Register of Interests – Declaration 2019-20
This form, and guidance included, must be completed by all Members, Trustees, Governors and Senior Management employees of Inspiring Futures through Learning.
In accordance with the Academies Financial Handbook, Inspiring Futures through Learning Multi-Academy Trust must publish on the Trust website (with a link through from school websites), the relevant business and pecuniary interests of each individual Member, Trustee or Governor (all referred to below as Governors) / Senior Management employee.
In completing this form, please note this guidance and that, detailing a definition of Related Party Transactions, below.
- As part of academy requirements you are required to detail any interests you, close family members, or anyone living in the same household as you, hold. Close family members include parents, partners, children, dependants etc. You are also required to declare any family member that works for, or attends the school.
- You are required to divulge areas where you have or could have any direct or indirect pecuniary or personal interest in any contract, proposed contract or other matter affecting the school.
- You shall be treated as indirectly having a pecuniary interest in a contract or other matter if, you are in the employment of a person, or a company or other body, which has or could have, any direct interest in any matter of the governing body.
- In the case of married persons the interest of one spouse shall be deemed to be also the interest of the other.
If a governor / senior management employee has any pecuniary interest in any matter under consideration at a meeting of a governing body meeting, or any other such meeting in which purchasing decisions are considered, he/she should disclose that fact and not take part in the discussion, or vote on any issue. Where appropriate, they should withdraw from the meeting.
There are many social connections, such as friends and relations, membership of clubs, societies or trade unions that can sometimes influence governors’ / employees’ judgements. These should be declared at the appropriate time. Personal relationships with staff must be declared.
This form must be completed by all who are requested to complete this and returned to the clerk. A record of the forms will be kept at the school and at the Trust.
Why do we collect information on your interests and related party transactions?
In line with financial reporting and Academies Financial Handbook duties, auditors must ask the Directors/Governors and Director of Finance who they believe are the related parties of the Academy Trust, the relationship, whether transactions have or are likely to have taken place in the year and the types of transactions involved. They must also ask what systems/methods we have in place to identify related party relationships and transactions, how these are authorised both in and outside the normal course of business.
This takes the form of requesting:
- A list of all parties who you believe to be related parties of the Academy;
- Explain the relationship (e.g. Governor /son of Governor etc.);
- The type and level of transactions in the year with the Academy;
- How are related party transactions identified by the Academy;
- How they are authorised both in and outside the normal course of business.
In order to do this it may be helpful to define a related party. The definition under UK accounting standards (UK GAAP) FRS 8 Related Party Disclosures can be found in the attached guidance section with our comments on the meaning of various terms in italics. In addition to this at the end of the guidance section are typical examples of related parties that may be applicable to an entity.
Related Parties - Guidance
Definition of a Related Party
A party is related to an entity if:
- Directly, or indirectly through one or more intermediaries, the party:
- Controls, is controlled by or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);
Control is the ability to direct the financial and operating policies of an entity with a view to gaining economic benefit from its activities. This ability is usually achieved with having more than 50% of the voting rights of an entity.
- Has an interest in the entity that gives it significant influence over the entity; or
Companies legislation provides that an entity will be presumed to have significant influence over another entity if it holds 20% of more of the voting rights of that entity unless the contrary is shown. This presumption is rebutted if the following criteria are not fulfilled, that: the investor entity is not actively involved in and is not influential in the direction of its investment entity policies and decisions.
In most cases an investor holding more than 20% of the voting rights will have significant influence over the entity.
- Has joint control over the entity;
This is where no one entity can control another but with one or more other entities can control an entity and each policy and procedure essential to the entity require approval from each entity.
- The party is an associate of the entity;
An associate is one where an entity (that is not a subsidiary) in which another entity has a participating interest and over whose policies and procedures the investor exercises significant influence. Broadly if an entity holds more than 20% of voting rights of another entity they will be classed as associates unless the contrary can be shown.
- The party is a joint venture in which the entity is a venturer;
- The party is a member of key management personnel of entity or its parent;
Key personnel are people who have authority and responsibility for planning, directing and controlling activities of the entity, including any directors (whether executive or non-executive).
- The party is a close member of the family of any individual referred to in subparagraph (a) or (d);
Close family members are those family members or members of the same household, who may be expected influence or be influenced by, that person in dealings with the entity.
Typical examples are spouses or children of a director or controlling entity.
- The party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with directly or indirectly, any individual referred to in (d) or (e); or
Typically this could be a company controlled, jointly controlled or significantly influenced by a director or their close family.
- The party is a retirement benefit scheme for the benefit of employees of the entity or of any entity that is a related party of the entity.
Principles applying to connected party relationships (extract from Academies Financial Handbook 2019)
Academy trusts must be even-handed in their relationships with connected parties by ensuring that:
- Trustees understand and comply with their statutory duties as company directors to avoid conflicts of interest, not to accept benefits from third parties, and to declare interest in proposed transactions or arrangements
- all members, trustees, local governors of academies within a multi-academy trust, and senior employees have completed the register of interests retained by the trust, in accordance with the Academies Financial Handbook, and there are measures in place to manage any conflicts of interest no member, trustee, local governor, employee or related individual or organisation uses their connection to the trust for personal gain, including payment under terms that are preferential to those that would be offered to an individual or organisation with no connection to the trust
- there are no payments to any trustee by the trust unless such payments are permitted by the articles, or by express authority from the Charity Commission and comply with the terms of any relevant agreement entered into with the Secretary of State. Trusts will in particular need to consider these obligations where payments are made to other business entities who employ the trustee, are owned by the trustee, or in which the trustee holds a controlling interest
- the Charity Commission’s prior approval is obtained where the trust believes a significant advantage exists in paying a trustee for acting as a trustee
- any payment provided to the persons referred to in the Academies Financial Handbook satisfies the ‘at cost’ requirements
The trust should be aware of the Charity Commission’s guidance for trustees CC11: Trustee expenses and payments.
The board of trustees must ensure that the requirements for managing connected party transactions are applied across the trust. The Chair of the Board of Trustees and the Accounting Officer (as senior executive leader) must ensure that their capacity to control and influence does not conflict with these requirements. They must manage personal relationships with connected parties to avoid both real and perceived conflicts of interest, promoting integrity and openness in accordance with the seven principles of public life.
Trusts must recognise that some relationships with connected parties may attract greater public scrutiny, such as:
- transactions with individuals in a position of control and influence, including the Chair of the Board of Trustees and Accounting Officer (senior executive leader)
- payments to commercial organisations which have a profit motive, as opposed to those in the voluntary sector
- relationships with external auditors that go beyond their duty to deliver a statutory audit
The trust must maintain sufficient records, and make sufficient disclosures in their annual accounts, to evidence that transactions with these parties, and all other connected parties, have been conducted in accordance with the high standards of accountability and transparency required within the public sector.
Trusts must seek ESFA’s prior approval for transactions with connected parties that are novel and/or contentious. Trusts should carefully consider the impact of this requirement and its relevance to transactions involving the Chair of the Board of Trustees and the Accounting Officer.