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Internal Audit and Systems Support

There is no doubt that academy status enables flexibility and innovation, but it also brings with it a strong need for accountability.  Academy Trusts need to be able to account for their results and their spending.  This need for apparent and transparent accountability calls for impeccable internal systems to be able to prove that the academy is operating efficiently, effectively and compliantly.

This need for accountability is underlined in the Academies: Accounts Direction 2011/2012 that confirms the need for a Governance Statement in each Academy’s Annual Report and Accounts.  An Academy’s Governance Statement needs to refer to the effectiveness of internal controls as well as containing a statement by the trustees or governors that the system of internal control was in place throughout the entire financial year.  The need for this statement calls for a thorough and indepth checking system to enable the governors or trustees to make their judgement.

Furthermore, the Academies: Accounts Direction 2011/2012 brought about the need for a compliance statement regarding regularity, propriety and compliance.  This testimony is the Academy Trust’s Accounting Officer’s confirmation that the academy has used the funds at its disposal appropriately and within the regulations set out.  It also confirms that the academy has met its responsibilities to Parliament in respect of conduct, behavior and corporate governance.

Academy Trust Assurance

When making their statement of accountability, Academy Trust members need to be confident that the systems in place in the academy ensure compliance.  The Education Funding Authority (EFA) initially insisted that a Responsible Officer be appointed to achieve the assurances required, but with the requirement for this role now relaxed, there are other options:

  • Avail of an internal audit, which can be carried out in-house, by a specialist provider or a sponsor.
  • Carry out a peer review by inviting, for example the finance director from another academy to act as an independent reviewer.

While each of these approaches will help the Academy Trust obtain assurance that their financial controls, systems and risk management procedures are effective, it’s always useful to look at every unique situation before making a final decision.  At UHY-WKH Partnership we’ll work with you to determine which method is most appropriate for your circumstances.

Internal Audit and Systems Support Services

At UHY-WKH Partnership we provide support to academies that can neatly be split into four different areas.  They are:

  • Corporate Governance
  • Risk Management
  • System of Internal Control
  • Self-assessment

Corporate Governance

Running a successful academy relies on focused governance right from the start.  Trustees need to establish their position and lead from the front to make sure objectives are achieved.  What’s more the Accounting Officer’s personal confirmation that the trustees have met their personal responsibilities to Parliament, as well as that appropriate standards of conduct behaviour and corporate governance have been achieved, places additional importance on this role.  It is for these reasons that we provide support to review committee structures and terms of reference; board and committee effectiveness and policies and procedures guidance as well as advice on Academy Trust performance and training and support for Trustees and governors.

Risk Management

Risk Management is an integral part of the successful running of any business, but in the case of academies, it is of particular importance to trustees when it comes to making sure that their goals are met.  A task that many academies have issues with, the external risk management support that we provide will ease the whole risk management process.  We can help you review risk, identify risk, mitigate risk and prepare action plans in situations where net risk is considered too high.

System of Internal Control

Because Trustees are required to make their statement of accountability, they’re highly likely to require some level of assurance over the effectiveness of key systems.  The best way of providing this assurance is by carrying out reviews of the academy’s system of internal control.  Such reviews should look at risks that have a direct financial impact on the academy, such as:

  • Reviewing core financial areas to ensure that the academy is operating compliantly with regard to the Academies Financial Handbook.
  • Reviewing budget setting and monitoring processes to ensure they meet requirements and aid decision-making.
  • Reviewing pupil records to make sure that they are accurate and up to date, as well as providing sufficient core data for the EFA returns.

These are all areas where we can provide expert assistance.

Self-assessment

Carrying out general self-assessment checks within academies is not only best practice but it also makes good sense from a monitoring point of view.   What’s more, there is an obligation to carry out certain self-assessment activities, for example:

  • Financial Management and Governance Self-Assessment (FMGS) is a return that’s required of all new academies and Free Schools that haven’t yet submitted annual audited accounts.  Not in itself a complicated process, this return is a great prompt for identifying areas that may require attention and is a process that provides a good platform for planning ahead.  This is an area where we can add real value.
  • Trustees have an obligation to carry out Annual Effectiveness Assessments to fulfill their responsibilities and to provide information for the Governors’ Report.  This can be a challenging task and many academies find that input from an external expert adds real value and effectiveness to the process.

If you’d like to discuss the possibility of adding an additional expert on your Academy’s team, why not get in touch?  It costs nothing to chat and we’re here for you if, and when you need us.