The Academies Financial Handbook (AFH) 2020 was published yesterday, with the HTML version of the AFH 2020 to be updated on 1 September 2020.
The foreword from Baroness Berridge acknowledges the contribution of Chief Financial Officers and encourages consideration of on-going professional development:
“….I want to acknowledge the key role played by chief financial officers in academy trusts. I know that many of you who are CFOs have challenging responsibilities that go much further than finance. But we rely on you to provide advice, leadership, and direction throughout your trust on the areas covered in the handbook. Of course, experience and training have a part to play in any profession and so I encourage you to develop both. In many cases, particularly if managing a larger trust, the value of a relevant financial qualification can be a great boost to your role as CFO. The new handbook prompts you to consider this if you have not already done so.”
The ISBL L7 qualification, developed in association with CIPFA, is listed as one of the relevant qualifications for trusts and CFOs to consider.
The key changes to the AFH are summarised here:
Governance: Further information on governance arrangements including trustees’ responsibility to maintain the trust as a going concern [1.14, 2.5 and 2.8], confirmation that members must not be employees or occupy unpaid staff roles [1.4], that members must remain informed about trust business [1.8] and that trusts must appoint a clerk to the board [1.40]. Also clarifying that trusts must keep their register of interests up to date [5.46].
Executive team: Confirmation that both the accounting officer and chief financial officer (CFO) should be employees, and a requirement for ESFA approval if, exceptionally, they are not [1.26 and 1.36]. Also encouraging larger trusts to consider relevant accountancy qualifications for their CFO, and for all CFOs to maintain professional development [1.37 and 1.38].
General controls and transparency: Updated clarifications including maintenance of a fixed asset register [2.7], termly review of pupil number projections [2.12], use of integrated curriculum and financial planning [2.13], avoidance of overdrafts [2.24], publication of information about high pay [2.32] and whistleblowing [2.44], confirmation that the trust’s funds must not be used to purchase alcohol [2.35], board and committee responsibilities for risk management [2.38, and 3.6 to 3.8] and completion of the School resource management self-assessment tool [6.8].
Internal scrutiny: Updated text including clarification that internal scrutiny covers both financial and non-financial controls [3.1], removal of the option for internal audit to be performed by the external auditor [3.17 and 3.20] and confirmation that trusts can use additional individuals or organisations to support internal scrutiny where specialist nonfinancial knowledge is required [3.18 and 3.23].
Annual accounts: More on the audit and risk committee’s role in relation to external audit [4.17].