It is sensible to plan for a reserve to meet anticipated extra costs. However, a planned surplus of more than 5% or £10,000 whichever is greatest, will usually attract enquiries from the LA. It may be justified if the school is setting aside money for a large item of expenditure.
A LA’s scheme for financing schools should prescribe for a statement from the governing body on what they plan to do with a surplus school budget which exceeds 5% of the school budget or £10,000 whichever is the greater.
The LA may direct the governing body as to how to spend a surplus in the school balance for a funding period if:
If the governing body does not comply with such direction, the LA may require the governing body to pay all or part of that surplus to the authority to redistribute within the local authority’s Schools Budget.
Where can I get more information about Governors and Finance?
Use the “following link”: http://www.governors.wales/publications/2014/02/20/governor-guide-governors-and-finance/ to download the Governors Wales Governor Guide on Governors and Finance.