New Academies Financial Handbook 2020- a summary of the main changes

Summary

On Tuesday the 23 June 2020, the Government published the 2020 edition of the Academies Financial Handbook, which can be found here. This handbook contains the financial management requirements that Academy Trusts must comply with as a condition of their funding agreement. The main changes, summarised below, will come into effect on 1 September 2020.

Qualifications for finance positions

Baroness Berridge, the Academies Minister, acknowledges the key role played by Chief Financial Officers (CFO’s) in academy trusts and the new handbook goes on to encourage larger Trusts to consider employing CFO’s with relevant financial qualifications. To determine whether you would be considered a larger Trust, an example of Trust’s with over 3000 pupils is given.

At page 16, “Trusts must assess whether the CFO, and others holding key financial posts, should have a business or accountancy qualification and hold membership of a relevant professional body, dependent on the risk, scale and complexity of financial operations.” Furthermore, CFO’s should engage in ongoing training and maintain continuing professional development.

It is further highlighted at page 14 that Trust’s must appointment a suitable accounting officer and CFO, who must both be employees of the Trust. If the individuals are not employees, prior ESFA approval must be sought.

New requirement to publish earnings over £100,000

At page 23, Trust’s must publish the number of employees whose benefits exceed £100,000 on their website ‘in a separate readily accessible form.’ This information must be published despite such information also being contained in Trust’s annual accounts and should be published in £10k bandings. The relevant benefits for the purposes of publishing this information include, salary, other taxable benefits and termination payments. The Trust’s own pensions costs are not included.

Other important changes

The other important changes within the handbook, also contained at page 9, include:

  • Trust’s must have procedures for whistleblowing in place and there is a new requirement for the agreed procedure to be published on the Trust’s website.
  • The Trust’s funds must not be used to purchase alcohol for consumption, except where it is to be used in religious services.
  • The School resource management self-assessment tool must be completed by all Trust’s each year to help Trust’s “appraise your approach in key areas of resource management and governance.”
  • Trust’s must avoid becoming overdrawn and may be required to report their cash position to ESFA if there are financial management concerns.
  • Internal audits can no longer be performed by a Trust’s external auditor.
  • There are additional changes governance arrangements “to support the way in which members, trustees and senior leaders interact, particularly to maintain appropriate separation between each of these roles.” Trust’s must also keep their register of interests up to date.

If you require any assistance with the recent changes to the Academy Financial Handbook, please do not hesitate to contact Stone King. 

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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