Guidance

Declare or seek approval for related party transactions: guidance for a private school, college or university supplier

Updated 1 September 2023

Applies to England

This page covers information and advice on reporting requirements for related party transactions (RPTs) where the supplier is a private school, college or university.

This guidance does not apply to related party transactions starting on or before 31 August 2023. The Academy Trust Handbook 2022 provides information about reporting these transactions.

1. Declaring related party transactions with a supplier that is a private school, college or university

ESFA approval is not required for the supply of goods or services to a trust by private schools, colleges and universities which are sponsors of the academy trust.

However, these transactions must be declared to the ESFA via the RPT online form and will be regarded as meeting the ‘at cost’ requirements.

Summary guidance describes the requirement for academy trusts to declare an intention to enter into a transaction with a related party before confirming the transaction. This includes transactions being renewed with a related party.

Academy trusts do not need to declare income transactions with related parties. For an expenditure related party transaction with a new supplier, academy trusts must confirm whether they have previously received a donation from the related party.

In line with paragraph 5.43 of the Academy Trust Handbook (ATH), salaries and other payments made by an academy trust to a related party under a contract of employment through the academy trust’s payroll are not in scope of this reporting requirement.

Academy trusts must report all related party transactions, regardless of value, in their annual financial statements as set out in the Academies Accounts Direction.

2. Seeking approval for related party transactions with a supplier that is a private school, college or university

Where the related party transaction value exceeds £40,000, ESFA approval of the transaction is required if the supplier is:

• a private school, college or university that is not a sponsor of the academy trust
• a subsidiary of a university, school or college (including academies) regardless of whether its parent body is a sponsor of the academy trust, or owned by the academy trust

If the RPT is novel, contentious and/or repercussive (ATH 5.44) or is for the appointment of an Accounting Officer or Chief Financial Officer who is not an employee of the academy trust (ATH 1.28 and 1.38), separate ESFA approval is required.

3. Using the online form

You need an Identity and Access Management System (IDAMS) account to use the form. You can register for an IDAMS account and set up other users to report related party transactions.

The form is for academy trusts to declare all expenditure transactions and seek approval where necessary for a transaction with a related party before it’s confirmed with the related party.

When creating a new supplier, you will need to enter the supplier’s details and choose from a list which best describes the supplier, and whether the supplier is a sponsor of the trust. If the supplier is a sponsor, your transaction will not require approval and is regarded as meeting the ‘at cost’ requirement. Where the supplier is not the sponsor of the academy trust and exceeds £40,000, your transaction will require approval and the ‘Using the online form’ guidance applies.

For all new suppliers, you must confirm whether the academy trust has previously received a donation from the related party and the type of donation: cash, in kind, both, or other.

4. Do you have any questions?

For all enquiries for the Education and Skills Funding Agency, please contact us using the enquiry form.