The ESFA has issued a supplementary bulletin, to go alongside its 2020 Accounts Direction, that provides guidance on academy reporting in connection with COVID-19.
Telling the story
Leaning on guidance already published for trustees of charities, the bulletin offers pointers as to matters to consider for inclusion in the trustees report. It will be important that the story is told through the eyes of the trust and now is not the time to allow rolled-forward boilerplate narrative to manifest itself in the annual report.
From achievements to uncertainty, financial and operational implications to specific prompts around how free school meal vouchers have been dealt with, the bulletin highlights a number of areas that trustees should consider.
The governance statement is also highlighted as an area that will need to be tailored. This is prompted by the bulletin in the context of Procurement Policy Note application and implications for value for money reporting, though will also be relevant when it comes to explaining any evolution of systems and controls in light of the current operating environment as well as implications for internal scrutiny provision across the period.
Regularity and audit approach
Whilst the regularity and audit requirements are fundamentally unchanged, the bulletin again offers pointers to help ensure adequate focus is given to COVID-19 related risks.
There are specific prompts around the application of Procurement Policy Notes and the review of exceptional government funding, but of particular importance is the prompt to consider the availability of sufficient, appropriate audit evidence and whether there is a documented trail of the trust’s decision-making process, including the rationale for the decision and details of those employees and trustees involved.
Exceptional funding disclosures
Where eligible costs for the financial support scheme for schools have been incurred, support has been claimed under the coronavirus job retention scheme or other exceptional government funding claimed, the amount and nature of exceptional government funding received, or eligible for and not yet received, and associated costs, needs to be disclosed in the note to the accounts that covers funding for the academy trust’s educational operations. An example of what this would look like is included in the bulletin.
Costs are not required to be split out as separate line items in notes to the accounts relating to expenditure.
To read the bulletin, click here.
All change for the ESFA filing deadline (one year only)
Eileen Milner’s letter to trust accounting officers, dated 26 August, has informed academy trusts that the date for submission of audited financial statements for academy trusts has been extended from 31 December 2020 to 31 January 2021. The submission date for the accounts return has also been put back by one month to 23 February 2021.
Whilst delegate responses to polls at our Mercia live academies conference and academies updates in June and July suggested that around half of auditors would have favoured keeping things as they were, for trusts that would struggle with information provision in the current environment, the additional time (as little as it actually provides over the Christmas holiday period) may be welcome for some. Many teams will have already scheduled their work for the autumn, however, so the key challenge may become one of ensuring the trusts remain diligent with proposed timetables to protect from rollover issues from one planned engagement to the next. Planning for a remote audit with a fixed deadline appears the sensible option at this stage as schools will doubtless be prioritising the attendance and health of their pupils and staff over site visits by contractors such as auditors as we get into the autumn.
To read this ‘Dear Accounting Officer’ letter, click here.
How can we help?
Subscribers to Mercia’s Academies Specialist Assignment Manual have received an email alert containing additional guidance on the application of the bulletin to this year’s audit and regularity approach, alongside updated pro forma accounts and an updated disclosure checklist.
You can also hear more about these changes, and other current issues in the academies sector, including legal and pensions updates and an update from the ESFA at our Mercia Live Academies Conference on Thursday 10 September. To find out more, including details of how to book your place, click here.