NAO questions DfE’s handling of academy finances

The National Audit Office (NAO) has questioned the Department for Education’s (DfE’s) handling of the financial statements of academy trusts, saying the current system ‘does not give a true and fair view’.

Amyas Morse, head of the NAO, has provided an ‘adverse opinion’ on the truth and fairness of the DfE’s group financial statements. An adverse opinion indicates that the level of ‘error and uncertainty’ is deemed to be ‘both material and pervasive’.

The issues stem from the fact that the DfE has a different reporting period from that of academy trusts, as the DfE produces financial statements by a year end of 31 march, whereas academies have a year end of 21 August - inline with the end of the academic year.

The NAO suggests that this poses a ’significant challenge’ in providing accurate financial statements and has concluded that the current approach does not give a ‘true and fair view’ of the departments financial performance or position.

Morse said: “Providing Parliament with a clear view of academy trusts’ spending is a vital part of the Department for Education’s work – yet it is failing to do this. As a result, I have today provided an adverse opinion on the truth and fairness of its financial statements. The Department will have to work hard in the coming months, if it is to present Parliament with a better picture of academy trusts’ spending through the planned new Sector Account in 2017.”