Academies Accounts Direction 2021 to 2022

The Education and Skills Funding Agency (ESFA) have recently released the Academies Accounts Direction (AAD) 2021 to 2022.

The current year changes are not significant, but the key ones have been highlighted below. The full publication can be viewed here. Note that many of the changes will only be applicable to certain circumstances or rather than applying to all Academy Trusts.

Non-compliance with the direction

The ESFA has issued updated feedback on non-compliance with the direction. Additionally, It also has found a number of ‘problem’ areas that they feel could be improved upon within Academy accounts. This includes emphasising that it is the trustee’s responsibility to ensure the contents of the accounts fairly reflect their Academy Trust’s performance and circumstances are compliant with the financial reporting framework. Whilst ensuring that the narrative should be relevant to, and reflect, the performance and circumstances of the particular year.

Trustees’ report

The AAD now clarifies that an Academy Trust should be in line with the Charities Statement of Recommended Practice (“SORP”). It must describe the organisational structure of any subsidiaries within their trustees’ report. The ESFA also requires them to describe the organisational structure of any joint ventures or associates.

Governance statement

A new section has been added to the governance statement. It requires Academy Trusts to explain how conflicts of interest are managed.

Severance payments

New disclosure requirements have been introduced. Whereby any severance payments made by the Academy Trust must be disclosed in set bandings. These are in line with guidance issues by HM Treasury for public sector bodies.

Business rates

From the 1 April 2022 the business rates payments process within Academy Trusts is changing. They will no longer be required to pay their business rates bill and then submit these to ESFA to recoup the costs. Instead, the ESFA will pay the bills on the Trust’s behalf direct to the billing authority. Despite no longer making the cash payments, the Trusts will retain liability for their business rates so will still need to account for their business rates within their financial statements.

Service concession arrangements

Where Academy Trusts are committed to such payments, they are also encouraged to provide narrative to support the numerical disclosures to describe what these payments relate to. These arrangements most commonly arise where the Trust occupies premises that are managed by a private sector contractor. but owned by the local authority.


There is new guidance on accounting for buildings whose construction was overseen by Department for Education (DfE) or a local authority and transferred to the academy trust on completion, although this just seems to clarify matters rather than changing the required treatment.

Dormant accounts

There is no longer a requirement to submit dormant accounts to ESFA.

Trading accounts for teaching schools

There is no longer a need to produce trading accounts for teaching schools (hubs) as separate notes to the financial statements. There is clarification on where and how such transactions relating to such activities should be shown in the financial statements.

At Carpenter Box we can assist with the preparation of statutory accounts for academy trusts of all sizes, statutory audit as well as services including internal scrutiny, academy accounts returns and Teachers’ Pension Scheme audit. If you would like to discuss anything further, please get in touch with a member of our academies team.