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News - 16 January 2014

The National Audit Office: warning on Educational Accounts

The National Audit Office (NAO), the government's spending watchdog has raised concerns about accounts from the Department for Education relating to its academy programme. They have "qualified" its signing off of the department's accounts for last year because of "errors and uncertainties".

Tonmoy Kumar, Manager of the Accounts Department of ABDS and an active school governor comments:
“Academies are semi-independent but state-funded schools which have more control over their finances, staff pay and conditions and the school day than other maintained schools.  The government is encouraging all good schools to switch to become academies and where schools are said to be failing to improve, they can be turned in to academies too. Nearly 3,000 academies were consolidated into the DfE's accounts during 2012-13.”

The NAO says part of the problem was that while the DfE finances operate in the normal financial year, ending in the spring, academies work to the academic year and produce accounts at the end of August.

To get around this problem, the NAO says the DfE and the Education Funding Agency (EFA) -which channels the money for academies - "hypothesised" financial data for the year to the end of August 2012.

The other problem cited by the NAO was that the EFA made an assumption that all land and buildings used by academies should be assumed to belong to them and therefore be counted as assets in the DfE accounts, when in reality some are leased or belong to other bodies, such as religious groups in the case of faith schools.

A spokesman for The Department for Education said: "We are pleased that the NAO has signed off these accounts but at the same time we note their comments and are committed to improving the process further.

The NAO "qualified" the accounts of six big government departments out of 17 last year.

If you need any help and advice with Free Schools, Academy Schools or Charities, contact Lavinia Newman or Peter Ham now to discuss how ABDS can help bring their experience to these matters.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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