Updated guidance on managing academy finances

An updated handbook to help improve the financial management and governance of academy schools has been issued.

The key change to the handbook is a new requirement for academy trusts to show they have checked the compliance and efficiency of their internal systems. This must be done through an independently-prepared annual report submitted to the Education and Skills Funding Agency (ESFA).

The handbook also includes enhanced material on the role governing bodies should play to make sure the pay and other benefits of senior staff are reasonable and reflect their responsibilities.

The need for trusts to maintain a risk register to ensure procedures and systems are adequately scrutinised.

The importance of having an agreed whistleblowing procedure and a structure that protects and supports staff so they can report concerns in confidence

The guidance explains the role of trustees, emphasising the importance of robust governance.

It also highlights the DfE's powers to act to tackle rare cases of mismanagement – including removing trustees from a trust.

The Academies Financial Handbook is updated annually by the ESFA to support academy leaders, trustees, accounting officers and auditors by describing the requirements to run effective, compliant and successful trusts.