Internal scrutiny: how academy trusts ensure the internal control environment is effective

05 July 2023

RSM, with the support of the Confederation of School Trusts (CST), surveyed academy trust executive management and board members to gather insights into the perception of internal scrutiny.

In undertaking this survey, our aim was to understand how the trustee board uses the trust’s risk management system to assure itself that the control environment is effective. The survey also sought to understand respondent views on the effectiveness of internal audit as a key source of independent assurance in the internal scrutiny programme.

Key findings

We asked executive management and board members about their perception of the effectiveness of the internal control environment. The outcomes are summarised below.*

Measuring the effectiveness of the internal control environment

Asset 3

The programme of internal scrutiny helps improve the trust’s wider governance, risk management and control framework.

Asset 4

We undertake at least annually a formal assessment of adherence with the Academy Trust Handbook.

Asset 5

There is explicit attestation from trust management on the effective operation of the key controls.

Asset 6

The Academy Trust Handbook forms part of our internal scrutiny process.

Asset 7

We map our sources of assurance to our key controls, including who has provided the assurance and when.

Asset 8

The outcomes of the assessment against the Academy Trust Handbook are reported to our audit committee.

Asset 9

In developing a risk-based programme of internal scrutiny (eg internal audit plan) there is effective collaboration between the board, audit committee or equivalent and internal scrutineer.

Asset 10

I have received enough training, support and development in regards to the role of internal scrutiny.

Internal audit is vital in the programme of internal scrutiny, adding most value when its remit extends to both financial and non-financial controls. There appears to be increasing recognition of this within the sector however, there remain some outliers, despite the clear messaging on this matter in the Academy Trust Handbook. Overall, 17% of respondents either strongly disagree, disagree or neither agree nor disagree that internal audit’s value extends beyond financial controls testing, to include non-financial controls.   

Below we summarise the survey outcomes from executive management and board members on the role of internal audit. 

The role of internal audit

Asset 11

Internal audit adds value to the organisation.

Asset 12

The role of internal audit is understood by the senior management team.

Asset 13

The value of internal audit extends beyond financial controls testing, to include non-financial controls.

Asset 14

Internal audit has impact in our trust.

Asset 15

Through risk-based plans, internal audit helps us deliver our strategic aims.

Asset 16

I feel comfortable to challenge, scrutinise and triangulate internal scrutiny with our risks (based on my understanding and knowledge of internal scrutiny).

*Key finding responses above either strongly agree or agree with the statement.

To learn more about the outcomes of our survey and our top 10 key considerations for improving internal scrutiny, download our report below.