The ESFA (Education and Skills Funding Agency) has been requested by the National Audit Office and the Public Accounts Committee to provide more information on academy trusts holding revenue balances that are more than 20% of their total annual revenue income.
This recommendation aligns with the Department’s work to ensure appropriate plans are in place where trusts are holding significant levels of reserves.
How will this information be collected?
Additional questions will be asked in the budget forecast return (BFR) which will be relevant to trusts where the revenue reserves balance exceeds 20% of their annual income. This will allow the Department to glean the necessary information required by the National Audit Office.
Government guidance on completing the BFR is available here.
What is the potential impact?
The ultimate aim of the Public Accounts Committee is to ensure the efficient spending of public money within the education sector; trusts holding significant levels of reserves without rationale, or a proper reserves policy would potentially highlight this. It is therefore recommended that if the trust holds significant levels of revenue reserves:
- It is in line with the reserves policy within the accounts; and
- Any future spend for which these reserves are earmarked, are clearly identified within the Trustees’ Report.
Our template Trustees’ Report has been updated to reflect the above recommendations.
For more information, please get in touch with your usual Landau Baker / BKL contact or use our enquiry form.