If your academy is part of a large Multi-Academy Trust (MAT), then you will need to be aware of new legislation coming into force this year.
For the purposes of this new legislation, a large MAT is generally considered to fall into either two or three of the following thresholds under the Companies Act 2006:
More than £36 million turnover.
More than £18 million balance sheet total.
Over 250 employees.
This new legislation applies to all large companies that fall into the above thresholds not just those operating in the education sector. Because of this, only academies in larger MATs will need to comply. Such companies will need to report twice a year on their fair payment practices, performance and other policies, and this information will be published on a new Government website.
For the MATs that need to publish their reports, there is a deadline in place. All information must be provided and published within 30 days of the mid-year and year-end reporting date (31 August). As such, those MATs will need to publish their six month reports to 28 February 2018, so the report will be due on 30 March 2018. The next will be due on 30 September 2018.
For those MATs that are required to publish their reports, you will need to start gathering the information that is required, including qualifying contracts and payment practices.
Qualifying contracts are considered to be a business relationship between two or more businesses sufficiently linked to the UK. Contracts should not be for financial services and must be for goods, services or intangible property. All of these criteria must be met in order for the “qualifying contract” to be considered.
A report on the payment practices, and performances relating to those contracts, should include:
Average time taken to pay invoices
Any invoices that were not paid within the agreed terms
The percentage of invoices that were paid within the reporting period.
If the new legislation is not adhered to and the deadline is not met, the MAT and every trustee will be considered as committing a criminal offence and the consequences can be very serious.
More information can be found here or alternatively, please contact your usual Wilkins Kennedy partner or Michelle Wilkes, Head of Academies..
New legislation comes into force this year for large Multi-Academy Trusts – and the deadline is looming.
A public sector audit is one covering government, healthcare, education, charities and other public non-for-profit organisations.