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Academies Accounts Direction 2013/2014 (AAD)

The education funding agency (EFA) published the AAD relating to academies for periods ending 31 August 2014 on 23 May 2014. The main changes are as follows:

Audit

Management letter

Additional information on the content of the auditor’s management letter has been added, in that there is now a summary of things that should be included with regard to the audit and the regularity work.

Independent review on regularity

The guidance has been updated with regard to which areas should be tested and discussion about the impact of materiality on the review. Previously the AAD referred to ‘external auditor’, this has now been corrected to ‘reporting accountant’.

Governance

Further information has been included with regard to the meaning of the term, ‘member’. Basically although members can also be trustees it is best to keep distinction between the two layers. Members should not be employees.

The timeliness of submitting accounts to the EFA (deadline 31 December 2014) has been emphasised, the deadline for publishing accounts on the Academies website has been changed from 31 May 2015 to 31 January 2015 and at least two years’ accounts should be kept on the website. An Academy should have arrangements in place in the event of the absence or departure of key signatories.

The names of an Academies’ members must now be included in the trustee’s report in the reference and administrative details section. The trustee’s report has been amended to take in the new rules for including a strategic report, this is within the trustee’s report and not a separate document and some headings have been moved around. At the start of the Trustees report it is suggested that a ‘scene setter’ is added.

A section on Governance review has been added to the Governance statement where any evaluation or review undertaken with regard to the effectiveness of the board of trustees should be noted together with what action was taken.

The Statement on regularity, propriety and compliance has been updated to require disclosure on the face of the statement of any instance of material irregularity, impropriety and funding non-compliance.

Financial Reporting

Guidance has been given with regard to the treatment of fixed assets funded from unrestricted funds. It states that funds do not have to be transferred to restricted funds in this instance.

Disclosure requirements have been added for ex-gratia/ compensation payments, gifts and losses (note 7 of the model accounts), staff severance payments (note 10), acquisition and disposal of freehold/leasehold land and buildings, and disposal of heritage assets (note 13) and guarantees, letters of comfort and indemnities (note 25). The operating lease commitment note (note 7) has been split between plant and machinery and others. Disclosure of expenditure on charitable activities and on governance (notes 8 & 9) have been simplified. Guidance has been added with regard to disclosure of operating leases. The disclosure note for Multi-Academy Trusts (MAT’s) has been updated so that trusts with no central management services/central charges must disclose that fact.

The Teacher’s pension scheme note text has been updated. The Local Government pension scheme guarantee has been included (note 28).

Further information has been given on capitalisation limits for fixed assets and valuation of investment assets. The list of funding streams with regard to the General Annual Grant has been updated.

The related party note must state that the transactions were at arms length.

The full text of the AAD 2013/2014 can be found at www.gov.uk/government/publications/academies­accounts-direction

 

 

Date: 23rd July, 2014
Author: Mercer & Hole Media

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