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As governors, we acknowledge we have overall responsibility for ensuring that Eaglesfield Paddle CE Primary Academy Trust has an effective and appropriate system of control, financial and otherwise. However such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only a reasonable and not absolute assurance against material misstatement or loss.

The governing body has delegated the day-to-day responsibility to the Head Teacher, as accounting officer and the School Business Manager (as Chief Financial Officer) for ensuring financial controls conform with the requirements of both propriety and good financial management and in accordance with the requirements and responsibilities assigned to it in the funding agreement between Paddle CE Primary Academy Trust and the Secretary of State for Education. They are also responsible for reporting to the governing body any material weaknesses or breakdowns in internal control.

Governance

The information on governance included here supplements that described in the Report of the Trustees and in the Trustees Responsibility Statement.  The board of trustees has formally met 6 times during the year.  Attendance during the year at meetings of the board of trustees was as follows:

The Finance Committee is a sub-committee of the main governing body. Its purpose is to assist the decision making of the governing body, by enabling more detailed consideration to be given to the best means of fulfilling the governing body's responsibility to ensure sound management of the Academy's finances and resources, including proper planning, monitoring and probity. Attendance at the meetings in the year was as follows:

Review of Value for Money

Financial Governance

As accounting officer, the head teacher has responsibility for ensuring that the academy trust delivers good value in the use of public resources. The accounting officer understands that value for money refers to the educational and wider societal outcomes achieved in return for the taxpayer resources received.

The accounting officer considers how the trust’s use of its resources has provided good value for money during each academic year, and reports to the board of trustees where value for money can be improved, including the use of benchmarking data where appropriate. The accounting officer and chief financial officer for the academy trust has delivered improved value for money during the year by:

• Ensuring trustees and all levels of management including budget holders are continuously trained in their roles and responsibilities from a financial perspective,
• Ensuring responsibilities are fully discharged by each trustee and responsible employee of the academy by producing the financial procedures manual.           
• Introducing new financial software and adopting the DfE chart of accounts to ensure robust detailed coding structure is in place which allows adequate control.
• Introducing new budgeting software to enable a comprehensive reporting structure used by the academy to ensure adequate control and, secondly, to support the decision making process by having a comprehensive reporting structure.
• Having cost centres held on the system mutually exclusive to budget holders, supported by detailed subjective analysis to support both statutory and management decision-making requirements.
• Ensuring budget holders are fully involved in developing their own budget proposals, and once approved by Trustees take ownership for decision-making and monitoring purposes.
• Having standing item on the Senior Leadership Team's weekly meeting agenda to discuss all relevant financial matters, receive financial reports including the annual report and final accounts, and budget proposals, and, make decisions on future direction based on financial findings.

• Ensuring Senior Leadership Team, in conjunction with trustees, are responsible for the Strategic financial direction of the academy.
• Ensuring trustees are involved in all stages in the annual revenue budget process, development of the medium term 3 year financial plan, and, the capital programme.
• Having regular finance sub-committee meetings. The finance committee meet formally at least 6 times per annum. The current finance committee chair is a qualified accountant and takes an active role in strategic financial matters affecting the academy. The chair is supported by a committee member with vast business and legal experience.

• Having clear terms of reference in giving the finance committee responsibility for developing the financial strategy of the academy in accordance with the overall objectives, and making recommendations to the governing body.

• Ensuring finance committee receive regular reports including budget monitoring, cost benefit analysis, year-end projections, cash flow, trading services etc. These are challenged to ensure robustness and sustainability at all levels prior to making any required recommendations to the governing body as part of the overall decision making process.

• The academy's staffing, admissions, and community committee have delegated responsibility for all establishment matters as this has the largest financial impact on the academy. They approve the establishment as part of the annual budget process, and, any requested amendments during the year must be authorised by staffing and community. Written and verbal reports are received half termly from the School Business Manager.
• The academy holding an annual development day involving all staff, trustees, school council, and other stakeholders. The purpose is to develop the 3 year development plan which then forms a key stage in the budget process.

• Ensuring the academy has clear divisions of responsibility with respect to raising purchase orders, receiving goods and services, and payment. All invoices are authorised by the accounting officer prior to payment, and controls are in place for signatories.

• Having tender limits set out in the Financial Procedures Manual.
• Ensuring the accounting officer reviews and signs for all reconciliations, including bank and payroll.
• Fully engaging with a review of the school’s financial operation and revenue and capital resources during a School Resource Management Advisor (SRMA) inspection.

Purchasing of Goods and Services

Fit for purpose

• The academy continuously reviews its services and contracts to ensure they fully meet the

      purposes required.

• The Financial Procedures Manual sets out purchasing and tendering requirements in terms of receiving verbal or written quotations through to a full tendering exercise.

• Quality and effectiveness are continuously monitored and reviewed to ensure that value for  money is achieved at all times.
• Existing contracts are regularly monitored by the School Business Manager to ensure that contract requirements are met.

• Project teams, including trustees, the accounting officer, and other relevant parties are set up with delegated responsibility to oversee any new contracts and contract renewals. They are responsible for all stages of the tender process from issuing tender documentation to recommendation of preferred supplier to the relevant committee.

• The School Business Manger undertook a procurement health check and a review of contracts with the School’s Buying Hub North West.

Benchmarking

• The academy has a good relationship with other academies and schools in the area, and shares information through regular formal workshops, visits, and also informally by telephone meetings and email.  We use this network to evaluate and compare data, and continuously review whether value for money is being achieved or whether there are alternative decisions to be made.
• The academy also utilises the national benchmarking website (financialbenchmarking.gov.uk).
• The School Business Manager has been appointed to the executive board of Cumbria  Association of School Business and Administration Management (CASBAM), she uses the networking, information and learning gained from this role to ensure that the academy is operating in line with best practice.

Economies of Scale

• The academy actively looks for potential partners on any new initiatives to drive in economies of scale.
• Currently we are reviewing our support costs and looking to introduce a new computerised accounting system better suited for academies.

• We are members of the Yorkshire Purchasing Organisation and Crescent Purchasing Consortiums and take advantage of their purchasing power wherever possible.

Income Generation

• The academy continuously review options to maximise income generation.
• Our excellent hall facilities are well used by the community, and we also provide a catering

    service on demand for children's parties etc.

• We continue to liaise with some major locally based employers for additional income through sponsorship deals, which will also be educationally beneficial for our children.

• The academy operates a wraparound care provision during term time, which continues to go from strength to strength.

• The academy uses a biomass heating system in the school, which generates additional income though the heating incentive grant from the government.

The Purpose of the System of Internal Control

The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives. It can, therefore, only provide reasonable and not absolute assurance of effectiveness.

The system of internal control is based on an on-going process designed to identify and prioritise the risks to the achievement of academy trust policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically.

Capacity to Handle Risk

The board of trustees has reviewed the key risks to which the academy trust is exposed together with the operating, financial and compliance controls that have been implemented to mitigate those risks.

The Risk and Control Framework

The academy trust’s system of internal financial control is based on a framework of regular management information and administrative procedures including the segregation of duties and a system of delegation and accountability. In particular it includes:

• Comprehensive budgeting and monitoring systems with an annual budget and periodic financial reports which are reviewed and agreed by the board of trustees
• Regular review by the finance committee of reports which indicate financial performance against the forecasts and of major purchase plans, capital works and expenditure programmes
• Setting targets to measure financial and other performance
• Clearly defined purchasing (asset purchase or capital investment) guidelines
• Delegation of authority and segregation of duties
• Identification and management of risks

The board of trustees have appointed CWR Chartered Accountants as Responsible Officer (RO). The RO's role includes giving advice on financial matters and performing a range of checks on the academy trust's financial systems. As permitted by the ESFA Financial Handbook for Academies, this task has been outsourced to external auditors. Twice a year the external auditor reports to the board of trustees on the operation of the systems of control on the discharge of the RO's financial responsibilities. From 1st September 2020 the external auditors are no longer permitted to perform this role and the board of trustees is reviewing how to provide this function in the future.

The board of trustees has delegated the day-to-day responsibility to the Head Teacher, as Accounting Officer, for maintaining a sound system of internal control that supports the achievement of the Academy's policies, aims and objectives, whilst safeguarding the public funds and assets for which she is personally responsible, in accordance with the responsibilities assigned to her in the Financial Memorandum between Eaglesfield Paddle Trust and ESFA. She is also responsible for reporting to the board of trustees any material weaknesses or breakdowns in internal control.

In addition the board of trustees has considered the guidance for directors of public listed companies contained within the Turnbull Report. They believe that although it is not mandatory for the Academy it should, as a public funded body, adopt the guidelines as best practice.

Review of Effectiveness

As Accounting Officer, the Head Teacher has responsibility for reviewing the effectiveness of the system of internal control. Her review of the effectiveness of the system of internal control is informed by:

• the work of the responsible officer;
• the work of the Senior Leadership Team within the Academy who have responsibility for the development and maintenance of the internal control framework;
• comments made by the Academy's financial statements auditors in their management letters and other reports

The accounting officer has been advised on the implications of the result of their review on the effectiveness of the system of internal control by the Finance Committee, which oversees the work of the responsible officer, and a plan to address weaknesses and ensure continuous improvement of the systems in place.

The Senior Leadership Team receives reports setting out key performance and risk indicators and considers possible control issues brought to their attention by early warning mechanisms, which are embedded within the school and reinforced by risk awareness training. The Senior Leadership Team and the Finance Committee also receive regular reports from the responsible officer, which include recommendations for improvement. The Finance Committee's role in this area is confined to a high level review of the arrangements for internal control. The emphasis is on obtaining the relevant degree of assurance and not merely reporting by exception.

Mrs Ann-Marie Steel

Chair of Trustees, and Foundation Trustee