Key Changes in the 2024 Academies Financial Handbook: An In-depth Look for MAT Leaders

The UK government has recently unveiled the 2024 edition of the Academies Financial Handbook, bringing forth crucial updates and simplifications aimed at enhancing governance and financial management within academy trusts. This comprehensive guide explores the significant changes and their implications, offering insights for Multi-Academy Trust (MAT) leaders. We also feature expert perspectives from Stephen Mitchell, CEO of Keystone Knowledge, to provide deeper understanding.

The 2024 handbook introduces several updates to governance, reflecting the trust quality descriptions published recently. These updates underscore the necessity for robust governance structures to ensure educational excellence. Stephen Mitchell, CEO of Keystone Knowledge, remarks, "The updated governance content reflects a stronger emphasis on accountability and transparency. Trust boards must now demonstrate a clear understanding of their governance roles, ensuring they are well-equipped to steer their institutions effectively."

In addition to governance updates, there is a renewed focus on estates safety and management. Trusts are now urged to prioritise the safety and efficient management of their estates. Mitchell emphasises, "Safety and effective management of school estates are paramount. This emphasis is a reminder that the physical environment plays a crucial role in the overall quality of education and the wellbeing of students and staff."

Another significant change is the requirement for trust boards to have sufficient financial knowledge to hold the executive to account. This ensures that financial oversight is both substantive and effective. "Financial acumen within trust boards is essential for sound decision-making," Mitchell asserts. "This requirement will help trusts navigate financial complexities and ensure resources are used optimally to enhance educational outcomes."

Moreover, the handbook clarifies that the roles of the Accounting Officer and the Chief Financial Officer should not be held by the same individual, aiming to enhance checks and balances within trusts. "Separating these roles mitigates risks associated with concentrated power and potential conflicts of interest, promoting greater integrity and accountability in financial management," Mitchell explains.

In an effort to reduce administrative burden, trusts are no longer required to provide an explanation if the board has not met at least six times a year. This change allows trusts to focus on essential governance activities without unnecessary paperwork. "This simplification allows trusts to focus on the quality rather than the quantity of their meetings, ensuring that each meeting is productive and meaningful," says Mitchell.

Additionally, trusts now have an extra month to submit their Budget Forecast Return, offering more flexibility in financial planning and reporting. Mitchell notes, "The extended deadline offers trusts much-needed breathing room to prepare accurate and comprehensive budget forecasts, which are critical for strategic financial planning."

The preparation and circulation of management accounts have also been simplified, granting trusts more discretion in their financial processes. "Greater flexibility in handling management accounts enables trusts to tailor their financial processes to better meet their unique needs, improving overall financial governance," Mitchell observes.

The handbook also clarifies the permissive stance on Electric Vehicle (EV) salary sacrifice schemes, supporting sustainability initiatives within trusts. Mitchell highlights, "Encouraging EV salary sacrifice schemes aligns with broader environmental goals and demonstrates a commitment to sustainable practices within the education sector."

The simplification of the General Annual Grant (GAG) pooling position highlights its value and importance for trusts, allowing for more effective resource allocation across academies. "GAG pooling can significantly enhance resource allocation, ensuring that funds are directed where they are most needed, thus supporting equity and excellence across all academies within a trust," Mitchell comments.

Refinements in the approval threshold for related party transactions and simplified arrangements for transactions with other educational providers aim to strengthen governance and reduce potential conflicts of interest. "Tighter controls and clearer guidelines on related party transactions safeguard against misuse of funds and ensure that all financial dealings are conducted with the utmost integrity," Mitchell states.

The section on Notices to Improve (NtI) has been amended to clarify the range of circumstances in which an NtI might be issued. This change aims to provide clearer guidance for trusts on the conditions that could trigger regulatory intervention. The Department for Education will also engage with the sector to develop its approach to intervention, ensuring that the processes followed by the department's Regions Group are transparent and based on robust evidence of trustees' oversight of educational performance.

The 2024 Academies Financial Handbook has been streamlined to make it more navigable and practical for trusts. MAT leaders should familiarise themselves with these changes and apply the supplementary guidance referenced throughout the handbook. Staying informed and proactive in implementing these updates will help maintain high standards of governance and financial management within your trust.

Stephen Mitchell concludes, "The changes in the 2024 handbook reflect a continued commitment to improving governance and financial management in academy trusts. By embracing these updates, trusts can ensure they are well-positioned to deliver outstanding educational outcomes."

For further details and to access the full handbook, you can view the document here.