Academy trusts: off-payroll appointments
Guidance for academy trusts on how to request approval from ESFA for appointing an off-payroll accounting officer or chief financial officer.
Applies to England
Introduction
The Academy Trust Handbook (ATH) paragraphs 1.34 and 1.45 requires academy trusts to seek prior approval for any new appointments where the accounting officer (AO) or chief financial officer (CFO) is not an employee of the academy trust. This also applies where an existing off payroll agreement has expired.
Approval for off-payroll AO or CFO appointments will only be given in exceptional circumstances.
The maximum length of time for which a post can be approved is 12 months. This is to enable the academy trust time to make a suitable on-payroll appointment. Where exceptional circumstances mean a longer-term arrangement may be needed, the approval must be reviewed annually.
How to request approval
Trusts must request approval before the appointment starts. Retrospective approval cannot be given. Trusts should submit their request as soon as possible to allow time for a decision to be made.
In some cases an appointment will need to be made quickly to avoid the academy trust being without an AO or CFO, for example if there is an unexpected leave of absence.
Where an urgent appointment is needed, this can be made in parallel to making an approval request. In these situations we ask that the appointment length is for no longer than 3 months. If the request is approved by ESFA this may potentially be extended for up to 12 months.
The person to be appointed cannot be the person submitting the form.
A request for approval can be made using the ESFA enquiry form unless a related party transaction (RPT) is involved.
If a RPT is involved, you must submit the request for approval using the RPT online form.
What you need to tell us
To consider the request, we need the following information.
- Details of the person to be appointed, including their experience and capacity to fulfil the role.
- The length of the proposed appointment, which must be 12 months or less.
- A statement setting out how the post holder will be held accountable and how accountability will be managed.
- Details of any other options which have been considered and an explanation of why the off-payroll appointment is the best option.
- A copy of any relevant documents, for example the service level agreement.
- Confirmation that ATH clause 2.28 on procurement has been adhered to.
If the arrangement is an RPT, you must submit all of the information needed for the off-payroll approval request, using the RPT online form, along with seeking approval for the RPT. There is a checklist to help you prepare the evidence needed when seeking approval for a related party transaction.
When we may approve a request
We will only approve requests in exceptional circumstances and if one or more of the following apply.
- The appointment is a time-bound, transitionary arrangement, needed on a temporary basis ahead of securing a permanent appointment.
- A short-term arrangement to cover a period of sickness or leave.
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It is an arrangement required due to the nature of the academy trust/request – for example:
- diocesan arrangements
- where there is a sound rationale for an off-payroll arrangement with a trusts sponsor organisation
- in situations where institutions have a close support relationship with academy trusts
When we may reject a request
We may reject requests from non-diocesan academy trusts if one or more of the following apply.
- The appointment is longer than 12 months or permanent.
- The AO is not the most senior executive in the academy trust (for AO appointments). The AO must remain the accountable individual within the trust.
- The AO/CFO is not subject to PAYE. Academy trusts must ensure that they are compliant with HM Treasury guidance.
- There is another option that would be more appropriate and in the best interest of the academy trust.
- The academy trust is unable to provide assurance on how accountability will be maintained.
- The academy trust is unable to demonstrate that the person to be appointed is skilled and suited to the role.
- The academy trust is unwilling to accept the conditions attached to approval.
Diocesan arrangements
In Church of England dioceses, diocesan boards of education (DBE) may have secondment arrangements for AOs and CFOs to their academy trusts. The diocese has a unique role in supporting it’s schools in this way and it relies on the ability to be flexible in how it deploys DBE staff across its academy trusts.
In Catholic dioceses it is more common for AOs and CFOs to be seconded from one Catholic academy trust to another. These arrangements are also known to work well and allow flexibility for the academy trusts.
Most requests from diocesan academy trusts seeking approval to appoint an AO or CFO from the diocese, or from another diocesan academy trust, may therefore be approved. However, these requests must still go through the approval process on an annual basis and conditions will be applied if there are any concerns.
In all cases, we will engage with a regional schools commissioner (RSC) prior to making a decision or applying conditions to an approval. In cases where there are concerns, we will ensure that both the RSC and diocese are engaged to determine the best course of action.
If you do not agree with the decision
The applicant can request a review if the academy trust does not agree with the decision, or if any new information has become available that may alter the decision.
Requests for a review should be submitted using the enquiry form, giving details of the reason(s) for requesting the review and any new information relating to the request.