In July the Chief Executive of the Education & Skills Funding Agency (ESFA), David Withey, wrote to all chairs of trustees at academy schools. Its message was one of partnership between trusts and the agency and how financial oversight framework can be streamlined.
With reporting season shortly to be upon us, now is a good time to recap on the key updates Withy’s letter highlights.
Withy recognises that with academies receiving £30 billion in funds every year the sector has “matured” with “high standards of financial management and governance”. He restated his position of wanting to listen to the sector and be “responsive” to areas open to improvement. The framework, he says, needs to be “easily understood” and “straightforward to use as possible”.
His letter points to the new Schedule of Musts as one example of how the EFSA is achieving this.
His letter highlights five key areas where changes have been made. These are:
- Related party transactions, doubling the threshold from £20,000 to £40,000, together with the removal of ESFA approval requirements for transactions with some schools, colleagues and universities.
- Annual reporting, and the removal of the requirement to provide explanation when holding fewer than six board meetings a year.
- Budget setting, providing an additional month to submit budget forecast returns.
- Budget monitoring, providing more discretion in the distribution of management accounts.
- Sustainability, confirming the ability to set up salary sacrifice schemes for electric vehicles.
Withy’s letter hints too to future potential changes, looking at future improvements to the financial oversight of academies, where trusts have financial autonomy and plans to join up ESFA and DfE information. It is, his letter says, about “getting the balance right between prescription and local discretion”. We believe the ESFA is well on track to achieving that.
For more information contact Alex Bottom on the details below.