Academies Accounts Direction 2023 to 2024 – what’s changed?

The updated Academies Accounts Direction was published on 27 March 2024 and will apply to accounting periods ending on 31 August 2024. Separate model accounts and an external auditors’ guide were also issued, in a similar manner to previous years.

The updated guidance includes both explanatory and narrative changes. The requirements include some which will affect the contents of the narrative reporting and some which will impact the notes of the financial statements.

The following new requirements have been added:

• The review of effectiveness of the system of internal control (part of the governance statement) must now include a conclusion on whether the trust has an adequate and effective framework for governance, risk management and control. If the trust concludes that the system is inadequate, then the reasons should be explained and improvement plans outlined.
• Separate disclosure of material non-GAG Department for Education (DfE)/Education and Skills Funding Agency (ESFA) grants has been expanded to include 16-19 core education funding.
• The staff costs note has been expanded to include Other employee benefits as a separate line item. This will include non-monetary benefits such as medical care, housing or, cars.
• The agency arrangements note has been expanded to include total cumulative unspent funds.

Other changes include the following:

• A new section What an academy trust must do has been added to the introduction page to provide a list of compliance related requirements.
• Relationship with other financial returns is also new and it includes two paragraphs explaining the relationship between the financial statements and the Academies Accounts Return (AAR). The section clarifies that the AAR is used to produce consolidated financial statements based on a different account framework (IFRS).
• References to Covid-19 supplementary bulletin have been removed as the specific funding is no longer in place or has been incorporated into other funding such as Recovery Premium.
• Feedback to the sector from the ESFA has been updated to include the areas where compliance could be improved. Some of the areas highlighted cover late submission of the accounts, trustees’ reports not reflecting current circumstances, and weak internal scrutiny arrangements.
• The guidance on the Statement of Regularity, Propriety and Compliance has been expanded to provide an additional example of sources of information reviewed by the Accounting Officer in forming their conclusions. The addition includes external assurance such as specialist reviews or inspections.
• The paragraph on the Valuation of long leasehold premises (from the Local Authority or other organisations) has been updated to include an assessment of the value of any assets from a transferring trust. It has also been clarified that DfE valuations, previously listed as a valuation source, are prepared under IFRS and assess value at the national, rather than local level.

The guidance can be found on the GOV.UK website and please get in touch if you would like to discuss in more detail.