Your trust must have a reserves policy
Your trust must set a policy for holding reserves, including a clear plan for managing them, and explain this in your annual report. This is set out in:
- Paragraph 2.8 of the Academy Trust Handbook
- Guidance from the Charity Commission on reserves including:
- Section 2 of Charity reserves: building resilience
- Paragraph 1.22 of the Charities Statement of Recommended Practice (SORP)
- Academy trust reserves guidance from the Department for Education (DfE)
A clear reserves policy not only helps your trust make sure it has appropriate levels of reserves to support financial stability, but also provides accountability for your use of public funds and confidence for stakeholders.
The trust board is responsible for approval and oversight of this policy. It's likely that your Chief Financial Officer (CFO) will draft the policy but it's your job to oversee it and to make sure that the trust is