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The Education and Skills Funding Agency has recently issued the updated version of the Academies Financial Handbook, now renamed the Academy Trust Handbook, effective 1 September 2021.

Key changes:

Reserved Governorships for Parents / Carers

ATH 2021 confirms that trusts should have reserved places for parents in their governance structure. The ESFA requires the minimum number of governorships to be reserved for parents/carers to be 2. This means that at all times a trust should be actively seeking to fulfil this number, if not exceed it. Where a Multi-Academy Trust has both Local Governing Bodies and a Board of Trustee’s, the rule of two applies to both.

Appointing Senior Executive leaders as a trustee

From 1 March 2022 any newly appointed senior executive leader (Headteacher / CEO) may only be appointed as a trustee should the members of the academy trust and the senior executive leader in question agree to this.

External reviews of governance

The ESFA has highlighted the importance of having a review of the governance of the trust board reviewed on a regular basis. This is emphasised specifically when the trust is undergoing significant change (Significant growth, Financial Notice to Improve etc). These reviews should also review the interaction between the members and the trustees.

Changes to the Senior Executive Leader

Where a trust is expecting to lose its senior executive leader (i.e through resignation or retirement), the board of trustees should approach their Regional Schools Commissioner to discuss trust structure and plans for recruitment.

Review of Scheme of Delegation

The Scheme of Delegation should be reviewed, at minimum, annually. However, if there is a change to trust management or organisational structure this should be reviewed immediately.

Reminder of essential governance documents to be published

The ATH 2021 requires, as a must, that the following be available for all meetings of trustees, local governing bodies and subcommittees:

  • Agenda for every meeting
  • Approved minutes for all meetings held
  • Any reports, documents or other papers considered at meetings.

Internal scrutiny must not be carried out by a member of Senior Leadership

The ATH 2021 stresses that Internal Scrutiny must not be carried out by any of the following: Accounting Officer, CFO, Other members of the Senior Leadership team, any of the finance team.

Updates to ESFA approval over severance

Trusts must now obtain ESFA prior approval where either of the following is true:

  • The exit package, regardless of the value of severance pay, is greater than £100,000.
  • The employee earns over £150,000 per annum.

Cybercrime

Trusts must now obtain ESFA approval where any cyber ransom demands are being paid.

Other Issues:

Other changes to the ATH include:

  • More information surrounding suitability checks for new trust members.
  • Further information regarding obligations in relation to safeguarding, health and safety and estates management.
  • Replacing the term “Clerk” with “Governance Professional”.
  • A reminder of the importance of DBS checks.
  • Additional information on data to be published on the Trust’s website for staff paid > £100,000.
  • Explaining that, where the audit and risk committee and finance committee are not combined, the chair of each committee must be different.
  • The suggestion is to retender for Audit and Accounting services every 5 years.
  • Requirement for trusts to provide ESFA with third party information where investigations are being carried out.
  • Renaming the “Financial Notice to Improve” to “Notice to Improve”.

If you would like to discuss any of these changes in more detail please contact Tyler Jeffs or Charlotte Toemaes on 01295 250401 or by email tjeffs@ellacotts.co.uk or ctoemaes@ellacotts.co.uk.

Information for readers: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.