New Academies Financial Handbook 2020 – everything you need to know
The 2020 Academies Financial Handbook has been published by ESFA. This version will come into effect on 1 September 2020, which will replace the 2019 version.
ESFA’s focus over the last year has been amendments and clarifications within the handbook, reflecting the departments belief that good governance and strong financial management are critical to an academy trust’s success. However, the radical and sweeping changes that had been called for from some quarters have taken a back seat in light of the current global pandemic.
The 2020 Academies Financial Handbook continues to emphasise the need for high standards of governance to be applied by all those involved in the management of academies. As expected, there are several changes to this edition which focus on this.
- The trustees must also take ownership of the trust’s financial sustainability and its ability to operate as a going concern
- Confirmation that members must not be employees or occupy unpaid staff roles
- Members must remain informed about trust business
- Trusts must appoint a clerk to the board (previously a ‘should’ requirement)
- Trusts must keep their register of interests up to date
- Both the accounting officer and chief financial officer (CFO) should be employees, and a requirement for ESFA approval if, exceptionally, they are not
- Also encouraging larger trusts to consider relevant accountancy qualifications for their CFO, and for all CFOs to maintain professional development
General Controls and Transparency
- Updated clarifications including maintenance of a fixed asset register
- Termly review of pupil number projections
- Use of integrated curriculum and financial planning
- Avoidance of overdrafts
- Publication of information about high pay and whistleblowing
- Confirmation that the trust’s funds must not be used to purchase alcohol
- Updated board and committee responsibilities for risk management
- Completion of the School resource management self-assessment tool
- Updated text including clarification that internal scrutiny covers both financial and non-financial controls
- Removal of the option for internal audit to be performed by the external auditor
- Confirmation that trusts can use additional individuals or organisations to support internal scrutiny where specialist nonfinancial knowledge is required
- More on the audit and risk committee’s role in relation to external audit
ESFA are seeking to ensure that academies are once again achieving the high standards of governance and financial management expected by public bodies. The changes and clarifications to this version of the handbook are a clear statement of this intent, and therefore Trust’s need to ensure that their processes and procedures meet these standards.