The Academies Accounts Direction 2022 to 2023 has now been published. The latest edition of the Direction does not introduce any new requirements and all changes relate to existing obligations.

The Direction outlines requirements for academy trusts preparing their annual report and financial statements for accounting periods ending on 31 August 2023. As the requirements in the Direction are mandatory, it is an essential reporting document for all those involved in the preparation of the annual report and financial statements.

Each year the Direction includes some changes, these can differ in substance from completely new requirements to the clarification of existing responsibilities. With no new requirements for the 2022 to 2023 edition, here is an overview of the main changes to be aware of.

Key changes for the Academies Accounts Direction 2022 to 2023

Expectations for interim arrangements, in the absence of key signatories

Adequate coverage is required in the event of the departure or long-term absence of key signatories. Trusts are reminded that if their Accounting Officer leaves prior to the accounts being signed, a process should be in place to enable the new Officer to adequately understand key issues from the previous year, making sure the relevant sections can still be signed on schedule.

See paragraph 1.18

Updated feedback on non-compliance

Details are included of areas that have been identified by ESFA (Education and Skills Funding Agency) to improve compliance, these include regular instances where the annual report does not appear to fairly reflect the circumstances and performance of the academy trust.

There is mention of several areas whereby compliance could be improved, including adequate information relating to the governance framework, satisfactory description of the processes in place to manage conflict of interest and explanation as to why a particular option was chosen for delivering internal scrutiny.

See paragraph 1.21

Updated themes arising from ESFA’s assurance work

ESFA publishes statistics on the sector’s performance and the themes arising from its assurance work. Key information relevant to the financial statements is included.

See paragraph 1.22

Changes in response to school buildings’ safety risk

Content has been enhanced to adequately respond to school buildings’ safety risk:

  • Clarification that the trustees’ report on principal risks and uncertainties should consider those risks impacting on trustees’ responsibilities to ensure the trust’s estate is safe, well maintained and complies with relevant regulations. See paragraph 2.14
  • Clarification that the review of value for money statement includes estates safety and management. See paragraph 2.40
  • It is suggested that Accounting Officers should consider demonstrating how they have effectively used relevant funding to ensure the trust’s estate is safe, well-maintained, and complies with relevant regulations, as one of their value for money examples. See paragraph 2.42
  • Clarification that the statement on regularity, propriety and compliance encompasses estates safety and management. See paragraph 2.60

Guidance on the treatment of loans

It is stipulated that all amounts owed, accrued or deferred by the academy trust should be included under the balance sheet heading of ‘creditors’ at the amount the academy trust expects to pay to settle the debt.

The amount owed must be split between amounts falling due within one year and amounts falling due after more than one year.

See paragraph 2.113

Disclosure of material income sources

Academy trusts are reminded of the need to separately disclose material income , including GAG, in note 4. Any remaining non-material sources of funding, from DfE and ESFA, can be grouped together.

See paragraph 2.130

Teaching assistant categorisation

There is clarification that teaching assistants are categorised as support staff in the costs note.

See paragraph 2.137

The complete Academies Accounts Direction 2022 to 2023, along with the Academies Model Accounts 2022 to 2023 and the Framework and Guide for External Auditors and Reporting Accountants of Academy Trusts.

We are here to support you in understanding the guidance within the Academies Accounts Direction and in complying with its requirements, should you have any queries regarding this year’s Direction please get in touch with us.