Academies Financial Handbook 2020 Update

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Education Article

02 July, 2020

As you may be aware, a new handbook was released last week to be effective from 1 September 2020.

Academy trusts must comply with this handbook as a condition of their funding agreements. The thought behind it is that managing your resources well will help you be accountable and enable you to get best value. It is what is expected of you in using public funds.

One of the unexpected changes is the confirmation that every trust must have a clerk to the board. The role is more than administrative support; it is about providing independent and expert advice. So, choose your clerk wisely! DfE have a Clerking Competency Framework to assist with what is needed.

Please find below a brief summary of the main changes. Alternatively click here for our detailed summary of the changes.

Breif summary of the main changes:

1) Governance

  • Trustees have a responsibility to take ownership of the trust's financial sustainability and maintain the trust as a going concern.
  • Members must not be employees or occupy unpaid staff roles
  • Members must remain informed about trust business
  • Trusts must appoint a clerk to the board
  • Trusts must keep their register of interests up to date

2) Executive Team

  • The accounting officer and chief financial office (CFO) should be employees and you need ESFA approval if they are not
  • Larger trusts need to consider relevant accountancy qualifications for the CFO and all CFOs must maintain professional development

3) General Controls and transparency

  • Maintenance of a fixed asset register
  • Termly review of pupil number projections
  • Use of integrated curriculum and financial planning
  • Avoidance of overdrafts
  • Publication of information about high pay and whistleblowing
  • Trusts must confirm that trust finds are not used to purchase alcohol
  • Board and committee responsibilities for risk management
  • Boards should refer to DfE's material on improving school resource management (2.14) and carry out completion of the School resource management self-assessment tool

4) Internal scrutiny

  • Internal scrutiny covers both financial and non-financial controls
  • Removal of the option for internal audit to be performed by the external auditor
  • Trusts can use additional individuals or organisations to support internal scrutiny where non-specialist financial knowledge is required

5) Annual accounts

  • More on the audit and risk committee's role in relation to external audit

For more information contact Gemma Duxbury in our Governance, Procurement & Information department via email or phone on 0333 207 4239. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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