The importance of compliance and some lessons learned for academy trusts

We look here at why compliance is important and some key observations from our compliance work with academy trusts.

In the early stages of any new government, we wait to see how government policy will develop by drawing on manifesto commitments made during the election campaign and other priorities which the government considers to be important for the country. Academy trusts find themselves in this same place as we wait to see how Department for Education (DfE) policy will develop for trusts and the sector as a whole. One thing that should remain as a constant, though, is the importance of compliance whatever form DfE policy takes. We therefore look here at why compliance is important for trusts and some of the key observations from our compliance work for trusts to draw on as they continue to build for the future.

Serving our children and young people

First and foremost, compliance is important because, if trusts are doing things well, they will be best-placed to safeguard and protect the interests of children and young people and help ensure they achieve their full potential both now and into the future.

Safety and wellbeing of our staff and children

If trusts have an effective estates strategy and are complying fully with health and safety legislation, they will be able to ensure the safety of their staff and children and others who visit their premises. If they have policies to care for those with disabilities and look after the wellbeing of staff and children, people will want to work and study with them.

Delivering our strategic priorities

Where we comply with our legal and regulatory obligations, we will be at less risk of things going wrong and therefore on a firm footing to deliver our strategic priorities and safeguard our future.

Discharging our legal obligations

Discharging our legal obligations under legislation and statutory guidance and our contracts with others will avoid the added time, cost and liability which might otherwise arise, enabling us to focus our attention and resources on our priorities for our children and young people and for the trust going forward.

Satisfying the ESFA

We will also satisfy the requirements of the Education and Skills Funding Agency (ESFA) and avoid their intervention or a notice to improve and therefore the diversion of time and resources from other key areas.

Protecting our reputation

Where we comply with our legal and regulatory obligations and adopt best practice, we will protect our reputation by helping avoid adverse opinion in the published media, on social media and in other conversations between children and young people, parents and carers and local authorities and in the sector generally.

Preserving our finances

We will preserve our finances by implementing internal controls to ensure our resources are used for their intended purposes and guard against fraud and by avoiding claims, interventions or other difficulties which divert our resources from our key priorities.

Continuous improvement

Compliance though is more than what we must or must not be doing. Approached in the right way, it should help us continuously improve how we operate by ensuring we do the right thing and learn from best practice.

We include below some key observations we have made during our compliance work with trusts, as we have helped ensure their compliance and improve how they operate.

Safeguarding

We have observed from the records of one trust a missing enhanced Disclosure and Barring Service (DBS) check for a member of staff, trustee or governor or volunteer. This was a key concern for obvious reasons including the potential risk to children and young people and the attention it could attract from Ofsted during an inspection. It may well have been the case that all DBS checks were in place. However, it’s important that records are also up-to-date.

We have also identified a safeguarding policy which didn’t reference the DfE’s prevent guidance. While we don’t doubt the trust was following the guidance in practice, this is something which could cause the ESFA to investigate, which any trust would want to avoid, not least when everything is working as it should in practice.

Section 128 directions

Meanwhile, we have identified some trusts without measures in place to ensure none of their members and trustees are the subject of a Secretary of State direction under section 128 of the Education and Skills Act 2008.

A section 128 direction prohibits someone from involvement in the management of an education institution and section 1.4 of the Academy Trust Handbook specifically requires that no member is subject to a section 128 direction.

We recommend that every trust requires each member and trustee to complete a declaration of eligibility at the start of each school year which (among other things) asks them to confirm they are not subject to a section 128 direction.

Outdated articles of association

Some trusts have had articles of association which are based on an old version of the DfE model document. Whilst not strictly a compliance issue, this could hamper a trust’s ability to keep up to date with DfE policy and follow best practice, for example by holding meetings of members and/or trustees virtually and/or circulating electronic documents when this isn’t fully permitted by their articles of association.

Parent governors

Some trusts have had parent governor vacancies on their local governing bodies. Since each local governing body must have at least 2 parent governors to avoid the requirement to have a minimum of two parent trustees on the board, this could place a trust in breach of their articles of association. Where the DfE queries this, we recommend that trusts evidence to the DfE that they have an election process in place to appoint new parent governors, which should satisfy any concerns they may have.

Published information

We have also identified trusts where their website information and their data on Get Information About Schools (GIAS) and Companies House is inconsistent, principally the details of their members and trustees. This is likely to raise a red flag for the ESFA as an indicator of a trust where there are serious governance concerns, whether this is the case or not, and trigger further enquiries leading possibly to intervention and a notice to improve where other issues are identified. This can be avoided by keeping on top of your website, GIAS and Companies House information and ensuring each data set is consistent, to avoid inviting further interest for the wrong reasons.

Some trust websites have published outdated policies or failed to include all supplemental funding agreements (including their deeds of variation) with the Secretary of State. Other trust websites have published several master funding agreements with the Secretary of State where more than one agreement exists. While this is not a compliance issue in and of itself, it can make it more difficult for a trust to ensure compliance where it is seeking to comply with different agreements. From a risk management perspective, it therefore makes sense to have one master funding agreement which the trust must comply with.

Registers of interest

We have identified registers of interests which are inconsistent or incomplete which could again invite unwelcome interest from the ESFA and which can be avoided by ensuring these registers are complete and up-to-date.

Conflicts of interest

Also of concern is the fact that we have identified trusts who don’t have a conflict of interest policy. Whilst not a technical breach of the Academy Trust Handbook, a good conflict of interest policy can help guard against conflicts of interest becoming a problem by defining what constitutes a conflict of interest, the procedures to be followed where a conflict of interest arises and how these procedures are to be applied and by whom. If you would welcome advice on producing or reviewing your conflict of interest policy, please get in touch.

In summary

Compliance is key to managing risk and safeguarding those in our care and can also help feed a cycle of continuous improvement to secure our future as trusts. Advice and support can help identify gaps in compliance and inform action to be taken to address any issues and ensure trusts secure their future for the benefit of the children and young people they serve. You can find details here of our governance review service which examines trust compliance and the effectiveness of its governance arrangements. If you would like further information or would like to arrange a review, please get in touch.