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Chris Beaumont Partner – Clive Owen & Co LLP

What you need to know about the difference between accounting requirements pre and post Academy conversion. Chris Beaumont Partner – Clive Owen & Co LLP. Agenda. What is an Academy Is an Academy free Matters to consider Pre/Post conversion The various returns

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Chris Beaumont Partner – Clive Owen & Co LLP

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  1. What you need to know about the difference between accounting requirements pre and post Academy conversion Chris Beaumont Partner – Clive Owen & Co LLP

  2. Agenda • What is an Academy • Is an Academy free • Matters to consider Pre/Post conversion • The various returns • Format of Year End Financial Statements • Interim Internal Reviews • Top Tips • Further information • Questions

  3. What is an Academy? • Company limited by Guarantee • Members • Directors/Trustees • Governors • Exempt charity – Registered with EFA

  4. Is an Academy ‘free’ • Of Local Authority control – YES • Of Whitehall – NO - EFA/DFE/Treasury/NAO

  5. Matters to consider (Pre Conversion) • Articles and memorandum • Land transfer – 125 year lease • LGPS Valuation • Insurance • Transfer of agreements e.g. photocopier leases • Service level agreement (SLA’s)

  6. Matters to consider (Pre Conversion) • Committees - Members - Directors/Trustees - Governors - Finance - Audit • Governors skills Audit

  7. Matters to consider (Pre Conversion) • Financial Procedures Manual • Scheme of delegation/limits • Register of interests (including family members) • Appointment of auditors • Appointment of Responsible Officer (RO)/Internal Assurance • Appointment of Bankers • Appointment of Lawyers • Policies - Fixed assets/Anti Fraud/Risk Assessment/Whistle Blowing etc

  8. Matters to consider (Pre Conversion) • Accounting system - PS Financials - Corero - Sage - Agresso -Capita Sims - Hoge 100 • Nominal Leger structure

  9. Matters to consider (Pre/Post Conversion) • Management accounts • Income and expenditure account • Balance sheet • Cashflow forecast • Restricted v unrestricted funds • VAT (Section 33B) • S126 • Register for VAT

  10. Matters to consider (Post Conversion) • Payroll Calculation of various deductions including - PAYE/NI deductions - Calculation of various deductions including - Teachers Pension Scheme - LGPS Pension Scheme - Union subscriptions - Dispensations / PIID’s - Payment of the above and net pay

  11. The various returns • EFA Returns - Budget forecast (By 31st July for following financial year) - Academy Accounts Return (AAR) - March return (1st year for some) - Financial Management and Governance self assessment (FMGS) • Audited financial statements to 31st August • End of Year Certificate (EOYC) • Companies House - Directors appointments and resignations - Annual return

  12. Format of Year End Financial Statements • Model financial statements include: • *Trustees’ Report (C or T) • *Governance statement (C and AO) • Statement of regularity, propriety and compliance (AO) • Statement of trustees’ responsibilities (C) • Independent auditor’s report of the financial statements • Independent auditor’s report on regularity • Set of financial statements • Statement of financial activities (SOFA) • Balance sheet (C or T) • Cashflow statement • Notes

  13. Trustees’ Report • Method of recruitment of trustees • Organisational structure • Risk management • Connected organisations • Objects and Aims • Achievement and Performance • Reserves Policy • Plans for future periods • Amongst others

  14. Governance Statement • Trustees – meeting attendance during the year • FGPC – if appointed, meeting attendance during the year • Audit committee – if appointed, attendance during the year • Risks • Description of interim internal checks • Detail any material control issues

  15. Interim Internal Reviews Requirements • Income > £10m or Assets > £30m MUST have an audit committee • All MAT’s below this should CONSIDER having an audit committee • All others MAY have an audit committee • Up to the Academy to identify risks and agree a programme of work to address

  16. Interim Internal Reviews Can be undertaken by one or combination of the following • Internal Audit (In house or brought in) • Supplementary programme of work for the external auditor • Responsible officer • Peer Review

  17. Top Tips • Undertake a Governor skills Audit • Consider Governance structure • Consider internal resource • Research and plan the implementation of an appropriate accounting package • Review MIS requirements • Take advice – VAT, Gift Aid and potentially Corporation Tax • Prepare an outline 3 and 5 year financial forecast • Set appropriate level of reserves • Have costed ideas for capital projects

  18. Further information • Academies Accounts Direction 2013 • Academies Financial Handbook • EFA website • EFA Bulletins • Charity Commission website • Your Advisers

  19. Any Questions?

  20. Contact details • Tel: 01325 349 700 • Email – chris.beaumont@cliveowen.com • www.cliveowen.com

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