Academy Financial Compliance

11th April 2014

Academies – 2013 Audit Outcomes

There were 2,248 sets of audited accounts submitted to the EFA for the year ended 31st August 2013. Of these 25 (1.1%) had a qualified audit opinion and 73 (3.2%) had a qualified regularity opinion. Of the 25 qualified audit opinions, 21 of these resulted from failure to disclose trustee’s salaries.  Other failures included land and buildings valuations and insufficient actuarial information on pension schemes.

There were also qualified opinions on regularity reports for a range of reasons which included:

  • Lack of a risk register
  • Absence of approval for leases
  • Lack of independent checking e.g. Responsible Officer / Internal Reviews
  • No audit committee in place
  • Weak internal controls and lack of authorisation over expenditure
  • No register of interests

This really does show how important it is to ensure that the academy’s internal controls are strong and that these controls are evidenced. The EFA have stressed that every set of accounts and management letter submitted to them is reviewed.  They have made it clear that they would like all issues to be included on the management letter, even if considered by the auditors to be minor.  Only the most serious issues will be followed up with the academy.  Going forward the EFA would like an academy response to be included on the management letter and for the points raised to be graded in terms of degree of importance.

The main areas identified from the management letters are as follows:

  • Poor governance
  • Lack of financial management
  • Issues with accounting policies
  • Poor internal controls
  • Related party transactions and declaration of interests
  • Payroll and HR issues
  • Control accounts not being reconciled e.g. bank and payroll reconciliations.

It is expected that the EFA will cover these points in a general letter to all academies later this year.



 
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