Key Insights from Academy’s 2018 Financial Handbook
In our latest Academy video Tracey Johnson, Partner and Nicola Mason, Corporate Senior Manager discuss the Academy’s Financial Handbook.
The latest financial handbook was published in June and applies from 1st September 2018. The focus has been on providing increased clarification and further emphasis in several areas, mainly standards of governance for trustees and their responsibility for financial management.
Tracey Johnson and Nicola Mason cover the main changes that trustees need to make themselves aware of to ensure that they are compliant by 1st September 2018, such as:
- Many of the requirements that were previously designated as good practice and under the category of trustees ‘should’ do this, have now been re-designated as a ‘must’ for trustees. This affects the requirements regarding the preparation of management accounts
- Trusts must prepare monthly management accounts
- Management accounts must include accounts budget variances, cash flow forecasts and sufficient information about cash balances and debtors and creditors to enable them to be properly monitored. These must be shared with the Chair monthly and with the rest of the Board 6 times a year.
- Boards must meet a minimum of 3 times a year. If they meet less than 6 times a year there will be a requirement to provide narrative in their Annual Report to explain how they have maintained effective financial oversight throughout the year.
- From 1st April 2019, if a trust is going to enter into a transaction with a related party which is either more than £20,000 or takes the total of transactions with that related party to over £20,000 in that financial year, then they will need to get advanced approval for that transaction. Trusts will also need to get approval for any novel, contentious or repercussive transactions.
All the changes are included in the front of the Financial Handbook and we would recommend that all trustees, accounting officers and senior management read through the whole document.
There is also a schedule of requirements which must be complied with at the back of the Handbook and we would recommend this is being used as a checklist each year.