Academy Trust Handbook 2021

The rebranding of the Academies Financial Handbook as the Academy Trust Handbook this year reflected the DfE’s increasing focus on wider good governance in schools and trusts as well as good financial management. It continues to set out the requirements with which academy trusts ‘must’ and ‘should’ comply, identifying minimum good practice (unless a trust can demonstrate that an alternative approach better suits their circumstances).

There is one new ‘must’ this year, which is worthy of special note, being:

“Trusts must be aware of the risk of cyber crime and put in place proportionate controls and appropriate action where a cyber security incident has occurred. This includes ensuring that permission is obtained from the Education and Skills Funding Agency (ESFA) before paying any cyber ransom demands.”

The ESFA already has cyber crime and cyber security guidance within its “Academy Trust guide to reducing fraud”. This includes checklists and questions to consider, such as:

• “Is data protected outside formal work environments, including in transit?”; and
• “Are logs and other monitoring activities able to identify unusual activity that could indicate an attack?”

The DfE is piloting a self-assessment tool called Cyber Secure for schools and trusts to assess their cyber security approach in a more accessible manner, assisting them to understand and improve their level of cyber resilience through signposting to a range of advice and guidance. The pandemic’s increase in remote working has raised the risk of cyber crime, so trusts need to have robust processes in place to mitigate this.

Other new ‘musts’ this year include:

1. Obtain prior approval for staff severance payments of £100,000 or more which include a non-statutory/non-contractual element, and/or where the employee earns over £150,000.

This is additional to the previous requirements for approval of severance payments of £50,000 or more and follows the June 2021 publication of HM Treasury Guidance on Public Sector Exit Payments.

2. Internal scrutiny must be viewed in the same way as internal audit.

This is driven by the Financial Reporting Council’s Ethical Standard for Auditors, which specifies that a firm providing external audit to an entity shall not also provide internal audit services to it.

3. Suitability checks must be in place for members to ensure they are not subject to a direction under section 128 of the Education and Skills Act 2008.

This should apply to both new members and existing members.

4. DBS checks must be arranged as appropriate.

In complying with government guidance and as set out in funding agreements, relevant DBS certificates are required for all staff and supply staff, trust members, trustees and individuals on any committees including local governing bodies.

The ESFA also specifies one new explicit ‘strong preference’ this year – that external reviews of governance are also conducted routinely as part of a wider programme of self-assessment and improvement. The DfE’s Guidance on External Review of Governance was updated in December 2021 and gives guidance on getting the most out of the review.

One new ‘should’ which was highlighted in the foreword by Baroness Berridge is that all trusts should have reserved places for parents, carers, or other individuals with parental responsibilities in their governance structure, where single academies should have at least two such places on the board, and multi-academy trusts should either have the same, or at least two such places on each local governing body.

The handbook again includes a schedule of the ‘musts’ in Part 8. This summarises the key requirements and all accounting officers, chief financial officers and trustees should read this as a minimum. Although it should not be used as a substitute for reading the full handbook, the summary is a good starting point for an approach to any trust’s governance arrangements and can serve as a useful tool for periodic reviews of the wider governance environment.

Read more in Academies Plus – March 2022

Contributor

Danna Lukic, Senior Manager