On 27 June, the Department for Education (DfE) released an updated version of the Academies Financial Handbook (AFH) which will come into effect from 1 September 2019. This document is essential reading for academy trustees as it outlines their financial responsibilities and legal duties.
A full list of updates in this edition can be found on page eight of the document. Amongst the changes, the updated AFH emphasises that trusts must (as opposed to “should” in the 2018 edition) keep a risk register, and should have a named member of staff or trustee as a point of contact for concerns raised through the whistleblowing procedure. The guidance also provides further clarification around: producing and reporting on management and audited accounts, related party transactions, transactions which need approval from the Education and Skills Funding Agency (ESFA), and the legal framework in which the secretary of state can intervene in a school causing concern. The document also provides information on the role of the trust board and audit committee in maintaining “internal scrutiny” and the requirement to provide the ESFA with an internal scrutiny report.
The guidance also provides a number of updates around how trusts handle executive pay, including: the duty for trusts with more than 250 employees to report on their gender pay gap; how boards can review executive pay to make sure it is “transparent, proportionate and justifiable”; and an emphasises on the fact that all senior staff employed by the trust need to be on the payroll and comply with tax obligations. Finally, the guidance also puts more emphasis on the role of the clerk and provides links to guidance and further resources.