ESFA Update Academies: July 2023

ESFA Update Academies: July 2023
The EFSA has published the Academy Trust Handbook 2023, which comes into effect on 1 September 2023.
This years’ handbook contains several key changes, including:

Related party transactions: an increase in the threshold beyond which ESFA approval is required for related party transactions from £20k to £40k
Annual reporting: removing the requirement for explanations in annual accounts when holding fewer than 6 board meetings per year
Budget setting: providing an additional month to submit annual budget forecast returns
Budget monitoring: providing more discretion in the distribution of management accounts
Sustainability: confirming that salary sacrifice schemes can be set up for electric vehicles, in most cases without our approval
A full list of changes can be found on page 7 of the handbook.

Simplified areas have also been highlighted below along with the main changes:

Roles and responsibilities
• Updating content on governance matters throughout part 1 following the publication of the trust quality descriptions
• Emphasising the importance and value of good estates safety and management (1.19)
• Confirming that the board should have sufficient financial knowledge to hold the executive to account (1.25)
• Explaining that the roles of the Accounting Officer and the Chief Financial Officer should not be occupied by the same individual (1.28)

Main financial requirements
• Confirming that trusts no longer need to provide an explanation in their governance statement where the board has not met at least 6 times in the year (2.3)
• Providing trusts with an additional month to submit their Budget Forecast Return (2.15)
• Simplifying the position on the preparation and circulation of management accounts, including more discretion for trusts (2.18 – 2.20)
• Explaining the permissive position on Electric Vehicle (EV) salary sacrifice schemes (2.31)

Delegated Authorities
• Simplifying the position on GAG pooling to strengthen the value and importance of this practice for trusts to consider (5.30 and 5.31)
• Refining the approval threshold for related party transactions, and simplifying arrangements for transactions within other educational providers (5.42 & 5.57)

The regulator and intervention
• EFSA have amended the section on NtIs to make clearer the range of circumstances in which an NtI might be issued (6.16.) The department will engage with the sector in developing its approach to intervention, including the process to be followed by the department’s Regions Group and the evidence that they will rely on to determine the strength of trustees’ oversight of educational performance.

If you would like to discuss this update, please contact Haslers dedicated team who specialise in working with individual academies, Multi Academy Trusts (MATs) and free schools on 020 8418 3333.