Internal audit in academies: change in guidance

23 July 2020

New guidance for academy schools on internal audit

The new Academies Financial Handbook makes a number of changes to strengthen internal scrutiny within the sector. Internal audit in academies is a key area of change.

From September 2020, your school’s external auditor will no longer be able to undertake internal audit activities as well. Our Assistant Director for Audit and Assurance, Ian, says:

“This separation of responsibilities will help to minimise possible threats to audit objectivity and independence.

“Internal and external audit are complementary functions and both are important for effective governance, however they fulfil different purposes.

“We see this change as an important step in helping to improve overall audit assurance.”

Offsite resource

Download the Academies Financial Handbook 2020

For academy members, trustees, accounting officers, chief financial officers and auditors.


View this resource
Are schools required to have internal auditors?

Yes, although the arrangements will vary between schools. Maintained schools will be covered by their local authority’s internal audit provision. Academy schools are required to arrange a programme of internal audit (otherwise called internal scrutiny). You can choose from a number of options:

  • Employ an in-house internal auditor
  • Buy-in an internal audit service from a suitable provider
  • Appoint a non-employed trustee
  • Arrange a peer review by a chief finance officer from another trust

Whichever option is chosen, the staff conducting the work should be suitably qualified and experienced.

What’s the difference between internal and external audit?

Internal and external audit are quite different. As the names would suggest, one looks at the organisation from the inside, and the other from the outside.

External audit is more financial based, while internal audit focuses on day-to-day operations. While they are conducted by different organisations, the two should have a working relationship to ensure their work is coordinated and resources are used efficiently.

Want to learn more about internal audit? Read our A-Z, or get in touch with our team.