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 in an audit guide from Education and Skills Funding Agency (ESFA) for the 2017 to 2018 academic year. It is designed to help local authorities gain assurance that institutions are administering the 16 to 19 Bursary Fund correctly. This guide 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.
It is important for local authorities to note that this guide is not mandatory. Local authorities must consider the risks to funding and the need for assurance in respect of their own direct provision, including local authority maintained schools with sixth forms, but it is for chief financial officers to determine whether and how any work should be undertaken to enable them to make their grant returns to ESFA. The use of all, part or none of this guide to enable them to do so is entirely at their discretion.
16 to 19 Bursary Funds are subject to assurance as part of the 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).
This audit guide is designed to sit alongside the 16 to 19 Bursary Fund guide for the 2017 to 2018 academic year which provides more information about bursary fund eligibility and processes.
Although this guide is not mandatory, local authorities should familiarise themselves with the audit processes and the error criteria it explains ESFA will use for the 2017 to 2018 academic year.
Copies of the working papers used by ESFA in audits are provided as part of this guide. Local authority auditors may wish to use these when assessing if 16 to 19 Bursary Funds have been used appropriately. The working papers are to record any actual payment errors, audit findings and suggestions for improvement identified at audit. There is also space for the institution’s comments/response.
For the 2017 to 2018 academic year, ESFA has determined that, when undertaking its own audits of bursary funding, institutions will be given a 5 day grace period in which to resolve any errors the audit identifies. Local authorities may wish to offer institutions this same 5 day grace period.
Where an error is identified and recovery action has not been carried out by the institution, the auditor should contact Jayne Lievesley in ESFA’s Student Support team with details. ESFA will then decide what to recover and how.
Audit guide and working papers
The purpose of the audit approach set out in this guide is to gain assurance that institutions have an appropriate system of controls in place to effectively administer 16 to 19 Bursary Fund payments to students. This will ensure that payments are made in accordance with ESFA requirements set out in the 16 to 19 Bursary Fund guide for the 2017 to 2018 academic year published in March 2017.
ESFA suggests that, where possible, local authorities should 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. It is entirely at the discretion of individual local authorities which type of audit testing, or combination of testing, they choose to undertake.
To assist local authority auditors, ESFA has provided a brief controls questionnaire alongside this document. This 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.
ESFA has also provided a suggested substantive testing programme alongside this document for use by local authorities who decide to undertake this type of testing as part of their audit approach. This sets out detailed checks that ensure funding is being used appropriately. The number of students to be included in the substantive testing sample should be determined by local authority auditors.
When undertaking its own audits of 2017 to 2018 bursary funding, ESFA has determined that institutions will be given a 5 day grace period in which to resolve any errors identified during the audit; for example, due to missing evidence or documentation. Local authorities may wish to adopt the same approach, but again it is emphasised that this is not mandatory.
The working papers can be used to record any actual payment errors that are identified and whether the institution has carried out any recovery action. There is one document for each of free meals in further education (though local authorities will not usually need to use this), 16 to 19 vulnerable bursaries and 16 to 19 discretionary bursaries. The error schedule document can be used to provide an overview of the value of the total errors within the sample.
The error criteria that lead to a recovery of funds if they are not met during a 16 to 19 Bursary Fund audit by ESFA are:
- each student applying for a bursary (vulnerable student bursary and/or discretionary bursary) must be assessed individually to determine their eligibility. Funds will be recovered if the institution cannot demonstrate how their students meet the eligibility criteria (see Note 1 below)
- any circumstances where the institution has claimed vulnerable bursary payments for duplicate students and/or cannot evidence that no duplicate payments have been made
Note 1: ESFA believes that an institution should be able to demonstrate that its assessment of a student’s eligibility has covered the following:
- the general eligibility criteria (set out in the 16 to 19 Bursary Fund guide for the 2017 to 2018 academic year and ESFA 16 to 19 Funding Guidance); that is age, residency (see Note 2 below) and type of provision
- where applicable, the specific criteria for receipt of a vulnerable bursary (set out in the 16 to 19 Bursary Fund guide)
- where applicable, the 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 itself and may, for example, be based on the evidenced level of the student’s household income
Note 2: Institutions must carry out residency checks which must be evidenced. Where auditors identify this is not the case, ESFA suggests they should advise the institution in their feedback that they must carry out residency checks and must ensure evidence is available to support them. For a first audit where such an error is found, auditors are advised to treat this as a control issue and ESFA will not recover funding. If the same issue reoccurs at any subsequent audit, funding will be recovered.
How to ask a question about this guide
Any questions should be sent to:
Contact form https://form.education...
For all enquiries for the Education and Skills Funding Agency