Balance control mechanism

Balance Control Mechanism (BCM) - Balances which exceed Schools' normal 7.5% or 12% Rollover limit

Sections 4.1 and 4.2 of the Scheme for Financing Schools gives procedures for the treatment of surplus and deficit balances arising in relation to budget shares. This is Kent's Balance Control Mechanism (BCM).

The maximum allowable surplus cash limit for year end is 7.5% for Secondary schools and 12% for Primary schools, Pupil Referral Units (PRUs) and Special schools of the year's income.

There are three BCM forms currently available.

Generic Balance Control Mechanism (BCM) form

A new generic BCM form has been created to enable schools to calculate their current BCM position at any given point in the year. This will assist in highlighting if the school is exceeding the BCM threshold and can be used for checking the school’s position on Three Year Plan forecasts as well as Monthly Monitoring.

Nine months Balance Control Mechanism (BCM) form

This form is to be used as part of your nine months return only. There is a guide for completion contained within the form together with an explanation of the BCM criteria.

Analysis of Year End Revenue Balances form

This form is to be used as part of your year-end return only. There is a guide for completion contained within the form itself, together with an explanation of the BCM criteria.

The three different BCM forms can be found on the Financial returns page

Completing the form will inform and detail whether there is need to exceed your maximum allowance, for instance, where your school has a capital project and there is a need for a contribution from revenue to capital as detailed in the three-year plan. You will need to ensure any amount over your maximum allowance is assigned for specific purposes as you will be asked to detail this on your year-end analysis form.

All supporting evidence should be retained in the school. To help schools and also to reduce bureaucracy the LA do not require documentation unless the school is notified.

Examples of criteria permitted by the LA for excess surplus balances are:

  • Contribution to capital projects
  • Funds held on behalf of other schools
  • Late allocations
  • Other grant income and funding sources

The Local Authority will not be sending out prior approval for any excess balances.

As part of the year end returns, schools will be expected to complete the year-end analysis form with details of all the committed revenue balances over the BCM limit.

Any school that does not spend their excess on the stated purpose will need to produce documentation for a panel decision to determine whether the money can be kept by the school or clawed back by the Local Authority. The panel will consist of members of Delegated Formula Funding Group.

If you have any queries, please contact Schools Financial Services on 03301 651 001.