In our Spring edition of the Digest we highlighted the publication of the College Financial Handbook that comes into effect effect from 01 August 2024. Following its publication, we have provided a summary of the six main sections and the actions that a College might like to take. We have also included a list of the ‘musts’ contained within the Handbook. In doing so we are mindful that the Handbook is principal-based but does contain statutory and legal requirements so having those to hand, we felt, would be a useful tool in order to assess compliance.
Starting with the sections of the Handbook
This section deals with the roles of the accounting officer, CFO, Governance Professional (Clerk) – its 3 pages long and should cover items already in place so shouldn’t be a major concern.
The first part of this section covers financial oversight and control principles as well as fincnial planning (budget setting and moniroting). The second part deals with more specific items such as procurement and setting executive pay. The third part includes details on risk management, conflicts of interest, whistleblowing and related party transactions. Part 2 overall lends itself to a series of rules and actions that the college must undertake, we would advise each college to perform a cross referencing exercise to ensure the financial procedures manual (or alternative) and scheme of financial delegation cover all of these ‘musts’.
This section concerns itself chiefly with the roles and responsibilities of the audit committee. There are a number of bullet point ‘musts’ here – it would be advisable for the College's governance professional to mark off each of these points against terms of reference and governance documents.
This is the shortest section of just three pages, and is largely cross referencing the Post 16 Audit Code of Practice and the College Accounts Direction.
This is the largest section of the Handbook and picks up the majority of the new permission requirements following reclassification. As with Part 2, this section is largely a series of rules and actions that the College must undertake. Once again, we would advise each College to perform a cross-referencing exercise, to ensure the Financial Procedures Manual (or alternative) and scheme of financial delegation cover these ‘musts’ – hopefully our list will assist in this process.
This section lists out the powers of the sector's regulators. It also details some of the College’s responsibilities in relations to fraud, theft, irregularity and cybercrime – again, there is a cross-referencing task to ensure that fraud policies and cyber policies have been updated to reflect some of the ‘musts’ prescribed by the Handbook. Another task for the College’s governance professional perhaps.
