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 2017 payment from the ESFA and this element should therefore be included as accrued income.
- UIFSM funding – part of the funding received from the ESFA in July 2017 relates to the first two terms of the 2017/18 academic year and this amount should be adjusted as deferred income.
- Rates grant – academies should have received their funding for the 2017/18 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 2017/18 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 2016/17. 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.
- If your payroll bill is over £3 million, you will have been subject to the new apprenticeship levy. This needs to be separately identifiable in your trial balance as it must be disclosed.
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.
7. Website Compliance
Your auditors will be checking that your website complies with guidelines for the information that it must hold. If you are unsure what this entails please see my previous article “Academies – is your website compliant?”.
Kreston UK’s 2017 Academies Benchmark Report has been published. To request your complimentary copy of the Report, please click here.
The benchmarking report will assist anyone who wants to understand more about how their academy trust is performing.