Guidance

16 to 19 Bursary Fund audit guide for local authorities: 2023 to 2024 academic year

Updated 17 April 2024

Applies to England

1. Key points

16 to 19 Bursary Funds should be subject to the standard controls and assurance arrangements for 16 to 19 education and training. Institutions should ensure they have appropriate processes in place to record bursary applications and awards (including the number, value, purpose, whether awarded or not, how much has been paid and a brief justification for the decision based on the institution’s assessment of each student’s actual needs). Institutions must also be able to confirm, during any audit, the amount of any unspent funds that have been carried forward to the current academic year.

The audit guide is designed to operate in conjunction with the 16 to 19 Bursary Fund guide, which provides more information about eligibility and processes. The guide includes a checklist institutions can use when assessing bursary applications from students and a list which summarises key points. Both have been developed to reflect common errors and issues identified during audits.

2. Audit guide and working papers

The audit approach set out in this guide aims to provide assurance that institutions have an appropriate system of controls to administer 16 to 19 Bursary Fund payments effectively to students, in accordance with the requirements set out in the 16 to 19 Bursary Fund guide.

Local authorities may wish to consider an integrated approach to individual audits at institutions. This means performing 16 to 19 Bursary Fund audits when they visit an institution to perform audit work in other areas, for example, the funding audit at maintained school sixth-forms.

Local authorities can obtain assurance over 16 to 19 Bursary Funding in several ways, for example:

• controls review/evaluation with walkthrough/compliance testing

• substantive testing of individual students

Local authorities have discretion to decide which approach they adopt.

ESFA working papers for the 2023 to 2024 academic year are published with this guide and include a controls questionnaire. The questionnaire sets out the key areas where assurance is needed and can be completed through discussions with the institution. Identified control weaknesses and suggestions for improvement should be reported to the institution by completing the relevant column in the document. The working papers include both bursary funding and free meals in further education, though local authorities will not usually need to use the free meals sections.

Our working papers also include a substantive testing programme. This sets out detailed checks that ensure funding is being used properly. Where local authorities adopt this approach, they should consider selecting a random sample of students which are representative of the population. Where there are major discrepancies affecting funding, the chief financial officer of the local authority should consider extending the sample within the institution.

We usually give institutions a 5-day grace period in which to resolve any issues or errors identified during an audit; for example, to provide missing evidence or documentation. Local authorities may wish to adopt the same approach.

Our working papers also include an error summary that can be used to record any actual payment errors identified.

3. Error criteria

3.1 We recover funds, identified by an audit of 16 to 19 Bursary Funds, in the following circumstances:

Where institutions cannot demonstrate each student meets the eligibility criteria. Each student applying for a bursary for vulnerable groups and/or a discretionary bursary must be assessed individually to determine their eligibility and needs. No student should automatically be awarded £1,200 or any other amount of funding.

Where institutions have used the funding for ineligible activity, in other words, expenditure which is not in accordance with the funding rules, set out in the 16 to 19 Bursary Fund guide.

Any circumstances where the institution has claimed bursary for vulnerable group payments for duplicate students and/or cannot evidence that no duplicate payments have been made.

3.2 Institutions must be able to demonstrate their assessment of a student’s eligibility has verified:

General eligibility criteria, set out in the 16 to 19 Bursary Fund guide for age, residency and eligible provision and in the post-16 funding regulations.

Specific criteria for receipt of a bursary for vulnerable groups (set out in the 16 to 19 Bursary Fund guide), including the student’s eligibility and their actual need for a bursary, based on the specific participation costs they have – students should receive the amount they actually need, not automatically be awarded £1,200.

Specific criteria for receipt of a discretionary bursary (set out in the 16 to 19 Bursary Fund guide). Institutions must ensure their bursary policy ensures funding reaches those students who are most in need of financial support. Institutions must use household income in some way to help establish which students are eligible before confirming the amount of support a student may need. The amount they receive must be based on each student’s individual circumstances and their actual financial need – students should not be awarded fixed or flat rate payments that do not reflect their actual needs.

4. Feedback and reporting

Auditors are expected to discuss and feedback the results of the audit to the institution and obtain explanations/reconciliation for any issues/variances identified.

The basis of the feedback should be the auditor’s summary of the audit outcome and the head teacher (or other accountable officer) should confirm agreement when the audit is complete, and any errors have been agreed or differences reconciled.

It is good practice to produce a letter or report summarising the audit results for the institution and any consequent recommendations or adjustments.

5. Further information

If you have questions after reading our guidance, or if there’s anything else you need help with, you can find more support in our customer help centre.