ESFA joins Santa by producing their own “Naughty List”

“They’re making a list and checking it twice,
Gonna find out who’s naughty and nice”


These words have a little more meaning than ever this year as Eileen Milner, Chief Executive of the Education and Skills Funding Agency, decided to forego Christmas cards and instead send a letter to all Chairs, CEOs and CFOs announcing the ESFA is producing its own Naughty List in 2018.

The production of a new list is based on the fact that the ESFA is changing its approach to academy trusts’ non-compliance with financial returns processes. Essentially, if a trust is late submitting, or even does not submit at all, two or more of the annual financial returns then they are named and shamed in public….and Father Christmas may not make a visit to their office chimney next December.

The rationale for this is understandable. If you receive public money then you have to comply by the rules of the game. The reality is that one in every 20 trusts does not submit their accounts in time and, as the ESFA points out, “it is essential that we receive returns on time in order for the ESFA to maintain its assurance to Parliament through the Sector Annual Report and Accounts (SARA). Missing or late returns have a detrimental impact on the accuracy of reporting and also our ability to provide timely support to trusts with potential financial issues.”

The letter received by all MATs implies, however, that people are just ignoring the rules. From my experience this is not the case. Trust’s don’t meet the deadline because the CFO is too busy basting the turkey and buying Secret Santa presents…the issue is that the production of the accounts takes time and can throw up some significant issues that need careful planning, consideration and management.

So how can you ensure that your trust can stay off the naughty list?

There are five key considerations:

Don’t bury your head in the sand:

If you go into the academy world thinking that financially you can do the same thing the day after conversion as you did the day before, with no plan, then you are setting yourself up for failure.

So, if you are one of the hundreds of new Trusts, make sure you know what is around the corner and be ready to comply by the rules of the game. Just as academy conversion brings some freedoms, it also brings rules and regulations. Be aware of them, understand what is required and prepare for them from day one. Don’t leave it to the last minute.

Don’t reinvent the wheel:

To be fair to the ESFA, they are pretty clear about what they want when it comes to financial returns. The reason for this is that they want consistency about how accounts are calculated and developed so that they can compare and contrast – so don’t try and produce something that is easier for you. That is how you fast track your way to the naughty list.

Start Early:

Accounts aren’t produced in isolation. In many circumstances, you will need to get pension details from LAs or data in relation to PFIs etc. Understandably, in many cases LAs respond to requests for information in weeks rather than days – so ask for the information early.

Manage Risk:

Understanding where you’ve come from, where you are now and where you need to be will help you understand the risks you will face in the academy world. Risk isn’t just your buildings, money or falling numbers. It is far more extensive than that. How you plan to handle those risks is a measure of how strategic the people in the Trust are.

Include risk evaluation as part of your thinking around returns. If you see risk, have a strategy in place to manage it so when the ESFA comes a calling you can show that there is a plan in place to get you to more stable ground.

Engage the Support:

Buy in the best quality support you can afford. It is virtually impossible to do everything a Trust must do without external support and advice. A TEAM is the best way to succeed, not a group of individuals.

When critical milestones happen, like reports, use external resource to challenge and quality assure what has been produced.

Staying off the naughty list isn’t your right – you have to work at it.  That’s why J&G Marshall developed Growth Audits and MAT MOTs.  They are processes that look at all aspects of your organisation to test, audit and evaluate how robust you are to be able to manage the challenge of running a Trust.

So give us a call to find out how we can ensure you are on the right list when the New Year starts, because being good isn’t about pulling your socks up for the December  31st return, it is about showing your worth all year round. Just like the jolly big man in the red suit, there is always someone watching in academy world!