Academies Accounts Direction 2023 to 2024 released

The Education and Skills Funding Agency (ESFA) has released the Academies Accounts Direction (AAD) 2023 to 2024. 

Once again, changes from previous years are not significant. In fact, the theme is more around providing clarification around the existing requirements. Having said that, trusts should make themselves aware of these changes to ensure they fully consider their impact.

A full copy of the new AAD and accompanying documents can be obtained here.

So, what is new in the AAD 2023 to 2024?

COVID is no more

The AAD no longer refers to the COVID-19 supplementary bulletin which was introduced in 2020 as Covid-19 grants commenced. However, as we know, these have stopped or are simply part of normal business activity now.

Concluding on your internal control system

The governance statement section has been updated and stresses that the financial statements must now include a conclusion on the effectiveness of trust's internal control system. This must now either be a positive statement or one which explains why the framework is not effective.

How can accounting officers become more comfortable with regularity?

The financial statements of trusts include a statement which the accounting officer signs to conclude upon their assessment regarding any breaches of regularity in the academic year. The AAD has now expanded the list of processes that accounting officers can undertake to ensure they are comfortable forming their conclusion (paragraph 2.57).

These include:

• Review of board minutes
• Review of management accounts
• Ensuring compliance with the “musts” of the Academies Trust Handbook
• Review of the School Resource Management Self-assessment Checklist
• Review of Notice to Improve letters and other ESFA correspondence
• Ensuring compliance with funding agreements and terms and conditions

plus many more!

Premises under long leasehold valuations

The topic of an appropriate valuation has caused much debate over the years. Paragraph 3.27 now provides further details on the options available to trusts to form a valuation and stresses where some may not be entirely suitable.

Accounts disclosures

There are a few disclosure changes as well which deserve a mention:

Funding for the academy trust’s educational operations

Paragraph 2.98 makes it clear that any trusts receiving 16-19 core education funding should disclose these separately under “non-GAG DfE/ESFA grants” rather than include them with GAG funding.

Staff costs

“Other employee benefits” should be disclosed separately in the staff costs note. These are effectively other forms of consideration given to employees in exchange for services, for example, benefits such as medical care, cars, housing, etc. So finance teams need to ensure their current trial balance allows for the separation of these costs for ease of reporting.

Agency arrangements

Those trusts operating as agents, notably those with 16-19 bursary funds, now need to state the amount of unspent funding they are holding and how much is repayable to the ESFA. This aligns with the recent change in the 16-19 Bursary Funding guidance which states all trusts must inform the ESFA of any unspent funds on an annual basis.

We often see trust’s struggling to fully utilise their 16-19 funds and we have recently conducted reviews helping to identify improved controls and methods to maximise pupil usage. If you’re interested in knowing more, then please get in touch.

Governance Statement

The requirement to describe how governance has been effective with fewer than six meetings a year has now been removed following the recent Academies Trust Handbook update.

Overview

As usual, we recommend that the Trustees' Report and Governance Statement is drafted as early as possible to reduce this admin burden when trusts return to a busy start of term in the autumn of 2024. 

PLR Advisory can also assist those trusts that are required to publish their Streamlined Energy and Carbon Reporting information. Please get in touch if you would like to find out more.

So, do invest the time in drafting the report as early as possible as these reports really do let stakeholders know of the fantastic work you are all doing in the sector.

However, if you are concerned or indeed unsure of any of the changes mentioned above, you should discuss these further with your advisors or feel free to book a discovery call with PLR Advisory.

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