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Are You Complying with the New Academies Financial Handbook?

on Friday, 13 October 2017.

In the new academies financial handbook, which applies from 1 September 2017, Lord Nash emphasises the importance of boards reviewing and refreshing their skills and knowledge, particularly if their trust is in transition.

The handbook refers throughout to the Governance Handbook and Competency Framework which we have previously commented on.

Here, we provide a checklist for you to ensure your compliance with the new changes:


Governance structure - Members and Trustees (page 7)

Is there a significant degree of separation between your Members and Trustees?  If a majority of your Members are not independent from the Trustees, why not?

If asked by the DfE, how would you justify this?         

Nolan principles (1.1.12)

Do your Members and Trustees understand, and adhere to, the 'seven principles of public life'?

Accounting officer letters (1.5.5)

Has the accounting officer shared the "Dear Accounting Officer" letters with Members, Trustees, the Chief Financial Officer and other members of the senior leadership team? Has the board of Trustees had the opportunity to discuss the letters and, if necessary, challenge the senior leadership team on the Trust's financial systems and controls?

Improving financial efficiency (1.5.11)

Is your Trust actively looking for ways to improve its financial health and efficiency? Is your Trust aware of DfE tools to assist?

Skills gaps (1.5.16)

Following on from the 2016's handbook requirement for boards to identify the skills and experience that it needs and address any gaps, has the board referred to the Competency Framework in doing so?

Does the board require any training?

Board effectiveness (1.5.17)

In assessing its effectiveness, has the board considered the six key features of effective governance in the Governance Handbook?

Does the board require any training?

Executive pay (2.3.5)

Has the board followed a robust evidenced-based process in taking decisions on levels of executive pay?

Are those levels reflective of the relevant individual's role and responsibilities?

Keeping Edubase up to date (4.7.4)

Officer and the Chief Financial Officer been completed on 'Get information about schools' (which replaced Edubase from 18 September) and is accessed through Secure Access.

Does the Trust have a system for ensuring that all records up to date?

Investigation reports and guidance (4.8.3 and 4.8.4)

Has the board of Trustees referred to the ESFA's guidance on reducing the risk of financial irregularities and the ESFA's investigation reports when considering their approach to risk management?


Further things to be aware of:

  • Transactions considered 'repercussive' (ie. those likely to pressurise other trusts to take a similar approach and hence have wider financial implications) must be referred to the ESFA for explicit prior approval.

  • The limit of £50,000 for non-contractual/non-statutory staff severance payments is gross not net (ie. before deductions).

  • An evidence-based approach to assessing executive pay levels could include an evaluation of pay of comparable posts where known or research with recruitment agencies. This is no failsafe method as pay levels do vary depending on the size and structure of the Trust.

  • It is for the Members to appoint the trust's auditor save where the Trustees are permitted to do so (i.e. the first period of account or to fill a casual vacancy). Further information on this can be accessed through OnStream, our free online portal.

The handbook continues to helpfully list all of the 'musts' in Annex C and so we have not repeated that here.  It also still refers to those matters of minimum good practice which it refers to as the 'shoulds'.  The link to the full handbook can be found here.

If you would like to receive information on how we can support your trust with its corporate governance requirements, including details of our documentation for the management of conflicts of interest or company secretary guides, please contact Jaime Hobday on 0121 227 3703 or Chloe Brunton on 0117 314 5301.

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