Why should Academies care about risk management?

Academy Trusts are held to account by the EFA to comply with the Academies Financial Handbook, their funding agreements, and all relevant aspects of company and charity law. At the most fundamental level, this means ensuring that there are robust systems of risk management and internal control in place; that financial control is exercised consistently; and that the organisation implements appropriate measures to protect its assets from fraud or loss.

Internal control extends far beyond financial control. Academy Trusts have a duty to implement processes for the regular review of the risks they face across all their operations and to ensure that those risks are reduced to acceptable levels. This duty encompasses ensuring effective safeguarding arrangements for the protection of pupils and the entire school community.

Benefits of Risk Management

Effective risk management better enables an Academy Trust to achieve its objectives whilst operating effectively, efficiently, ethically and legally. The key benefits include:

  • Knowing the key risks that could potentially disrupt the operation of the Academy Trust enables those risks to be effectively managed
  • Ensuring compliance with statutory obligations and standards and alignment with best practices
  • Providing Academy Trust’s with a means of improving strategic, operational and financial management
  • Helping to maximize realistic opportunities and to achieve and even exceed plans
  • Helping to minimize events which might result in financial loss, service disruption, bad publicity, threats to the safety or health of pupils and other stakeholders, or claims for compensation

Good risk management has the potential to enhance the ethos of the Academy Trust.

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