Academies Trust Handbook (“ATH 2023”) applies with effect from 1 September 2023. It is available on the ESFA website here.
The ATH is described as ‘sharpened and shortened’ and giving trusts more flexibility in certain respects. However, it needs to be read in conjunction with a wide range of other guidance which is signposted throughout.
Schedule of musts
The schedule of ‘musts’ was previously included as part 8 of ATH but for 2023, it has helpfully been issued as a separate spreadsheet which will facilitate its use as a checklist by Trusts. See here.
Roles and responsibilities
This section has been updated and shortened so it is important to refer to the other guidance documents for details of the roles and responsibilities of members and trustees (The Governance Handbook (available here) and Academy Trust Governance – Structures and Roles (available here).
One particular change:
Clarification that the roles of the Accounting Officer and the Chief Financial Officer should not be occupied by the same individual (para 1.28).
Estates management
The message about estate management has been strengthened with additional wording in paragraph 1.19 which states that trusts should ensure they are aware of and applying the following guidance relevant to estates safety and management:
- Good Estates Management for Schools
- Estates Management Competency Framework
- Condition Data Collection processes
- Reinforced Autoclaved Aerated Concrete guidance (‘RAAC’ – an acronym with which we have become all too familiar).
Main financial requirements
Frequency of board meetings – these must still occur at least three times a year but there is no longer a requirement to explain in the governance statement where a trust has not met at least six times (para 2.3).
Budget Forecast Returns – trusts have been given an extra month to submit this with the new deadline being 31 August (para 2.15). (It would be interesting to know what proportion of trusts took advantage of this given that the extra month occurred during the holiday season).
Management accounts – there is more flexibility in that trusts are no longer required to share management accounts with trustees six times a year although the board must consider them every time it meets (para 2.18). (The management accounts must still be shared with the chair of trustees every month.)
Electric Vehicle (EV) salary sacrifice schemes – clarification that these do not need ESFA approval where no liability falls on the trust if an employee does not fulfil their contractual obligations with the scheme provider (para 2.31).
GAG pooling
The guidance on a pooling of General Annual Grant (GAG) has been simplified to “strengthen the value and importance of this practice for trusts to consider”.
ATH 2023 states in para 5.30 that “the ability to amalgamate and direct funds to meet improvement priorities and need across the trust’s schools can be integral to a trust’s successful financial operating model”.
ESFA is clearly keen for trusts to consider this possible strategy but it is important to have a clearly written policy which clarifies the basis on which the pooled GAG is to be allocated across the schools so that you are in a position to handle appeals.
We also note that the guidance refers only to GAG income and so ESFA/DfE presumably expect other grant income to be spent by the school for which it is given. Further clarification on this by ESFA would be helpful.
Reserves Pooling
Pooling of revenue reserves is a separate strategy which some trusts are progressing. There is no specific guidance on this in ATH 2023. However, unrestricted funds are, by definition, available to spend as the trustees decide, whilst it is implicit in the wording of ATH 2023 noted above that GAG reserves can be pooled.
If your trust is progressing with pooling reserves, we strongly recommend that a clear written policy is developed in order to avoid arguments, if or when a school leaves the trust. It is also helpful for sharing with schools which are considering joining the trust and have concerns about how their existing reserves would be dealt with by the MAT.
Related Party Transactions
The threshold above which prior ESFA approval must be obtained for a related party transaction is now £40,000. Previously, the threshold was £20,000 for a single contract or the cumulative value of contracts with the same related party in the same financial year. (This cumulative test does not appear in ATH 2023).
Prior ESFA approval for a related party transaction is also no longer required for contracts and other agreements for the supply of services to a trust by:
- the colleges or universities which are sponsors of the trust; and
- state-funded schools, academies and colleges.
(This concession does not apply to transactions with a subsidiary of such a related party).
The concession in relation to prior ESFA approval also applies to academies with religious designation in relation to certain services provided by their religious authority.
These transactions to which the prior approval concession applies are also deemed to be ‘at cost’.
It should be noted that irrespective of these exemptions, all contracts and other agreements with related parties must still be reported to ESFA in advance of the contract or agreement commencing or being renewed.
Notices to Improve
The section on NtI (para 6.16) has been extended to include examples of the circumstances when an NtI might be issued on financial management grounds or governance grounds.
If you would like further guidance on these points or any other aspects of the Academies Trust Handbook, please get in touch with one of your usual contacts at BHP.
