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ESFA funding assurance reviews

The Education and Skills Funding Agency (ESFA) has a varied annual assurance programme which includes elements such as desktop reviews of provider data through the Funding Rules Monitoring (FRM) reports and funding assurance reviews of funding claims and associated Individualised Learner Record (ILR) data for a sample of further education colleges, Independent Training Providers (ITPs) and Higher Education Institutions (HEI’s).

The funding assurance reviews incorporate a random and risk-based selection of providers on an annual basis, with work typically being undertaken on the random providers prior to the final ILR submission in October, and the risk-based providers being reviewed shortly thereafter. Providers typically fall into the risk-based category where the ESFA has concerns in relation to data quality or issues have been identified from previous funding assurance related activity. The approach encompasses a combination of a detailed review of individual learner files (based on a sample of 30 learners for each funding stream), along with a detailed review of the Provider Data Self-Assessment Toolkit Reports (PDSATs).

As the timing for these reviews is when many providers are in the midst of enrolment, and considering the volume of information that the funding assurance auditor needs to see, providers should not underestimate the impact that these reviews can have on business-as-usual activities.

The potential impact of these reviews where areas of non-compliance with the ESFA funding rules are identified can be significant, with some providers facing significant clawback of funding. This is not only relating to the current year but also prior years, especially in relation to apprenticeships.

We note that the ESFA has recently released their common issues briefing based on 2021/22 funding assurance reviews. Below we summarise some of the common issues identified from the ESFA funding assurance reviews that RSM has undertaken either for the ESFA or our wider client base on 2022/23 ILR data.

16-19 study programmes

The overarching testing relates to whether the evidence and information retained on the learner file supports the data recorded on the ILR. This includes the planned hours, the aims recorded and learning activity undertaken. Most issues identified related to data quality concerns such as:

However, we continue also to identify funding errors in relation to the following:

Adult education budget (AEB)

Similar to 16-19 study programmes, the overarching testing relates to whether the evidence in the learner file is consistent with the data recorded in the ILR. This is including whether the learner is eligible for funding and whether there is evidence of participation. Whilst the funding rules for AEB have remained largely unchanged for 2022/23, we continue to see a number of issues which have a funding impact, including:

Apprenticeships

Apprenticeship funding is the most complex of all the funding streams in scope of an ESFA funding assurance review. The testing approach mirrors that complexity, covering all aspects of the learner journey from initial assessment of knowledge, skills and behaviours to off-the-job training planning and delivery, through to completion. This is also the funding stream where the majority of funding errors are identified with the main issues relating to:

In addition, evidence was lacking to demonstrate that active learning had taken place at least every four weeks for learners who started after 1 August 2022, which meant that the learner should have been placed on a break in learning in compliance with the 2022/23 funding rules.

Advanced learner loans

The testing in relation to advanced learner loans takes the form of a triangulation of data recorded on the ILR, the Student Loans Company (SLC) portal and the learner file. Funding errors have been minimal, however we have identified the following data quality issues:

Many of the issues identified in relation to 2022/23 ILR data are similar to those reported in previous years. However, ongoing clarifications on apprenticeship funding and compliance pose new challenges in areas such as initial assessments and the need to demonstrate active learning every four weeks.

authors:richard-lewis,authors:lisa-smith