Academies Accounts Direction 2019 to 2020 - Supplementary Bulletin

The Education and Skills Funding Agency (“ESFA”) has released a supplementary bulletin to the Academies Accounts Direction 2019 to 2020. The supplementary bulletin introduces a small number of additional requirements which academy trusts must comply with.

Dated: 24 August 2020 Author: Mark Gurney, Audit Associate Director

Academy Accounts Direction

The supplementary bulletin provides guidance to trusts on matters arising from the COVID-19 global pandemic and how they may have an impact on the financial statements for the year ended 31 August 2020.

The additional requirements are:


The bulletin confirms that the scope of the regularity review remains unchanged. The review by your auditors will cover income and expenditure, including any new COVID-19 funding. The ESFA have confirmed however that they will not be seeking any additional assurance from auditors in relation to any new COVID-19 funding. Any COVID-19 funding received will however be reviewed as part of the year end audit.  

Based on guidance issued by the Financial Reporting Council, your auditors will be considering the following:

  • Capacity – What was the impact of COVID-19 on the governance and control arrangements, staffing levels and operations of the trust? Where alternative procedures were required, are they reasonable under the circumstances?
  • Proactivity – When were the issues identified by the trust? Before or after ESFA advice? Was advise sought from other trusts or from professional advisors?
  • Reaction – Was retrospective or redressive action taken after an event?
  • Evidence – Is there a full document trail around the decision-making process, including the rationale for the decision and details of those involved?

Procurement and value for money

PPN 02/20 and its supporting guidance notes (issued in March and April 2020) and PPN 04/20 (issued in June 2020) are fundamental documents issued by Cabinet Office. These documents provided guidance from HM Treasury to public sector bodies including academy trusts on making payments (with limits) outside of the normal managing public money rules. The trusts Accounting Officer must be satisfied that a value for money case is made for each case by the virtue of securing continuity of supply of critical services in the medium and long term.  Example of these contracts could be exam board fees or catering contracts.

Auditors will be required to review the application of PPN 02/20 and PPN 04/20 as part of their regularity testing. Academy trusts should therefore ensure that there is a clear evidence trail in place to support any decisions that the Accounting Officer has taken. 

In addition, the Accounting Officer must reflect cases where PPN 02/20 or PPN 04/20 have been applied in their value for money review in the governance statement. They should also explain any situation where COVID-19 has adversely impacted on value for money.

Trustees’ report

The Trustees will need to consider the impact on the financial statements of any changing activities that the trust may have had. They will also need to ensure that they provide users of the financial statements with information regarding the material decisions that they have had to take on judgements and uncertainties.

The below list is based on advice issued by the Charities SORP Committee and covers areas that Trustees may wish to consider when preparing their trustee’s report for the year ended 31 August 2020:

  • In reporting the main achievements of the academy trust (paragraph 1.20) explaining how the virus control measures affected their activities;
  • Taking the opportunity to explain any financial uncertainties regarding the academy trust’s financial sustainability and consideration of going concern (paragraph 1.23) and the steps being taken to address these uncertainties;
  • Explaining how the contribution of volunteers, where appropriate, assisted the academy trust in its work in managing in the changed circumstances (paragraph 1.39);
  • The impact on the academy trust’s ability to fundraise (paragraph 1.41) and how the trustees managed this situation;
  • How the outbreak of the virus has affected staff, volunteers and beneficiaries (such as the academy trust’s pupils) and the implications for the academy trust’s operations and activities for the coming year (paragraph 1.45);
  • How the financial and operational effects of the virus and the control measures relating to the virus affected the principal risks and uncertainties facing the academy trust during the reporting period (paragraph 1.46);
  • Give consideration whether there are any implications for any existing or potential defined benefit pension liability (paragraph 1.47) and investments the academy trust holds (paragraph 1.47);
  • Consider any impact on the academy trust’s reserves policy, level of reserves and any change to funds set aside for future commitments (paragraph 1.48);
  • Consider the likely impact of the virus control measures and potential duration of the control measures on the future aims and activities of the academy trust (paragraph 1.49);
  • The impact of the virus-related control measures on any wider network of which the academy trust is a part and how this affects the academy trust’s operations (paragraph 1.51)

Financial support for COVID-19

Academy trusts may have received (or be eligible to receive) funding in relation to exceptional costs incurred in respect of COVID-19 or in respect of furloughed staff under the Coronavirus Job Retention Scheme. Where this is the case, trusts must disclose the funding received within the “Funding for the Academy Trust’s Educational Operations” note in the financial statement as “Exceptional Government Funding”. In addition, trusts are required to include a brief narrative as to why the funding was received. 

National free school meals support

Those trusts who used the national free school meals voucher scheme will not have to make any disclosures around this as they merely acted as a facilitator for the distribution of the vouchers to parents of eligible pupils.

If however the trusts used an alternative scheme, due to issues surrounding the scheme at the time, it will be claiming these costs back under the “exceptional costs” heading.

The ESFA recommend that trusts include some narrative around their involvement in the scheme as part of the Trustees’ Report.

Other funding

The bulletin does not cover funding receivable in respect of costs incurred in 2020/21, including Coronavirus Catch-up Premium (also known as Universal Catch-up Premium, recently announced by the ESFA. 


As it can been seen the main impact of the supplementary bulletin relates to additional disclosures in the Trustees’ Report. It is the trusts opportunity to demonstrate how it has adapted during these unprecedented times.

A full copy of the Academies Accounts Direction 2019/20 Supplementary bulletin can be downloaded from here.

Need assistance?

If you have any questions regarding any of the changes to this years Academies Accounts Direction, please contact a member of your engagement team or email: