Internal Control Changes for Academy Trusts

Internal Scrutiny Report

As academy trusts turn their attention to their financial year ends, trustees will need to ensure that their internal auditor will be providing them with an Internal Scrutiny report for 2019/20.The Internal Scrutiny report will need to be submitted with the trust’s audited financial statements by 31st December, but it is important that the document is prepared well in advance of this date so that trustees can review and respond to the issues raised.

As this is the first year of submission of this document, you may also want to agree the format with your internal auditors, as this is not prescribed by the ESFA, although there is a suggested format in their good practice guide.

Changes to Internal Audits

Another change on the horizon for internal audit, was the publication of the Financial Reporting Council’s new ethical standard in December last year.  This change in standard is not particularly aimed at the academy sector and applies across all sectors, but it has been introduced to prevent conflicts of interest and strengthen auditor independence.  The revision may mean that your trust can no longer use the same auditor for both external and internal audit from September 2020.

Trusted Adviser

If you currently use one audit firm for both internal and external audits, you should raise the issue as soon as possible, if you have not already discussed it.

A trust’s external or internal auditor is often a trusted adviser for a wide range of topics so if you do have to go through a procurement process for a new supplier, you should give your trust ample time to complete this thoroughly and ensure the best possible outcome.

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