LEAs are required under section 52 of the Schools Standards and Framework Act 1998 to prepare a budget statement before the beginning of each financial year for that year, by 31 March. After the end of that financial year they are required to prepare an outturn statement.
The exact formats to be used for this financial reporting are prescribed by the Secretary of State.
Purpose of financial statements
It is a statutory duty that LEAs must publish their budget and outturn statements as and when prescribed in the section 52 regulations. The size of the Schools Budget, and the amounts to be allocated to each factor depend on budget decisions taken by the LEA before the beginning of each financial year, so budget statements are the means of informing schools and the public in general about the funding plans of the LEA.
Budget statements
The budget statement for the forthcoming year is intended to provide a clear picture of the authority's planned spending:
How much of the whole education budget the LEA intends to spend on items outside the Schools Budget
How much the LEA is proposing to retain centrally within the Schools Budget for school services
How the formula is working to produce budget shares for each school in the LEA's area
Outturn statements
The outturn statement at the end of the year is intended to provide schools, parents and others with an interest in education, with details about school and LEA expenditure.
Provide data for the Departmental Annual Report (DAR);
Inform policy making
Inform the treasury for monitoring purposes
Inform Parliament in its role of monitoring the Department's accountability for public funds
It is important that schools and others can compare funding and methodology between different LEAs, so as to inform debate about budget and expenditure levels and such issues as the balance of funding between primary and secondary schools. It is therefore essential that all statements are prepared to a common format.