Who should read this handbook

Find out if this handbook applies to you.

This handbook sets out the Department for Education’s (DfE’s) financial governance, management and control requirements for:

  • further education and sixth-form college corporations
  • bodies designated as being in the further education sector

It is part of a suite of interlocking publications forming the financial governance, management, financial and assurance framework for colleges, which they must comply with as a condition of their accountability agreement. The other components include:

We use the term ‘college’ to refer to:

The handbook may also be of interest to sector and representative organisations such as:

  • the Association of Colleges
  • the Sixth Form Colleges Association
  • the Chartered Institution for Further Education
  • the Catholic Education Service
  • Mayoral Combined Authorities
  • the Greater London Authority
  • Local Enterprise Partnerships
  • the Office for Students
  • local authorities
  • employers

Colleges are not the only providers of post-16 education in England. For the avoidance of doubt, this handbook does not apply to:

  • 16 to 19 academies
  • sixth-form colleges having the legal status of, or forming part of, an academy trust
  • local authority-maintained schools with a sixth-form
  • 16 to 19 free schools
  • University Technical Colleges

What the handbook covers

The handbook comprises short topics, explaining requirements, as well as elements of good practice.

The handbook:

  • describes the financial responsibilities of colleges, reflecting their status as charitable corporations acting in the public interest and classified as central government bodies
  • explains when colleges must obtain advance approval for certain financial transactions - colleges must ensure they are familiar with these requirements, as described in part 5
  • balances the need for effective financial management with the freedoms that colleges need over their day-to-day business
  • reflects The Seven Principles of Public Life (selflessness, integrity, objectivity, accountability, openness, honesty and leadership) to which public office holders must adhere
  • must be complied with as a requirement of colleges’ accountability agreements with the Secretary of State for Education
  • sets out that DfE may take action, in accordance with the framework for College oversight: support and intervention where there are concerns about a college’s compliance with financial management requirements

Where this handbook refers to ‘we’ or DfE taking action or making a decision, this should be taken to mean officials in the department, and/or the Education and Skills Funding Agency (ESFA) and, potentially, ministers, working together, unless stated otherwise. Where teams are referred to specifically, the expectation is that those teams will be leading on that specific aspect of work.

Terminology when using the handbook

In the handbook:

  • ‘must’ – means statutory, contractual and other regulatory requirements, such as, but not limited to charitable rules and public sector spending rules
  • ‘should’ – means minimum good practice that colleges should apply, unless  they can demonstrate that an alternative approach better suits their circumstances

Governors and trustees

Throughout the handbook, the  term ‘governors’ is used to refer to those forming the board of the college corporation. Given colleges’ charitable status, the board of governors are also the college’s trustees.

However, in the context of Catholic Sixth Form Colleges the  term ‘trustee’ refers to diocesan trustees and so the term ‘trustee’ has not been used, except where it is necessary to consider governors’ charity trustee duties specifically.

Likewise, in the case of designated institutions with the legal character of a company limited by guarantee, the  board members are also directors of the company, but the term ‘directors’ is not used in this handbook.

Principal and chief executive

Colleges generally refer to their senior executive leader as a ‘principal’, but the term ‘chief executive’ is sometimes used as well or as an alternative.

The handbook makes reference to the senior executive leader of a college primarily in relation to the responsibilities of the accounting officer, but is not prescriptive concerning the job title.

Chief financial officer

The handbook references the role and responsibilities of the member of the senior leadership team with lead responsibility for financial management. This role is referred to as ‘chief financial officer’, though alternative job titles may be used in practice.

Governance professional

The handbook refers to the college’s governance professional as the role to lead and support governance within the organisation. In some colleges the role may be referred to as:

  • ‘head’ or ‘director of governance’
  • ‘clerk to the board’
  • ‘college clerk’
  • ‘clerk to the corporation’
  • ‘company secretary’