Academies: Summer newsletter

Hillier Hopkins LLP

Chartered Accountants & Tax Advisers

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It’s been yet another busy time for you, with TPS audits and budget forecast returns in hand. With the exciting news that the EFA has now become the ESFA: Education & Skills Funding Agency, it’s a good time to update you on the latest deadlines and guidance.

New Return

The latest newsletter from Peter Lauener, Chief Executive of the ESFA, highlights that they will require a new return from Academies this year. It’s called the land and buildings collection tool (LBCT), and the deadline will be 31st October. There’s no news yet on content beyond the obvious, specific guidance will be issued on 10th July, and the online return will not be available before the 1st October. We will update again in due course when we know more.

Additionally the letter sets the scene for the Budget Forecast Return being extended to a 36 month forecast. There will be a pilot with some schools before they finalise their plans and presumably roll it out.

Teachers’ pensions annual service return

The return details your employee’s service and salary data for the period ending 5 April 2017, and the deadline for the return is Thursday 6th July. All members who are employed in a teaching capacity should be included on the Annual Return, including members who have previously opted out of the Scheme but are still employed and also members who are re-employed after retirement.
From April 2018 you’ll only be able to submit data via Monthly Data Collections, so please ensure that, if you’re not on-board already, you’re prepared for the change.

Budget forecast return

The Budget Forecast Return must be completed using the online form by Friday 28 July. If a new academy joins an existing multi-academy trust on or after the submission deadline, a separate return for that academy will be required.

Year end Deadlines – Including new AAR deadline!

As before, the accounts and auditor’s management letter must be filed electronically with the EFA by 31 December 2017 and the accounts must be published on the trust’s website by 31 January 2018.

The deadline for completion, audit clearance and submission of the academies accounts return for 2016 to 2017 will be Friday 19 January 2018, a significant 12 days earlier than last year. They expect the return to be a similar online form to the one used last year, with improvements and enhancements based on feedback the EFSA received.

The accounts return will be issued on 1 October 2017, and once released we will send updates regarding the information required. We will require the information to be returned by 30 November in order to meet the new AAR deadline.

Accounts direction

The ESFA has issued its latest Academies Accounts Direction, providing guidance to academy trusts and their auditors on the preparation and audit of annual reports and financial statements. It applies to all types of academy trust with a funding agreement with the Secretary of State for Education and an open academy at any point during the accounting period ending 31 August 2017 (the option for a long first accounting period has been removed).

The latest guidance:

  • Includes information on the apprenticeship levy. Levy payments are to be accounted for as expenditure through the SOFA as staff costs and disclosed as a separate line within the Staff Costs note (below wages and salaries, social security costs and costs of defined benefit pension schemes);
  • Specifically discusses land and buildings occupied under licence by church academy trusts, which has been an ongoing debate. The guidance is fairly detailed, so if this affects you please get in touch with your audit manager to discuss as church trusts may need to reconsider their accounting treatment of any premises occupied under licence;
  • Includes Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017, and larger academy trusts are reminded that if they have 250 or more employees they are required to publish information on their website relating to the gender pay gap;
  • Enhances disclosures of pension obligations to accord with reports provided by actuaries. Additional disclosure should be made where the scheme is in deficit and the entity has entered into an agreement with the trustees to make additional contributions in addition to normal funding levels, including the number of years over which it is anticipated that the additional contributions will be paid. Academies are also requested to make sensitivity disclosures in £000s rather than as a percentage of the pension liability, to support the consolidation of these disclosures. The trust’s actuaries should be able to supply disclosures in this format;
  • Includes the requirement that all academy trusts with a funding agreement and an open academy in 2016/2017 must submit audited accounts;
  • Removes the section devoted to transition to FRS 102, as this is no longer applicable;
  • Includes disclosures required for transfers of existing academies, clarifying that both sides of any transfer must present similar disclosures of the assets and liabilities transferred, and that the transfer should be accounted for by both parties on the same day. Trusts receiving an existing academy from another trust are required to present a table setting out the acquired assets and liabilities, and any fair value adjustments the receiving trust may make.  Separate columns of disclosures should be presented for each academy transferring out;
  • Clarifies that where an asset is being constructed under the Free Schools or Priority School Building Programme, the funding for the programme is not recognised as a capital grant until there is unconditional entitlement. The expenditure is capitalised in assets under construction until the project is complete;
  • Includes information on teaching schools, and clarifies that where an academy trust has teaching school status and receives a separate annual grant (known as core funding), it should record this as restricted funds. GAG should not be used to support the work of the teaching school principles.

General Data Protection Regulation (GDPR)

The GDPR will apply in the UK from 25 May 2018 and the UK’s decision to leave the EU will not affect the commencement of GDPR. The GDPR applies to ‘controllers’ and ‘processors’ of personal data, like DPA, however the GDPR’s definition is more expansive, reflecting changes in technology and the way organisations collect information.

The most significant addition is the accountability principle. The GDPR requires you to show how you comply with the principles, including the requirement to implement appropriate technical and organisational measures that ensure and demonstrate that you comply, maintain relevant documentation on processing activities and implement measures that meet the principles of data protection.

A personal data breach means a breach of security leading to the destruction, loss, alteration, unauthorised disclosure of, or access to, personal data. The GDPR will introduce a duty on all organisations to report certain types of data breach (a notifiable breach) to the relevant supervisory authority within 72 hours of becoming aware of it, and in some cases to the individuals affected. Failing to notify a breach when required to do so can result in a significant fine up to 10 million Euros or 2 per cent of your global turnover.

Additional information can be found here.

Information Exchange

The knowledge centre will become a ‘help centre’ focused on providing guidance about using the information exchange. Any general content can now be found on the relevant subject pages.

If you have any concerns over anything mentioned above,​ please contact Alex Bottom or your audit manager who will be happy to help.

Do you need extra information?

Louise Tucker - Senior Audit Manager at Hillier Hopkins

Louise joined Hillier Hopkins in 2010 after graduating with a First class degree in Accounting and Management Information Systems from the University of Hertfordshire.

Contact Louise at or on +44 (0)1923 634473