In the last few days the ESFA has published a supplementary bulletin to the Accounts Direction in order to introduce some additional requirements in light of…
The ESFA have now published the Academies Accounts Direction (AAD) that will apply to accounting periods ending 31 August 2020.
There are a modest number of changes to the AAD this year, with the main changes following on from new reporting requirements for large companies.
Academies which exceed the large company size thresholds, will now have to include additional narrative in the Trustees Report covering:
- How they have promoted the success of the company;
- How they have engaged with suppliers, customers and others in a business relationship;
- Streamlined energy and carbon reporting requirements; and
- How they have engaged with employees, including disabled persons (required by any company with over 250 employees)
There have also been some disclosure clarifications and amendments in the AAD affecting all academies, including:
- Needing to specify the monetary amount where there have been instances of irregularity, impropriety or non-compliance disclosed by the Accounting Officer or Reporting Accountant.
- Separately identifying legal costs in the notes to the financial statements.
- Including an analysis of changes in net debt note.
- Including narrative in the Governance Statement describing how the internal scrutiny arrangements are affected by the new FRC Ethical Standard (which prevents the external auditor also undertaking internal audit services for the same client).
- Updated narrative to the Teachers’ Pension Scheme note to reflect the latest actuarial valuation.
- Where trustees have reviewed and taken account of the guidance in the Governance Handbook and Competency Framework for Governance, this should be stated in the Governance Statement.
- Including a statement where a funds note is omitted due to zero brought forward and carried forward balances.
There are further changes highlighting the accounting treatment where activities are transferred to a wholly owned subsidiary, and clarifying when subsidiaries may be excluded from consolidation if they are immaterial.
The new AAD also links to the ESFA’s checklist to help academies prepare for external audit.
The Academies Accounts Direction 2019 to 2020 can be downloaded from:
A supplementary bulletin has also been recently published which addresses matters arising from the Covid-19 pandemic. The supplementary bulletin is summarised here.