As limited companies and charities with a significant level of income academy trusts are required to appoint qualified auditors to sign off their annual report and accounts and also to provide certificates of contributions to pension administrators.
Academies are also required to put in place a sound assurance regime that may include an internal audit service or other suitable arrangements.
Assurance is not just a review of a few transactions. It needs to be part of a comprehensive and appropriate framework of controls and reviews that take into account financial, organisational, legal, regulatory and performance risks.
How do you ensure that you appoint external auditors with the appropriate experience and at a reasonable price? Should you use national firms with a large client base or local firms that understand the environment in which you operate?
What factors should you take into account when deciding how to organise the necessary level of assurance? How do you decide whether to engage a professional firm to undertake the role or are other, perhaps less expensive options just as good?
The right choice of external and internal audit will depend on many factors including the effectiveness of your finance department and the skills within it. The characteristics of the governing bodies and/or board of governors may also effect the decision as well, of course as the cost.
The CIPFA Hub offers guidance on how to establish a robust assurance infrastructure within your academy trust identifying the key factors you need to consider. The services available within the Hub to members will enable you to determine the effectiveness of your current internal controls and assess the extent of external advice and assurance required.
The hub will provide guidance on tendering for external audit, internal audit and other assurance services. It will help you decide on their scope and characteristics to ensure that you are able to meet the standards required for managing public funded services including EFA’s requirements as set out in the Financial Handbook.
16 to 19 provision: audit approach / Education Funding Agency
Academies financial assurance / Education Funding Agency
SFA financial assurance: SFA and EFA joint audit code of practice / SFA and EFA
Communication with academy auditors 2014 / National Audit Office
Communication with academy auditors 2015 / National Audit Office
Financial assurance and governance in academies 2013: workshop presentation / CSFAN and BGF
Financial assurance and governance in academies 2013: briefing / CSFAN and BGF
Handbook for audit committee members in further and higher education (fully revised second edition) / CIPFA