A non-mandatory audit guide for LA’s to gain assurance that institutions are administering the 16 to 19 Bursary Fund correctly.
Who this guide is for
This Education and Skills Funding Agency (ESFA) audit guide is designed to help local authorities gain assurance that institutions are administering the 16 to 19 Bursary Fund correctly. It will be of interest to local authority chief financial officers, directors of children’s services, heads of children’s services finance and heads of internal audit.
The guide is not mandatory. Local authorities must consider the risks to funding and need for assurance for their own direct provision, including local authority maintained schools with sixth forms, but it is for chief financial officers to determine whether and how work is undertaken to enable them to make their grant returns to ESFA.
16 to 19 Bursary Funds are subject to normal 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, and a brief justification for the decision). They 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 bursary fund eligibility and processes.
Copies of the working papers ESFA uses in audits are provided as part of this guide.
Audit guide and working papers
The audit approach set out in this guide aims to gain assurance that institutions have an appropriate system of controls in place to administer 16 to 19 Bursary Fund payments effectively to students. This ensures payments are made in accordance with ESFA requirements set out in the 16 to 19 Bursary Fund guide.
ESFA suggests that local authorities may wish to consider an integrated approach to individual audits at institutions. This means undertaking 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 a number of different ways, for example, controls review/evaluation with walkthrough/compliance testing and/or the substantive testing of individual students. Local authorities have discretion to decide which type of audit testing they undertake.
The ESFA working papers include a brief 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 questionnaire (and other documents noted below) include both bursary funding and free meals in further education though local authorities will not usually need to use the free meals sections.
The ESFA working papers also include a substantial testing programme. This document sets out detailed checks that ensure funding is being used appropriately. It may be helpful if local authorities decide to carry out this type of testing.
ESFA gives institutions a 5 day grace period in which to resolve any errors identified during an audit; for example, to provide missing evidence or documentation. Local authorities may wish to adopt the same approach but this is not mandatory.
The working papers also include 3 documents that can be used to record any actual payment errors identified and any recovery action taken. There is 1 document for free meals in further education (though local authorities will not usually need to use this), 1 for 16 to 19 bursaries for vulnerable groups and 1 for 16 to 19 discretionary bursaries . The funding errors summary is the final working papers document and can be used to provide an overview of the value of the total errors.
ESFA will recover funds in the following circumstances if identified in an audit of 16 to 19 Bursary Funds:
- 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
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 and EFSA 16 to 19 Funding Guidance); that is, age, residency and type of provision
specific criteria for receipt of a bursary for vulnerable groups (set out in the 16 to 19 Bursary Fund guide), including the student’s financial need for a bursary
specific criteria for receipt of a discretionary bursary (set out in the 16 to 19 Bursary Fund guide). These criteria are determined by the institution and may, for example, be based on the evidenced level of the student’s household income and the type of financial help each student needs to participate
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
How to ask a question about this guide
Any questions about this guide should be sent to ESFA via our online enquiry form.