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Academies Financial Handbook 2019 - What Are the New Obligations?

on Monday, 08 July 2019.

A new Academies Financial Handbook was published on 27 June 2019 and takes effect on 1 September. The structure of the Handbook has changed this year and whilst it feels more logical in its order, you will need to familiarise yourself with the new order.

The Handbook continues to list the ‘musts’ (now in Part 8) and now more clearly sets out further guidance available to Academy Trusts in greyed out boxes throughout.

The checklist below is intended to summarise the key changes and to help you comply with the new obligations which it contains.

The Clerk 

There has been much conversation within the education sector over the last 12 months or so about the role of the Clerk or ‘governance professional’. The theme that the Clerk is an essential part of a board’s toolkit is now emphasised in the Handbook.

  • Does your Clerk have the skills and knowledge to support your board?
  • Have you looked into the Department for Education’s programme for developing your Clerk?

Management Accounts 

The Handbook now sets out what the format of management accounts must include. 

  • Do your monthly management accounts include an income and expenditure account, variation to budget report, cash flows and balance sheet? 

Setting Executive Pay 

This section has been expanded and clarification added.

  • When considering executive pay, are you considering benefits (such as pension contributions) as well as salaries? 
  • Does your board have sight on broader business interests held by senior executives, and is satisfied that any payments made in relation to such interests do not undermine the transparency requirements for disclosing pay in accordance with the Academies Accounts Direction

The Handbook continues to contain a reference to HM Treasury’s Review of the Tax Arrangements of Public Sector Appointees, but now sets out that this explains that senior managers with significant financial responsibilities should be exclusively on payroll with income tax and NI contributions being deducted at source.


Your Academy Trust must maintain a risk register.


For some time, Academy Trusts have been required to have whistleblowing procedures in place but the Handbook now expands on this obligation. 

  • Have your Trustees agreed the whistleblowing procedure? 
  • Has the Trust appointed at least one Trustee and one member of staff to whom staff can report concerns?
  • Do your staff know what protection is available to them if they report, what areas of malpractice or wrongdoing are covered, and who they can approach?

Trustees must ensure that all staff are aware of the whistleblowing procedures. Available on our eLearning Solutions platform under VWV Plus, our whistleblowing course can help you meet this requirement. Driven by our leading lawyers, this course enables academy trusts to provide staff with their whistleblowing policy, track all staff have read this and embed their understanding of their roles and responsibilities.

Get in touch with Imogen Street on 07384 545998 to find out more or book a demo.

Audit Committees and Internal Scrutiny 

The Handbook sets out several musts for your Audit Committee (or other Committee with an audit function).

Does your committee: 

  • have written terms of reference?
  • agree an annual programme of work to deliver internal scrutiny?
  • review its risk register to inform its programme of works and agree who will perform that work?
  • consider reports at each meeting relating to that programme of works and consider progress?
  • consider outputs from other assurance activities by third parties including ESFA reviews?
  • have access to the external auditor as well as those carrying out internal scrutiny?

Your programme of internal scrutiny must focus on: 

  • Evaluating the suitability of, and level of compliance with, financial and other controls. This includes assessing whether procedures are designed effectively and efficiently, and checking transactions to confirm whether agreed procedures have been followed
  • Offering advice and insight to the board on how to address weaknesses in financial and other controls, acting as a catalyst for improvement, but without diluting management’s responsibility for day to day running of the Trust
  • Ensuring all categories of risk are being adequately identified, reported and managed.

A short annual summary report must be submitted to the Committee for each year ended 31 August by the person or organisation carrying out the programme of works outlining the areas reviewed, key findings, recommendations and conclusions. This must be submitted to the ESFA with the audited accounts by 31 December each year.

If you would like to receive information on how we can support your trust with its corporate governance requirements, please contact Jaime Hobday on 0121 227 3703, or complete the form below.

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