Academies accounts direction for 2023-2024 – what has changed?

Published by Kimberley Foulkes on 3 April 2024

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The Education & Skills Funding Agency (ESFA) has published its Academies Accounts Direction for 2023-2024.

The Accounts Direction (AAD) sets out the requirements and provides guidance for academy trusts preparing their annual report and financial statements for the period ending 31 August 2024.

A full copy of the new AAD and accompanying documents can be obtained here.

At the same time, the ESFA has also published its model set of accounts for academy trusts for 2023-2024 (the Coketown model) and its framework and guide for external auditors and reporting accountants of academy trusts for 2023-2024. These can be found here.

Content changes to the model documents, have helpfully been highlighted in yellow by the ESFA, for. We recommend as well as becoming familiar with the AAD changes, that Trusts consider commencing compiling the audit documents and Trustees’ Report as early as possible now, as these documents are all vital.

To confirm, the changes from previous AAD are not significant at all. However, Trustees and academy finance staff should always make themselves aware of these changes to ensure their Trusts are compliant and to fully consider the impact on their own risks, financial practices, and controls.

The ESFA has made 10 main changes to the AAD and these are summarised below.

  • The introduction of a new ‘What an academy trust must do’ section to help academy trusts better understand their obligations.
  • Provision of greater clarity on the relationship between the financial statements and other financial returns (paragraphs 1.4 – 1.5).
  • The removal of references to the Covid-19 supplementary bulletin, reflecting that Covid grants have either stopped or become part of business-as-usual activity.
  • The expansion of the review of the effectiveness of the systems of internal control to include a conclusion on whether an academy trust has an adequate and effective framework for governance, risk management and control (paragraphs 1.17 and 2.48).
  • Updated ESFA feedback to the sector on outcomes of its assurance work and compliance with the Direction (paragraphs 1.20 – 1.23 and Annex A).
  • Confirmation of how 16-19 core education funding should be disclosed in the financial statements (paragraph 2.98).
  • Clarification that the staff costs note should separately identify ‘other employee benefits’ (paragraph 2.134).
  • Clarification of how an academy trust can determine an appropriate value for the initial recognition of premises occupied under a long leasehold (paragraph 3.27).
  • Update on the information to be disclosed for agency arrangements to include cumulative unspent fund balances (paragraph 3.132).
  • The addition of further examples of sources of information to inform the Accounting Officer’s statement of regularity, propriety and compliance (paragraph 2.57). These include:
  • review of management reports;
  • review of trustees’/governors’ minutes;
  • ensuring use of funds is compliant with the funding agreement or relevant grant terms and conditions;
  • review of correspondence from ESFA for example FNtI/NtI/ ‘minded to’ letters;
  • review of the school resource management self-assessment checklist (SRMSAC);
  • confirming compliance with the academy trust’s scheme of delegation;
  • compliance with delegated authorities;
  • evaluation of compliance with the ‘musts’ in the Handbook;
  • ensuring related party transactions have been completed in accordance with the not-for-profit principles and the relevant statements of assurance have been obtained and reviewed;
  • consideration of whether any personal benefit has been derived from the academy trust’s transactions by staff or connected individuals;
  • adherence to tendering policies;
  • review of the tests the reporting accountant carries out in the Auditor Framework and Guide to provide evidence to support their conclusion on regularity; and
  • review of other external sources of assurance available to the academy trust over the year, for example specialist reviews or inspections.

If you have any questions on how these changes will affect your academy trust please contact our dedicated Academies team here.

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