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Academies update – Three-year budget review 2019 open for completion

Gemma Roger

What is included in the report?

As in previous years, an Excel workbook has been made available to assist with the preparation of the return prior to submission.   This year submission is via the IDAMS portal (similar to the May budget forecast return outturn (BFRO) submission).
The workbook this year has been updated to more closely resemble the May BFRO data collected; assuming that no errors have been identified, actuals to March and budgeted results to August 2019 can be transposed directly from the BFRO.  These figures will be automatically populated in the online form (from the submitted BFRO information) but can be manually overridden for any changes identified.

Detailed forecasts are required on a line by line basis for March and August 2020.

General disclosure of debtors/creditors is not required in the BFR3Y.

The final section of the report is a summary forecast for the 2019/20, 2020/21 and 2021/2022 academic years. The 2019/20 figures feed from the more detailed analysis in sections above so it is just the 2021 and 2022 figures that need to be input.

What assumptions are required in the three-year forecast?

The ESFA put the onus on individual Academy Trusts and MATs to formulate their own assumptions appropriate to their circumstances. ESFA will not advise on the assumptions to be made; it is appreciated that forecasts by their nature will be open to interpretation but should be based on sensible and measured expectations.

There are some key considerations when preparing the three-year forecast:
  • Assumptions should be based on historic trends and known future events. For example funding levels, pupil numbers or investment plans.
  • The BFR3Y has “free text” fields in all sections where the basis for assumptions or estimates can be stated. This is particularly important for any material areas of the budget.
  • All forecast decisions remain the responsibility of the Trustees.
  • Any forecast deficit must be accompanied by details of the mitigating action plan in place.
  • The following driving factors are identified by the ESFA to assist with forecast assumptions:
    • Income
      • forecast pupil numbers (line 9000) 
      • estimated National Funding Formula funding per pupil with a baseline including minimum funding guarantees (line 1990)
      • changes in pupil premium funding and mix of pupils with special needs
      • mix of weighting factors including area cost adjustment
      • other income assumptions such as, commercial income and investment income
    • Expenditure
      • pay awards for all staff (national rates or locally determined rates) (line 3100)
      • staff turnover estimates and future staff grade ratios
      • TPS contribution rates (indications of national rates)
      • LGPS contribution rates (varies according to region)
      • non-staff cost inflation- could apply a flat rate or variable one subject to different rates depending on specific costs (line 3300)
Need further help?

An online ESFA enquiry form is available to provide assistance in preparing and submitting the BFR3Y. To ensure that queries are dealt with efficiently, the ESFA recommend titling the query “BFR3Y” and quoting the UPIN number of your Trust.

The ESFA are also running a weekly Skype call service every Wednesday from 26 June to 29 July at 1pm. Details are available through the website.

If you need further guidance on this or any other aspect of academy trust finance and reporting, please contact your local Moore office.