Another Neg Question

[Guest]

I have yet another question with ref the NEG, though I am sure it has probably been asked and explained on here somewhere!

 

We are a day nursery, open 11 hours a day. If a child comes to me just, for example morning sessions (5.5 hours) we charge them the cost of a morning session and then deduct the NEG. We are still on the 12.5 hours funded sessions per week.

 

So for example if a morning session is £23.50, we put that on the invoice and deduct the £8.75 NEG (I think its that amount), so the parent pays £14.75.

 

We do offer just the funded sessions and parents choose if they want to do the whole morning session, it is not compulsary.

 

There is some conjecture between our nurseries that this is wrong.

 

Can somebody please let me know if this is the incorrect way to do it and explain to me (in words of one syllable please) how we should be doing it

 

Thanks

[Inge]

from my understanding this is the correct way.

 

you should be separating the fee paying part of the day and the funded part... so when you charge a fee it is ONLY for the part of the day which is not funded.

 

You must be giving 2.5 hours (or 3 if you have changed to this) free..

 

so if a child attends 5.5 hours

 

you have 2.5 hours which is free to the parent and funded.. the remaining time of 3 hours you may charge your normal hourly rate for..

 

by just deducting the funding you get it is possible for the child not to be getting 2.5 hours free... this does depend on your fees but to ensure they are we always had an invoice which showed the free part and the funded part..

 

 

perhaps someone else can explain it better.. it does get complicated..

 

Inge

[anju]

Inge has explained it well.

 

we are required by the local authority early years finance people to show clearly on invoices:

 

the free hours (i.e. the 2.5 hours in the case you cite)

 

the paid for hours (i.e. the extra 3 hrs in your case) and the hourly rate you charge for these extra hours.

 

for example in my setting this would be 3 hrs X £3.60 per hour and that's all we can charge.