The Academies Accounts Direction 2020 to 2021 has been published
The Government has published its detailed guidance for academy trusts and auditors on preparing and auditing academy trusts’ annual financial statements.
The Academies Accounts Direction is the reference pack for academy trusts and their auditors to use when preparing and auditing financial statements for the accounting period ending on 31 August annually.
It explains the elements you must include in your academy trust’s annual report and financial statements and the accounting treatments required. It also provides a model format for the report and the financial statements and ensures consistency of treatment between academy trusts.
The Accounts Direction outlines the requirements for each academy trust to:
- Prepare an annual report and financial statements to 31 August
- Have these accounts audited annually by independent registered auditors
- Produce a statement of regularity, propriety and compliance and obtain a regularity assurance report on this statement from the auditor
- Submit the audited accounts and auditor’s regularity assurance report to ESFA within 4 months of its year end, usually by 31 December
- File the accounts with the Companies Registrar as required under the Companies Act 2006
- Publish the audited accounts on the trust’s website, usually by 31 January
In light of the global COVID-19 pandemic, ESFA have sought fit to keep the changes to a minimum and mainly structural in nature. One of the kay changes from the previous iteration has resulted in the document being split into three separate documents:
- The ‘Coketown’ model accounts;
- A separate document aimed towards auditors; and
- The direction consisting of three distinct sections.
The remainder of the changes are as follows:
- Provided greater clarity on the content of the financial review section of the trustees’ report.
- Introduced a new requirement for trusts who have had a Financial Notice to Improve in place at some point during the year to declare this and provide more information.
- Added a section to aid trusts by explaining the main types of audit opinion on the financial statements and when they will be expressed by an auditor.
- Explained that where the academy trust has entered into an “off-payroll” arrangement with someone who is not an employee, including but not limited to where ESFA has exceptionally approved the appointment of an Accounting Officer (AO) or Chief Financial Officer (CFO), the amount paid by the trust for that person’s work for the trust in this role must also be included in this note as if they were an employee. The prior year figure should also be reported and restated if necessary.
- Clarified which funding sources should be classed under each heading, to align more closely with the Academies Accounts Return.
- Added in a reminder for academy trusts to ensure the correct identification, classification and treatment of finance and operating leases.
- Clarified that service concession commitments e.g. payments made under secondary agreements with local authorities should be disclosed as part of the long-term commitments note.
You can read the full document here: https://www.gov.uk/guidance/academies-accounts-direction