As educational institutions navigate the ever-evolving landscape of financial management, it is crucial for academies to stay abreast of the latest guidelines and regulations. The Academies Accounts Direction is a document issued annually by the Department for Education (DfE) in the United Kingdom. It serves as a roadmap for academies that are preparing their annual report and financial statements, outlining the financial reporting requirements and offering guidance on best practices.
In this blog, we will delve into the key aspects of the Academies Accounts Direction for the period spanning 2022 to 2023 and highlight some key changes in this year’s guidance to help you fulfil your financial reporting responsibilities;
One of the primary objectives of the Academies Accounts Direction is to promote transparency and accountability in financial reporting. Academies are expected to provide a clear and accurate account of their financial position and transactions. The guidance emphasises the importance of disclosing all relevant financial information, ensuring it is easily understandable to stakeholders.
The Accounts Direction places a significant emphasis on good governance and robust internal controls within academies. It encourages academies to maintain strong financial management systems, including effective oversight and risk management frameworks. Academies should strive to implement regular internal audits and ensure compliance with relevant financial regulations.
The Academies Accounts Direction for the accounting periods ending 31 August 2023 introduces some revised reporting requirements for academies. These changes aim to provide a more comprehensive view of an academy’s financial health. For instance, the document includes new reporting formats for reporting executive pay and related-party transactions, highlighting the need for increased transparency in these areas.
Given the impact of the COVID-19 pandemic on educational institutions, the Academies Accounts Direction provides specific guidance on reporting COVID-19 support received from the government. Academies must clearly disclose any additional funding or support received during this period, such as the Coronavirus Job Retention Scheme or the catch-up premium.
Academies are expected to demonstrate financial sustainability and value for money in their operations. The Accounts Direction encourages academies to adopt effective budgeting and forecasting practices, ensuring that resources are utilised efficiently. It also highlights the importance of conducting regular benchmarking exercises to compare costs and performance with other similar institutions.
The reporting requirements for pension schemes have been revised in the 2022 – 2023 Accounts Direction. Academies must accurately report their pension liabilities and costs, adhering to the applicable accounting standards. The guidance provides clarity on the valuation of pension obligations and the recognition of related costs.
In the area of estates and school buildings’ safety risk, the DfE has enhanced the AAD’s content, specifically:
The Academies Accounts Direction for 2022 – 2023 sets the course for academies in terms of financial reporting and management. It also provides additional resources, such as model accounts to help academy trusts see what their accounts should look like. By following the guidelines outlined in this document, academies can enhance transparency, strengthen governance practices, and ensure compliance with regulatory requirements. Adhering to the reporting standards and best practices will ultimately contribute to the financial sustainability and success of academies in the ever-changing educational landscape.
You can watch Barker’s AAD webinar HERE
If you would like to discuss with our team please CONTACT US