Funding to upgrade FE estates will be available for 2020/21 to assist upgrading the condition of college estates.
Redundancy Support Service for Apprentices
On 1 August the ESFA launched its support service in response to the impact of COVID on the employment of apprentices.
As the furloughed scheme comes to an end the full impact of the pandemic on the economy and employers will become more evident.
As with previous recessions unemployment will increase and the opportunity for apprentices to secure employment or re-employment will become more difficult.
This service has been established to:
This service is in addition to employer incentives announced by the Chancellor for recruiting new apprentices aged under 25 of £2,000 and £1,500 aged 25 and above. These incentives are in addition to those already in place.
Post-16 audit code of practice 2019-20
This updated guidance has been published later than usual this year having been issued in July 2020 applicable for financial periods commencing on or after 1 August 2020. Changes include:
Reminder – fraud reporting
Due to remote working or potentially reduced levels of scrutiny a reminder over the procedures associated in cases of suspected or discovered instance of fraud, theft, bribery, corruption, irregularity, major weakness or breakdown in the accounting or other control framework are identifiable.
Where identified, corporations must inform the chair of the audit committee, external auditors and internal auditors (if applicable) as soon as practically possible.
The ESFA, and where relevant the MCA or GLA, must also be informed when the amounts are significant, that is exceeding £10,000 in value, as soon as possible. Specific Update for Colleges Summary updates and reminders 18
Going concern considerations
The nature and scale of the virus and the measures introduced to tackle it will have had a significant impact on all aspects of corporations’ finances, budgeting and strategic planning. The ESFA issued a brief reminder for corporations to ensure it continued to receive timely and accurate information to monitor financial sustainability. Key considerations identified included:
With the impact of the pandemic it is even more important for corporations to complete a robust going concern assessment. This assessment will be under greater scrutiny from auditors and other stakeholders.
An impaired financial performance and position may also adversely affect compliance with bank loan covenants. Corporations are advised to ensure that conversations with their lenders take place promptly where covenants are in danger of being breached, to mitigate the risk that amounts will become repayable on demand.
If bank covenants have been breached, the going concern assessment within the financial statements should include a summary of the outcome or status of negotiation with the lender, including whether waivers have been obtained. The outcome of these negotiations is likely to be critical to corporations in determining whether the borrowings are classed as short or long-term in the financial statements (waiver received pre or post 31 July accordingly), and so constitutes a major factor in the determination of solvency as well as the formal assessment of financial health by the ESFA.
Due to public interest in the sector there are areas of the financial statements that attract more interest than others. Included below is a reminder of the guidance associated with these areas: