Academies Accounts Direction 2020 to 2021

With the summer term approaching, The Education and Skills Funding Agency (ESFA) has recently released the Academies Accounts Direction 2020 to 2021. The most noticeable change is that the direction has been separated into three individual documents as follows:

  1. Academies Accounts Direction 2020 to 2021
  2. Academies model accounts 2020 to 2021
  3. Framework and guide for external auditors and reporting accountants of academy trusts

Whilst the full publication can be viewed here, a summary of the key changes are provided as follows:

Trustees’ report

Further clarity is provided on the content of the financial review section that is included in the trustees’ report. The review must cover a handful of ‘musts’ which includes explaining:

  • the financial effect of significant events on financial performance
  • the trusts principal risks and uncertainties and
  • the overall financial position of the trust (based on the balance sheet).

It must also identify and explain funds in deficit and describe the key factors that may affect future performance.

The financial review should also explain:

  • the financial performance during the year (based on the Statement of Financial Activities) and
  • the investment policy in place.

It should also describe the principal sources of funding and any fundraising practices.

Classification of funding

The direction now explicitly states the classification of certain funding sources to better align with the Academies Accounts Return. The ‘funding for the academy trust’s educational operations’ note must now split out the material grants received from the Department for Education and the ESFA (e.g. pupil premium and UIFSM).


A reminder has been added for trusts to correctly identify, classify and treat finance and operating leases.

Auditor opinion

The direction has been updated to help trusts to understand the different types of audit opinion that may be issued by the external auditor.

Good practice and feedback

The direction makes greater reference to the ESFA’s good practice guides and a new section has been introduced which provides feedback from the ESFA to the sector relating to application and compliance with the direction. A key focus of the feedback included in this direction was in relation to the governance statement which stresses the importance of ensuring all disclosure requirements are met.

Changes likely to apply to fewer trusts but still to be considered

There is now clarification that service concession commitments (e.g. payments under secondary agreements with local authorities) must be disclosed as part of the long-term commitments note.

The staff costs disclosure requirements have been expanded to include “non-employees”. These are individuals where the trust has entered into an “off payroll” arrangement with them. Where such arrangements exist, the amounts paid to those individuals must now be included in the staff costs disclosure notes as if they were an employee (and the prior year restated as necessary).

If a trust has received a Financial Notice to Improve at some point during the financial year this must be disclosed and explained in the financial review section.

At Carpenter Box we can assist with the preparation of statutory accounts for academy trusts of all sizes. If you would like to discuss anything further please get in touch with a member of our Academies team.