Academy Trust Handbook 2022

The Academy Trust Handbook 2022 (ATH) (formerly the Academies Financial Handbook) was published on  25 August 2022, and came into effect on 1 September 2022. In this Academies Insight publication we summarise the changes from the 2021 Handbook, and comment on changes we anticipate in the coming year. There continues to be an emphasis of the level and quality of internal scrutiny in trusts with the publication of the White Paper, continued cyber threats and newly emerging risks such as Environmental, Social and Governance (ESG). We have commented on how the handbook addresses gaining assurance and how trusts monitor and manage their risks. 

Changes to the handbook

As an acknowledgement of the delay in publishing the document the changes to the ATH this year have been kept to a minimum, with no new requirements for the sector creating additional pressure on trusts to ensure compliance at this stage. The changes reduce the administration burden on trust teams.

Financial reporting

This change is a withdrawal of a filing requirement easing the burden on the trust’s finance team. The Budget Forecast Return Outturn (BFRO) which academies had to submit to the ESFA in May each year has been withdrawn. Trusts continue to be required to submit an academies budget forecasts return (BFR) in July in accordance with deadlines published annually. The outturn information is now permanently included within the budget forecast return, and hence the withdrawal of the BFRO form.

Special payments

The guidance around special payments has been clarified to state that it only refers to ‘special’ (non-statutory/non-contractual) payments. This should assist trusts in distinguishing payments that do or do not require authorisation.

Indemnities

Trusts will be able to enter into indemnities which are in the normal course of business without seeking approval, for example catering or cleaning contracts. Previously all indemnities over certain thresholds required ESFA consent. The Trust needs to:

1. Make an assessment of the contract to ensure that it is in the normal course of business;
2. Maintain a contract register of known indemnity clauses with the necessary assessments; and
3. Take appropriate legal advice before entering into any contractual agreement.

Trustees need to provide the appropriate level of oversight and challenge to ensure the appropriate assessments and records are maintained.

Further guidance can be found here: Handling contractual indemnities

Religious character, Related party transactions – at cost requirements

The ATH has extended the scope of the at costs requirements from dioceses to all religious authorities. The guidance now states that for academies with a religious designation, the provision of services to protect and develop their religious character and ethos, which can only be provided by their religious authority, are regarded as meeting the “at cost” requirement. 

Download our insight series into the Academy Trust Handbook 2022 article.