Preparing for your financial year end

The accounting year end for academy trusts of 31 August is fast-approaching. For many School Business Managers the external audit can be one of the most stressful times of the year and is combined with the schools returning after the summer holidays for a new academic year. Here is a reminder of some things you can consider to assist the external auditors and make the audit process as efficient as possible.

1. Audit timetable

It is important that you agree a timetable with your external auditors to ensure everyone is aware of the key deadlines to meet. This will include planning and completion meetings.

2. Finalising your trial balance

You should consider making as many accounting adjustments as possible to produce your finalised year-end trial balance. This could include:

• Pupil premium funding – academies will receive their funding for July and August in their October 2016 payment from the EFA and this element should therefore be included as accrued income.

• Summer school grant – academies will receive 50% of their funding for the current academic year in November 2016 from the EFA and this therefore be included as accrued income.

• UIFSM funding – part of the funding received from the EFA in July 2016 relates to the first two terms of the 2016/17 academic year and this amount should be adjusted as deferred income.

• Rates grant – academies should have received their funding for the 2016/17 rates period and part of this should be adjusted as deferred income.

• Depreciation charges – using your fixed asset register, the charge for the year by category of asset should be calculated and included as an expense.

• Capital expenditure – assets purchased in the year with values greater than the academy trust’s capitalisation limit should be separately identified within a separate capital expenditure nominal code.

• Prepayments – consider all significant expenditure for which an element would relate to the 2016/17 accounting year and prepay accordingly. This will include any trips for which advance payments have been made.

• Accruals – consider all expenditure that will be included in the next accounting year and accrue for any amounts that relate to 2015/16. This should include fees for this year’s audit.

• Deferred income – in addition to the grant income noted above there may be other income received in advance, such as for school trips or other events.

• Voluntary fund – if you are an academy school with a separate voluntary fund that is part of the academy, ensure you post the income and expenditure for the year into your main accounts system.

• Fund accounting – check your system has appropriately matched expenditure against related income by fund. For example, ensure expenditure relating to pupil premium is matched against pupil premium income in your restricted funds.

3. Prepare the year end audit file

Your auditor should have provided you with a detailed list of required audit information. Preparing a complete file will help reduce the time they will need to spend with you during the audit visit.

This will include non-financial information such as minutes of meeting held and any internal audit reports.

4. Register of interests

Review your academy trust’s register of interests to ensure this includes all relevant business and pecuniary interests of the members, trustees, local governors (if operating a multi-academy trust) and senior employees. This must include any relevant material interests arising from close family relationships.

5. Companies House records

Review your academy trust’s records held with Companies House to ensure that all appointments and resignations of trustees have been recorded.

6. Local Government Pension Scheme (LGPS) valuation

You will need to request this from the pension provider in adequate time. Remember, you are not the only academy school that will be requesting this information and some Local Authorities (LAs) will require plenty of notice.

If you have any concerns or questions regarding your external audit requirements, please get in touch with one of our academy school specialists at your local Kreston Reeves office or complete our online contact form.