Link Academy Trust Conference

Session Agenda The Academy Environment Academies Financial Handbook Overview Local Governance Tips Pam Tuckett, Partner ptuckett@bishopfleming.co.uk @Pam_tuckett

The Academy Environment

An academy is a business and separate legal entity Company Environment Limited by guarantee Memorandum and articles of association Companies Act 2006 Member = shareholder Director = Trustee Governors may not all be Directors Company Secretary usually = clerk to Governor An academy is a business and separate legal entity

Charity Environment Exempt charity Principal regulator is Secretary of State for Education Otherwise a charity in all respects Directors are Trustees for Charity Law purposes Charities Act 2016 and Trustee Act 2000 CC10 – Hallmarks of a well Run Charity CC3 – The Essential Trustee CC23 – Exempt charities

Financial Environment Academies Financial Handbook (AFH) Accounts Direction - Coketown Accounts Companies Act 2006 Accounting requirements Audit required under the funding agreement UK Generally accepted accounting Principles (UK GAAP) Statement of recommended practice for charities (SORP) Tax requirements Reporting to Companies house, EFA, HMRC, etc Accounting Officer role CFO role FMGS (within 4 months) CC8 – Internal Controls Checklist

Academies financial Handbook OVERVIEW

Academies Financial Handbook Roles and Responsibilities Main Financial and Governance Requirements Delegated Authorities Audit Requirements Annexes Definitions Schedule of freedoms and delegations Schedule of requirements (musts) Further sources of information Must, should, may definitions

Audit requirements Statutory audit Regularity audit Funding audit Teachers’ pension audit Internal audit NAO, PAC and EFA SARA (Sector Annual Report and Accounts)

Regularity and Propriety Regularity: Comply with legislation, funding agreement, AFH and the Trust’s internal procedures Propriety: In line with Parliaments intentions – standards of conduct, behaviour and corporate governance

Novel and Contentious Novel No experience Outside normal business activity Contentious Trust could be criticised by Parliament/public/press Must get EFA approval for such payments

Connected Party Transactions Pay no more than ‘cost’ for goods or services provided by: Member or trustee (LGB chair?) Individual or organisation connected to a member or trustee (complex rules) Individual or organisation that has the power to appoint a member or trustee Sponsors Does not apply to contracts of employment De minimus £2,500 Need an ‘at cost’ statement of assurance Still needs to be properly procured

Accounting Officer Responsibilities 1.5.18 Personally responsible to Parliament and EFA Accounting Officer Must ensure high standards of probity in the management of public funds regularity propriety value for money Must ensure proper financial records kept opportunities and risks are managed Reporting lines Academy Board of Trustees EFA’s Accounting Officer

Pitfalls to watch out for No borrowing (watch out for credit cards) Gifts Special payments (bonuses) Leasing (new definitions) Fixed asset transactions requiring approval

Governance Tips LOCAL Governance tips

Governance Tips Top 10 Planning Checks for Governors https://www.gov.uk/guidance/schools-financial-efficiency-top-10-planning-checks-for-governors Kreston Benchmarking report can help http://www.bishopflemingacademyaccountants.co.uk/wp-content/uploads/2017/01/Bishop-Fleming-Academies-Benchmark-Report-2017.pdf

Financial Governance Tips Questions to ask: Is there a regularity or propriety issue? Have we got value for money? Is there a connected party issue? Is it a novel or contentious transaction? Have we followed our scheme of delegation and tendering procedures? Are we complying with the Academies Financial Handbook?

Disclaimer This workshop has been prepared by Bishop Fleming and must not be distributed to any third parties without our express agreement. The information in this presentation is based on our current understanding of current Legislation, Regulations Consultation and Review Documents. These may be affected by future changes. We recommend that before taking any action in respect of the content of this workshop that you seek specific advice from Bishop Fleming based on the individual circumstances.