Academies Financial Handbook 2016

11 October 2016

The EFA have published the 2016 edition of the Academies Financial Handbook, which applies to the accounting period beginning on 1 September 2016.

The main changes are as follows:

Governance

  • Boards of trustees should identify the skills they need and address any gaps through recruitment or training
  • To align with the terminology used in the Governance Handbook, the EFA refer to the trust’s publication of its governance structure and remit as its ‘scheme of delegation for governance functions’
  • All trusts must have a senior executive leader who should also be appointed as accounting officer, and that these roles must not rotate
  • Trusts must publish the relevant business and pecuniary interests of their accounting officer regardless of whether they are a trustee. They confirm that local governors are included when identifying relevant interests from close family relationships
  • Trusts must use Edubase to notify the Department for Education (DfE) of the appointment and vacating of the positions of member, trustee, local governor in a multi-academy trust, chair of trustees, chairs of local governing bodies, accounting officer and chief financial officer.

Financial control

  • Variances between budget and actual income and expenditure must be understood and addressed
  • Exposure to investment products must be tightly controlled so that security of funds takes precedence over revenue maximisation
  • Where there are concerns about financial management in a trust, the trust may be required to report information about its cash position to the EFA
  • A whistleblowing procedure is now a requirement, rather than a recommendation
  • Trusts should consider opting into the risk protection arrangement (RPA) unless commercial insurance provides better value for money
  • Trusts must implement reasonable risk management audit recommendations that are made to them by risk auditors
  • The audit committee’s oversight must extend to the controls and risks at its constituent academies, where the trust has them.
  • Oversight must also ensure that information submitted to the DfE and EFA that affects funding is accurate and compliant.
  • When considering a staff severance payment, trusts must satisfy the conditions in the handbook and obtain the required approval before making a binding commitment to staff.

If you have any questions, specialist Partners at MHA MacIntyre Hudson can advise and support you.

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