IMPROVING SCHOOL
GOVERNANCE

3.3 Finance - Online learning activity C - Internal controls

Internal controls

Goal

To enable councillors to test their understanding of internal controls.

Resources

Steps

  1. Be familiar with the table of minimum internal controls.
  2. Do the quiz, considering whether each statement is true or false.
  3. Read the feedback given for each statement.

Question One

If there is no-one else available, it is okay for the person who approved the order of goods to record them as received in the finance system.

Feedback:

Separating the approval and receipt of goods or services is an important internal control for purchasing.

Question Two

Both the finance sub-committee and the school council are responsible for reviewing the financial reports.

Feedback:

Most school councils have a finance sub-committee. Both the finance sub-committee (where it exists) and school council review financial reports, and the finance sub-committee recommends action to be taken to school council.

Question Three

An annual stocktake of all assets on the asset register must be conducted.

Feedback:

In line with annual reporting of the school’s financial accounts, a bi-annual stocktake of assets must be conducted.

Question Four

It is okay for the chair of the finance sub-committee to be the school business manager, as long as they are not an employee of the Department.

Feedback:

The chair of the finance sub-committee cannot be the business manager.

Question Five

The school council approves a budget every three years.

Feedback:

Council approves the budget before the start of each new year. An external auditor must audit the school’s financial statements at least once every four years.

Question Six

All payments require two signatories: the principal and a nominated councillor.

Feedback:

Payments, including those made online, must be approved by two signatories. The business manager cannot be a signatory.

Question Seven

A school councillor who has a question about compliance with an internal control can't ask the question unless they are the school council chair.

Feedback:

Council is responsible for ensuring that the school maintains and monitors a system of internal controls. All councillors can and should ask questions when they have them.

Conclusion

Councillors must know about minimum internal controls, as council is responsible for ensuring that the school maintains and monitors a system of internal controls.

Back to top