Working with schools

According to figures released on 1 August this year by the Government, there are now 7,475 academy schools in the UK and, as a percentage of state-funded schools in the UK, they now account for 35.20 per cent (with free schools at 2 per cent and Local Authority maintained schools at 62.80 per cent).

Academies are publicly-funded independent schools which receive their money direct from the Government and are run by an academy trust. Some academies have sponsors such as businesses, universities, other schools, faith groups or voluntary groups. Originally introduced under the Labour Government to replace poorly performing secondary schools, the number of academies increased from 200 in May 2010 to over 4,500 in March 2015.

According to the ESFA (The Government's Education & Skills Funding Agency) in The Academies Financial Handbook (effective 1 September 2018), there are certain financial disciplines that any well-run organisation should be expected to deploy, including:

• Having rigorous procedures for preparing and monitoring financial plans.
• Delivering effective operational controls.
• Maintaining a system of internal scrutiny to remain compliant

Partner Richard Young, who is head of the audit department at Deeks Evans, has a wealth of experience in dealing with both academy and private schools.

The majority of private schools and academies are set up as charities and therefore have to adhere to the rules and regulations set down by The Charity Commission.

Schools are highly accountable; robust testing is called for and 'related party transactions' must be fully disclosed. According to the ESFA, the board of trustees must ensure requirements for managing related party transactions are applied across the trust. The chair of the board and the accounting officer must ensure their capacity to control and influence does not conflict with these requirements. They must manage personal relationships with related parties to avoid both real and perceived conflicts of interest, promoting integrity and openness in accordance with the 'seven principles of public life'. 

Deeks Evans has acted for private school clients for more than 20 years and, over the last five years, has taken on academy/free school clients.

When it comes to this sector, Deeks Evans benefits from its membership of the UK 200 Group, which is made up of leading firms of independent accountants.

With developments in UK charity law and the growth in the number of academies in Britain, keeping abreast of developments is absolutely essential for any professional firm providing services to these sectors.

The charities and education industry group within the UK 200 Group performs an important and active role in keeping members informed about developments that could affect their clients, as well as broader guidance on the issues that these sectors face.

In total, UK 200 Group members support around 500 independent schools and academies, a significant proportion of the total sector.

As well as carrying out statutory audits for schools or charities Deeks Evans can advise on accounts preparation, implementing systems and controls and VAT issues. Work with schools is concentrated on helping clients to remain compliant, while also supporting them with their budgets and forecasts, which must look three years ahead.

As Theodore Agnew Parliamentary Under Secretary of State for the School System says in his introduction to the The Academies Financial Handbook: “The benefits of an independent audit are considerable. It provides transparent evidence about the quality of trusts' accounting and financial reporting systems. If you are an auditor, you play an important role in supporting our sector.”

For more information about how Deeks Evans supports schools and charities, contact Richard Young on tel: 01892 526417 or email: richard.young@deeksevans.com