Internal scrutiny: a key to financial health in growing academy trusts

As academy trusts navigate increasing financial pressures and the strategic challenges of growth, one area that deserves renewed attention is internal scrutiny.

Often misunderstood as a tick-box compliance exercise, internal scrutiny - done well - is a vital source of assurance for trust boards and executive leaders. In the context of an expanding multi-academy trust (MAT), it becomes even more essential.

What is internal scrutiny?

Under the Academy Trust Handbook (2024), all academy trusts must establish a programme of internal scrutiny to provide independent assurance to the board that financial controls and risk management processes are operating effectively.

This is not about duplicating the work of external auditors. Instead, it focuses on how well systems are working in practice, and where improvements can be made.

At its core, internal scrutiny offers the board and its audit committee independent assurance that systems of financial control and risk management are operating effectively.

This independence is vital:

• It enables the board to verify what the executive team reports.
• It reassures trustees (who hold personal accountability for the trust’s financial stewardship) that they are fulfilling their fiduciary duties.

For example, if the CFO says the new procurement process is embedded, an internal review can confirm that schools are using approved suppliers and following thresholds.

Another key benefit to internal scrutiny is that it highlights areas of financial and operational risk. Although Boards are responsible for overseeing risk, they can’t manage what they can’t see. Internal scrutiny can help to surface issues early, and by identifying these issues before they escalate, boards can take targeted action to prevent financial loss or reputational harm.

Why it matters, especially in a growing trust

As trusts grow - whether through mergers, rebrokerages or the addition of new schools - systems can become stretched. Processes that worked well with three schools may not scale neatly to seven or more.

Key challenges include:

• Inconsistent practices across schools
• Limited oversight of delegated budgets
• Varying approaches to procurement, payroll, or HR
• Risk of financial inefficiencies being embedded in new schools

A robust internal scrutiny programme helps trusts:

• Identify these issues early
• Standardise effective practices
• Build confidence in the financial governance of the trust
• Prepare for due diligence in potential growth scenarios

Best practice tips for internal scrutiny

1. Align with your risk register

Internal scrutiny should be guided by your trust’s risk register, not just a generic checklist.

2. Engage with your central team and local leaders

Work collaboratively to identify review areas that are timely and useful—for example, a review of budget setting across schools or compliance with procurement thresholds.

3. Use the findings

Reports should be discussed at both finance/audit committee and executive level, and followed up with action plans. It’s not just about assurance; it’s about improvement.

4. Rotate areas of focus annually

Avoid reviewing the same areas year after year. Rotate between functions like payroll, fixed assets, procurement and budgeting, using a multi-year plan to ensure broad coverage over time. And don’t overlook non-financial areas, such as data & information security, safeguarding or health & safety.

5. Use thematic reviews across schools

In MATs, consider thematic reviews (eg. staff absence management or trips income) across multiple schools. This helps identify inconsistencies and share best practice, strengthening central oversight.

6. Link reviews to strategic priorities

Where possible, align internal scrutiny with your trust development plan - for example, reviewing IT asset controls if you’re rolling out 1:1 devices, or grant monitoring if you’ve received targeted capital funding.

7. Track and monitor follow-up actions

Ensure that findings from reviews lead to tracked actions with assigned owners, deadlines and regular monitoring. A good audit committee will review a tracker at each meeting.

8. Think forward

As you plan for growth, consider internal scrutiny of areas like onboarding new schools, integration of finance systems, or transfer of assets.

Internal scrutiny as a growth enabler

Trust boards are ultimately responsible for ensuring that public money is well spent. In growing trusts, this can feel like an increasingly complex task. A targeted, well-managed internal scrutiny programme gives boards the visibility and confidence they need. This is not just to stay compliant, but to grow with integrity.

The next step

At UHY, we offer a robust internal scrutiny service that covers a range of financial and non-financial areas. If you would like to discuss how we can help your trust please contact Allan Hickie, national head of academies at UHY, or get in touch with your local UHY academy adviser.