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Academy trust due diligence

Posted on 13th August, 2022

Academy trust due diligence is a crucial process to undertake before a school joins a trust. When a school or academy wishes to join a multi academy trust both parties should undertake a process of due diligence. By undertaking due diligence, the trust will fully understand all of the risks, assets, liabilities and relevant information to make a fully informed decision about whether adopting the academy is the right decision. From the academy’s perspective they will also be fully informed of the same matters with regard to the trust.

due diligence
Due diligence, worthwhile homework?

Conducting due diligence investigations can be detailed, complex and time consuming which is why organisations often engage a specialist firm. A review of health and safety arrangements is a key element of the due diligence process.  Due diligence is also a key ingredient of robust financial management detailed in the Education and Skills Funding Agency’s Academy Trust Handbook previously known as the Financial Handbook.

Due Diligence

A health and safety review would normally start with a desktop review of documentation including the policy, control arrangements and risk assessments such as those required under the Management of Health and Safety at Work Regulations 1999 and the Control of Substances Hazardous to Health Regulations 2002.

Fire risk assessments should also be scrutinised to ensure they comply with the Regulatory Reform (Fire Safety) Order 2005. All documentation should be current and regularly updated. Where documents have not been updated for some time this could indicate that controls or systems are inadequate. Inspection records should be readily available for review such as fire equipment, gas boilers, lifts, fire alarm, emergency lighting, extraction equipment, etc.

The academy’s health and safety performance should also be reviewed by examining the accident book, reports under the Reporting of Injuries, Diseases and Occurrences Regulations 2013 (RIDDOR) and near miss reports. This information should then be compared with employee and public liability claims submitted to the academy’s insurer. Frequent accidents can be an indicator of poor controls but equally a lack of accidents and near miss reports would also raise concerns.

Employee training records should indicate and health and safety related training and should be reviewed to ensure it is up to date. Training could cover a wide range of safety issues such as the use of ladders, first aid, fire safety awareness, etc.

Academy Trust Leadership

Due diligence should also provide an opportunity to review health and safety leadership and governor/board meeting minutes should be scrutinised for safety items – is safety a standard item on each agenda? It is also worth ascertaining whether a specific governor/director has been given responsibility for health and safety in the organisation and if a specific committee has been established.

A review should ascertain where the organisation obtains its health and safety advice from. This could be an internal employee for large multi academy trusts or an external consultant which is common in other cases. Are these people competent, have they got the qualifications and experience to undertake the role? Where they provide health and safety audits and inspections are the reports adequate and circulated to governors/the board?

Occupational health is an important aspect of any health and safety management system and this should also be the focus of any due diligence review. How are occupational risks such as stress assessed and controlled? Are arrangements in place for occupational health support when required and are employees returning to work supported with an effective plan?

Buildings & Other Assets

Buildings and other assets need to be reviewed to ascertain their current condition which may give an indication of capital works which will be required going forward. The identification of asbestos containing materials (ACMs) should have been undertaken with a clear, up to date management plan in place. There have been a number of schools prosecuted by the Health and Safety Executive for inadequate control of ACMs and this can give rise to long term liabilities.

Details of any enforcement action past or pending should also be considered including prohibition and improvement notices, fee for intervention payments and prosecutions. The revised Sentencing Guidelines for Health and Safety offences which came into effect in February 2016 have significantly increased the levels of fine imposed following prosecutions and this could be a huge financial cost to an academy or trust. The board and trustees should also be aware of the risk of personal liability for health and safety offences under section 37 Health and Safety at Work etc. Act 1974 where the offence is committed with their consent, connivance or attributable to their neglect.

With due diligence audits the greater the detail and information the better. It is only when you have all the information that you can make an appropriate assessment and decision. Where things go wrong it is usually due to a gap in information which was not included in the due diligence process. A robust due diligence exercise will provide some comfort to the governors/board that they have all the information they need to make an informed decision which can be defended at a later date if required.

If you require advice on health and safety due diligence for you school or academy trust then contact Mark Stouph for more information.

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