The ESFA have recently updated their published guidance on internal scrutiny in academy trusts, which makes it an ideal time for anyone who has not read this recently to refresh their knowledge of the requirements.
The guidance is aimed at trustees, audit and risk committees, accounting officers, chief financial officers (CFOs) and anyone undertaking internal scrutiny in, or on behalf of, academy trusts.
The updated guidance includes expanded direction to those involved in setting the programme of work, explaining how this links to risk management and what internal scrutiny should cover.
Whilst any internal scrutiny programme will have financial control systems as a core element and will include the evaluation of controls and some testing of controls by a sample of transactions, it is common for other key areas to be covered. The guidance suggests the following areas might be considered:
- financial governance and oversight
- financial efficiency
- strategic financial planning
- IT systems
- cyber security
- health and safety and estates management
- organisational culture
- management information
- anti-fraud
- safeguarding
- HR systems
- succession planning.
One common question we receive is how frequent internal scrutiny visits should be. Whilst there is no definitive answer to this since the Academy Trust Handbook does not stipulate how often visits should occur, the subject is covered in the guidance. The frequency and length of visits should allow for the internal scrutineer(s) to obtain appropriate coverage for the trust’s size and complexity, taking into account consideration of previous matters arising, external audit findings, individual context, and other sources of assurance that the trust has commissioned.
Other factors that may impact on the programme of work include when there has been a change in senior management or if a multi-academy trust has expanded by taking on new academies.
Visits should be timed to feed into audit and risk committee meetings where interim findings can be discussed, and consequently it is more appropriate for visits to be evenly spread throughout the year as opposed to being conducted in a block of days at one specific time.
Here at UHY we are able to support your trust with compliance with this important aspect of the ATH. Many of our offices are able to offer a menu of internal scrutiny topics, such as those listed above, which we are happy to build into a programme of visits.
The next step
If you require further information on the above, please contact Allan Hickie on a.hickie@uhy-uk.com, or your usual UHY adviser.
