The Academy Trust Handbook 2026 took effect on 1 October 2026. It is not legislation — compliance is a condition of the funding agreement between each trust and the Secretary of State — but it binds just as firmly, and it carries the delegated authority limits, related party rules and reporting deadlines that shape an academy trust's finance function.
What the Handbook is
The Handbook sets out the financial and governance requirements every academy trust must meet. Its force comes from contract rather than statute: compliance with the requirements is a condition of the funding agreement. It remains in force until updated or replaced, and the edition effective from 1 October 2026 is the current one.
That contractual basis matters in practice. A breach is not a criminal matter, but it is a breach of the agreement under which the trust is funded, which is why the Department for Education's response to non-compliance can escalate quickly.
Delegated authority: what needs DfE approval
The general rule comes first. Novel, contentious or repercussive transactions must always be referred to DfE for approval before the transaction is agreed or takes place — regardless of value. Trusts that read only the numeric limits miss this, and it is the one that most often bites.
Then the numbers:
- Special severance payments — delegated up to £50,000 for the non-statutory, non-contractual element; DfE prior approval must be obtained before making any offer at £50,000 or more. Prior approval is also required for exit packages of £100,000 or more, or where the employee earns over £174,000;
- Compensation payments — delegated below £50,000 for the non-statutory, non-contractual element; prior approval at £50,000 or more;
- Write-offs and liabilities, per single transaction — 1% of total annual income or £45,000, whichever is smaller;
- Cumulative write-offs — 2.5% of annual income up to a maximum of £250,000 a year for new trusts or those without two years of timely unqualified accounts; 5% of annual income up to the same £250,000 maximum where the trust has submitted timely unqualified accounts for two years.
Note what improves the cumulative limit: a clean, on-time filing history. It is one of the few places where good compliance buys tangible freedom.
Related party transactions
This is the area DfE scrutinises most closely, and the rules operate at three levels.
Report everything. Trusts must report their intention to enter into a new transaction with a related party to DfE before confirming the transaction with the related party. All expenditure transactions with a related party must be reported through the online form. Retrospective submission is a breach of the Handbook.
Approval above £40,000. Prior DfE approval is required where transactions exceed £40,000 for the supply of goods or services to the trust by a related party in the same financial year ending 31 August. On aggregation, the guidance is explicit that the £40,000 approval threshold applies to single transactions with the same supplier — the transaction value is not aggregated by supplier.
At cost above £2,500. The at-cost requirement applies where the value of the transaction exceeds £2,500 cumulatively in any one financial year ending 31 August. At cost means the price at which goods or services are supplied without any mark-up or profit, including direct costs — materials and labour used directly — and a proportionate share of fixed and variable overheads.
Exemptions from approval cover supplies by colleges, universities, schools which are sponsors, and state-funded schools and colleges including academies, and supplies to a trust with a religious designation for functions fundamental to its religious character. The exemptions do not extend to subsidiaries of those bodies.
Internal scrutiny
All academy trusts must have a programme of internal scrutiny providing independent assurance to the board. Trusts with annual revenue income over £50 million must use an in-house internal auditor or a bought-in internal audit service rather than any of the lighter-touch options.
The internal scrutiny summary report must be submitted to DfE by 31 December each year.
Accounting officer and chief financial officer
The board must appoint an accounting officer in writing — normally the principal in a single academy trust or the chief executive in a multi-academy trust. The AO must be able to assure DfE's own accounting officer, Parliament and the public of high standards of probity, and must complete and sign an annual statement on regularity, propriety and compliance.
The board must also appoint a chief financial officer to whom responsibility for the trust's detailed financial procedures is delegated. Finance staff should be appropriately qualified or experienced, assessed against the trust's risk, scale and complexity.
There is a deadline approaching here that is easy to miss. For trusts with more than 3,000 pupils, the 2026 Handbook says the CFO should hold a professional accountancy qualification, and new CFO recruitment from 1 October 2026 should specify a qualified accountant with relevant professional body membership or the CIPFA level 7 qualification. From 1 September 2027 that becomes a must, unless DfE receives advance notice with justification. Trusts above 3,000 pupils recruiting a CFO between now and then should be specifying accordingly.
The reporting calendar
- 31 December — audited annual report and accounts submitted to DfE, and the internal scrutiny summary report;
- 31 January — accounts published on the trust's website;
- 31 May — accounts filed with Companies House;
- 26 January 2027 — deadline for the academies accounts return for 2025/26;
- Budget forecast return — by the deadline DfE sets each year, with DfE notified within 14 days if a revenue deficit budget is proposed.
Acumon works with academy trusts through education audit, school and academy accounting and internal audit, including internal scrutiny programmes and the accounts return. If your trust is above 3,000 pupils and recruiting a CFO, the September 2027 qualification requirement should be in the job specification now.