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<p>The department continually reviews and improve systems and processes to oversee
academies. We have strengthened our processes for monitoring the overall performance
of MATs and ensuring growth is sustainable and delivers improvement. We have also
improved support available, for example, through funding professional development
programmes for MAT trustees[1] and funding Academy Ambassadors to match high calibre
business leaders with academy trusts. Academy Ambassadors work closely with academy
trusts and Regional Schools Commissioners to identify trust boards where additional
business expertise would improve the governance of the trust and any skills or background
that would be particularly desirable in light of the opportunities and challenges
the trust is facing.</p><p> </p><p>The department has a robust system of financial
accountability. Processes are founded on a clear framework communicated and regulated
by the Education Skills and Funding Agency (ESFA), with effective oversight and compliance
based on proportionate risk assessment, and robust intervention when things go wrong.
ESFA scrutinises a broad range of academy trust data and intelligence to identify
risk, including audited accounts and a number of annual financial returns.</p><p>
</p><p>All academy trusts must publish details of their financial performance in annual
accounts. To ensure strong external scrutiny, all academy trusts must have an annual
external audit of their annual accounts by a registered statutory auditor and the
department expect trusts to act on audit findings as an opportunity to strengthen
their systems. The ESFA’s focus is much broader than intervention, working with the
sector to continue building capacity and expertise in financial management and forecasting.
To reinforce the importance of three year financial planning the ESFA are further
strengthening budget forecasting, the ESFA CEO Eileen Milner wrote to academy trusts
in March 2018 setting out the requirement for all academy trusts to submit three-year
financial forecasts.</p><p> </p><p>Where concerns arise, ESFA works with trusts to
prevent financial instability and enable them to recover their financial position
and return to stable governance. Intervention is always proportionate, risk-based,
and linked to non-compliance with requirements set out in the Academies Financial
Handbook and academies’ funding agreements. The sector remains in a stable position,
with just over 1% of academy trusts subject to an active Financial Notice to Improve.</p><p>
</p><p>We constantly keep under review the financial control and reporting framework
for academies and introduce any necessary enhancements through the Academies Financial
Handbook and the Academies Accounts Direction, both of which are re-issued on an annual
basis.</p><p> </p><p> </p><p>[1] https://www.gov.uk/guidance/school-governors-professional-development</p>
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