Governance & Compliance Codes
The Audit Code of Practice & Regulatory Self-Assessment Questionnaire
The post-16 audit code of practice (the ‘Code’) sets out a common standard for the provision of assurance in relation to funding of post-16 providers. It sets out:
- The overarching assurance arrangements for post-16 providers
- The specific responsibilities within the assurance framework for sixth-form and further education corporations, and their external auditors/reporting accountants
The Code should be read alongside any agreement setting out conditions of funding in Education and Skills Funding Agency’s (ESFA’s) grant funding agreements and contracts. The scope of the work of the Audit committee is also set out in the DfE guide.
The FE Code of Good Governance 2023 & Compliance Checklist
The Code is a voluntary initiative (although the ESFA Accounts Direction stipulates FE corporations must comply with the principles of a code), and should not be seen as supporting a 'tick box' approach. Rather, it should be viewed as a guide to the topics of discussion Boards should be having, in order to inform strategy and have sufficient oversight of educational and financial performance. Boards are encouraged to adopt its 'spirit' as much as its 'letter'. By adopting and implementing the Code, the belief is that Boards will reinforce their college’s reputation and that of the wider sector, and give key stakeholders and partners’ confidence in the sector's ability to self-regulate. The aim is to help governing boards meet and exceed basic governance requirements, demonstrating that the sector has robust arrangements to govern and manage its own affairs.
The Code of Good Governance for English Colleges 2021 & Compliance Checklist
The Charity Governance Code and Compliance Checklist
Good governance in charities is fundamental to their success. It enables and supports a charity’s compliance with the law and relevant regulations. It also promotes a culture where everything works towards fulfilling the charity’s vision. This Code is a practical tool to help charities and their trustees develop high standards of governance. A compliance checklist is available for download below
The Code of Governance for Independent Training Providers and Compliance Checklist
Independent Training Providers (ITPs) provide excellent learning and training experience for learners and apprentices and are a key element of the skills delivery system of this country. They are entrusted with billions of pounds of public funds annually to provide quality services and experiences to students and apprentices. Collectively ITPs deliver most of the UK apprenticeship programme and any individual
provider failure damages reputation and trust in the whole programme. Therefore, it is important that they demonstrate the highest standards of governance. A compliance checklist against the Code is available for download below.
Committee of University Chairs Higher Education Code of Governance
CUC HE Code of Governance Checklist and Action Plan
The Colleges Senior Post Holder Remuneration Code and Model Statement
In May 2018, AoC Governors’ Council established a working group to produce the Colleges Senior Post Holder Remuneration Code (the Remuneration Code) and related guidance to support colleges in good governance practice. In terms of context, three other factors influenced Governors’ Council thinking:
- to ensure colleges remain at the forefront of good governance nationally
- in response to new Office for Students (OfS) regulatory requirements and, in part
- as a response to the political and media interest in senior staff pay and to respond to high-profile examples of questioning trustee, governor and other boards’ oversight.
This Remuneration Code aligns with and is equivalent to the Committee of University Chairs (CUC) Remuneration Code. This supports colleges in meeting the requirements for registration with OfS and ESFA reporting requirements and ensuring efficient and consistent practice across educational sectors.
The College Accounts Direction states that corporations must either adopt one of the codes (AOC's or CUCs) or explain why they have not done so. This means that corporations must either state that they have followed the minimum requirements of the relevant code or provide meaningful explanations for non-compliance
and how their alternative arrangements meet the principles of transparency, accountability, proportionality, understandability, value for money and the extent to which remuneration for senior people is evidence based.
A model Statement on Non-Compliance with the CUC Remuneration Code is available for download below:
The UK Corporate Governance Code
The Committee on the Financial Aspects of Corporate Governance was set up in May 1991 by the Financial Reporting Council, the Stock Exchange and the accountancy profession in response to continuing concern about standards of financial reporting and accountability – which produced the Cadbury report after Sir Adrian Cadbury, who chaired the committee. The report sets out recommendations on the arrangement of company boards and accounting systems to mitigate corporate governance risks and failures
The Greenbury Committee was established in 1994 by the Confederation of British Industry in response to growing concern at the level of salaries and bonuses being paid to senior executives. Its key findings were that Remuneration Committees made up of non-executive directors should be responsible for determining the level of executive directors' compensation packages.
In 1998 The Hampel Committee was established to review the extent to which the objectives of the Cadbury and Greenbury Reports were being achieved. The resulting Hampel Report led to the publication, in June 1998, of The Combined Code on Corporate Governance (the Combined Code)
In 1999 The Turnbull Committee was established to provide direction on the internal control requirements of the Combined Code, including how to carry out risk management.
Sir Derek Higgs was commissioned by the UK Government to review the roles of independent directors and of audit committees. Revised combined code was published in 2003
It was revised in 2006, 2008, 2010, 2012 and the Corporate Code of Governance was published in 2014, which has subsequently been revised in 2016 and 2018.
Comply or Explain
Currently, the governance codes we have in the UK are predominantly Comply or Explain codes. This means:
a. all the Principles of any chosen code MUST be complied with;
b. disclosure must be made if any of the steps required for compliance with an over-arching Principle have not been met;
c. any disclosure of non-compliance must be accompanied by an explanation. The purpose of any explanation is to provide a meaningful and convincing justification to show that, despite non-compliance, the organisation has a complete and robust system of governance, equivalent to fully compliant organisations. The explanation must therefore contain two elements: (1) the disclosure on where no compliance lies, and (2) what alternative steps the organisation has taken to ensure compliance with the over-arching Principle.
d. an explanation may also be used to detail how an organisation has not only complied, but what extra steps it has taken to exceeded compliance with a Principle/s of a code.
The purpose of the Comply or Explain regime, is to give flexibility to organisations in the acknowledgement that a one size fits all approach, is not satisfactory.
NB: a News Feed post of 13th March 2020, draws attention to the possibility of the change from Comply or Explain to a rules based system, and what the implications of this may be.