If you haven't had a chance to thumb through the recently updated Academies Financial Handbook, SG World have put together a summary of the updates and handy infographic explaining how it impacts a school's asset inventory process and how SG World can help!.
The changes in this latest edition of the handbook reinforce an academy's duty in the following areas:
1. Roles and responsibilities of trustees and their statutory duty to exercise care, skill and diligence and avoid conflicts of interest. The ESFA will be working closely with Chairs when there are concerns over issues such as executive pay and related party transactions, or where there is insufficient oversight or control of a trust's money.
- Highlighting directions the Secretary of State may make in relation to members, trustees and other individuals [1.2.7 and 1.2.8].
- Referring to the Charity Commission's role in addressing non-compliance [1.2.9].
- Greater emphasis on trustees applying high standards of governance, the role of the chair, working with ESFA, and updated references to church academies [1.3.1 to 1.3.5].
- Updating the description of the role of members to align with the Governance Handbook [1.4.1 to 1.4.5].
- Removing the term 'ex-officio' to avoid suggesting an academy trust's senior executive leader would automatically act as a trustee [1.5.1].
2. Key financial and governance requirements - every academy is expected to have rigorous procedures for preparing and monitoring financial plans, delivering effective operational controls and a system of internal scrutiny to remain compliant
- Confirming that trusts must apply robust cash management [2.2.1, 2.3.3 and 2.3.5].
- Setting clearer requirements for budgeting [2.3.2 and 2.3.3].
- Recommending the national deals for schools [2.4.2]
- Strengthening expectations about the process for setting executive pay and highlighting gender pay gap reporting [2.4.4 and 2.4.5].
- Emphasising the proper handling of whistleblowers [2.7.1].
- Confirming reporting requirements in relation to internal scrutiny [2.9.7 to 2.9.9].
3. Delegated authorities - the accountability that comes with financial freedom and the need for decisions in areas such as procurement options and remuneration to withstand public scrutiny.
- Explaining new requirements for related party transactions [3.10.4, 3.10.6 and 3.10.7] and arrangements with dioceses [3.10.20]. We are also moving to the conventional term 'related' parties.
4. Audit requirements - the benefits of an independent audit are considerable in providing transparent evidence about the quality of trusts accounting and financial reporting systems.
- Focussing on the importance of acting on audit advice [4.3.1].
- Highlighting how ESFA may take action where trusts do not comply with requirements for submitting financial information [4.8.4].
