If you run an Academy you need to start planning your year-end audit in September, even better in July or August. This financial audit will cover all income, expenditure, prepayments, accruals and depreciation – in fact anything that relates to the financial management of your Academy.
What do Academies need to do for their audit?
Academies need check all financial information on their finance system, so everything is accounted for. This includes all income, expenditure, prepayments accruals and depreciation. Read on for some specific tips.
Why do Academies have to complete a year end audit?
Academies, like charities and other larger businesses, have to have an annual financial audit. This provides an external opinion whether the finances are in accordance with required criteria.
The auditors check your financial statements against evidence they gather (i.e. they check and review a percentage of your transactional data) so they can give independent confirmation that your finances are as stated. The results of this audit must be published to the ESFA and to your local stakeholders on your website.
What is the academies year end audit?
The government requires you, as an Academy trust to complete the following:
- prepare an annual report and financial statements to 31 August
- have these accounts audited annually by independent registered auditors
- produce a statement of regularity, propriety and compliance and obtain a regularity assurance report on this statement from the auditor
- submit the audited accounts and auditor’s regularity assurance report to ESFA within 4 months of your year end (that’s highly likely to be 31 December)
- file the accounts with the Companies Registrar as required under the Companies Act 2006
- publish your audited accounts on your trust’s website by 31 January
What is the year end date?
Your auditors need to complete the year end audit by 31st of December for the year that has just ended on 31st of August. If your year end isn’t the 31st of August, you have four months from the year end.
Tips to make your year end audit easier
Let’s be honest, some accounting entries are best left to your accountants (e.g. depreciation and movements in pension fund liabilities), but your finance department can make your (and their) lives easier by checking your balance sheet and accounts now, by doing things like:
- Get in touch with your auditors (if you haven’t already), ask them for the list of what they will require and confirm the dates they will visit.
- Check your pupil premium funding from July and August (will be received from the ESFA in October). It needs to be included as accrued income, and in primary schools deferred income for UIFSM.
- Accruals. Consider all expenditure that will be paid in the next accounting year, which relates to amounts for last year (before August). These amounts should be accrued for. As an example, this includes fees for auditing your accounts for the year just completed.
- Reconciling all bank accounts
- Check and reconcile all purchase ledger accounts, if possible, with supplier statements.
- Inspect sales ledger accounts, looking out for potential bad debts.
- Reconcile your Salaries and PAYE/NIC accounts. At the year-end your Salaries control account should probably be zero and your PAYE/NIC control accounts should probably show just your August deductions and employers’ contributions.
- Submit a VAT repayment claim (VAT 126 or VAT 100) as soon after the 31st August as is practical.
- Check your VAT repayment claim balances with the VAT control account as at the year end.
In Academies that are running well (from a financial management perspective) most of these points are completed at the end of each month. However, a double check between year end and your audit will make the process smoother, that’s one of the reasons we often recommend finance departments work throughout the academic holiday period.
Check with your auditors
Your auditor should provide you with a detailed list of required audit information. Getting this ready early will reduce the time your auditors spend with you during the audit visit. This may include non-financial information such as minutes of meeting held and any internal audit reports.
Need some more help?
We don’t audit Academies, but as specialists in the sector we may be able to help you. If you want help understanding your previous audits, or want help preparing for this year’s audit – call Karen on 0203 984 8686 or email us Karen@alanpatient.co.uk
We specialise in helping Academies in London and the Home Counties focus on education, rather than financial management.
How could we help you?