In June the Education and Skills Funding Agency (ESFA) published the Academies Financial Handbook 2020 (AFH2020). The ESFA continues to strive for the highest standards of financial management and governance, making changes that increase the focus on internal scrutiny requirements. It is clear the ESFA are looking to improve this area of reporting and ensure that Academy Trusts’ internal scrutiny is more akin to that seen in further education entities.
The AFH2020 increases the expected controls and transparency that trusts should have in place going forward including the mandatory maintenance of a fixed asset register (para 2.7)
1. Internal Scrutiny
What the Guidance Says:
Check the purchase of any capital assets (e.g. desk computers, interactive whiteboards, kitchen equipment) for physical existence. The accounting officer must have oversight of financial transactions by ensuring the academy trust’s property and assets are under the trustees’ control, and measures exist to prevent losses or misuse
Internal Scrutiny in academy trusts: Annex 2 - Procurement
The AFH 2020 foreword stresses the role of efficient financial management and accountability, recommending schools follow guidance outlined in the ESFA Good Practice Guide on Internal Scrutiny.
How an Asset Management System helps:
A school can have hundreds, even thousands of physical assets but without an accurate asset list you would be hard pressed to quickly find the physical location of a specific tablet or laptop. A School Asset Management system will significantly reduce the time tracking down and verifying assets in the database.
2. Probity in Managing Public Funds
What the Guidance Says:
The accounting officer must have oversight of financial transactions by ensuring the academy trust’s property and assets are under the trustees’ control, and measures exist to prevent losses or misuse.
Part 1: Roles & Responsibilities 1.31
Part 1 of the AFH underlines the roles and responsibilities of the Trust’s key personnel, including the Accounting Officer. They have the specific responsibility of assuring Parliament, and the public, of high standards of probity in the management of public funds, particularly regularity, propriety and value for money.
How an Asset Management System helps:
An asset management system is the perfect tool to help a school pro-actively record, track and manage it’s assets. Accounts can be confident that they have detailed, up-to-date asset information to support the school budgeting process, investment decisions and procurement strategies.
3. The Asset Register
What the Guidance Says:
The academy trust must have sound internal control, risk management and assurance processes. The control framework must manage and oversee assets and maintain a fixed asset register.
Part 2: Main Financial Requirements 2.7
The AFH references Buying procedures and procurement law for schools which goes into more detail on fixed assets. Fixed assets are items of value you will use for a long time such as:
- land
- buildings
- machinery
- vehicles
- furniture
- office equipment
- IT
Keep a ‘fixed asset register’ of any fixed assets that cost more than the amount set in your school’s rules. This will help prevent loss and track their value over time for depreciation, tax and insurance reasons. To do this you should:
- record them all, including their location, who is responsible for them and their condition
- tag them – many people use tags with serial numbers and barcodes to make inventories easier
- keep a loan book
- inspect them all once a year
- have procedures for moving, transferring and disposing of assets
How an Asset Management System helps:
An asset management software platform will help a school keep their fixed asset register accurate, up-to-date and free from ghost assets ie: an item which appears on the fixed register but is lost, stolen or unusable. A software platform is the quickest, easiest way for a school to record their assets and then keep track of them, including the annual audit. An integrated mobile barcode/QR code app can quickly scan asset tags, confirming their location in the database. The software can also be set up to support school asset depreciation and disposal procedures. Additionally, loan items can also be scanned to check in equipment to temporary users and update the database.
4. Insurance
What the Guidance Says:
The trust’s management of risks must include contingency and business continuity
The academy trust must have adequate insurance cover in compliance with its legal obligations
Part 2: Risk Management 2.4
The school must maintain a risk assessment process, a risk register and have continuity plans in place e.g. dealing with an influenza pandemic, school trips or bad weather.
How an Asset Management System helps:
In the event of major incident such as fire or flood, an asset management system will give schools an accurate, detailed asset list with the right insurance cover and supporting paperwork - all the information needed to quickly make a claim and access the funds required to get back up and running. With a cloud-based solution, accessed by any web browser, this is all safely hosted offsite.
5. Theft
What the Guidance Says:
Academy trusts must be aware of the risk of fraud, theft and irregularity and address it by putting in place proportionate controls. Trusts must take appropriate action where fraud, theft or irregularity is suspected or identified.
Part 6: The Regulator and intervention 6.10
The ESFA may conduct or commission investigations into actual or potential fraud, theft or irregularity in any academy trust, either because of a notification from the trust itself or from other information received. ESFA may involve other authorities, including the police.
How an Asset Management System helps:
With an asset management system, it is easier to identify missing assets. A label tagging system also signals to staff and students that asset locations are being pro-actively tracked.
Tags: Asset Management