14 ways to make sure your ESFA apprenticeship audit is compliant

The Education, Skills and Funding Agency (ESFA) will be looking at a number of critical factors during their audit, but these aren’t always easy for training providers to pinpoint.

Our recent webinar looked at ESFA compliance in detail, and we were lucky to be joined by guest speaker Rupert Crossland, Director of Audit and Compliance at Professional Assessment.

Rupert has over 25 years’ experience in compliance and auditing roles within the training industry. This includes Principal Auditor at the Skills Funding Agency, the forerunner to the ESFA, so he’s well-placed to provide advice on audits.

In the webinar, Rupert shared common mistakes he’s found in samples of recent audits. Here are 14 key takeaways to make sure your next apprenticeship audit is compliant.

Want more exclusive insight on how to prepare for your next ESFA audit? Watch the full webinar on demand now.

1. Make sure the apprentice is on the PAYE scheme

Apprentices must be on the pay as you earn (PAYE) scheme and it must be declared on the apprenticeship service account.

Be aware that the ESFA has access to HMRC records too. They have been known to separately audit these against the Individualised Learner Records (ILR) for some providers, so it’s likely that this will be added to funding audits in future.

2. Confirm the apprentice is under a contract of employment

The employer must sign to say they have an apprentice under a contract of employment. This must be in place for at least the duration of the apprenticeship and the end point assessment.

3. Understand the small employer waiver rules

If the apprentice is fully funded under the small employer waiver, you need to ensure certain checks have been made. The ESFA will want to see a signed declaration to show you had an average of less than 50 employees for the 365 days prior to the apprenticeship start.

4. Assess prior learning of knowledge, skills and behaviours

You should have a process in place for assessing prior learning of knowledge, skills and behaviours. As part of this process, you should also consider reducing content to avoid duplicating prior learning. You should then decrease the price and duration accordingly.

If the reduction in duration results in a duration less than the ESFA minimum, the apprenticeship would be ineligible for funding. You may then discuss with the apprentice and employer whether an alternative apprenticeship standard would be suitable.

This year’s funding rules include a formula for reducing the price. The assessment document must also refer to knowledge, skills and behaviours of the standard.

Auditors will check learners’ records to see if you’ve completed an assessment that draws on the knowledge, skills and behaviours for the particular standard. They will also check for prior learning, such as similar qualifications.

If there is no prior learning, there are new rules in place from this year. You must now agree this with the employer and document the agreement before starting the apprenticeship.

5. Get your training plan in shape

The apprenticeship commitment statement is now called the “training plan”. It should contain all the required fields including:

• The responsibilities of all parties
• The planned off-the-job training hours
• Confirmation that the apprentice will be paid at least the minimum wage

The training plan must be signed and in place before the apprenticeship starts, and the apprentice must be in place by the start date.

Recent updates from the ESFA now require:

• The version to be entered as well as the level in the apprenticeship standard field
• Employer name and location to be entered in the place of work field

6. Determine the right price for apprenticeships

The price of the apprenticeship should be based on eligible costs, which are listed in the funding rules. Provide this for each standard you deliver and make sure it reflects prior learning.

Double check that everything you record is consistent between the training plan and the ILR. Any inconsistencies will become funding errors in terms of what the employer has agreed to.

This can become a problem if prices have been negotiated over time with certain employers. If they become a larger scale client then prices should be renegotiated.

7. Check the price for your own staff apprenticeships

The auditor will check that the negotiated price for your own staff on apprenticeships is based at cost.

Auditors may query if the price for an apprenticeship for your staff is the same as for other employers. But before you rush to reduce the price of your own employee apprentices, look at your delivery.

You may actually be putting in more time to provide the learning for your own staff. Quantify and cost this – the difference in price may be reduced as a result of the additional time you’re putting in.

8. Provide evidence of learning activity

This is a critical factor that will definitely be audited, so make sure your ILRs include evidence of learning activity from the actual start date. The same principle applies for returning from a break in learning – there must be evidence of learning on that return date.

If an apprentice completes one level of Functional Skills and then starts the next level up, ensure there is evidence of learning on the start date for the new aim.

9. Know the four tests auditors use for evidence of off-the-job training

There are four tests that will be applied in the ESFA audit and can’t be overlooked. Confirm that each off-the-job training (OTJ) activity passes these four tests:

1. It is directly related to the apprenticeship – it can’t be non-relevant learning
2. It teaches new knowledge, skills and behaviours – it can’t be repeating prior learning
3. It takes place during the apprentice’s normal working hours
4. It does not include English and maths up to level two

10. Get your off-the-job data in order

Your planned OTJ hours must be calculated correctly, and will be checked based on duration and weekly working hours. A funding error will occur if you don’t have evidence that you’ve completed the planned OTJ hours for completions.

A new rule has been added to this year’s funding rules, requiring actual OTJ to be recorded in the ILR for learners that withdraw.

OTJ doesn’t have to be delivered every week and it doesn’t have to follow a linear pattern. But you should investigate any significant shortfalls, because this naturally correlates with a lack of progress. It may lead to the apprentice going beyond their planned end date or becoming disengaged and withdrawing.

11. Understand what will be checked around functional skills

There are a few basics to cover when it comes to Functional Skills. The first, and perhaps most obvious, is to ensure that functional skills are actually being delivered. This is especially the case for apprentices progressing to level two after completing level one.

It’s also crucial to ensure that the apprentice is on the correct level of functional skills, based on their initial assessment results.

12. Evidence of learning

Evidence of learning must be there throughout the programme for each aim. Avoid large gaps as these suggest the learner is not engaged. Remember that, under the new funding rules, the apprentice must be scheduled to receive learning at least every four weeks.

13. Learning support

Differentiate between learning needs and difficulties. All learners have learning needs, but specific learning difficulties or disabilities must be identified through a proper assessment.

Once this has been conducted and recorded, make a plan of reasonable adjustments to overcome the learning difficulty. This should cover the duration of the learning support that you intend to provide and it must be signed by the learner.

You must keep evidence of delivering learning support, and this should correspond with the plan. For starters from this year, if you do not deliver a learning support intervention in a month, you must turn learning support funding off in the ILR and only turn it back on when support is provided again.

You must evaluate the effectiveness of the learning support, and if necessary, update the plan.

14. Organise your financial records

The ESFA will want to see certain financial records to provide evidence of:

• Payments to end-point assessment organisations for completers
• Additional payments in respect of apprentices
• The collection of the employer contribution for non-levy apprentices

Get ready for your next ESFA audit with Bud

Manually reviewing points like these for each individual learner is time consuming. With Bud, you’ll have peace of mind that your operations are fully compliant.

Our single, joined-up platform collects accurate learner data from multiple points every day, so you have all the evidence you need from enrolment through to end-point assessment.

Learn more about how Bud removes the hassle of ESFA audits or book a demo now.