Academies Financial Handbook
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Academies Financial Handbook
'' is a handbook issued by
Education and Skills Funding Agency The Education and Skills Funding Agency (ESFA) is an executive agency of the government of the United Kingdom, sponsored by the Department for Education. The ESFA was formed on 1 April 2017 following the merger of the Education Funding Agency an ...
in England that sets out finance-related requirements for academy trusts in terms "musts" and "shoulds". The Handbook was first published in September 2006. It was substantially revised in 2012. Since then it has been updated annually.


Overview

Academy schools are state-funded schools in
England England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe b ...
which are directly funded by the
Department for Education The Department for Education (DfE) is a department of His Majesty's Government responsible for child protection, child services, education (compulsory, further and higher education), apprenticeships and wider skills in England. A Department ...
and independent of
local authority Local government is a generic term for the lowest tiers of public administration within a particular sovereign state. This particular usage of the word government refers specifically to a level of administration that is both geographically-loca ...
control. The terms of the arrangements are set out in individual Academy Funding Agreements. Most academies are
secondary school A secondary school describes an institution that provides secondary education and also usually includes the building where this takes place. Some secondary schools provide both '' secondary education, lower secondary education'' (ages 11 to 14) ...
s (and most secondary schools are academies). However, slightly more than 25% of
primary school A primary school (in Ireland, the United Kingdom, Australia, Trinidad and Tobago, Jamaica, and South Africa), junior school (in Australia), elementary school or grade school (in North America and the Philippines) is a school for primary e ...
s (4363 as at December 2017). There are no academies in Wales or Scotland where education has been devolved Academies are self-governing
non-profit A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
charitable trusts and may receive additional support from personal or corporate sponsors, either financially or in kind. The
Education Funding Agency The Education and Skills Funding Agency (ESFA) is an executive agency of the government of the United Kingdom, sponsored by the Department for Education. The ESFA was formed on 1 April 2017 following the merger of the Education Funding Agency an ...
monitors financial management and governance of academies. In March 2016 the Perry Beeches The Academy Trust, a multi-academy trust, was found to have deleted financial records for £2.5 million of free school meal funding, and that the chief executive was being paid by sub-contractors as well as by the trust. Its schools are likely to be taken over by a new trust. In August 2016, the former principal and founder of
Kings Science Academy Dixons Kings Academy is a mixed free school for pupils aged 11 to 16 located in Bradford, West Yorkshire, England. The school opened as the Kings Science Academy in September 2011 and was one of the first free schools to open in England. It c ...
, the former finance director, and a former teacher who was the founder's sister were found guilty of defrauding public funds of £150,000. In October 2017, the
Wakefield City Academies Trust Wakefield City Academies Trust (WCAT) was a multi-academy trust (MAT) that managed 21 schools (14 primary and 7 secondary) across West Yorkshire, South Yorkshire, and the East Riding of Yorkshire. As an academy trust, it was an exempt charity reg ...
collapsed, and ''
The Observer ''The Observer'' is a British newspaper published on Sundays. It is a sister paper to ''The Guardian'' and ''The Guardian Weekly'', whose parent company Guardian Media Group Limited acquired it in 1993. First published in 1791, it is the w ...
'' reported that "Wakefield City Academies Trust now stands accused of 'asset stripping” after it transferred millions of pounds of the schools’ savings to its own accounts before collapsing. On 8 September it released a statement announcing it would divest itself of its 21 schools as it could not undertake the ´rapid improvement our academies need' ". The Academies Financial Handbook describes the correct way of managing public assets. 'Compliance with the handbook is a condition of each trust’s funding agreement'.


Document

The Academies Financial Handbook sets out the financial management, control and reporting requirements that apply to all academy trusts. It describes a financial framework for trusts that focuses on principles rather than detailed guidance and reflects their accountability to Parliament and to the public. It is sixty sides long, and is divided into 4 sections with a foreword and appendices. *Part 1 Roles and responsibilities *Part 2: Main financial and governance requirements :2.1 Financial oversight :2.2 Financial planning, monitoring and reporting :2.3 Internal control :2.4 Internal scrutiny :2.5 Transparency *Part 3: Delegated authorities :3.1 Proper and regular use of public funds :3.2 Trading with connected parties :3.3 Novel, contentious and repercussive transactions :3.4 Borrowing :3.5 Gifts :3.6 Write-offs and entering into liabilities :3.7 Special payments :3.8 Acquisition and disposal of fixed assets :3.9 Leasing :3.10 Managing the General Annual Grant (GAG) :3.11 Applicability of delegations and freedoms *Part 4: Audit requirements :4.1 Statutory audit :4.2 Regularity audit :4.3 Financial management and governance self-assessment :4.4 Funding audit :4.5 National Audit Office and Public Accounts Committee :4.6 Audit access rights :4.7 Provision of information :4.8 Investigation of fraud, theft and/or irregularity


Compliance

Some governing bodies have difficulty with the document. The Commons public accounts committee concluded that “too often academy trusts are falling short” of the “highest standards of governance, accountability and financial management” and that the Department for Education is often “too slow to react”. In May 2018, ''The Guardian'' highlighted the failings in one multi-academy trust comprising four primary schools. The schools serving 2000 pupils were awarding the head a salary in excess of £211,082 which had been raised by 10% from the year before. She had taken £6 250 to fund a fact finding mission to the far east. In 2014, £26,000 had been spent on refurbishing the heads office.Four of her staff had been issued with £1 250 laptops while the school had been running an in-year deficit of almost £1 000 000. “Discussions with both the head and the acting chair of the board demonstrated a poor understanding of the current financial situation of the trust.” Also criticised was the way that large contracts for consultancy and advertising were taken out without following the tender procedure, and invoices could be produced.


References

{{authority control School types Education policy in the United Kingdom Public education in the United Kingdom Public finance of England State schools in the United Kingdom United Kingdom educational programs 2016 in education