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ESFA publish key assurance findings for their 2020-21 year

The key findings are:

  • 97% of trusts submitted their financial statements by the (extended) deadline for last year of 31 January.
  • 8.5% of accounts contained a modified regularity opinion, up from 7.1% in the previous year. Of the total number of reasons for the modifications, just under 14% were directly attributed to the COVID-19 pandemic. The main issues for the regularity modifications due to the pandemic were related to internal financial reporting and related party transactions.                                                   

Internal reporting issues largely related to management accounts (e.g. not preparing at all due to Covid, adequacy of the information, or not sharing with the board), whilst related party issues included:

  • prior approval not sought (not obtained from ESFA for RPTs greater than £20k).
  • ‘At cost’ policy not adhered to.
  • Conflict of interests (main issue, failure to identify and document conflicts of interest appropriately). 


Breakdown

Breakdown of the reasons for modified regularity opinions (Source: ESFA)

Financial management and governance reviews. In general reviews have found that trusts are making good progress towards compliance with the Handbook. Areas for development noted included:

  • Delivery of an appropriate internal scrutiny programme and oversight of the findings.
  • Management accounts, ensuring they contain all required elements, are shared with all trustees six times a year and support appropriate board action, to review and maintain financial viability.
  • Trusts publishing the pecuniary interest of its’ trustees and governing structure on their website.

Academy funding audits. The levels of errors relating to both census data and free school meal (FSM) entitlement remained low, consistent with previous findings.

A FSM error was noted in one instance where the academy trusts had failed to retain evidence to demonstrate that learners’ entitlement to free school meals had been checked at the census point. In some instances, academies were relying on the records held by the previous school.

A small sample of Bursary funds have also been checked. Weaknesses identified:

  • Insufficient evidence supporting payments decisions.
  • Evidence to support eligibility for discretionary bursaries not retained.

The next steps

For more information, please contact Allan Hickie or your usual UHY adviser.

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