Support and guidance for schools during COVID-19 (Finance)

Purpose

To support schools to maintain appropriate financial controls during the COVID-19 pandemic. To raise awareness of increased risks, in order to support schools to mitigate these. 

Advice
 

Core funding allocations

Schools continue to receive their core funding allocations, as determined by the LA for maintained schools and through the general annual grant (GAG) for academies.

For early years settings, the dedicated schools grant (DSG) continues to be paid by the LA for provision of free entitlement. Where parents access hours beyond the free entitlement, early years providers should continue to charge in the normal way.

DfE financial support

The DfE has issued a set of sector specific guidance that outlines the funding and financial support available for education, early years and childcare settings. It was last updated on 21 May 2021 with guidance on financial support for education, early years and children’s social in state funded schools. As and when further guidance is issued after the budget, this will be updated.

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New Education Recovery Plan

The government has announced a new £700 million education plan which lays out further aspects of the education recovery package to help young people in England catch up on lost learning due to the pandemic.

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Job Retention Scheme

The job retention scheme has been extended until 30 September 2021. From 1 July 2021, the government will pay 70% of wages up to a maximum cap of £2187.50 for the hours the employee is on furlough.

Employers will top up employees’ wages to make sure they receive 80% of wages (up to £2,500) in total for the hours the employee is on furlough. The caps are proportional to the hours not worked.

Find out more about changes to the job retention scheme.

Claims for furlough days in June 2021 must be made by 14 July 2021.

Key point to note from the scheme are:

  • For periods ending on or before 30 June 2021 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. You must pay your employee at least 80% of their usual wages for the hours that they are furloughed and not working. This is the amount you can claim through the scheme. From 1 July 2021, changes to the job retention scheme mean the level of grant will be reduced each month and you will be asked to contribute towards the cost of your furloughed employees’ wages
  • You can claim for employees on any type of employment contract, including full-time, part-time, flexible or zero-hour contracts.
  • If you have staff costs that are publicly funded you should use that money to continue paying your staff, and not furlough your staff.
  • You can fully furlough employees - they cannot undertake any work for you while furloughed full time.
  • You can flexibly furlough employees - they can work for any amount of time, and any work pattern but they cannot do any work for you during hours that you record them as being on furlough.
  • When your employees are on furlough they can take part in training, volunteer for another employer or organisation or work for another employer (if contractually allowed).

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Fraud risk

Periods of instability bring an increased risk of fraud. Fraudsters will actively exploit these difficult times and will target vulnerable areas for financial gain.

ActionFraud reported a 400% increase in reports of coronavirus related fraud in March 2020. The reported frauds are varied and include:

  • charity fraud
  • online shopping fraud
  • phishing emails

Further information is available on the ActionFraud website.

Periods of instability also lead to increased pressure, which may lead to reduced internal controls and management oversight. This might make schools more vulnerable to fraud risks. During these periods, busy school staff can be more susceptible to targeted attacks from fraudsters, particularly around changes to payment details. Remember, fraudsters can be very convincing: they are exploiting organisations and will have prepared thoroughly.

Organisations should continue to follow all usual business processes and procedures designed to protect them from fraud.

Schools should ensure that they:

  • maintain effective governance and financial management oversight.
  • remind all staff about the need to implement and comply with internal controls.
  • maintain strong internal controls and retain and implement clear policies and procedures.
  • provide further training on these policies and procedures where required.
  • maintain and promote strong anti-fraud controls.
  • review internal control risk assessments and fraud risk assessments.
  • ensure that staff know how to report suspected fraud.
  • undertake internal audits to monitor internal controls (and segregation of duties) to ensure they are operating effectively.

Further guidance on reducing fraud risks is also available (this was produced for academies but may be helpful to all organisations).

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Cyber crime

This is an increasing risk to the education sector so the DfE have published specific guidance on cybercrime. We recommend that you engage with this.

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Scam alerts

We know that some parents have received emails asking them to send their bank details if they are entitled to free school meals and want to continue receiving support. This is a scam. Please remain vigilant and continue to support parents to understand this.

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Payment to catering contractors

We’re aware that some of you are still unsure what to do about making payments to catering contractors during COVID-19. There’s no ‘one size fits all’ guidance that we can offer here because schools across MK have individual contracts with varied catering suppliers. For your school to decide what to do you need to consider:

  • what your normal business relationship is with your supplier (i.e. what are they asking you to continue paying for and what is this based on)
  • what the contract the school has with the supplier says
  • whether you’ve challenged the provider about their eligibility for and uptake of other government initiatives

Suppliers should agree to act on an open book basis and make cost data available during this period. They should continue to pay their employees and flow down funding to their subcontractors.

If you need help and support about making payments to caterers please email schoolsfinance@milton-keynes.gov.uk who will be able to offer you bespoke support and advice.

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Last Updated: 25 June 2021