Internal Scrutiny for Academy Trusts - Are You Measuring What Really Matters?

Internal scrutiny for schools, academies, and trusts is often seen as a compliance exercise, but it's essential for driving improvements across your academy and trust's operations. The Academy Trust Handbook (ATH) requires all academy trusts to have a programme of internal scrutiny in place to provide independent assurance on the effectiveness of risk management, control, and governance processes.

An internal scrutiny process helps you check that the trust's financial and non-financial controls and risk management processes are operating effectively. These education-specific audits need to follow the guidelines of the Academy Trust Handbook (ATH).

If you're not sure whether your internal scrutiny process is measuring what really matters to your school or academy trust, you've come to the right place.

Here, we're discussing how you can define what really matters for your trust and what you aim to achieve from the internal audit process by aligning it with your trust's control framework.

Typical Internal Scrutiny Areas (But Are They Enough?)

According to the ATH, the common compliance areas for academy trusts to cover in internal scrutiny include:

• Governance and management structures and oversight
• Estates management, health & safety
• Strategic financial planning, efficiency, funding, and budgets
• Cash and banking
• Monthly financial closedown
• Management accounts and related information
• Procurement
• Related party transactions
• Human resources
• Payroll
• Induction and training
• Safeguarding
• Whistleblowing
• Fraud and theft
• IT systems, cyber security/risk mitigation, data management and protection
• Business continuity plans/disaster recovery
• Risk protection arrangement and Insurance
• Environmental, social and governance (ESG) issues, including sustainability

How Internal Scrutiny Can Add Real Value

In the report from your internal scrutiny partner, you may have been given recommendations to tweak your academy trust's processes or take steps to ensure your academy's compliance with the ATH rules.

Working on the recommendations in the Academy Internal Scrutiny report is an effective way to improve your academy trust's operations. But the real value addition comes in the form of being proactive in implementing recommendations and using scrutiny insights to strengthen governance.

Be Proactive in Implementing Recommendations

As outlined in the ATH, the internal scrutineer will provide individual reports to the audit and risk committee, allowing the committee to review each one during its meetings. In addition, an annual summary report will be submitted, and for larger trusts, progress reports will also be provided—highlighting, for instance, progress against the plan and key findings or results.

The true value of internal scrutiny lies in the actions taken in response to its recommendations. Rather than viewing findings as criticisms, consider them opportunities for improvement. Some providers, such as Keystone Knowledge, offer added value by not only carrying out the audit but also supporting the implementation of their recommendations.

Use Scrutiny Insights to Strengthen Governance

Internal scrutiny provides insights that can help trustees and leaders make informed decisions. Use these findings to refine your risk management strategies and strengthen overall governance. An effective internal scrutiny programme helps trustees discharge duties to oversee controls.

Keystone's internal scrutiny service provides the tools and expertise needed to protect your academy trust and stay ahead of compliance requirements, ensuring the best outcomes for your trust and its pupils. Our tailored service includes a deep understanding of the challenges faced by academy trusts.

Scrutiny of Central Services Value

Internal scrutiny of the schools within a multi-academy trust helps you gain a deep understanding of the cost-effectiveness of central services, including HR, finance, IT, and governance. You can assess whether central services are providing good value across all the schools in your trust, as well as if their services are improving efficiency in your operations.

Internal scrutiny can also highlight any inconsistencies, gaps, or overlaps that may act as a barrier to performance or raise costs.

The Focus of Internal Scrutiny in Education

The ATH explains that internal scrutiny work must focus on:

• Evaluating the suitability of, and level of compliance with, financial and non-financial controls. This includes assessing whether procedures are effective and efficient, and checking whether agreed controls and procedures have been followed
• Offering advice and insight to the board on how to address weaknesses in financial and non-financial controls. In this way they can act as a catalyst for improvement, but without diluting management's responsibility for the day to day running of the trust
• Ensuring all categories of risk are adequately identified, reported, and managed

The internal scrutineer(s) can:

• Give assurance.
• Help the trust improve governance, risk and control arrangements.
• Provide comfort that the trust is doing the right things in the right way.

An independent scrutineer supports the trust in meeting the requirements of the ATH while also strengthening its governance and accountability framework. This, in turn, helps management stay focused on delivering its key priorities.

What Is the Link With Risk Management?

The planning of the programme of internal scrutiny must be a risk-based exercise between the trust board, the audit and risk committee, and the internal scrutineer - with input as required from the trust's CEO and CFO. Each trust will have a distinct risk profile.

The programme of internal scrutiny will be informed by the trust's risk register, which is owned by the trust board, with advice from the audit and risk committee. The risk review process is iterative and the findings of the programme of internal scrutiny in turn inform the risk register. Risk scores are influenced by internal scrutiny work and risks are updated accordingly.

For further guidance on risk management, please read the DfE's good practice guide on academy trust risk management.

Integrating Impact Measurement into Regular Processes

Measuring the impact of internal scrutiny in academy trusts should be a continuous process. Ideally, you should integrate the assessment of the impact into your termly reviews, governance reporting, and improvement planning cycles.

Measuring and monitoring the impact of compliance processes ensures your school or trust management is accountable, encourages improvement, and makes further adjustments if you're not seeing the expected results.

Partner with Keystone Knowledge for an Impactful Internal Scrutiny Process

Our internal scrutiny process is compliant with the ATH handbook and DfE regulations, designed to help you add value to your academy trust and measure what truly matters to your goals.

The team of education specialists at Keystone Knowledge deliver a comprehensive internal scrutiny process, providing you with practical recommendations for improvement based on a knowledgeable, holistic view of your trust and school operations.

Get in touch to learn more about our tailored internal scrutiny for schools.