Internal Audit

Previously known as responsible office services

It is a requirement of the Academies Financial Handbook that the Audit Committee obtains assurance from an appropriately skilled and experienced auditor, that the internal financial control framework protects the trust from misappropriation of resources.

Because we’re a specialist firm that focus precisely on services to the academy sector, we can provide these statutory services at the highest quality at a fraction of the cost of large accountancy practices.

If required, we can provide internal audit services in other areas of risk as identified by the trust’s risk register. The fee structure described in this section focusses on the cost of audit of financial controls as required by the Academies Financial Handbook, but charge out rates used in the calculation of fees for other areas are provided for information.

You can be assured of the competence and quality of our work because...

  • Academy Advisory Ltd is a regulated by the ACCA, the world’s largest global body of accountants.
  • We act as internal auditors for over 70 academies across the UK.
  • Our team works as both auditors and finance directors within the sector.
  • We know the challenges you face running your trust because we help to run them too.
  • Each audit visit will be reported formally and summarised for the Trust audit committee
Association of Chartered Certified Accountants

How much will these services cost?

Annual planning will cost £400.00 for a small MAT and £800.00 for MATs with over 10 academies.

PRIMARY

Audit fee per visit (including reporting)

Single Academy Trust

£600.00

SECONDARY

Audit fee per visit (including reporting)

Single Academy Trust

£800.00

The fee includes reporting (example reports are available, so you can see the quality and user-friendly design of our approach).
Discounts are available in the event of academies sharing finance and administrative functions.


Additional assurance work

In the event of additional assurance work being required we will submit a quotation based on estimated time of delivery and our current day rates. Below we have included the daily charges out rates for key members of the team:

DIRECTOR / ASSOCIATE DIRECTOR

Daily rate

£475.00

SENIOR CONSULTANT

Daily rate

£400.00

ACCOUNTANT / INTERNAL AUDITOR

Daily rate

£300.00

ASSISTANT

Daily rate

£250.00

The Risk Management Cycle

Risk management is a process of understanding and managing the risks that the organisation is subject to in attempting to achieve its strategic objectives. The risk management framework is a vital business process; ideally risk registers should be a living and breathing part of regular senior leadership meetings both at academy and trust levels.

Four key stages

Identify

Identify

STAGE ONE

Assessment

Assessment

STAGE TWO

Mitigate

Mitigate

STAGE THREE

Monitor and Report

Monitor and Report

STAGE FOUR


Identify

Identify

The first stage of risk management is to identify the risks that most affect the organisation. These risks are summarised in the Risk Register.

Assessment

Assessment

Once the risks have been identified, they are assessed and risk ratings are attributed according to probability and potential impact.

Mitigate

Mitigate

The third stage is to identify any controls that exist, or that could be put into effect in order to reduce risk. A good example would be health and safety compliance, where a member of staff will be accountable for checking compliance and approved suppliers used in order to ensure regulations are adhered to.

Monitor and Report

Monitor and Report

The controls that help to mitigate risk are subject to internal audit checks or other internal monitoring. Monitoring activities are summarised into reports that are received by the audit committee, allowing the committee and board to assess the adequacy of the internal control framework, and to assist in the planning the next round of internal audits.

  • The role of internal audit is to provide independent assurance that an organisation's risk management, governance and internal control processes are operating effectively.

    The Academies Financial Handbook requires that trusts have, “a process for independent checking of financial controls, systems, transactions and risks”. Therefore there is a requirement for the financial control framework to be independently verified. Other areas of the Risk Register can be included within the scope of internal audit if assurance is required.

    Below we provide a breakdown of the typical work we conduct on mandatory areas (financial controls), but typically additional audit work is undertaken to provide assurance for other areas of high risk, (as indicated by the trust's risk register).

  • We plan our work carefully and will undertake an initial visit at the trust’s centre to ensure the management structure and processes are documented. It is vital that the structure of the trust’s management is fully understood through robust audit planning, as different MATs have differing levels of decentralisation, and it is important to tailor tests accordingly to ensure an efficient and effective audit.

    There are two key elements to the internal audit work programme; tests to be conducted at the trust’s centre and those undertaken at academy level.

    1
    Trust level review will be tailored to suit the management structure of the trust, but indicative themes are provided below:
    • Review policies in place at the trust and how they are implemented operationally
    • Review the controls in place centrally in order to ensure effective management of academies
    • Review the risk register and key central controls that mitigate those risks
    • Review the financial systems and controls in place at the trust’s centre are effective
    2
    The following tests are often carried out at academy level, but will be tailored to suit the needs of the trust. They’re included below to provide an indication as the usual scope of work:
    • Review a sample of purchase orders for each academy, reviewing adherence to trust policies
    • Review any leases / contracts held to ensure documentation is available.
    • A sample of capital grant expenditure items are reviewed to ensure spend is in line with trust policies and grant terms
    • A sample of income transactions are reviewed to ensure prompt recording and banking takes place, in accordance with policies
    • A sample of payroll transactions are reviewed to ensure pay is in accordance with HR records and policies
    • A sample of new starters are reviewed to ensure they have been properly authorised in accordance with trust policies
    • A sample of expense claims are reviewed to ensure spend is appropriate and authorised in accordance with trust policies
    • All ex-gratia payments are reviewed to ensure they’re in line with trust policy.
    • A sample of business card transactions are reviewed to establish whether they’ve been properly authorised and incurred in accordance with trust policy
    • A sample of journals are reviewed to ensure they’re appropriate, and have been authorised in line with trust policy
    • We review petty cash transactions to establish whether transactions over the authorised limit have been made
    • We review whether month-end petty cash has been properly reconciled
    • We review whether month-end bank balances have been properly reconciled
    • We establish whether the academy budget has been approved by the trust in accordance with stated policies
    • We review petty cash controls and balances (to establish whether the authorised limit has been exceeded)
    • We review and test the procedures and controls around non-grant income, covering areas such as: trips; facilities hire; catering; and donation income.
    • We review monthly management accounts to identify any financial issues, and to gauge the effectiveness of budgetary control.
    • We enquire as to the level of communication with the academy principal
    • We review any disposal of assets to ensure they’re in accordance with the ESFA Financial Handbook and trust policy
    • We review the procedures in place at the academy to capture any potential conflicts of interest
    • We review any related party transactions and report any that may be of significant issue
    • All previous recommendations of internal audit are followed up and considered as part of our reporting
    • We consider the findings of and liaise with External Audit
    • We review for any instances of whistleblowing and / or fraud
  • The audit committee may wish to utilise our audit services to review other specific areas. This is something that many of our clients do, utilising internal audit review areas of key risk, as identified by the risk register.

    Areas we often are asked to cover by specific internal audit reviews include:

    • Governance (including trust-level compliance to handbook and governance structures at local levels)
    • Fixed assets
    • Procurement and contract management
    • ICT strategies
    • Estates strategies
    • HR policies, systems and controls
    • Review of policy framework
    • Business and strategic planning processes
    • Budget preparation processes and procedures
    • Management reporting
    • Management of trips

    Any results of additional reviews would be included in our reports for consideration by the Audit Committee.

  • Following each visit to your academies we will meet with trust management to brief them as to findings.

    We will also agree the focus of work or any additional areas of coverage for the next round of termly visits.

    Our approach is based upon a foundation of our tried approach to testing, but we will always supplement this with bespoke testing, amended sample size and / or reviews in areas of the business that may be of concern to management or trustees.

    Our approach will be agreed with you in advance and detailed formally in the internal audit plan prior to the commencement of final audit work.

  • Each academy will receive an individual audit report detailing findings and risk-rated recommendations.

    Following the conclusion of all academy audits, a trust audit report will be prepared which consolidates the results of all academy internal audit testing and provides useful overview and dashboards to assist the audit committee in identifying areas of risk.

Meet the team

Our leadership team

Chris Whiting

Chris Whiting FCCA

FINANCIAL SERVICES

Peter Cox

Peter Cox

EDUCATION SUPPORT SERVICES

Ralph Hilton

Ralph Hilton

ESTATE SERVICES