THE ROLE OF FINANCE TEAMS IN APPRENTICESHIPS

Transcription

1 THE ROLE OF FINANCE TEAMS IN APPRENTICESHIPS June 2018 based on Funding & Performance Management Rules V6 Rebecca Rhodes, Senior Associate, UVAC

2 Documentation (with hyperlinks)

3 Agenda Policy & Rules Costing & Pricing Incentive Payments Audit & Evidence Reporting & Governance

4 Timing of Finance Accountabilities At Approval At Contract Negotiation During Delivery At Completion

5 Role of Finance in Apprenticeship Delivery & Compliance Subcontractor or Employer Due Diligence Confirming proceed to contract Agreeing the Apprenticeship Guide Price Costing the apprenticeship Ensuring only eligible activity is included Conduct Employer Due Diligence Confirm approval to contract / for contract value Conduct Subcontractor Due Diligence Retain evidence for compliance Collect Employer Financial Contributions Must collect contribution minimum every 3 months Must chase late contributions Must confirm value collected to Apprenticeship Hub & HESA/ILR team Transfer Funding Earned to Departments After monthly reconciliation Reconcile ESFA monthly payments Ensure payments received matched payment forecast & profile Pay Employer Incentives At 90 and 365 days Must meet 90 day compliance deadline for University Pay End Point Assessment Organisation On receipt of invoice Retain invoice and evidence Pay Subcontractors Including employers delivering to their own staff Maintain Evidence of Compliance Employer contribution payments Subcontractor Invoices and payments

6 POLICY & RULES

7 Monitoring Accountabilities & Approach Eligibility Employer contribution Incentive payment deadlines Subcontracting Evidence Requirements P201. We will review and monitor whether the training you provide represents good value for money. If we consider that the funds in an employer s apprenticeship service account or government-employer coinvestment we have provided is significantly more than the cost of the education and training, we may reduce the amount of funding we pay you after consulting with you. Make someone accountable for apprenticeship compliance

8 Eligible Costs/ Evidence Pack RULE 145. You must carry out your own due diligence checks on potential delivery subcontractors. The process and results must be available for inspection by us and employers. You must not use a potential delivery subcontractor s presence on the register of apprenticeship training providers, or any other public register or database, as an indicator that they are suitable to deliver to your, or the employer s, specific requirements You must not agree with an employer the use of a delivery subcontractor that you assess is unsuitable, or whose quality of delivery is demonstrably inadequate, even where the employer decides not to work with you as a consequence. EXPLANATION / IMPACT That you must put in place an assessment of risk / decision making process before entering into a contract with employer or subcontractor ACTION TO CONSIDER create a step in the authorisation process for due diligence signoff - particularly for high contract values or new clients Retain the due diligence check rationale

9 Rules & Evidence Pack RULE You must account for prior learning when negotiating a price with the employer. You must reduce the content, duration and price, where the individual has prior learning necessary to achieve the apprenticeship. Funds must not be used to pay for skills already attained by the apprentice. You must document how you have assessed the individual s prior learning and include this in the evidence pack (paragraphs P and P243.26). EXPLANATION / IMPACT That price has been reduced for prior learning in proportion with the prior learning ACTION TO CONSIDER Agree a pricing strategy and break even that assumes some price reduction

10 Eligible Costs/ Evidence Pack RULE 193. At least every three months you must: have collected the matching coinvestment from employers report the cash value on the ILR of total employer contributions received from the beginning of the apprenticeship to the end of the quarter on the ILR in June, September, December and March 194. The employer co-investment must be a transfer of funding visible in your financial systems. This will typically be in the form of a provider invoice and corresponding employer payment. Sanctions On-programme At completion EXPLANATION / IMPACT You must be able to demonstrate through your systems that funding has been invoiced and collected, and recorded in the ILR to he quarterly timetable ACTION TO CONSIDER Invoicing upfront for additional contribution - or at least annually Must chase non-payment - but liaise with Apprenticeship Hub on this process Code apprenticeship payments separately for easier visibility/ reporting

11 Eligible Costs/ Evidence Pack RULE P101. You will also receive the additional payments due to the employer and you must pass these on in full to the employer within 30 working days of receiving this funding from us. Where an apprentice is employed by an ATA, any applicable additional payments must be paid to the ATA. EXPLANATION / IMPACT That it should be clear in the evidence pack that the price should only contain the applicable eligible costs. ACTION TO CONSIDER Create checks that ensure payment windows are not missed

12 Rules & Evidence Pack RULE The evidence pack must include the following: details of the cost negotiated by the employer and provider. By details we mean that it should be clear that only eligible costs have been included in the price. P101. You will also receive the additional payments due to the employer and you must pass these on in full to the employer within 30 working days of receiving this funding from us. Where an apprentice is employed by an ATA, any applicable additional payments must be paid to the ATA. EXPLANATION / IMPACT That it should be clear in the evidence pack that the price should only contain the applicable eligible costs. ACTION TO CONSIDER Consider creating / publishing a costing summary for employers for each apprenticeship Update employer and apprentice guidance - be clear on what is not eligible for funding and what you offer free Complete the funding table in the Commitment Statement with what is not eligible for funding but is still paid for by you or the employer Create a module breakdown setting out clearly the activity and calculations. Track this learning and monitor progress

13 COSTING & PRICING

14 Costing Structure Pricing Employer Contribution ESFA Eligible Delivery Costs University Delivery Costs Evidenced Setting A Guide Price: Factors/Considerations Profit Funding Cap Market Value for Money Prior Learning Transparency

15 Costing Assumptions

16 Eligible Costs off-the-job training through a provider, or evidenced costs for employer provider delivery. registration and examination (including certification) costs associated with mandatory qualifications excluding any licence to practise regular planned on-programme assessments (progress reviews) to discuss progress to date against the commitment statement and the immediate next steps) distance, online, or blended learning relating to the off-the-job training element of an apprenticeship materials (non-capital items) used in the delivery of the apprenticeship framework or standard -the equipment or supplies must be necessary to enable a particular learning activity to happen. These items would not normally have a life span beyond the apprenticeship any administration directly linked to training and assessment, including endpoint assessment. This includes costs relating to the ongoing development 16 of teaching materials, lesson planning, the processing of the ILR, and quality assurance cost to resit an exam linked to a mandatory qualification, even where no additional learning is required. additional learning required to retake a mandatory qualification or an endpoint assessment. accommodation costs for training delivered through residential modules where the residential training is a mandatory requirement for all apprentices. Any costs for residential modules must represent value for money costs of an apprentice taking part in a skills competition if the employer and provider have agreed that participation in the competition directly contributes to helping that individual achieve the apprenticeship standard Any of the eligible costs can be bought in from a third party, including the apprentice s employer - only actual costs will be funded and these must be recorded. Funds from an employer s apprenticeship service account or government co-investment must not be used to fund other services from a third party.

17 Ineligible Costs Enrolment, induction, prior assessment, initial diagnostic testing, or similar activity travel costs for apprentices under any circumstances apprentice wages personal protective clothing and safety equipment required by the apprentice to carry out day-to-day work off-the-job training delivered only by distance learning, although you can include online and other blended learning activity as part of the delivery of an apprenticeship any training, optional modules, educational trips or trips to professional events in excess of those required to achieve the apprenticeship registration and examination (including certification) costs associated with a licence to practise. nonmandatory qualifications (qualifications that are not specifically listed in the standard) end-point assessment costs incurred by the training provider but not included in the price repeating the same regulated qualification where the apprentice has previously achieved Residential costs associated with non-mandatory learning, including qualifications, capital purchases including lease agreements -longterm assets which would have a lifespan beyond the apprenticeship being funded, e.g. ICT equipment (e.g. tablets and similar electronic devices) or maintenance of capital purchases. time spent by employees/managers supporting or mentoring apprentices, or the time of other employed staff arranging training support, except where this is directly linked to the training and assessment, including endpoint assessment. specific services not related to the delivery and administration of the apprenticeship. This includes the recruitment and continuing professional development of staff involved in apprenticeships, company inductions, managing agents, brokerage services (to an employer or provider) and the costs of memberships or other costs paid to employers, or their representatives, associated with procurement registers or opportunities to secure business You must not pay incentives or inducements or any other payment not authorised by us to the employer or to an end-point assessment organisation in relation to any part of the apprenticeship programme.

18 Staff Costs Teaching Department/ Faculty / School Year 1 - Per Apprentice Staff Member / Role Subtotal Hours TOTAL COSTS cost per hour 1. classroom/face to face delivery Module 1 Module 2 Module 3 Module 4 Module 5 hours hours hours hours hours Block 1 Costs - Academic staff Student Reviews Number Hours 3. Tripartite Reviews 5. Assessment Preparation 6. Other Teaching (specify) Number Hours 4. Project Supervision Number Hours Number Hours Number Hours Total Cost per Year Similar for non-teaching and don t forget: admin /programme staff in School/Dept/ Faculty Quality, HESA, Admissions, Registry NON TEACHING - beware facilities, overheads Beware ratio of teaching to non teaching

19 Costing & Income Internal View ONLY Apprenticeship Name Dates Start Completion Duration 36 Price Guide Price 10, Funding Cap 15 Funding Cap 15, EPA Price 1, Cohort Earnings Year 1 Year 2 Year 3 Year 4 Year 18/19 19/20 20/21 21/22 Student Numbers Total Retention % 50% 100% 100% 50% Earnings Per Apprentice TOTAL Guide Price 2, , , , , HEFCE top up funding English & Maths Additional Learning Support Incentive Payments Clearly, any across 0.00 the board elements 0.00 used in Employer contribution establishing a price, 0.00 rather than 0.00 representing an Total Income actual cost 2, e.g. profit margin 2, should only be 2, , , listed as such on internal documents. Costs (Eligible) Apportion these across the elements included in TOTAL costing when producing a document for EPA 1, , external use which sets out your price. Staffing Costs Non-Staffing Costs Sub-Contracting University % 33.00% , Total Costs 1, , , , , Total Net Income 1,637 1,637 1, ,100

20 FUNDING FLOW

21 Funding Flow Once a price and a final date for the end of the apprenticeship are agreed: Funding flow is based on the actual start date and planned end date of learning Create a forecast monthly earnings to reconcile with ESFA remittance statements Three way work between HESA/ILR team, Apprenticeship Hub and Finance Incentive Payments 1000 paid 50% at 90 and 50% at 365 days To the employer and the provider Core Payments - For A Levy Payer 20% is allocated to the planned end date month The remaining 80% is divided equally across the months in the apprenticeship Core Payments -For A non Levy Payer 20% is allocated to the planned end date month 10% is for you to collect from the employer AT LEAST every quarter [and report in the ILR] The remaining 70% is divided equally across the months in the apprenticeship

22 Funding, Price and Payments Other payments outside the levy paid by ESFA o English and Maths at 431 each o Learning support at 130 pcm Framework uplifts are paid across life of apprenticeship Once agreed, a price should not increase unless : o End point costs not known at the start (It is ok to add the assessment organisation and the price in at a later date) o Other change of circumstance may affect earnings Take time to reconcile levy account as the Employer and payments received as the Employer Provider

23 Price and Payments A reasonable profit is an acceptable part of the price You have 30 working days to pass the additional payments to the employer Funding is deducted in the month it occurs, NOT saved from an earlier month. You must not net or reduce the price for an employer provider who is delivering some element of the apprenticeship. They must pay the price in full and be paid for their delivery as part of their subcontract - Funding must be transparent Levy value in an employer s account may change if reconciled by HMRC. SFA will absorb any discrepancy in levy and collect employer contribution direct Framework uplifts are paid across the life of the apprenticeship Additional incentive payments, English and maths and learning support are paid out of funding paid to you Remember to assume some attrition/ early leavers in any costing or brake even calculation for each course

24 Mapping your Earnings A worked example with a 12 month apprenticeship Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Apprenticeship instalments X X X X X X X X X X X X Apprenticeship completions X Framework uplift instalments X X X X X X X X X X X X Framework uplift completion X Additional payments (incentive) X X English instalments X X X X Maths instalments X X X X

25 VAT P182. Supplies of training which are paid by government funding, including the apprenticeship levy, are exempt from VAT. This includes additional payments. Prices entered onto the ILR should not include VAT P183. You are responsible for determining the VAT treatment on your invoices to employers. P184. The ESFA does not provide advice on VAT. You must always seek your own advice on VAT from HMRC if you are in any doubt about VAT treatment. P185. If you add VAT to invoices and the employer is VAT registered, the employer may be able to recover that VAT through its VAT returns. In determining the costs of training or end-point assessment, an employer will need to check with you if VAT will be added and verify, internally or with HMRC, if it can be recovered.

26 MONITORING & AUDIT

27 Funding Rule Test 1. Was this apprenticeship eligible for the level of government funding that I claimed? 2. Can I prove this, for this apprenticeship, through the evidence I have collected? 3. Can I prove that my employer has met their responsibilities for this apprenticeship through the evidence I have collected? 4. Does my ILR/HESA record accurately reflect what happened in this specific apprenticeship? DOCUMENTATION RATIONALE

28 The ESFA Provider Hub

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30 Contracts & Finances on The Hub Provides on-screen information about your mainstream and ESF contracts, payments and performance. This can be filtered by contract and funding year by selecting parameters in the sliding filter on the right of the screen and clicking on the Apply button below. Information displayed on the screen can be exported in PDF and Excel formats by clicking on the Actions button Content : contract, payment and performance information download funding statements download contract documents download funding claim form and reconciliation statements export contract, payments and performance data Only lead providers have access to the contracts and finances area. Access The user roles for the contracts and finances area are: Contracts and finances provider user: read and download Contracts and finances provider content author: read, download and upload If you have the correct user role, you will see the contracts and finances tab as you log in If you can t see this tab your super user can give you access

31 Funding Reports in the Hub Detailed information showing the earnings ESFA calculated for you Designed to provide key information to check you have recorded the correct information, to recreate the funding methodology, and be able to manage your funding. The reports range from headline funding reports that aggregate learner and learning aim information into the earnings by programme, to detailed reports at learning aim level. Usually generated after you submit an ILR file, an earnings adjustment statement (EAS) or a supplementary data file. After each ILR Close ( 4 th working day each month), three apprenticeship reports also available This is calculated payment NOT actual payment : ESFA may not pay values shown in the report e.g. if a value exceeds a maximum contract value or if there is no valid contract for that provision. You should check that where funding values are in these reports they correspond with your contract and forecast earnings via the Funding Summary Report The Funding Information System (FIS) software also produces some of these reports but these ones are indicative only

32 Funding Reports in the Hub Apprenticeship Data Match Report Apprenticeships Additional Payment Report Apprenticeships Co-Funding Contributions Report Apprenticeships Indicative Earnings Report each apprentice, their learning activity and their expected earnings generated each month. Apprenticeships Monthly Payment Report - match with your remittance advice each apprentice, their learning activity, and the funding earned each month (both programme funding and additional payments) and the payments generated. Apps from 1 May 2017 X X X X X Apps BEFORE 1 May 2017 EAS Submission Report X X Funding Summary Report X X Funding Summary Report (produced at period end) a summary of total earnings per apprentice including those with a contribution from the employer. Summary of Funding Model 35 Funding by Learner Report Summary of Funding Model 35 Funding Report Trailblazer Apprenticeships Employer Incentives Report Trailblazer Apprenticeships Occupancy Report X X X X X X

33 General Evidence Pack & Document evidence can be electronic but you must have other systems and processes to check apprentices exist and are eligible for funds document, collate and store evidence when an exception occurs document collate and store evidence when a change of circumstances occurs provide confirmation that evidence is correct when it is collected Must store invoices and show outbound payments Must store incoming employer contribution Principles Evidence Pack Single (can be virtual) store of evidence to support funding claims Hold evidence that explains the guide price Rationale for price e.g. the calculation for reducing duration and price for prior learning

34 Audit Framework Nine questions = 33 critical factors Eligibility Age Employed status Employment Hours Apprenticeship Training Agencies AGE Grants Duration Delivery location Distance learning Breaks in learning Learning Support Start and end dates plus activity Achieve New areas for audit Negotiated Price English and maths Written agreement and commitment statement Payment of employer co-investment Payment of price over funding band maximum Additional payments for or with EHCP Small Employer co-investment waiver Completion and end point assessment

35 END TO END TASKS

36 Role of Finance in Apprenticeship Delivery & Compliance Agreeing the Apprenticeship Guide Price Costing the apprenticeship Ensuring only eligible activity is included Conduct Employer Due Diligence Confirm approval to contract / for contract value Conduct Subcontractor Due Diligence Retain evidence for compliance Pay Employer Incentives At 90 and 365 days Must meet 90 day compliance deadline for University Collect Employer Financial Contributions Must collect contribution minimum every 3 months Must chase late contributions Must confirm value collected to Apprenticeship Hub & HESA/ILR team Transfer Funding Earned to Departments After monthly reconciliation Monitor Contributions, ESFA Payments and Chase Payments Reconcile ESFA monthly payments Ensure payments received matched payment forecast & profile Pay End Point Assessment Organisation On receipt of invoice Retain invoice and evidence Pay Subcontractors Including employers delivering to their own staff Maintain Evidence of Compliance Employer contribution payments Subcontractor Invoices and payments

37 Questions Please use the questions facility to add your feedback and comments about the webinar Any queries or anomalies - please me r.rhodes@bolton.ac.uk Webinars To Book : Audit and the Evidence Pack Webinar Subcontracting Webinars to Review : Costing an Apprenticeship