Internal Assurance Requirements for Academies – Changes from September 2020

Oct 21, 2020 | Finance Posts

Internal Assurance Requirements for Academies – Changes from September 2020

Among the changes in the updated Academies Financial Handbook (AFH) 2020, the ESFA makes clear that the Internal Audit function for Academy Trusts can no longer be carried out by the Trust’s External Auditor.  Separating these functions provides necessary independence and therefore additional individuals or organisations can be used to support the process of internal scrutiny, which covers both financial and non-financial controls.

Whilst the Finance and Audit Committees of many Academy Trusts have for some time ensured separation between their providers of Internal and External Audit services, for others this represents a shift.

How can Campion help?

As a provider of Financial Advice to Schools and Academies registered with the DfE, we are working with Trusts to support this process.  Our financial consultants are all experienced Chief Financial Officers and Finance Directors who, prior to working for us, worked in Senior Leadership teams in Academy Trusts, reporting to Trustees and stakeholders such as the ESFA.  We have many years’ experience of supporting Trusts in areas such as Internal Audit & Assurance and Risk Management to ensure they are compliant with the requirements set out in the AFH.

How does it work?

Internal Audit services are structured so as to provide support to the Trust in fulfilling its responsibilities for internal scrutiny and the management of risk.  This work is generally driven by the Trust’s Audit and Risk Committee, whether that is separate or incorporated within the Trust’s Finance Committee.  We provide support and guidance for the Committee in setting an appropriate annual programme for Internal Audit each year.

Through our Internal Audit work our aim to provide Trusts with assurance in relation to their various internal controls processes, including their own financial procedures, and we carry out a full range of testing against those controls to assess the level of compliance.  Based on that assessment and other findings, our reports provide recommendations to support Trusts with their review and improvement agenda.  We also support Academy Trusts with procedures for the effective management of risk and prioritisation and this links closely with our testing programme.

The format of our reports is simple in layout and straightforward, prepared with both the financial specialist and the non-specialist in mind, to ensure as full an understanding as possible in order to bring about any necessary improvement or development.  We draw on any relevant context, and ensure Trusts are updated on developments to the ESFA’s AFH each year.  Our Internal Audit services also include ongoing telephone support so that the Trust is able to seek advice or clarification when needed.

How does this work alongside External Audit?

Campion has always promoted the good practice of separating both the preparation of Academy accounts and External Audit services from Internal Audit and Assurance.  As a result, we are well used to respecting and understanding differences in roles and to preparing reports of the high standard required to enable the Trust’s External Auditor to factor our own findings into their overall assessment of Risk.  External Auditors are well used to this system and generally favour the approach as a means to further reduce Risk.

Contact for Further Information

In these difficult times when Schools are focused on day-to-day business while also managing the circumstances around the pandemic, we understand that getting around to AFH updates and taking action can feel virtually impossible, so why not let Campion help?  If you would like further details or to discuss the support we can provide, contact

*Campion Financial Consultancy Ltd holds professional indemnity insurance and our Internal Audit services are procured via formal contract.