Internal Audit

A successful internal audit should be based on a true strategic partnership between the trust and the auditor, resulting in an honest and transparent process that supports the finance team and adds value to the trust.

A robust control framework is a requirement of the Academies Financial Handbook (AFH) and it is also a requirement of the AFH that all academy trusts must have a programme of internal scrutiny that includes the independent checking of financial controls, systems, transactions and risks.

These requirements have increased over recent years and specifically with the 2020 version of the Financial Handbook including the following:

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One

The audit* committee’s role must include directing the trust’s programme of internal scrutiny and reporting to the board on the adequacy of the trust’s financial and other controls and management of risks (AFH 3.8)


Two

The committee must review the risk register to inform the programme of work, ensuring checks are modified as appropriate each year (AFH 3.8)


Three

Oversight must ensure that information submitted to the DfE and ESFA that affects funding, including pupil number returns and funding claims (for both revenue and capital grants) completed by the trust and (for MATs) by constituent academies, is accurate and in compliance with funding criteria (AFH 3.14)

Four

An annual summary report must be prepared each year outlining the areas reviewed, key findings, recommendations and conclusions, to help the committee consider actions and assess year on year progress. This annual summary report must be submitted to the ESFA each year by 31 December.

*or another suitable committee whose remit includes the function of an audit committee.

What has changed for the school year 2020/21?

In December 2019 a new Ethical Standard was published by the Financial Reporting Council (FRC) (the body which regulates audit firms) and this prohibits firms from providing both external and internal audit services to the same client.

Internal scrutiny work, required by the ESFA and delivered to academy trusts, is caught by this tightening up of ethical rules for audit firms.

The new ethical standard, which is a major revision, is aimed at strengthening auditor independence and to prevent conflicts of interest arising and has been implemented to try and avoid audit failures that have blighted the audit profession in recent years. The new rules governing the provision of internal audit services are just one area affected although many of the changes affect only the very largest public interest entities and listed companies.

Many audit firms, including WR Partners, have until now provided internal audit type services to their external audit academy clients. This will no longer be permitted, with the 2020 AFH confirming that the option for internal audit to be performed by the external auditor has been removed.

So what now?

As a Trust, you need to consider who your advisers for Internal and External audit will be.  It is most likely that Trusts will appoint a new Internal Auditor to cover the school year 2020/21

 
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WR Partner’s internal scrutiny service
 

How can we help?

WR Partner’s internal scrutiny service

At WR Partners, we have developed a complete package for Internal Scrutiny to assist your Accounting Officer and Audit Committee, based on our experience in the academy sector. Our service will ensure you comply with all aspects of internal financial management and control required from the Handbook and can be tailored to the individual risks you may have identified as areas of focus.

The AFH requires the programme of internal scrutiny work to be determined by the Audit Committee but we can help you settle on a suitable programme of work if required.

Our expert teams have covered the following topics or themes in recent years:

  • Governance

  • Key financial decisions

  • Risk register and management

  • Fixed assets control

  • Payroll and HR

  • Procurement, including VFM and major contracts

  • Budgetary control and accuracy of management accounting information

  • Senior executive remuneration

  • Central trust function (for a MAT)

We work with our academy school clients throughout the year by building sound working relationships, offering proactive advice and being available to act as a sounding board for any issues or concerns your finance team, Accounting officer or governors may have. As such, we do not charge your team for dealing with ad hoc calls or emails during our engagement with you.

We are committed to keeping you informed of the changing reporting and regulatory issues that may impact your trust. We produce a regular series of updates and host sessions for Accounting Officers to discuss the current issues faced within their Trusts.

If you would like to discuss your Internal Audit requirements with our dedicated Internal Audit team, please speak to our team below.

  • Fran Johnson

    Audit Partner

    Email: FJohnson@wrpartners.co.uk

Academy portfolio

Trusts that we act for in the region include:

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  • Wade Deacon Trust

  • The Great Schools Trust

  • Cheshire Academies Trust

  • West Derby School

  • Concordia MAT

  • The YES Trust

  • Shaw Education Trust

  • New Bridge MAT

  • Over Hall Academy

  • The Russett Learning Trust

  • De La Salle Academy