From 1st April, all related party transactions (RPTs) must be reported to the ESFA in advance of the transaction taking place. This includes RPTs where the Trust receives a payment and not just RPTs where the Trust makes a payment.
In some instances, Trusts are required to obtain the prior consent of the ESFA where:
the contract exceeds £20,000
the contract takes the total value of all contracts with that related party beyond £20,000
the £20,000 threshold has already been met and a new contract is proposed
Where an RPT is "novel, contentious and / or repercussive", Trusts must obtain prior consent from the ESFA regardless of the £20,000 threshold and Trusts are told to carefully consider the impact of this requirement and its relevance to transactions involving the chair of Trustees and / or the accounting officer.
Trusts will need to use the ESFA's online form for these purposes.
Trusts need to keep on top of these new requirements and should consider their processes for obtaining information about trustee and member business and pecuniary interests as a starting point, and putting procedures in place for identifying RPTs and notifying the ESFA / seeking consent.
For further info, please contact Jaime Hobday on 0121 227 3703 or at firstname.lastname@example.org.