College Accounts Direction 2024

Each year the ESFA re-issue their Accounts Direction and it was our expectation that the 2024 edition wouldn’t be amajor news event, given that there haven't been changes in the underlying accounting standard FRS102 and we also have the new Financial Handbook to get used to.

We are pleased to report that our expectations were met, although there are a couple of interesting considerations for 2024.

Starting with what’s not in this edition – references to the COVID supplementary bulletin and pandemic-related disclosures have been removed from the College Accounts Direction (CAD).

Then, on to what’s been added or clarified:

1. There is a reminder for those Colleges who are also registered charities to make sure they file their accounts and annual return with the Charity Commission 10 months after the year end. There is also an important reminder for those Colleges registered with the OfS that they need to publish their accounts on their website five months after their year end – so by 31 December in most cases. This is one month earlier than the ESFA deadline.
2. New disclosures are required in relation to the external governance review that is required every three years (with effect from 2021-22). When a review has been completed you are required to name the review and give the date when the review took place. You are also now required to provide a summary of the findings alongside confirmation that an action plan has been agreed with the reviewer. The action plan should then be detailed either in the Statement of Governance and Internal Controls or on the College's website.
3. For related party transactions, where the College is part of a group, all intra-group transactions and balances must be reported, not just those with wholly owned subsidiaries or the parent entity where they exist.
4. Where a College has refinanced its commercial debt with loans from the ESFA, consideration must now be given as to whether the ESFA loans meet the definition of a concessionary loan. A concessionary loan is one that is below the prevailing market rate of interest and that is not repayable on demand. There is a choice of accounting treatments for new concessionary loans which is either the fair value methodology or the amount received then adjusted for accrued interest. We would recommend early consideration of this choice with your auditor.
5. There are two news considerations in the CAD in relation to the Local Government Pension Scheme. The first is a reminder that the next scheme valuation is 31 March 2025 and new contribution rates will be applicable from 01 April 2026, and also a reminder that any deficit funding plans must be disclosed in the notes to the accounts. The second is regarding pension assets, a reminder that accounting policies and disclosure notes should include the explanation of any key accounting estimates or judgments that have been made in impairing or recognising pension assets.
6. Finally, there is also a reminder that the Teachers Pension Scheme employer contribution rates increased by 5%, coming into effect on 01 April 2024.