Quarterly academies update from the Department of Education (DfE) - May 2026

Each week, DfE publishes information for academies on the GOV.UK website outlining the latest developments, required actions and reminders of previous communication.

Below, the Duncan & Toplis Academies Team has provided a financial round-up of key updates from March 2026 to May 2026.

March 2026

• General Annual Grant (GAG) allocations – DfE expected to issue all pre-16 GAG allocation statements during March 2026 for open academies. These are available on Manage your education and skills funding (MYESF).
• Publication of the updated academy national non-domestic rates (NNDR) guidance – The NNDR claims guidance is only for academies whose billing authorities are not on the central system, the NNDR online claim portal is now live. Where the billing authority has implemented the central NNDR payment process, there is no need to submit a claim, but the academy should ensure that it follows the updated academy accounts NNDR accounting guidance and grosses up the value of GAG received by the value of their NNDR bill(s) and includes a matching expense.
• Inclusion 2028 programme – The Inclusion 2028 programme has been extended from 2026 to 2027, with links to access free, bespoke resources through the inclusive education hub.
• 16 to 19 funding 2026 to 2027 – DfE published details on 16 to 19 funding for 2026 to 2027; funding allocations are available on the DfE Document exchange.
• Publication of the inclusive mainstream fund and inclusive early years fund – DfE published the methodology and best practice documents for the 2026 to 2027 inclusive mainstream fund and inclusive early years fund.
• Pupil Premium allocations – DfE published the quarter 4 update to pupil premium allocations for the 2025 to 2026 financial year.
• Academy Trust financial framework documents – DfE published the academies accounts direction (AAD), the model accounts and the framework and guide for external auditors for 2025 to 2026. Accounts for the period ending 31 August 2026 must comply with the updated AAD and model accounts; the changes over 2025 are minimal and include:

• Removal of the duty to report trade union facility time
• Updates to the text on streamlined energy and carbon reporting
• Updates to the definition of regularity and propriety
• Clarified that payments in lieu of notice (PILON) must be included as part of restructuring costs. Previously, PILON was excluded from the severance element of restructuring
• Clarified disclosure requirements for higher-paid staff, to include part-time staff. Narrative text must be used to disclose part-time staff or staff who only worked for part of the year whose FTE would exceed £60,000 on a pro rata basis
• Updates to the definition of key management personnel and disclosure of their benefits
• Clarified disclosure requirements for related party transactions where the principal/CEO is a trustee
• Changes to site improvements at church academy trusts by clarifying that the decision to recognise an asset should be based on the recognition criteria in FRS102
• The addition of a new annex, preparing for the introduction of the new Charities SORP 2026, as the AAD 2026 to 2027 will require trusts to follow SORP 2026. Key SORP changes concern lease accounting and revenue recognition, and trusts should start to prepare for the transition before 1 September 2026. Academies must not adopt the new SORP before the financial year 2026 to 2027

April 2026

• Fraudulent letter – DfE “National Regulatory Notice” – DfE raised awareness of a fraudulent letter which was recently presented as a DfE notice. It was confirmed as fraudulent and should not be followed or shared.
• Special Severance Payments – The academy trust handbook (ATH 2025) was updated to reflect an increase in the threshold for prior DfE approval of exit packages, dependent on earnings from £150,000 to £174,000. This is perhaps the first in-year amendment to the ATH, following its move from a PDF to a web-based document.
• Pupil Premium allocations – DfE published the 2026 to 2027 financial year pupil premium conditions of grant, indicative allocations and updated guidance on using pupil premium.
• 16 to 19 in-year growth funding reduction – DfE announced that in-year growth funding allocations for the academic year 2025 to 2026 would be reduced due to funding pressures on the available budgets. This is delivered by changing the 16 to 19 funding methodology for in-year growth.
• National Insurance Contributions (NICs) grant and schools budget support grant (SBSG) – DfE published the final 2025 to 2026 NICs grant and SBSG grant allocations for academies to cover the period April to August 2026. From the 2026 to 2027 academic year, the NICs and SBSG grants will roll into GAG funding.

May 2026

• 16 – 19 education and skills funding – DfE published guidance on 16 – 19 funding for the academic year 2026 to 2027.
• Free School Meals (FSM) – DfE published FSM guidance for academic year 2026 to 2027. All households in receipt of Universal Credit will become eligible for FSM. Schools should check FSM entitlement ahead of the October census. Details of the FSM expansion grant were also published, which supports additional costs arising from the expansion of FSM funding to all children in households receiving Universal Credit. Funding will be paid in March 2027 for the period September 2026 to March 2027. Academies will receive a further payment to cover the period April 2027 to August 2027, after which it will be rolled into their core budget allocation.
• 16 – 19 Bursary Fund – DfE published updated guidance for the 16 to 19 bursary fund. Academies should note that they cannot carry forward unspent 16 – 19 bursary funding for more than one year and must inform DfE (using their customer help portal) the total amount of any unspent funds (not previously reported) from any year up to and including academic year 2024 to 2025.
• Care to Learn (C2L) and 16 – 19 Bursary Fund for defined vulnerable groups - DfE opened the window for submission of new claims and a year-end reconciliation (for existing claims) for C2L and 16 to 19 Bursary Fund for defined vulnerable groups. The window closes on 1 July 2026.
• Free breakfast club grant – DfE published the allocations for the free breakfast club grant for the 2025 to 2026 academic year. Fixed-rate academy allocations for the summer term 2026 will be paid in advance at the beginning of June, alongside any arrears payment for the spring term 2026. Data collection on actual uptake in May and June may result in an adjustment, with an arrears payment being received in November 2026.
• Post-16 National Insurance contributions (NICs) grant – DfE published the conditions of the grant and allocations for the Post-16 NICs grant for the financial year 2026 to 2027. This will help support eligible institutions with the increase in employer NICs linked to post-16 education. Eligible institutions include academy sixth forms and 16 to 19 academies, with the first payment being made in October 2026.
• Opening new schools – DfE published new guidance on opening new schools from 1 September 2026.

There have also been five DfE Notices to Improve (NtI) issued recently.

One of the NtIs noted a breach of the ATH requirements on safeguarding. This followed a fatal stabbing and subsequent external investigation into safeguarding. The investigation found weaknesses in the organisational structure and systems, including not following statutory guidance. This is perhaps the first NtI that did not include an element linked directly to financial governance.

Two of the NtIs raised concerns over trust failures to maintain robust financial oversight and a lack of accurate and realistic budget setting and monitoring. The trusts concerned had reported significant deficits in revenue reserves in their financial statements. Further issues included having no fixed asset register, information missing from the trust website and having an insufficient number of audit and risk committee meetings. One of the trusts was instructed to review its statutory audit provision to ensure it provided an independent view of the trust’s financial statements and also to implement an Internal Scrutiny programme. This was potentially as its 2025 financial statements stated that only Health and Safety was covered within that year’s Internal Scrutiny programme.

The remaining two NtIs also raised oversight concerns. Reading the NtIs alongside the trust's 2025 accounts suggests that Internal Scrutiny work coverage may not have covered financial controls. One trust did not have regular monthly management accounts.

The DfE guidance on Internal Scrutiny in academy trusts states that an internal scrutiny programme will have financial control systems as a core element and will include evaluation of the controls and some testing of controls on a sample of transactions. The DfE guidance and the ATH make it very clear that internal scrutiny must be undertaken in addition to the external audit, and both cannot be undertaken by the same firm. The work of the internal scrutineer may be used as evidence by the external auditor in forming their audit opinion, but an extract from the external auditor’s management letter cannot be used in lieu of an internal scrutiny annual summary report.

Duncan & Toplis works with academy trusts across the UK, providing support across internal scrutiny, external audit, VAT, cyber security, budgeting and specialist education audits. If you are seeking advice for managing your academy, contact Rachel Barrett or your usual Duncan & Toplis adviser.

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