The Department for Education (DfE) published an update on its website this week about EFA academies’ external assurance, in which it talks about their public standards of accountability.
In the article, the DfA explains that academies are charitable companies and also classified by the Office for National Statistics (ONS) as central government public sector bodies. They are therefore subject to public standards of accountability.
Academies are required to appoint an accounting officer, who is generally the principal, who will have personal responsibility to Parliament for regularity propriety and value for money.
This means in effect that the principal must spend the funding the academy receives for the purposes intended by Parliament and must handle the money honestly while avoiding conflicts of interest. The principal should also obtain value for money in work carried out on the academy.
However, within this framework each academy is responsible for its own financial management and the accounting officer will be expected to operate a balanced budget.
That being said, the Education Funding Agency (EFA) has special responsibility for obtaining assurance on academies’ financial health and requires them to submit a copy of their budget to it each academic year. In addition, if an academy has a deficit, it will be required to produce a recovery plan for agreement with the EFA.
Academies are also expected to complete a self-assessment of their financial management and governance. The EFA may undertake validation of the evidence provided.
The DfE requires academies to prepare annual accounts for each academic year ending 31 August and to have these accounts independently audited and published.
As an accountant, Gill Freeman specialises within academy finances and charity tax.