18 April 2019
We have been contacted today by some academy trust clients whose Chair of Trustees and Accounting Officers have received letters from the ESFA following a review of their financial data.
The letters explain that the ESFA are trying to improve the way they engage with academy trusts on financial concerns and hence are taking a new approach to assessing the various data returns submitted. These include the 3-year BFR and auditing findings report.
In a welcome step the ESFA appear to be moving to adopt an approach that is preventative – working with trusts to prevent financial deficits, and offering support where this is needed.
The letters we have seen comment on longer-term forecasts and any trend of depleting reserves, and the ESFA have asked trusts that have received these letters to reply to provide “reassurance that you are taking action to mitigate the risk of a deficit and prevent further erosion of your reserves.”
The letters ask the Chair of Trustees to confirm whether they agree with the ESFA’s assessment, and point them to resources such as the self-assessment tool and school resource management website pages to help them establish the latest position.
If you have received a letter of this nature from the ESFA it is naturally important that you reply by any date stipulated in the letter. You should provide as much information as you feel necessary, including any more recent revised forecast figures, to provide the assurance the ESFA are seeking.
In our view the increased engagement and forward-looking approach is welcome and the responses the ESFA will receive will help increase their understanding of the problems many trusts are currently facing.
If you would like more information, or have any academy school-related questions, please contact me or your local UHY academy expert. Alternatively, to read more academy schools blogs please click here.