Academies Financial Handbook effective from 1 September 2021

Academies Financial Handbook effective from 1 September 2021

On 18th June the Education and Skills Funding Agency updated the handbook that describes financial requirements for academy trusts.

The Academies Financial Handbook sets out the financial management, control and reporting requirements that apply to all academy trusts.  It describes a financial framework for trusts that focuses on principles rather than detailed guidance and reflects their accountability to Parliament and to the public.

Compliance with the handbook is a condition of each trust’s funding agreement.

The June 2021 edition of the handbook is effective from 1 September 2021.

What has changed in this edition?

The main changes are as follows:

  • Roles and responsibilities
  • Information on suitability checks for existing and future members [1.4]
  • Confirming that trusts should have reserved places for parents in their governance structure [1.11]
  • Highlighting trusts’ obligations in relation to safeguarding [1.15], health and safety [1.17] and estates management [1.20]
  • Emphasising the process if appointing a senior executive leader as a trustee [1.23]
  • Emphasising the value of external reviews of governance for trusts [1.32]
  • Advising trusts to liaise with their RSC when their senior executive leader is planning to leave the trust to discuss their structure and options [1.36]
  • Replacing the term clerk with governance professional [1.49]
  • Reminding trusts of the requirement for Disclosure and Barring Service checks [1.51 and 1.52]

Main financial requirements

  • Explaining when trusts should review their scheme of delegation [2.4]
  • Updating information on what trusts need to publish on their website in relation to employees whose benefits exceed £100k [2.32]
  • Reminding trusts of governance documents which need to be available for public inspection [2.51]

Internal scrutiny

  • Explaining that the chair of the audit and risk committee should not be the same person as the chair of the finance committee [3.10]
  • Explaining that the internal scrutiny must not be carried out by a member of the senior leadership team [3.15]

Annual accounts and external audit

  • Setting out when trusts should re-tender for their external audit service [4.5]

Delegated Authorities

  • Explaining that trusts must obtain prior approval for staff severance payments of £100k or more which include a non-statutory/non-contractual element, and/or where the employee earns over £150k [5.12].

The regulator and intervention

  • Introducing a requirement for trusts to provide ESFA with authority to obtain third party information [6.5].
  • Providing trusts with advice and guidance on cybercrime [6.16 and 6.17]
  • Renaming the Financial Notice to Improve (FNtI) to Notice to Improve (NtI) reflecting how ESFA intervenes in broader governance issues [6.18 to 6.22]

To view the Academies Financial Handbook 2021

Academies Financial Handbook effective from 1 September 2021