June 14

Academies Internal Scrutiny…top tips

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As the end of the Academic year is fast approaching and year accounts loom we wanted to share with you some of our top tips from our work on internal scrutiny that may support your year-end or plans forward.

Top tips to getting more from your Internal Scrutiny…

  1. In-year structure
    • We work with our clients to understand their systems and structures and develop a simple cloud filing structure:
      • It is designed to create a year end file all through the year
      • It follows the external audit file so that finance teams can really think about how the auditor works and get good information ahead of the audit that can be used in the year rather than after the year end
      • The internal auditor can carry out in-year testing from this structure which is not only efficient but encourages a more proactive internal check
        • e.g. if they ask for additional information this can be filed in the structure and its ready for the external auditor
      • In time our aim is our clients can design their own in-year checks and the internal auditors work can become very focused around the needs of your academy
        • moving away from generic workbooks providing even more value for money.
  2. Management accounts
    • This is the backbone of your financial reporting systems.
    • A good internal audit should give a thorough review of your process and give advice to support you.
    • The ESFA are continuing the investment in driving Trusts to produce good quality and reliable data in house
      • Reliance on the external auditor/accountant should be reduced.
    • If you are not already putting more investment into your management account systems and structures we would encourage you to do this in the new Academic year.  The results will be far reaching:
      • Your Boards will have data in time
      • You can create a fluid process rather than yet another add on task.
    • Make your management accounts your own:
      • Beyond data is communication of the numbers.
      • The accounts need preparing monthly but perhaps there is more in-depth analysis or overview that can be conducted quarterly:
        • to encourage time to be better spent
        • increased participation by senior leadership.
  3. Payroll
    • We ensure our payroll internal reviews are conducted by a qualified payroll manger which provides lots of value to our Trusts.
      • Payroll is complex in schools and even more so with pensions and furlough.
      • We have seen cases of errors undetected and being clawed back over many years.
      • A good internal review should give a thorough check of your processes and offer proactive advice of safeguards and best practice.
  4. Fixed Assets
    • This is an area is often considered at year-end but can have some big implications on funds and balance sheet position.
    • Our top tip is to get familiar with they way that your year-end accounts use fixed assets with fixed asset funds so that you are reporting the very strongest balance sheet position to your Boards.
      • Depreciation needs to be considered monthly.
      • With tight budgets a depreciation journal can often result in an in year deficit in-year.
    • Valuation of fixed assets is also a difficult area.
      • Work closely with your external and internal advisors well ahead of year-end as these numbers have a big impact on the solvency of balance sheets in many cases.
      • Free schools often have complex consideration in this area and again early discussions will ensure the management accounts are accurately reporting in line with the year end accounts.

At Infinitas we have been working with the Education and Charity Sector for 20 years and we work all through the year with our clients to support their finance teams and Boards with training, systems and proactive value added focused service. 

If you would like to discuss this subject or any other aspect of your service please contact caroline@infinitasaccountants.com  


academy accountants, education sector, internal scrutiny, top tips

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