contain the following information: Child’s Name: Details of charges Details of payments received including receipt number and date of payment Balance outstanding Fees are set annually by the Governing Council and are usually paid term by term. Some preschools allow weekly payments. Fees are usually set at a flat rate which includes holidays and closure days, etc. Other charges levied may include charges for programs such as lunch care, occasional care, emergency care and excursion costs. A Bad Debts policy should be discussed, formulated and minuted by Governing Council each year Banking Banking procedures should be decided between the Director and Finance Officer and must be carried out at least weekly or as required Preschool cash holding limits must not exceed $500 overnight. However, in the case of theft only $100 will be replaced. All money must be held in a secure place and banked in the form in which it was received. For example, petty cash or personal cheques cannot be cashed with money received from fees. Basic Rule: All money must be receipted and banked as soon as possible following receipt Expenditure Preschool expenditure is either: o Petty cash expenditure (nominal purchases $10 or less) o Cheque payments (purchase of goods and services and invoices received for payment All expenditure must be supported with documentation in the form of a compliant tax invoice/receipt Page 11 If no invoice has been received and the amount is under $75, a payment authorisation form signed by the Director and the receiver of the reimbursement must be completed. For payment over $75 where no invoice is received a Statement by a Supplier form must be completed by the person receiving payment according to tax legislation requirements. Petty Cash Directors may hold a petty cash float to meet small day to day operating expenses, which require immediate cash payment. This petty cash forms part of the limit of $500 allowed to be held on site. The Governing Council determines the amount of the petty cash float – usually an amount sufficient to meet the normal operating expense items for a month. The Governing Council also establishes the maximum amount that may be expended on any one item from petty cash. A recommended maximum should be set by the Governing Council. These amounts are usually a maximum of $100 and $10 respectively to avoid having large amounts of cash on site A Tax Compliant cash register docket or a petty cash voucher (ED114) authorised by the Director must support all expenditure from petty cash. Details of petty cash expenditure must be recorded in the petty cash record book. Periodically the Finance Officer will be required to draw a cheque to reimburse the petty cash float. Records of reimbursements should be included in petty cash record. The petty cash record is authorised by the Director and filed with the invoices and payment authorisation vouchers as authority to draw the reimbursement cheque. Petty Cash is reimbursed from the Preschool operating account for the amount of the receipts available i.e. if $19.50 has been spent leaving 50 cents in petty cash then cheque must be written for $19.50 and not rounded to $20. Details of the petty cash expenditure are allocated according to the purpose of the expenditure and debited to the appropriate Chart of Accounts Classification, e.g., curriculum materials, stationery, postage, etc. Petty Cash Record books are available from newsagents if required. Purchase Orders Purchase orders should be used for all purchases. The Purchase Order Form book (ED147) can be obtained from Distribution Centre by faxing the request on the order form to 8234 0136. Directors do not have authority to authorise any purchases over $220,000. These must be ordered via DECD Procurement. Details are available from the Procurement website Policies and Guidelines/Procurement Framework. It is the responsibility of the person requesting the purchase order to complete the Hazard Audit and sign that this has been done. This is a legal requirement under the OHS&W Act. The Purchase Order must be signed by the person requesting the goods and then countersigned by the Director. All Purchase Orders require 2 signatures, one of which must have delegated authority for the $ value being expended. (Refer AIG’s Section 1.134 Page 149) Purchasing by staff without a Purchase Order having been raised is to be discouraged. Purchases Orders must be filed in numerical order for audit purposes. A copy of the purchase order may be attached to the invoice. Entering the goods on the Asset/Equipment Register and marking them with Site Identification is required for all non-consumable resources and should be done Page 12 when goods are received into the site and the account has been verified for payment. Open Purchase Orders should be checked monthly to ensure that all orders listed are for goods still required Payment Authorisation Vouchers Finance Officer ensures that sequentially numbered Payment Authorisation Vouchers (PAVs) are completed when an invoice cannot be provided, e.g. drawing Petty Cash, advances for camps/excursions, reimbursements. PAV must be authorised by the Director or in the case of the Director’s purchase, the Chairperson of the Governing Council. PAVs must be generated before the drawing of the cheque. Details of the appropriate budget area to be debited and the number of the issued cheque are to be shown on the face of the PAV. Claims for reimbursement of expenses incurred using a PAV must have attached the tax compliant receipt confirming the expenditure has been incurred. Recipient must sign PAV when receiving the reimbursement cheque Under GST legislation, the purchase must be solely for preschool purposes and must not include private items on the same receipt/Tax Invoice (i.e. Invoices that also contain private purchases must not be submitted). Processing Invoices for payment All goods received must be checked and verified against the invoice details for payment. The Invoice should be signed by the person verifying accurate receipting of the goods. The Director should approve the account for payment and allocate a budget line from which payment is to be processed. The invoices are then passed onto the Finance Officer for payment. The Finance Officer is responsible for verifying the arithmetical calculations, that the invoice has not been previously paid and appropriate GST treatment. Confirmation of this verification can be either a stamp or attaching a verification Slip initialled by the person confirming the procedure completed. The Finance Officer will also reconcile at least monthly all supplier statements of accounts received and investigate any discrepancies. Payments are not to be made against statements, only actual invoices must be paid. Important: Individual cheques are NOT to be cashed or taken to the bank and redeemed for cash by the Finance Officer. Ensures that accounts attracting discount are paid promptly in order to take advantage of the amount offered. Keeping documents The following documents are required to be held on site: Invoices supporting issued cheques filed in cheque numerical order Purchase Order Book All manual receipt books/ forms used, in use and new, must be stored securely and in the Accountable Documents Register recorded Page 13 Cheque payments Payment of expenditure exceeding the amount approved as the maximum for Petty Cash should be made by cheque. All cheques must be stamped “Not negotiable”. It is not recommended that cheques be drawn for “CASH” Director examines cheques and invoice details prior to signing to ensure that the amount/payee details are correct and that all related vouchers/invoices are present and correctly certified for payment. Director and other delegated officer sign cheques. Director ensures that all goods purchased are solely for preschool use. Director ensures that the GST has been accurately applied to all transactions. Director ensures that blank cheques are not signed/issued. Director signs all PAV. Reimbursement to staff requires the preparation of a PAV to which all relevant documentation must be attached, clearly indicating the budget lines from which the funds are to be taken. Monitoring your expenditure The Governing Council must ratify the budget which outlines maximum expenditure in budgeted areas. It is recommended that the budget is completed using the Site Budget Planning Tool (SBPT) on FABSnet. Once the budget has been approved by the Governing Council, the Director then has responsibility for authorising expenditure within the allocated budget areas. However, the approval of the Governing Council is required for expenditure which exceeds approved budget allocations e.g. unexpected site funded works. Costs to sites of staffing expenses, breakdown maintenance and site funded works are monitored through the FABSnet reports. End of Month For preschools using EDSAS Details relating to EDSAS End-of-Month processes and reports required are included in the EDSAS Step by Step User Guide on the Gold Book website. As some reports are no longer available after End-of-Month processes have been completed therefore it is necessary that some reports are printed prior to the commencement of this process (refer to the Finance Fact Sheet GN0105 Daily Weekly and End-of-Month Processes). Close Period - should be carried out either on the last business day of the current month or the first business day of the next month BEFORE ANY NEW TRANSACTIONS HAVE BEEN PROCESSED. For all sites Finance Officer produces and issues End-of-Month Reports to the Director. After entering details relating to the SASIF Statement, Bank Reconciliation, Site Financial Journal, and Business Activity Statement the Finance Officer produces reports for the Director, Finance Advisory Committee and Governing Council. GST/BAS returns must be received at the Australian Taxation Office by the 21st of each month (special exemption may be negotiated for December by DECD). Late lodgement of returns may result in fines being imposed by the ATO even if a refund is due. Part-time staff absent due to holidays is not an accepted excuse for late lodgement. Page 14 Director Receives a copy of all reports and discusses general issues identified in the Budget Report with the Finance Officer at their regular meeting For sites using EDSAS/MYOB the Director presents the reconciled Balance Sheet, Profit and Loss statement and Governing Council Report to the Governing Council For sites not using EDSAS, a report showing total budgeted income/expenditure for the year-to-date against the actual income/expenditure must be presented to Governing Council. Signs the BAS prior to the 18th day of each month to ensure the BAS arrives at the ATO by the 21st of each month. Must sign all journals and ensure they are filed in batch number order for audit purposes. GST Correct GST procedures should be used and all documentation retained for audit. The latest copy of the GST Manual is available on SSONet under Finance Issues / Tax/GST. GST training is available by contacting DECD Training Unit 8226 6967 or email [email protected] If you have GST coding questions it is recommended that sites use the DECD Site Financial Resources Team 1800 100 191 in the first instance in preference to contacting the ATO. The Director should be provided with all documentation supporting the BAS (requiring Director’s signature) monthly and in sufficient time for the BAS to reach ATO by the due date. GST/BAS returns must be received by Australian Taxation Office by the 21st of each month (special exemption may be negotiated by DECD for December). Late lodgement of returns may result in fines being imposed by the ATO even if a refund is due. School holidays are not an acceptable reason for late lodgement of the BAS. Bank and Investment Accounts Preschools maintain an operating cheque account and have an investment account with the South Australian Schools Investment Fund (SASIF). All State Office funding is transferred to sites via the site’s SASIF account. The Finance Officer will be responsible for monitoring that sufficient funds are maintained in the preschool operating account to enable accounts to be paid and that the funds remaining in SASIF are optimised to attract the maximum amount of interest. The Finance Officer should reconcile bank and investment accounts monthly and advise the preschool on the advisability of the transfer of surplus into SASIF account from daily operating account or the requirement to redeem funds from the SASIF account to pay accounts received. The Bank Reconciliation should be completed before finalising the BAS report for the same month. Bank Reconciliation Every month when bank statements are received the Finance Officer must complete a bank reconciliation. Authorisation to withdraw money from an investment account must be signed by two persons appointed by the Governing Council, one of whom should be the Director. Page 15 SASIF Statement SASIF and Banking information is available from the Gold Book SASIF transactions should be processed as soon as possible after the receipt of the Statement by the Director via email. SASIF balance should be checked to ensure the closing balance on the SASIF report for the same month should reconcile with the balance of the SASIF Account/s on the Balance Sheet/financial records. The SASIF transactions should be entered before finalising the BAS report for the same month. Annual Audit An auditor from a panel of auditors is appointed by DECD. The Director is responsible for liaising with the auditor and supplying all necessary financial records for the audit. The Finance Officer will prepare an Annual Financial Statement in the format required by DECD to be forwarded to State Office by 28th February each year (whether audited or not) Preschool End of Financial Year Procedures is available on SSONet > Site Finance > End of Year Procedures Preparation of the Annual Budget It is important as part of the financial management of a preschool that a budget be prepared for each calendar year. It is recommended that the SBPT (Site Budget Planning Tool – Web based on FABSnet) be used. This tool allows the input of data from the site’s Resource Entitlement Statement. Combined with other identified preschool income, the SBPT is able to calculate the impact of expenditure in budget areas. The Director is responsible for the development of the budget with assistance of the Governing Council Treasurer who also assists in monitoring the budget. Ideally a draft budget should be prepared prior to the commencement of the preschool year using current staffing information, financial reports from prior years, Site Learning Plan Priorities and current needs as a guide to levels of expenditure. After approval by the Governing Council, the budget becomes a legal document and will be required as part of the end of year audit. Any further amendments must be presented at the Governing Council meeting for approval and a copy of the minutes held with the original approved budget. It is not required that the budget is approved at the AGM. Data retention and backup It is important that all current financial records are stored at the preschool and that all financial information is backed up and copies maintained at the site. Page 16 GAINING AN UNDERSTANDING OF YOUR SITE’S FINANCIAL POSITION WHERE TO START Do you have a current budget? KEY POINTS COMMENT • Was it created using the Site Budget Planning Tool (SBPT)? • How accurate is the budget? • Has it been approved? Where does your site funding come from? What funding from DECD is anticipated? • DECD Resource Entitlement Statement (RES) on FABSnet • Human Resources based on warranted Term 3 attendances – refer to HR Consultant for up to date information. Complete an ITS008 for access to your current preschool’s SBPT on FABSnet. www.eduportal.sa.edu.au Contact Customer Support for password: [email protected] Support available for checking accuracy of SBPT from Site Financial Resources 1800 100 191 SBPT (see first screen) – Approved Yes/No Check Governing Council Minutes Current year RES information is accurate from February. Prior Year final financial report.(after reconciliations) Check SBPT budget for commitments and Balance Sheet for Liabilities & Reserves. Details should have been documented in Site Budget section of SBPT What site generated funding is anticipated? • Preschool Fees • Fundraising • Additional Federal or State Government Grants by application What money is already available at site level? • Opening Balance - Cash at Bank / SASIF Balances • How much of that is committed? What expenditure is planned? • • • • • • How much of your income are you allocating to staffing? Curriculum & Learning Plans Utilities & Breakdown Maintenance Administration Site Funded Works & Facilities Other Expenditure Page 17 WHERE TO START Accountability Tax Compliance KEY POINTS COMMENT • Change signatories for cheque and investment accounts. • Change contact details with ATO • Monitoring your budget • Do you have the generic email address forwarded to your emails? • Preschool Director is responsible for ensuring compliance with tax legislation • DECD requires the Preschool Director to sign the Business Activity Statement (BAS). Site Financial Operations • Do you have a finance advisory committee? Audit requirements • Preschool Director is responsible for managing financial processes at the site Page Change signatories form for cheque account available from the bank. SASIF Account Signing Authority Form required to be completed to change SASIF signatories. The form is available from SASIF or on SSONet Contact the ATO requesting NAT 2954 on 137226 Ensure all approved budgets are entered against the relevant account lines The SASIF Statement is emailed to Preschool Directors. A copy should be forwarded to finance officer immediately. GST Reports are required to be printed and checked each month prior to the preparation of the Business Activity Statement (BAS). BAS must reach ATO by 21st of each month. Fines apply for late lodgement even if a refund is due. Excursion proformas (ED169) should be completed for all excursions. Principal to sign verification that excursion is educational and therefore GST Free. GST decisions are made prior to teachers sending information to parents regarding costing. Any documentation sent home including related costs should include appropriate GST treatment. Principal to sign documentation relating to Fundraising GST decisions Sign all Purchase Orders (two signatures required) Sign all Journals completed by Finance Officer (if software package). Co-sign all cheques. Cheques for signature should include appropriate documentation/invoices Bank Reconciliation printout should be signed by both Finance Officer and Principal. 18 PRESCHOOL DIRECTOR’S CHECKLIST Weekly BANKING Banking should be done at least weekly. NO MORE than $500 on site – only $100 covered by insurance PRESCHOOL DIRECTOR to sign Banking/Deposit Slip Verification CHEQUES – Accounts Payable When signing cheques – Finance Officer should present for signing 1. Invoices with Purchase Order attached, with signature of person who checked that all goods invoiced were received. 2. Invoices should have ‘Passed for Payment” (or similar) stamp, with date, Finance Officer’s initials to verify the account has not previously been paid, account codes, & GST 3. Refunds to Staff need a Payment Authorisation for approval 4. Cheques – for signature 5. Cheque register (if using EDSAS) – for signature 6. Budget report to check for over budget expenditure Monthly BANK RECONCILIATION – done each month – Preschool Director to sign – Bank Statement should be attached to the back of the Reconciliation Statement SASIF TRANSACTIONS – done each month – Preschool Director to initial SASIF Statement – check SASIF balance on Balance Sheet/Financial Reports and SASIF statement are equal. BAS – GST – done each month – to reach ATO by 21st of each Month Before signing BAS Statement check the GST reports. MONTHLY SITE FINANCIAL INFORMATION RECORDED IN FINANCIAL RECORDS Preschool Director to check monthly expenditure reports (EDSAS - Profit and Loss Statement) for current month transactions relating to salaries and utilities. Site Financial Reports should be checked for accuracy e.g. staff details included are accurate. BUDGET REPORTS should be checked to monitor spending against the approved budget. Page 19
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