The ESFA timeline: 10 steps an audit will follow

Autumn is a busy time in any training provider’s calendar. With hard close (R14) complete it’s time to find out if you will be audited. So, if that all important email from the ESFA does arrive – what happens next?

At the end of the year, the ESFA reviews its data to understand if you have complied with your funding requirements.

If the ESFA finds inconsistencies, it is very likely they will audit you. The audit will look at a sample of data from your Individualised Learner Records (ILRs) and will follow a set process. The audit could be based on the previous year’s data or on the current year.

Rupert Crossland, Director of Audit and Compliance at Professional Assessment, explains:

“If you have an audit of a current year, one that’s before hard close, the auditors will base their audit on the next ILR you submit. That gives you time to get that ILR data and the supporting evidence fully accurate and up to date. That is absolutely critical to a successful audit.”

“For a pre-audit ILR update, I advocate using reports from your management operating system, such as Bud, to identify learners that are due for any form of update and prioritise those.”

We asked Bud customers to share their recent experiences from ESFA audits. Read their responses in our insider’s guide.

The 10 steps of an ESFA audit

It’s important to understand the process so that you can prepare relevant information in advance and comply quickly with the ESFA.

Step one: Intention shared and agreed

A letter or email announcing the ESFA’s intention to audit will be sent to your contract signatory.

You should reply to this letter quickly to arrange an introductory call with your lead auditor. The introductory call won’t necessarily happen immediately – you might have to wait a few weeks – so the quicker you respond to this letter, the quicker you can complete the process.

It’s normal to feel anxious about a potential audit, but your auditor will support you through the process. If your ILR data is accurate and up to date, and you have a plan in place for managing your audit, there is no need to delay responding to the initial request.

Step two: Introductory call

This call will kick off the initial period of the audit, which will be scheduled around two to four weeks after the call. In the call you will:

• Discuss the process and your auditors’ expectations
• Have the chance to ask any questions about what will happen during the audit
• Agree on key dates for the audit, and when the auditor will receive your sample data

Step three: Sample data is chosen

The ESFA will choose a minimum sample size of 30 ILRs, or 10% of your total learner base.

The sample will be based on a mix of learners at different stages in their learner journey. It’s likely some will still be on programme, some will have completed and some may have withdrawn.

As one Bud customer noted previously, this sample is the luck of the draw: it’s almost inevitable that there will be a few learners that you’d prefer weren’t in there.

Step four: Upload evidence

Once you’ve collated the data for the sample, the auditors will ask you to upload the records onto their online platform. Before you upload the evidence, you will need to make sure it is accurate and completely up to date.

If you use an online system such as Bud to track learner progress, then this process is fairly quick and simple.

Training providers who are not currently using Bud will need to transfer learner records to the auditors’ online system. If you have paper files, you will need to make electronic copies before you can upload them to the system, which will take a lot longer.

Step five: Fieldwork

This is when the auditors spend time investigating the data you’ve submitted. Together you will agree how and when they will feed back to you the information they’ve found, including any inconsistencies that they need you to provide more evidence for.

It is typical to expect a daily feedback summary. However, if they need something from you urgently, they will contact you straight away. If you receive a request for more evidence, you will need to prioritise this and deliver the information in a quick and timely manner.

If there are learners in your sample that you know have inconsistencies, it’s worth getting ahead of this process and contacting them to gather the information in anticipation of the auditors’ request.

Step six: Error feedback

Once the main sample has been audited, you will receive written feedback detailing any errors. These will be listed either as:

Funding errors: where funds are at risk of recovery. For example, if an apprentice has completed their course but has completed less than the required off-the-job training hours, all of the funding for that apprenticeship could be at risk.

Data errors: where the ILR is inaccurate, but it does not impact on funding. For example, if an apprentice is still in learning but their planned hours have been calculated incorrectly, this can be corrected and completed because they are still on the programme.

View our list of the top ESFA auditing errors and how to avoid them

Step seven: Upload additional evidence

Once you’ve received the auditor’s feedback, you will have another opportunity to upload evidence. This can be a complicated process as you will need to look at each error on a case-by-case basis. Spend time going through this in detail and decide whether you agree with their assessment.

Check how they’ve assessed other learners and whether the same rules could apply. Contentious issues could include:

• Whether they are applying the rules correctly to a particular scenario
• Whether your evidence is sufficient
• Whether it is a funding error or data error
• The amount of the funding area – all or a proportion

You will need to be ready to defend any decision that you disagree with and have evidence to back up your assertion.

Examples of the type of scenarios you might have to defend and where you can get support are explained in detail by Rupert Crossland in our free webinar on preparing for an ESFA audit. Watch the webinar now.

Step eight: Evidence reviewed

Once you’ve provided all the evidence you can, you will have to wait for it to be reviewed. This can take some time and you will need to be patient if you do not hear back straight away.

Step nine: Unresolved errors confirmed

If there are any unresolved errors once you have shown all your evidence, the auditors will advise you on any data amendments necessary.

If there are a number of similar errors, then you may be investigated further. In some cases, the ESFA will want to check a wider sample of learners to confirm whether an error is isolated or systematic.

This is known as 100% auditing. If an error is found to be systematic (for example, associated with a specific trainer or course) then you will need to investigate this further.

Step ten: Reporting and recovery

Once all errors have been audited, you will receive a report. This will include an error rate on each funding stream and instructions for how to clear funding errors. There will be recommendations for how to address errors and prevent them occurring again.

Quick list – the dos and don’ts of the ESFA audit process

Do…

• Prepare for lots of questions – the auditors will be questioning every bit of detail in your data. You may need to go back to learners who have left the programme to collate evidence if information is missing.
• Be ready for the audit to be carried out remotely – this began in lockdown and has continued, although some audits are happening face-to-face
• Be ready for a lengthy process – there are a lot of steps to the process (more details on this below) and it can take several months to produce the final report.
• Expect periods of silences – auditing is a detailed process and it takes time to review evidence and produce reports. This means you might be waiting to hear from them.
• Assign a lead – the process is resource heavy, so choose someone to coordinate the preparation and handling of the process. The person should be cognizant of the rules and will need to have a lot of their time freed up.

Do not…

• Wait for the audit letter to start planning – every training provider should have a plan in place for handling an audit before they receive a letter from the ESFA. Read more about preparing for an ESFA audit.
• Expect the audit to always be carried out by the ESFA – the ESFA sometimes contracts out the audit process to private firms. This can mean that the process takes longer as they need to get approval and sign-off from the ESFA.
• Expect the process to be quick or try to rush it

Manage the audit process smoothly with Bud

Simple errors can be avoided and eliminated by using Bud. Our single, joined-up system, automatically records evidence at every step of the learning process, so you can be confident that your data is always accurate and up to date.

Laura Moore, Head of Data, Funding and Compliance at Raise the Bar recently experienced an ESFA audit:

“I’ve completed audits in previous roles and it has been very stressful. But because we use Bud at Raise the Bar, I knew the data I needed would be accurate and I knew exactly how to easily access the evidence. I’m absolutely thrilled to say there were 0% errors!”

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