On 27 March 2024 the ESFA published the latest Academies Accounts Direction (AAD), along with an updated set of model accounts. 

There are no major changes compared to previous versions of the AAD, although some clarification has been included around specific accounts disclosures. For example, the ESFA have confirmed that all material grants (including 16-19 core funding) should be separately disclosed in the notes to the accounts, and that other employee benefits (including non-monetary benefits) should be included within the staff costs disclosure note.  

The valuation of academy premises has always been an area of judgement in academy accounts, and the latest AAD suggests some available information sources which may help academies determine an appropriate fair value, including professional external valuations or assessing the value of incoming assets from a transferring trust. Specifically, the ESFA note that DFE or insurance valuations are unlikely to be appropriate for accounts purposes. 

From a governance and regularity perspective, there is greater emphasis on the “review of effectiveness of the system of internal control” disclosures, with the requirement to include a specific conclusion in this area of the accounts. This is likely to be in response to one of the main themes coming out of the ESFA's review of the prior year accounts, audit findings reports and internal scrutiny reports, as their feedback to the sector suggests that internal scrutiny arrangements are not always adequately reflected in the accounts or appropriately directed by the trust board or audit committee. 

The latest AAD is relevant for academy trusts preparing financial statements for the year ending 31 August 2024. Please get in touch if you would like to discuss any of these updates in more detail as you approach your year-end preparation.