The Skills Funding Agency last year introduced a new requirement for certain training providers. Arising from increased concern within the SFA relating to the subcontracting arrangements of a minority of lead providers, the 2015/2016 Funding Rules addressed these concerns and the new requirement to obtain an external assurance report on the effectiveness of a provider’s subcontracting processes and controls sought to provide further comfort to the SFA that these rules are being followed and implemented.
If you contract directly with the SFA and then sub-contract £100,000 or more of that contract value to other training providers, and have done so in the 2016/17 academic year, then you will be required to engage with an external auditor in order to obtain an assurance report as to your systems, procedures and controls over the operation of your subcontracted delivery. This clause will be contained within the 2016/17 funding agreements of lead providers.
The SFA has published guidance on this process in September 2015 entitled ‘Providing External Assurance On Subcontracting Controls’. This explains the scope of the assurance report which must be obtained by 31st January of each academic year, by which date the provider must certify to the SFA that it has obtained the report and that the report has identified no weaknesses in its subcontracting process. A template of this certificate is attached to the above guidance.
Failure to obtain a report or if you receive an unfavourable report may ultimately result in the SFA withdrawing funding contracts.
Time is of the Essence
Nationally, many lead providers failed to obtain their report by the prescribed deadline for 2015/16 and incurred the displeasure of the SFA. Make sure you are not one of those that fall foul of the deadline this year.
At 360 Accountants, we have extensive experience of the training sector and work regularly with a number of training providers. We engage with numerous lead providers, locally and nationally, to undertake this assurance work and we understand what is needed by the SFA and how we can add value to the process. If you would like to meet with us or contact us, at no obligation to yourself, in order to discuss your assurance report requirements, then we are confident that we can provide you with an efficient and effective service.
Depending on the complexity of your subcontracted provision, we would anticipate that the cost of this service will start at £1,500.
If you are interested, please contact Andy Jewitt, a director in our Hull office on 01482 427360 or email at andyj@360accountants.co.uk.
