Q&A: the role of an academy trust’s accounting officer

In accordance with the Academy Trust Handbook, there are a number of key roles within an academy trust which have crucial parts to play in the overall running, and success, of the trust. As well as having members, trustees, and a chief financial officer, academy trusts are required to appoint an accounting officer.

How is the accounting officer appointed?

An academy trust’s accounting officer is appointed by the board of trustees in writing who, in accordance with the Academy Trust Handbook, must appoint a named individual as its accounting officer.

Who can be an accounting officer?

The trustees are required to appoint a senior executive leader (who may also be appointed as a trustee). It is specified that, in the case of a single academy trust, this should be the principal, and in the case of a multi academy trust, it should be the chief executive officer, or equivalent. Therefore, whilst the role of principal or, in the case of a multi academy trust the chief executive officer, and the role of accounting officer are separate, on a practical level they will be the same person.

It should be kept in mind that this requirement is a ‘should’ rather than a ‘must’ in the Handbook and therefore, whilst it is the Department for Education’s strong preference and is the minimum good practice which should be applied, it is possible for an alternative decision to be made where the trust can demonstrate that the alternative approach better suits the trust’s circumstances.

We do advise that if you are considering moving away from the Department for Education’s preference, you have a strong reason to do so, and you may wish to seek approval. Indeed, if the trustees propose to appoint an accounting officer who is not an employee of the trust, it will need ESFA approval which will only be granted in exceptional circumstances.

What makes an individual suitable for the role?

Whilst the individual appointed to the role of accounting officer is expected to be the principal or chief executive officer, and therefore the scope for appointment is limited, it is specified that the accounting officer must be a fit and suitable person for the role. It would be expected that any individual who is appointed to take on the role of principal or chief executive officer would possess the transferable skills to enable them to take on the role of accounting officer successfully, but this should be kept in mind by the trustees when they are considering appointments.

What is the role of the accounting officer?

The accounting officer has specific responsibilities for financial matters in the trust.

Primarily, the accounting officer will maintain oversight of financial transactions in the trust by:

• ensuring the academy trust’s property and assets are under the trustees’ control
• ensuring that measures exist to prevent losses or misuse
• ensuring bank accounts, financial systems and financial records are operated by more than one person
• keeping full and accurate accounting records to support their annual accounts

Each year the accounting officer must sign a statement on regularity, propriety and compliance which is submitted to the ESFA with the audited accounts. Within the audited accounts they are also required to prepare a governance statement setting out how the trust has secured value for money.

In considering the regularity and propriety of a transaction, the accounting officer should consider whether the expenditure is in the best interests of the trust, and whether it will create a valid benefit for the trust. As a public body, the trust also has various procurement rules and policies to adhere to, and therefore the accounting officer should also be satisfied that, where necessary, any transaction complies with these rules.

This can be achieved via a number of methods, including reviewing management documents, considering whether there is any personal benefit to an individual if the trust enters into a transaction, and considering any conflicts of interest, and reviewing minutes of trustee meetings to ensure that they are comfortable with the decisions being made by the trustees.

The trust may also have in place a number of policies to assist the accounting officer in performing their role, such as a tendering policy. The accounting officer should ensure that they are familiar with any such policy and have the necessary oversight to be able to consider whether it is being adhered to.

Who is the accounting officer responsible to?

The accounting officer has a personal responsibility to Parliament, and to ESFA’s accounting officer, for the trust’s financial resources. They must be able to assure Parliament, and the public, of high standards of probity in the management of public funds, particularly regularity, propriety, and value for money, and must adhere to the 7 principles of public life.

The accounting officer must also take personal responsibility for assuring the trustees that there is compliance with the trust’s funding agreement and with the Academy Trust Handbook. This may include reporting to the audit and risk committee and working closely with the trust’s finance team. As part of this responsibility, the accounting officer must be confident in advising the trustees in writing if any action being considered is incompatible with, or if the trustees fail to act where required by, the trust’s funding agreement, articles of association, or the Academy Trust Handbook.

If the trustees proceed with an action against the accounting officer’s advice, the accounting officer must consider the trustees’ reasons and, if they still consider that there will be a breach of the articles of association, the funding agreement or the Academy Trust Handbook, they must notify ESFA’s accounting officer immediately in writing.

Practical steps

The Academy Trust Handbook is a key document when considering the roles and responsibilities of individuals within your trust, including the role of the accounting officer. The Academy Trust Handbook is updated on an annual basis, and you should therefore ensure that you keep abreast of updates to ensure that all roles, including the accounting officer, are carried out in accordance with the requirements.

You should also ensure that the accounting officer, together with the trustees, have a clear understanding of the requirements set out in the trust’s articles of association and funding agreement to ensure that decisions are always made appropriately.

The Department for Education does update its model articles and funding agreements for academy trusts, so we recommend that you consider whether it is now necessary to update your trust’s articles and/or funding agreement if they are out of date.