Academies – General Annual Grant (GAG)
Date: 18th June, 2013 | Author: Wendy Bambrick | Comments: 0
Important information for Academies who existed pre 1 September 2012.
The Academies Financial Handbook which is relevant from 1 September 2012 changed the rules with regard to carrying forward of unspent GAG for any year.
Before 1 September 2012, the rules with regard to how surplus GAG could be used were:
At the beginning of any Academy Financial Year, the Academy Trust could hold unspent GAG from previous Academy Financial Years amounting to up to 12% of the total GAG payable for the Academy in the Academy Financial Year just ended or such higher amount as may from time to time be agreed. The carried forward amount could be used as follows, 2% for any purpose for which the GAG is paid and the rest of the 12% could be used for the upkeep and improvement of premises. Amounts over the 12% have to be returned to the DfE.
The Academies Financial Handbook (AFH) which is relevant from 1 September 2012 changed these rules with regard to carrying forward of unspent GAG for any year. It removed the limits completely.
However the new rules do not automatically apply to Academies in existence pre 1 September 2012 these Academies have to apply to the DfE to have their Funding Agreement amended or will still come under the old rules. It is very important therefore to check your funding agreement if your academy existed pre 1 September 2012 and your GAG surplus is likely to be greater than 12% or if you don’t wish to have to use most of it for premises.