Education update: 2024/25 Academies updates from the Department for Education (DfE)

Each year we summarise the key changes that are likely to impact academies in advance of year end reporting to ensure that everyone is prepared. Here is our summary of the latest factors that might impact academies.

Academy Accounts Direction (AAD) 2024-25

The Academies Accounts Direction (AAD) 2024 to 2025 was published at the end of March 2025, providing guidance for academy trust’s annual financial statements for the 2025 financial year. There are only two changes this year, being:

• An alert to the Companies Act 2006 requirement for the inclusion of a non-financial and sustainability information statement within the strategic report for academy trusts with income over £500million and with over 500 employees. All academy trusts must continue to include a Strategic Report detailing the achievements and performance of the academy, the outcome of the Trustee’s assessment of going concern and how the Trustees have promoted the success of the academy. This additional statement includes the following key elements:
  • Information on the academy’s impact on the environment, including policies and outcomes related to environmental protection.
  • Details about employee-related issues, such as working conditions, diversity, and inclusion.
  • Information on the academy’s social impact, including community engagement and social responsibility initiatives.
  • Policies and outcomes related to human rights within the academy’s operations.
  • Information on measures taken to prevent corruption and bribery.
  • Identification of key risks and uncertainties related to non-financial matters and how they are managed.
• To highlight the changes in the Academy Trust Handbook (released in July 2024) that Trusts are able to enter into finance leases where the lease category is on the DfE approved list. For example, IT equipment, telephones, catering equipment, cleaning equipment and minibuses. Model accounting policies have been provided for Academies that have entered into finance leases.

The full guidance can be found here.

Model Accounts 2024-25

The following areas have been updated in the latest model accounts (published in March 2025):

• Throughout the accounts, updates have been made to reference the Secretary of State for Education and the DfE rather than the ESFA.
• The wording in the accounting officer’s statement of regularity, propriety and compliance has been made clearer.
• There is revised guidance on the requirements of the Independent Auditors Report. These updates are items we already report on and so, assuming no issues are identified this year, there will be no significant changes to the format of our audit report.
• The narrative in relation to the Teachers Pension Scheme has been updated to reflect the latest actuarial results.
• The update to the Academy Trust Handbook that Trusts with income over £50m must use an in-house auditor or a bought-in internal audit service (rather than a non-employed Trustee or an independent peer review by another academy trust) to carry out its internal scrutiny has been highlighted. From 1 September 2025 this is a requirement and not a suggestion.

We provide template Financial Statements to our clients that flag any changes/areas for consideration in advance of the summer break so they can easily be identified where they are included.

Other useful information