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Academy Schools Sector in England Consolidated Accounts 2015-16

Amyas Morse, the Comptroller and Auditor General (C&AG), has qualified his opinion on the Academy Schools Sector in England’s consolidated annual report and accounts for the year ended 31 August 2016. Today’s report finds that, despite improvements on previous years, the Department for Education was unable to provide adequate evidence to support the £45 billion of Academy Trusts’ land and buildings included in the accounts.

This year, for the first time, the Department for Education has produced consolidated accounts dedicated to the Academy Schools Sector in England, instead of consolidating the results of academy trusts into its own group accounts. Consolidating 3,013 academy trusts into the Department for Education’s group accounts was challenging as the trusts’ financial year end of 31 August did not match the Department’s 31 March year end. Removing the trusts from the Department’s group accounts enabled the Department to publish its group accounts several months earlier than in previous years and allowed the C&AG to remove his qualification from the Department’s group financial statements.

The report on the Academy Sector Accounts, highlights progress that has been made on accounting for land and buildings but points out that there are still some significant weaknesses. The main weaknesses highlighted are:

  • The frameworks used to produce the Academy Sector Accounts and the individual academy trusts’ accounts are different, meaning adjustments need to be made to some figures. The Department has included in its accounts all land and buildings occupied by academies, regardless of whether they were occupied on a freehold, leasehold or licence basis. This means that the accounts may include land and buildings that do not meet the definition of an asset set by the financial reporting framework.
  • The Department has reviewed the way it values its estate and improved controls over the professional valuation process but its processes to make sure the accounts reflect the current condition of the land and buildings remain weak. The C&AG’s report Capital funding for schools (February 2017) noted the Department estimated it would cost £6.7 billion to return all school buildings across both the academy and maintained sectors to satisfactory or better condition.As well as addressing the specific weaknesses in the valuation of the estate, the report recommends producing the accounts more quickly and enhancing the Annual Report to allow Parliament to scrutinise more effectively how taxpayer’s money has been spent. The Department should consider how it can use the data it collects both to support oversight of academies and provide them with information to improve their financial management.

October 2017

Notes for Editors

1. The Academies Act 2010 granted academy trusts exempt charity status. Academy Trusts prepare their accounts in accordance with Accounting and Reporting by Charities: Statement on Recommended Practice (the Charities SORP). The consolidated accounts of the Academy Schools Sector in England are prepared in accordance with the Government Financial Reporting Manual (FReM). These two frameworks have different requirements on asset valuation.

2. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.

3. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £734 million in 2016.


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PN: 53/17