Building on the wealth of information found in the Using Aptem to prepare for an ESFA Audit eBook, Aptem Product Owner Freya Ni Chleirigh collaborated with apprenticeships and compliance expert Tony Allen. We ran a session on preparing for an ESFA Audit with Aptem. We share details on understanding what the auditors will be looking for. Our team also talk about how you can leverage Aptem’s extensive capabilities to help you prepare.
Having a plan
Developing a Compliance Framework is invaluable as many providers lack a clear approach. Sharing responsibility across the entire organisation is key, with a focus on clear roles and decision-makers. Internal auditing is best practice, particularly in combination with a logical approach to sampling. Audits should focus on areas of the business with higher risk. If non-compliance is found, do you have a strategy for addressing this? Demonstrating proactive measures are in place to rectify potential issues will provide auditors with confidence that you know what you are doing when it comes to compliance.
Navigating funding rule compliance
Navigating the funding rules requires a vigilant approach. Consistently refer to the regulations and seek clarification from the ESFA Helpdesk or experts in cases of ambiguity, paying close attention to nuances like the use of “must” or “should” in the wording. Document inquiries and interpretations via email for a clear audit trail. Be mindful of changes in the rules, which can occur throughout the year. Take advantage of early access to draft versions released in May, ahead of implementation in August, and review summaries of changes from previous years to adapt processes accordingly. Note that new rules may not affect learners already enrolled unless explicitly stated.
The Audit
The ESFA have both a random and risk-based approach to audits, but providers can expect a minimum of two weeks’ notice. The agency specifies the number of auditors and days for inspection, typically around four days depending on business size.
Auditors may review records dating back six years and examine evidence, whether in paper form or within digital systems like Aptem. Audits are interactive, allowing for ongoing communication. If issues arise, audits may be extended for additional information, with auditors investigating past learners for common errors. While rare, the most severe outcome is a 100% audit involving examination of all learners.
Evidence requirements
Whether it is stored in Aptem, or as physical files, or across several systems, or a combination of these, evidence is necessary. Here are some of the key evidence requirements:
Key evidence requirement 1
Learner eligibility involves assessing residency, date of birth, and ensuring at least 50% of working time is in England. Recognition of prior learning (RPL) is crucial and should include a Skills Scan that is reviewed by the provider. RPL extends beyond qualifications and considers the learner’s experience. Providers must follow the ESFA format for RPL calculations and calculate the hours for off-the-job activities. The percentage of a learner’s prior knowledge or experience is then calculated and used to adjust the pricing. Any reduction in funding must align with a corresponding adjustment in content, programme duration, or both.
Key evidence requirement 2
Starting 1 August 2023, every apprenticeship must undergo a learning support screening exercise, though specific guidelines are not given. Learners can self-screen, subject to provider verification. Evidence of ongoing support needs is crucial for those accessing additional funding and must be documented monthly. Functional Skills assessments should be comprehensive, possibly including diagnostic tests, with clear documentation on delivery methods. Exempt learners must provide GCSE certificates for English and maths. Additionally, employment arrangements, such as being on a PAYE scheme and receiving a lawful wage, must be on record. Please note, apprenticeship minimum wage regulations for those over 19 only apply in the first year of the apprenticeship.
Key evidence requirement 3
Ensure you accurately calculate Off-the-Job (OTJ) hours, not forgetting to account for the statutory 28-day holiday requirement. Maintain consistency in OTJ hours, especially at the start of the apprenticeship. Although, the training plan and agreement may change during the programme which may trigger a change in the OTJ hours. You can change the hours on the ILR, if you have the sole justification that this originally was an administrative error. The hours on the ILR should align with those in the apprenticeship agreement and training plan. Thoroughly document OTJ in the training plan, ensuring a clear mapping to the KSBs of the standard.
How Aptem’s Performance Dashboard and Off the Job hours card help
Key evidence requirement 4
Each learner must have at least four progress reviews per year. Reviews must be signed by the learner, employer, and provider. The employer or line manager’s attendance at progress reviews is now a more of a requirement. Ofsted disapprove of employers that do not attend. You must provide evidence of eligible cost breakdown, distinguishing between fundable and non-fundable items.
Five key areas that you can draw down funding for:
- Initial assessments
- Off the job and on the job
- Materials and consumables
- Peripheral costs – progress reviews, on programme assessments, not EPA (that is a separate cost)
- Government management to offer the programme
These should be clearly broken down and clearly articulated and should be agreed with the employer. Clearly state your profit element, this should be articulated separately. If you are an employer provider or a provider that has their own apprentice, you cannot make profit on your own employees.
How Aptem’s Reviews functionality helps
Key evidence requirement 5
If providers are receiving incentive payments that are intended for the employer, they must be paid on time. The EPA must be a written agreement with the EPAO and a signed statement regarding the employment status of the learner with the EPAO. The ESFA expects you to have a commercial agreement / contract for services with the employer – the apprenticeship agreement between the employer and the learner, the training plan, and any co-investment arrangements. If an employer is not a levy payer, then you need to make sure that there is a proper documented agreement regarding their 5% contribution. Be cautious when billing upfront; if a learner leaves, you will be expected to refund the full amount.
Key evidence requirement 6
Be prepared to evidence any BiLs, and watch out for the 23/24 rule, addressing the scenario where if there is no evidence of learning for a calendar month, even if learning resumes the next day, the learner must be placed on a break. Also, consider maternity/paternity leave and stay vigilant for changes in apprenticeship standards and transitioning learners between versions of the standards. Providers should remain informed about subcontracting rules to avoid any compliance issues.
How Aptem’s Process Automation Trackers keep your ILR current
Evidence gathering
As part of evidence-gathering, thorough documentation is essential. A platform like Aptem streamlines this task significantly, providing a self-evident audit trail within the system, far more efficient than a manual paper-based approach. Evidence must be accurate, firsthand, robust, and directly relevant to the individual learner.
Some red flags raised by your ILR returns that may alert the agency
- Always claiming 100% funding
- Many changes to ILR
- Changes to OTJ planned hours
- OTJ hours less than planned
- Frequent BiLs
Common mistakes identified during an audit
- No signatures
- Wrong price on ILR / agreements
- Not used ESFA RPL methodology
- OTJ not related to KSBs
- OTJ activity taking place on evenings and weekends
- Training Plan never revised
- Insufficient evidence of learning in a month
- Infrequent or non-existent progress reviews
Monitoring your own performance
- Have a planned approach
- Use ESFA reports (DSAT)
- Audit compliance is everyone’s responsibility – not just the Compliance Officer
- Conduct regular internal checks
- Arrange a mock audit (external)
Navigating the complexities of ESFA audits requires thorough planning. Establishing a robust Compliance Framework and adhering to key evidence requirements, whilst using a platform like Aptem helps to ensure compliance. We partner with providers across the sector, providing them with the tools and insights to stay compliant. Talk to us today.
