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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 the end of March 2019 is 7.5% for Secondary schools and 12% for Primary schools, Pupil Referral Units (PRUs) and Special schools of the year's income to March 2019.

The BCM form below has been created to assist schools to determine the amount your BCM will be at the end of the year. This form has now been included in the nine month returns to the Local Authority and will need to be completed each year.

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
  • Late allocations
  • Outstanding collaboration money
  • Other grants - e.g. teaching schools.

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.

BCM Limit Calculator (XLSX, 43.1 KB)

If you have any queries please contact Schools Financial Services on 03000 41 54 15.