1. Initiation
The DfE has decided, from an allegation of financial irregularity or breach of funding rules or agreements, that an investigation is required. The DfE may conduct the investigation themselves, or they may provide a list of approved audit firms, of which Forvis Mazars is one, and instruct the provider to appoint one of these firms to conduct the investigation at cost to the provider.
2. Notification
The DfE typically informs the education provider about the investigation by letter, informing them of the nature of the concerns and the areas that are being investigated (often referred to as the scope of the investigation). The scope may also set out the timescales to respond to requests for data and information, which might include the appointment of an approved audit firm as well as an agreement around the scope of work between all parties.
3. Data collection
The DfE/approved audit firm will request relevant documents, including financial records, funding agreements and compliance documents, and other supporting records and records related to student eligibility, enrolment, attendance, completion and achievement. This may also include conducting interviews with senior management, staff members, and other stakeholders, such as learners and employers.
4. Importance of transparency
The DfE aims to conduct investigations transparently and fairly so that providers have the opportunity to respond to any concerns raised.
5. Analysis
The gathered evidence and information are analysed to assess compliance against the scope of the investigation.
6. Reporting
A draft report is prepared outlining the findings from any irregularities or non-compliance, which may include a summary of evidence, areas of recommendations for corrective actions and financial implications, including financial clawback. The provider may be given an opportunity to respond to the findings before the final report is issued. In cases where an approved audit firm is used, the report typically will also be shared with the DfE.
7. Final report and outcomes
Outcomes may include receiving guidance on how to rectify issues and the possible support the DfE can provide. Action plans with required steps for compliance may be issued. In some instances, financial recovery will be required in the case of mismanagement, which could also impact current contracts and future growth and may also involve withholding of payments. In serious cases, this could result in a severe breach which may lead to loss of contract, bankruptcy or liquidation
8. Follow-up
The DfE may conduct follow-up reviews to ensure that the provider implements the required changes and is no longer non-compliant.
How to prepare for the investigation process
If you are investigated by the DfE, it's important to handle the situation carefully and professionally. Here are some helpful steps you should take:
- Review the notification - Carefully read the notification (letter or email) to fully understand the scope and reasons for the investigation.
- Audit firm engagement – If you have the option to and decide to engage an approved audit firm, it’s important to do so as soon as possible. If it’s the DfE conducting the investigation, consideration should still be given to engaging with an experienced firm that can help guide you through the process.
- Gather documentation - Collect all relevant documentation and records that may be required by the investigations team, such as financial records, learner records, and any correspondence with the DfE.
- Cooperate fully - You must engage with the DfE investigations team/appointed audit firm openly and honestly. Provide them with the requested information and access to necessary records.
- Seek legal advice - Consider consulting with legal professionals who specialise in education law to ensure you understand your rights and obligations.
- Develop an action plan - Create a response plan to address the issues raised in the investigation. Think about including corrective actions, policy changes, disciplinary actions or other actions to rectify any identified problems.
- Communicate with stakeholders - Be open with your stakeholders by informing staff, learners, and governing bodies about the investigation and any steps being taken to address the issues.
- Monitor progress - Regularly review the progress of the investigation and the implementation of any corrective actions.
What is the importance of compliance?
For providers, maintaining compliance with DfE funding rules and agreements is essential not just for continued funding. The DfE have produced handbooks for independent training providers (ITPs) (Financial handbook for independent training providers - Guidance - GOV.UK) and colleges (College financial handbook - Guidance - GOV.UK) which provides an overarching framework to support them in applying financial management, governance and other controls, consistent with their obligations as publicly funded bodies.
Also, regular assessment and reviews around learner data and funding claims can help education providers avoid potential issues.
Get in touch with our risk consulting specialists
We are one of the five audit firms approved to undertake funding assurance reviews, and one of ten audit firms approved to undertake investigations. We also work with a number of Combined Authorities and have conducted numerous investigations.
Want to find out more about our services? Contact us using the button below and a member of the team will be in touch.
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Our risk consulting contacts
Graeme Clarke Partner - Risk Consulting - London
Wayne Gellion Manager - Risk Consulting - Nottingham
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