DfE push for academy schools to automate financial reporting
In a bid to inprove the quality of financial reporting at academy trusts, the Department for Education (DfE) has launched a new academies chart of accounts as the first step to automated financial reporting
20 May 2019
This is intended to provide the standard for financial data that underpins the academies' accounts return and budget forecast returns. Reports from the National Audit Office have previously highlighted issues regarding the ‘truth and fairness’ of the reporting of academy finances in DfE accounts, not least because the department’s year end differs from that of the academies themselves.
Academy trusts that choose to adopt the standard will benefit from potential automated data transfer from their finance system for financial returns relating to the 2019/20 financial year. DfE says an additional benefit is that this provide richer and more accurate financial benchmarking information allowing academies to compare their finances with other similar academies with greater confidence.
Lord Agnew, Parliamentary under secretary of state for the school system said: ‘We have recognised that the current system of submitting financial data to the department is time consuming and offers insufficient benefit to academy trusts.
‘By having a standard chart of accounts, we create the essential building blocks for the new system as it provides a consistent way of recording financial data for all academy trusts.
‘This will allow us to reduce the burden on trusts through the electronic submission of financial data directly from finance systems and adding greater value to trusts by enabling us to create new financial efficiency tools as well as improve the timeliness and quality of the existing tools.’
The department says adopting the new chart of accounts will require an investment of time and effort from trusts, but says this will lead to significant future benefits. For example, around 65% of the accounts return comes from data within a trial balance, so being able to have that data pre-populated will be very helpful to trusts.
Adopting the academies chart of accounts is voluntary.
DfE guidance, Academies chart of accounts