The department’s academy trust intervention strategy is robust, ensuring that where concerns are identified, our intervention is proportionate to the risk and preserves the effective education of children. By combining school improvement and financial management oversight, the Education and Skills Funding Agency (ESFA) works with Regional School Commissioners to ensure that the department’s intervention is joined up and consistent.
We are continually looking to develop and strengthen our approach. The Academies Financial Handbook is strengthened year on year to enhance the accountability framework. We published a new edition in June 2018, the main changes were:
- Executive pay – even more focus on the board’s responsibility for ensuring decisions about senior leaders’ pay are proportionate, justifiable and clearly documented;
- Related party transactions (RPTs) – embedding a new requirement for trusts to report all RPTs to the ESFA in advance and to seek approval for those over £20,000;
- Management accounts – emphasising a rigorous approach to setting and monitoring financial plans, including board engagement;
- Audit findings – being clear that trusts must respond in an appropriate and timely manner to advice from auditors, taking opportunities to strengthen their systems.
Overall, the financial health of the academies sector is strong: the latest published accounts show no regularity exceptions for over 95% of trusts and 98% of trusts’ accounts received unqualified opinions.