Academy Schools

Significant change is taking place within the education sector with many maintained primary, secondary and special schools considering becoming Academies. This option is now open to all schools providing they work in partnership with a high performing school.

Benefits of Academy Status

Schools with Academy status will have greater flexibility in setting policies including:

• Creating their own curriculum
• Admissions policies
• Staff structure and reward 
• The number and length of school sessions during the year
• They will own their buildings and land with a greater say in their future

One of the biggest attractions for new Academies is the additional funding from the Department for Education and greater control over how it is used.

Additional Responsibilities

Before leaping to change to Academy status, schools should be aware of the additional responsibilities the change will bring, including:

• A new Academy will automatically become a charity and will become established as a Company Limited by Guarantee. It will therefore be subject to the accounting requirements of both the Companies Act and Charities Act.
• Each Academy will need to appoint an external independent auditor to provide an annual audit.
• The annual accounts will need to be prepared to comply with the Department for Education guidance, based on company and charity law. 
• The financial systems of many Academies may need to be reviewed to ensure the effective management and control of their finances. 
• Academies will need to manage the administration of running their own payroll and take on greater management of staff.

Conversion to Academy Status

This is not a simple process and the school governors, heads and parents should take a commercial as well as educational stance when considering moving to Academy status. The conversion should be approached as a business acquisition and an in-depth review taken of the pros and cons of changing. A Due Diligence Review should be undertaken to highlight any financial issues and ensure the new Academy begins on the right foot. Examples of issues to look out for include:

• Pension black holes i.e. will the new Academy inherit any significant deficits 
• Other payroll issues e.g. ensuring there are no significant existing errors
• Ensuring there is complete clarity on any financial surplus or deficit on the date of conversion
• Clarifying the status of the other schools joining a lead school, particularly if they are going to form one legal entity.

A lot of the expertise necessary to run an Academy is quite different to that needed to run a school under local authority control. Even a very well managed school may struggle with the changes unless they quickly gain the necessary expertise and professional assistance.

Most school governors are very committed but, along with Head Teachers, may have limited experience of a major business transaction such as the conversion to Academy status.

How Monahans Can Help

• Assistance with financial reviews 
• Payroll Services & Support
• Review of Banking Arrangements
• Review of Accounting Systems, Training & Support
  

If you subsequently become an Academy, we can provide ongoing support through:

• Assistance with the preparation of annual accounts and meeting the requirements of the charities SORP and company law
• Audit 
• Internal control reviews
• School fund examinations
• Payroll bureau
• HR assistance
• VAT and corporation tax advice
• Advising on the financial implications of land transactions 
• Training and guidance for governors and the finance team

Monahans gained significant experience in the audit of state schools when they had grant maintained status. More recently we have also reported to governors on internal controls, audited grant claims, reviewed management accounts and prepared trading company accounts.

We also have significant experience in auditing a wide variety of charities and in the preparation of both incorporated and unincorporated charity accounts.  Read more about our specialist charity service here.

We have assisted many schools with the transition to grant maintained status and this, together with our significant charity expertise, puts Monahans in an ideal position to assist you with the transition to Academy status.

Our Academy School Specialists 

Linda Boss

Partner

email Linda

or call her on (01225) 785520

Based in our Trowbridge office, as well as specialising in Charity accounting, Linda is responsible for general Audit quality across Monahans. Linda advises a large number of charities including Bath YMCA,  Wiltshire Wildlife Trust and Bath Institute For Rheumatic Diseases.

She regularly gives presentations and writes news articles on issues affecting charities.

Steve Fraser

Partner

email Steve

or call him on (01793) 818300

Based in our Swindon office, Steve looks after a large number of significant Charities including The Bible Society and White Horse Care Trust.

He also has a particular expertise in Information Technology, being responsible for Monahans IT systems, and is able to combine this knowledge with accountancy skills to really benefit his Charity clients.

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