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Managing the expansion of the Academies Programme Part Three 33
3.6 Our survey also suggests most academies are complying with good practice in
financial governance. For example:
• Around half of academies have an Audit Committee, compared to just over a third
in 2010.
• Over 99 per cent of academies have either Internal Audit functions or Responsible
Officers to provide financial assurance. Virtually no Responsible Officers are
subject to conflicts of roles through chairing the Governing Body or Board of
Trustees (16 per cent in 2010).
3.7 The proportion of academy Finance Directors with recognised accountancy
qualifications has reduced since 2010, from 61 per cent 6 to 34 per cent. The Department
no longer recommends that all academies should have qualified Finance Directors.
However, its revised guidance requires trustees and managers to have the skills,
knowledge and experience to run the academy trust.
3.8 The EFA and its predecessor have undertaken a few formal investigations into
concerns over governance or financial management in academies, mainly in response
to whistle-blowers or other local intelligence. Academy governing bodies may also
commission similar investigations. On 30 March 2012, the Chief Executive of the
Priory Federation of Academies Trust resigned; the EFA published a report of its
investigation into the trust on 27 April 2012. The YPLA had previously validated the
trust’s self-assessment as outstanding. A further investigation is currently under way
at Quintin Kynaston Community Academy.
3.9 In addition to their individual impact at academy level, failures in financial control
and governance create risks of wider reputational damage to the Programme. In
September 2012, the EFA issued new guidance clarifying its expectations of academy
trust accounting officers and governing bodies.
Academies’ financial position and cost base
3.10 In 2009/10, around 12 per cent of academies reported cumulative deficits, falling
to around 6 per cent in 2010/11 – a similar proportion to the maintained sector. This
reduction reflects changes in the profile of schools becoming academies during that
period, with 95 per cent of converters having a surplus on conversion.
3.11 Schools can convert with deficits, although they must have an agreed recovery
plan and the ability to pay back the deficit within two to three years. Some academies
have required financial support to address pressures arising after they became
academies. In 2011-12, the Young People’s Learning Agency gave a total of £15 million
in financial support to 110 academies, an increase from £7 million in 2010-11.
6 Comptroller and Auditor General, The Academies Programme, Session 2010-11, HC 288, National Audit Office,
September 2010, page 36.