Published
The ESFA has published useful guidance for academies on the appointment of Auditors. The majority of the guidance focusses on how to find and appoint an auditor and recommends the CPC Audit Services Framework Agreement as an easy way to achieve this. This CPC framework is also recommended by the DfE. The guidance sets out points for academies to consider when tendering for an auditor and as you can see from the summary below, are addressed when using the CPC Audit Services Framework:
Local or national firm - Would a local or national firm suit the needs of the academy trust better? Does the trust have a wide geographical spread which a national firm would be better placed to advise?The CPC audit framework includes a mix of 6 regional suppliers and 6 national suppliers for external audit services
Experience of the audit firm and market presence - Academy trusts are exempt charities and their annual accounts are prepared in charity format. As well as ascertaining the firm's audit experience in the academy sector, it is important to also understand what experience the firm has in acting for charities, auditing them and in preparing charity accounts. Experience with other entities in the Education Sector (such as independent schools, FE/HE institutions etc) may also be helpful. Does the audit firm have a good reputation? Has the firm established itself as reliable and knowledgeable, particularly within the academy sector?The CPC have done this evaluation for you! When establishing the framework we ensured that all the audit firms demonstrated sufficient experience in providing audit services to the education sector including academies and multi academy trusts.
Financial standing - All audit firms are required to carry appropriate professional indemnity insurance. However, you may also wish to establish that the potential audit firm is of sound financial standing itself. A copy of the firm's own accounts may be requested.The CPC have done this for you too! All the auditors on the framework had to initially pass a financial standing test and confirm their professional indemnity insurance. We regularly monitor our suppliers financial standing so we can take appropriate action and reduce risks for our members.
Capacity and resources to take on and service new clients - All academy trusts have a year end of 31 August with a deadline for filing accounts with the ESFA by 31 December. Accordingly, the autumn period is a particularly busy period for academies and audit firms alike. You should therefore establish the structures and/or processes that the firm has in place to ensure that your trust will receive the support and attention it needs to meet your timetables.Not only did CPC evaluate the audit firms approach to this very issue when the framework was established, the mini competition template that comes with the framework includes award criteria relating to how the firms would manage and resource your contract and guidance is provided on the weighting we suggest you place on this criteria.
Sample Management Letter, audit plan and levels of staff involved - Ask the potential audit firms to explain their audit procedures, including their approach to materiality, view on audit risks, methods of communication, proposed timetable, sample management letter and who is going to be involved in the contract.
All of the above is suggested award criteria within the mini competition template provided with the framework that helps you set out your requirements and design your own evaluation methodology.
Visit the CPC Audit Services web page to learn more about the framework or contact Gary Sadler, CPC Contract Manager on 0161 974 0940 or email [email protected]