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Eileen Milner’s letter to Accounting Officers

Following on from the clarifications made in the updated Academies Financial Handbook in regard to internal scrutiny, Eileen Milner (ESFA chief executive)  issued a letter to accounting officers in July.  A copy of the letter can be found here.
 

Audit Committee

As part of Trust’s committee structure they must appoint an Audit Committee. This can be either as a dedicated Audit Committee (required if Trust income is in excess of £50 million) or combined with another Trust committee. Whichever structure is chosen, they must meet at least three times a year.
This Committee must advise on the adequacy of financial and other controls as well as the risk management arrangements within their Trusts. They are also required to direct a programme of internal scrutiny  to provide independent assurance to the Board that the Trust controls are operating effectively. Likewise they need to review the results and the quality of the Trust’s annual external audit.
 

Internal scrutiny

The Trust’s internal scrutiny programme must:
1. Be independent and objective
2. Be timely, with the work spread appropriately over the year
3. Include regular updates to the audit committee. This includes, a report of the work completed to each Audit Committee which will also include recommendations made to enhance controls.
 
In addition, Annually also a summary report highlighting areas reviewed, key findings and recommendations made must be prepared. This will also need to consider year on year progress, particularly around previously identified control weaknesses.  All findings must be made available to all Trustees promptly.

 

NEW!  Submitting internal scrutiny report to the ESFA

(section 3.22 of the Academies Financial Handbook 2019)

Going forward, Trusts must submit an annual internal scrutiny report to the ESFA by 31 December each year. This report will summarise the work completed and the conclusions reached for the year. This will first apply in December 2020.
 
In Eileen Milner’s letter in July, she confirmed that in the interim, the ESFA will be expecting Trusts to submit their most recent internal scrutiny findings by 31 December 2019 alongside their annual financial statements. This will be your last term’s review report. Further guidance on the submission process of this will be published in October 2019.
 
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