Financial handbook for independent training providers
Independent Training Providers (ITPs) deliver Department for Education (DfE)/Education and Skills Funding Agency (ESFA) funded education and training valued at £1.5bn a year. The Financial Handbook for ITPs provides a framework for governance, financial management and assurance and is effective from 1 August 2024.
The Handbook outlines expectations of ITPs based on the level of direct funding they receive from the DfE/ESFA across three principal areas:
- Governance
- Financial management and oversight
- Assurance.
Every well-governed organisation should follow the fundamental principles outlined in the Handbook. While it is acknowledged that smaller ITPs may find some of the guidelines to be ambitious, it is beneficial for them to consider which of the suggested and optional practices could be integrated into their operations to enhance efficiency and effectiveness.
For instance, although establishing a full-scale internal audit service may not be feasible for smaller ITPs due to resource constraints, engaging in independent reviews within certain niche areas could provide valuable insights and oversight. These reviews can be tailored to the specific needs of the organisation and can help in identifying areas for improvement, ensuring compliance with relevant standards and enhancing the overall governance structure.
By selectively adopting these practices, smaller ITPs can make significant strides in their governance and operational excellence.
- Governance
- Funding compliance scrutiny
- Counter fraud and error
- Risk management
- External audit
Governance
Corporate governance is crucial for an organisation's long-term sustainability as it aligns performance and purpose, as well as ensures compliance with legal and regulatory requirements. It establishes consistent policies for managing social, environmental and ethical issues. The Handbook outlines governance expectations, such as the appointment of non-executive directors and the roles of the Audit and Risk Committee. Compliance with a code of governance appropriate to the organisation is also addressed. A transparent approach to governance influences people management, earning respect and loyalty from stakeholders and employees.
It is important to regularly assess adopted measures to promote integrity and positively influence corporate culture:
- Set the tone by conducting itself within the spirit of the governance code being adopted.
- Monitor whether the right behaviours are being shown throughout the organisation.
- All boards should be equipped with the tools they need to constructively challenge the decisions of senior leadership, to lead and affect both cultural and behavioural shifts where necessary.
How we can help
At RSM, we have been advising boards and organisations on effective corporate governance and good decision making for many years.
We have a four-part method that reflects the various corporate governance codes now in place:
- Compliance and risk
- Oversight and behaviour
- Purpose and impact
- Ethics and transparency
Funding compliance scrutiny
The funding of education and skills has always been complex. Therefore, maintaining the accuracy of the data, funding claims and appropriate supporting documentation is always a key risk for all education and training providers.
The Handbook outlines the expectation that ITPs should implement appropriate oversight and scrutiny arrangements over their Individualised Learner Records (ILR) data and funding claims, with specific roles covering:
- Oversight of funding claims and ILR data submissions.
- Ensuring funding claims and ILR data submissions are complete, accurate and follow funding rules and associated guidance. This includes the use of the Provider Data Self-Assessment Toolkit (PDSAT), exception reports and validation checks.
- Providing recommendations for improvements or amendments to the processes in place for funding claims and ILR data submissions.
The Handbook also outlines expectations in relation to sub-contracting requirements, including the subcontracting standard.
How we can help
91探花are one of four firms contracted by the ESFA for funding assurance. This means we have the skills and background necessary to provide you with a complete funding compliance service.
We offer a comprehensive package which can be adapted to reflect your needs, including:
- Funding compliance reviews, following the ESFA’s methodology
- Ad-hoc advice and guidance
- Training to your Management Information System (MIS) teams on how to effectively review your PDSAT reports
- Subcontracting standard reviews.
Counter fraud and error
Fraudulent activity can negatively impact any organisation, whether through reputational damage, lost and stolen assets, or finances. Having the right policies, procedures and independent support on hand is critical in helping prevent and resolve risks.
The Handbook outlines a requirement for ITPs to implement appropriate counter fraud, error, and whistleblowing policies and procedures.
There is also a requirement that all staff working on DfE/ESFA funded contracts be provided with training on fraud awareness indicators.
Our team of experienced counter fraud specialists is well-versed in helping our clients have robust preventative procedures in place, while also conducting complex investigations. We can guide you through proactive prevention exercises and bespoke training to strengthen control mechanisms and minimise the risk of fraud or bribery occurring in your organisation.
How we can help
We will help you stay ahead of these issues with the following services.
Prevention, detection and deterrence
We can help you identify and assess the risk of fraud within your organisation, advising on and carrying out:
- Fraud and bribery risk assessment
- Compliance with the Bribery Act and the Governmental Functional Standard 013 for Counter Fraud
- Policy fraud risk governance
- Bespoke fraud and bribery awareness training and e-learning
- Tailored proactive prevention and detection reviews
- Recruitment and right to work processes
- Whistleblowing
Investigations
Our team manages fraud and financial irregularity investigations for corporates, regulators and the public sector, ranging from small employee-perpetrated frauds to large cross-border investigations.
Forensic technology
Our forensic technology experts investigate and report on digital-based evidence, including metadata, data provenance, internet activity, destruction of evidence and copying. We work closely with you to understand your key concerns and risks to develop a tailored solution that suits you.
Risk management
Effective risk management is the bedrock of all successful organisations. If this goes wrong, the ramifications can be deeply damaging, from financial loss and individual harm to reputational damage.
Where organisations get it right, they become more efficient and effective at delivering what their customers want.
The Handbook outlines the expectation for ITPs to have risk management processes in place, which include:
- A risk management policy
- Risk register
- Business continuity policy
- Conflicts of interest policy.
How we can help
Our enterprise risk consulting team are not just consultants; we are architects of a resilient future, working with you to design a robust framework that effectively manages your risk exposures.
Our approach is not about ticking boxes, it's about maximising value and implementing practical, proportionate solutions that resonate with your business ethos.
From interactive workshops to comprehensive risk management change programmes, we provide access to Insight4GRC, our cutting-edge risk management software, ensuring a watertight programme that stands the test of time.
Our seasoned experts have extensive knowledge across all sectors and are committed to working closely with you. We delve deep to understand the risks unique to your business and craft a management solution that minimises exposure efficiently and effectively.
With RSM, risk management is not a task – it's a strategic journey to safeguard your business's future.
External audit
Many ITPs are already required to appoint external auditors under the Companies Act 2006, Charities Act 2011 or Limited Liability Partnership Audit and Accounts Regulations 2008. However, the Handbook has now extended this requirement to all ITPs receiving more than £1m of DfE/ESFA funding.
How we can help
A statutory audit, while a requirement under the Handbook, shouldn’t just be a compliance exercise for you - or for us.
Our five-step audit approach ensures you receive quality audited financial statements, offering valuable insights for your business.
1. Understanding your business
We ensure our team has the right capabilities, expertise and industry knowledge for your business. Our team invests time in understanding your processes, systems, controls and data so that your audit plan is bespoke to you and can take advantage of our innovative data solutions.
2. Assessing risks
We take the time to fully understand the business environment you operate in, so that we can pinpoint your current and future risks. Creating, nurturing and sustaining a culture of respect and openness is part of our DNA; we encourage upward challenge to ensure that the right audit strategy is developed.
3. Meeting timescales
Project management is key to delivering a quality audit to agreed deadlines. Our client portal allows us to share vital data and information across the audit team throughout the engagement. The application of our global audit methodology provides consistency as well as flexibility in executing the audit strategy. Its integration into our audit software provides maximum efficiencies.
4. Communication
We keep an open dialogue with you from day one - during the delivery of the audit and throughout the year - to maintain an understanding of your needs and any changes to your business. Our engagement leaders maintain regular dialogue with the wider audit team to ensure the appropriate amount of oversight is upheld, and to provide support at a senior level, where needed.
5. Continuous improvement
We understand that constructive feedback is essential to achieving our overall objective of delivering consistently high-quality audits. We seek feedback from our clients and colleagues on a 360-degree basis to ensure we deliver on all our objectives.
