Every summer, academy trust boards face the important task of approving the budget for the year ahead. It’s a process that goes beyond compliance - trustees must be satisfied that the trust is financially sustainable and that risks are understood.
What the Academy Trust Handbook requires
- Para 2.10: The board must approve a balanced budget (or a deficit budget supported by a recovery plan).
- Para 2.16: The board must also approve the Budget Forecast Return (BFR) before it is submitted to ESFA.
At first glance, this feels duplicative. The BFR is simply the mechanical upload of the budget into DfE’s template. So why two separate approvals?
Why both matter
The DfE wants assurance that trustees have signed off not just the budget, but also the exact figures being submitted nationally. In practice, however, trusts don’t usually want to reconvene in August just to approve a return that mirrors what was already agreed in July.
A practical approach
July board meeting: Trustees should approve the budget, recording in the minutes key outcomes such as the predicted surplus/deficit and the expected reserves position. This evidences proper scrutiny. The board can also authorise the chair or finance committee to review the BFR once it’s compiled and approve its submission, provided it is consistent with the approved budget.
Example model wording:
The Board reviewed and discussed the Trust’s budget for the financial year [20XX/XX]. The Board noted that the budget shows a forecast surplus/(deficit) of £[x] and an expected year-end reserves balance of £[x]. After due consideration of the underlying assumptions, risks and sensitivities, the Board resolved to approve the budget for submission to the DfE, in accordance with paragraph 2.10 of the Academy Trust Handbook.
The Board further noted that the DfE Budget Forecast Return (BFR) is to be prepared for submission by [date]. The Board recognised that this return will be compiled directly from the approved budget. The Board therefore authorised the [Chair of Trustees/Chair of Finance Committee] to review the final BFR to confirm its consistency with the approved budget and to approve its submission to ESFA on behalf of the Board in accordance with paragraph 2.16 of the Academy Trust Handbook.
The Board requested that confirmation of submission be reported at the next full Board meeting.
- Autumn term board meeting: The board can then note that the BFR was submitted on time, under delegated authority, and that it matched the budget already approved. This closes the loop and leaves a clear audit trail.
The next step
If you have any questions about academy trust budget approval process then please contact Allan Hickie or your local UHY academy expert.
