Academy Financial Compliance

11th April 2014

Academies – 2013 Audit Outcomes

There were 2,248 sets of audited accounts submitted to the EFA for the year ended 31st August 2013. Of these 25 (1.1%) had a qualified audit opinion and 73 (3.2%) had a qualified regularity opinion. Of the 25 qualified audit opinions, 21 of these resulted from failure to disclose trustee’s salaries.  Other failures included land and buildings valuations and insufficient actuarial information on pension schemes.

There were also qualified opinions on regularity reports for a range of reasons which included:

  • Lack of a risk register
  • Absence of approval for leases
  • Lack of independent checking e.g. Responsible Officer / Internal Reviews
  • No audit committee in place
  • Weak internal controls and lack of authorisation over expenditure
  • No register of interests

This really does show how important it is to ensure that the academy’s internal controls are strong and that these controls are evidenced. The EFA have stressed that every set of accounts and management letter submitted to them is reviewed.  They have made it clear that they would like all issues to be included on the management letter, even if considered by the auditors to be minor.  Only the most serious issues will be followed up with the academy.  Going forward the EFA would like an academy response to be included on the management letter and for the points raised to be graded in terms of degree of importance.

The main areas identified from the management letters are as follows:

  • Poor governance
  • Lack of financial management
  • Issues with accounting policies
  • Poor internal controls
  • Related party transactions and declaration of interests
  • Payroll and HR issues
  • Control accounts not being reconciled e.g. bank and payroll reconciliations.

It is expected that the EFA will cover these points in a general letter to all academies later this year.

Other items in Blogs
Joe Fretwell
1st July 2022 Is your PAYE code correct?

With the rising cost of living, it has never been more important to ensure you are paying the correct amount of tax through your PAYE tax code. It is important to understand your tax code, any changes to this and why your tax code on your payslip is what it is. There are many reasons…

Ruth Pearson
23rd June 2022 Changes to National Insurance

In April 2022 we saw Employee’s National Insurance Contributions increase by 1.25% from 12% to 13.25%, as part of the Governments Health and Social Care levy. Employer’s National insurance also increased from 13.8% to 15%. From April 2023, the health and social care levy will be paid separately to National Insurance and become a tax…

James Selby
23rd June 2022 Pensions Contributions: Maximise tax relief

We are seeing more and more cases of individuals missing out on claiming higher rate tax relief on their employee pension contributions especially where they are not in self-assessment and required to file tax returns.   Where employers have enrolled their staff to make employees pension contributions via a ‘relief at source’ scheme, the contributions…

Paul Jefferson
14th June 2022 VAT Penalty Changes

A new penalty regime will come into effect for VAT periods starting on or after 1 January 2023. The changes will impact the charges for missing VAT filing and payment deadlines and will be replacing the current surcharge system. These changes place continued importance on being up to date with your VAT returns, aware of…

Liz Simpson
13th June 2022 NIC: All Change!

HMRC Changes to the National Insurance contributions for 2022-2023 tax year, are you confused? Due to the COVID-19 strain on the NHS, the government announced that they would be increasing the National Insurance contributions by 1.25% as a means to increase spending on health and social care. The Health and Social Care Levy was applied…

Jaimie King
10th June 2022 30-Jun-22: Covid Recovery loan deadline approaching

Time is running out for businesses to apply for Recovery Loans, the follow on Covid-support product from the CBILS.   In order to qualify for the Recovery Loan Scheme (RLS), your business has to have been affected by Covid-19 and you have to apply and have received the funds by 30th June 2022. The RLS…