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The importance of internal scrutiny for academies

The importance of internal scrutiny for academies

Ann Mathias


Following on from the publication of the Academy Trust Handbook 2021 (formerly the Academies Financial Handbook) which became more of a general governance on all areas and not just purely focusing on the finances of the trusts, there are some key points within the handbook which all Academy Trusts should be aware of and complying to. 

All academy trusts must have a programme of internal scrutiny to provide independent assurance to the board that its financial and non-financial controls and risk management procedures are operating effectively. 

Continuing developments

The requirement and responsibility of the Academy Trust’s full trust board (normally delegated to the audit and risk committee or the finance committee fulfilling the remit of a audit and risk committee) for internal scrutiny has developed and increased over time. Considerations should now involve whether all categories of risk, financial and non-financial, are being suitably identified, reported and managed as well as that controls are being continuously improved to ensure they are suitable, effective and compliant. Baroness Berridge has previously highlighted in the ATH 2021 the importance of both governance review and cyber security including the value of an external review by experts in order to identify any improvements and that the trust is not undergoing their own self-assessment.

Academies looking for good practice guides for internal scrutiny can find ESFA advice here. There are also helpful best practice guides on risk management which can be found here.

Cyber security has been emphasised by the Department for Education (DfE) due to the increasing number of cyber attacks schools have faced and the destructive effects it could have if unprotected and unprepared. See sections 6.16 and 6.17 of ATH for guidance on cybercrime considerations. The ATH 2021 also brings attention to the responsibility of trustees in relation to non-financial issues such as the safeguarding and health and safety of both students and employees as well as estates management. These are highlighted in section 1.15 to 1.20 of the ATH within the trustees’ duties.

In this webinar, Moore (South) Head of Education, Ann Mathias, provides oversight into the academy sector with particular insight into the AAD 2021, ATH 2021, Internal Scrutiny and Audit. It will be particularly useful to trustees and financial directors.


All Academy Trusts must have a programme of internal scrutiny to provide independent assurance to the Board that its financial and non-financial controls and risk management procedures are operating effectively as well as being suitable and compliant.

Failure to ensure proper control over key business processes may lead to an intervention by the ESFA or a modification of the external auditor’s regulatory opinion. This leaves Academy Trusts with the following options:
  1. Employing an in-house internal auditor
  2. An Academy Trust can engage a separate audit firm such as ourselves or specialised internal audit consultants to carry out its internal scrutiny procedures.
  3. An Academy Trust has the option to team up with another local Trust and carry out a ‘peer review’ the process whereby a school or trust leader invites a trusted peer to look carefully at issues that they are most concerned about.
  4. An Academy Trust has the option to appoint a non-employed Trustee. The person carrying out this role must have the relevant experience and/ or qualifications to be able to carry out the role effectively.

Our approach involves detailed discussions with the Audit and Risk committee to evaluate the risk profile of the Trust, the maturity of financial and other systems and the concerns of the audit committee.

We recommend the use of an audit needs assessment (ANA). This is a bespoke tailored programme of tests broken down by business system to assess the key risks and hot topics. The ANA should be updated on a yearly basis, however as organisations are seeking to achieve more organic strategies that evolve more frequently to reflect the changes in the sector fuelled by technology and competition. This requires a more frequent monitoring approach of the internal and external environment, including more regular and meaningful dialogue with both senior management and the audit committee.

At Moore (South), we offer an hour free consultation with a senior member of our Education team to discuss how we can work with you to deliver your internal audit, providing a fully compliant service. 

Choosing a qualified chartered accountant’s firm like Moore (South) gives the Trust Board assurance that those carrying out the programme of work are suitably qualified and experienced. Moore (South) are also governed by a professional code of ethics and standards and the work performed is based on established audit disciplines.

Our team has been providing academy audit services for many years. With decades worth of expertise, we are able to share best practices and benchmarking of systems and control processes that arise from our work. As the scope of internal scrutiny continues to grow significantly, we are always up to date and able to provide a complete internal scrutiny package to ensure all aspects of internal financial management and control as required by the ATH 2021.

Through our contact and discussions with various audit and risk committees, we are able to keep you up-to-date on the latest thinking behind more bespoke programmes of tests to enable a more effective reporting of operations. We are currently working with various schools on risk management, but other topics have covered procurement arrangements, catering, lettings, fraud awareness and the reporting function to the governing body.

If you would like to speak to our audit team about internal scrutiny for academies then please contact us today. We cover the South of England with our offices based in Chichester, Guildford, Isle of Wight (Newport), Salisbury and Southampton.