Academies Accounts Direction 2023 to 2024

The ESFA once again have released their latest Academies Accounts Direction (AAD) for 2023 to 2024, which can be found here https://www.gov.uk/guidance/ac...

Just a reminder that on this webpage there is also a copy of the Academies Model accounts for 2023 to 2024, which gives Trusts a starting template for a set of accounts.

There are no new rules introduced by the ESFA this year, which is good news! Any changes are therefore clarifications to the rules.

There is a new ‘what an academy trust must do’ section on page 4 of the AAD it highlights key requirements such as audited accounts, external auditor’s findings report and an annual internal scrutiny report to ESFA by 31 December 2024 and publish the full accounts on the academy trust’s website by 31 January 2025. However, it does not cover all ‘must’ requirements.

The most important change I believe is:

• Clarification about how a Trust may determine an appropriate value for the initial cost of premises (school land and buildings) occupied under a long leasehold. This may apply to any new school converting to an academy and joining an existing Multi Academy Trust (MAT).The Trust is responsible for reviewing the valuation method adopted to ensure it is complete, appropriate and complies with FRS 102 accounting standards. Initial valuation options suggested in the AAD are;
  • obtaining a valuation from a chartered surveyor
  • obtaining a valuation from the relevant local authority
  • obtaining a valuation from the construction company, where appropriate iv. assessing the value of any assets from a transferring academy trust
  • assessing valuation certificates provided by DfE. However, these valuations are prepared under International Financial Reporting Standards and their primary purpose is to enable DfE to place a value on the national school estate rather than at a local level
  • insurance valuations are unlikely to be appropriate if they simply represent the rebuilding cost of the asset rather than its fair value.

• Per the AAD, items (v) and (vi) are not options in their own right, but they can be used for comparative purposes. Trusts will likely need to obtain a professional land and building valuation for any new schools joining the Trust to ensure it's in line with FRS 102, i.e. uses the fair value method. The DfE valuation certificates are prepared using International Financial Reporting Standards (IFRS) and not under FRS 102 so shouldn’t be used as an initial valuation.

Other changes include;

• An explanation that some of the reporting requirements for the financial statements (accounts) differ from those of the Academies Accounts Return (AAR). This means that not all of the figures in the accounts always agree exactly to the figures needed in the AAR. This is due to the financial statements and AARs using different reporting frameworks.
• References to Covid-19 supplementary bulletin have been removed as Covid-19 grants have ceased.
• Revised wording in the governance statement is needed to include a conclusion on whether the academy trust has an adequate and effective framework for governance, risk management and control. If the Trust does not, the reason for this conclusion must be stated, along with the plan for improvement.
• In the funding for the academy trust’s educational operations note separate disclosure is needed for material non GAG DfE/ESFA grants. This may include; Student Support Services, 16- 19 core education funding, Pupil Premium and Service Premium, Pupil Number Adjustment, Universal Infant Free School Meals, Insurance, PE and Sports Grant, and Teachers Pay Grant.
• The staff costs note should separately identify ‘other employee benefits’.
• The information to be disclosed for agency arrangements, to include cumulative unspent fund balances has been updated.