ESFA Post-16 Audit Code — What Applies to FE College Solar Projects
How the ESFA Post-16 Audit Code governs Salix loan applications, PSDS bids, and capital project reporting for FE college solar projects.
Published 27 April 2026 by SEO Dons Editorial
The ESFA Post-16 Audit Code is the framework FE corporations work within for capital project governance. For solar projects funded via Salix Decarbonisation Loan or PSDS Phase 4, three Audit Code areas matter most: capital approval thresholds, energy savings auditability, and asset register treatment.
Capital approval thresholds
ESFA Post-16 Audit Code requires corporation board approval for capital projects above the corporation’s delegated authority threshold — typically £100,000-£250,000 depending on the corporation’s scheme of delegation. Almost every FE solar project crosses this threshold (a typical 200 kW install at £180,000-£220,000 capex sits squarely above the threshold at most corporations).
This means corporation board approval is mandatory, not optional, for the Salix loan application or PSDS bid submission. The board paper needs to cover:
- Project scope (system size, location, sub-vertical context)
- Capital cost and funding source (Salix loan term, PSDS grant value)
- Annual energy savings model and methodology
- 25-year financial projection
- Risk register (DNO delay, structural surprises, asbestos discovery, weather)
- Climate Action Plan alignment
- Procurement strategy
The board minute formally recording approval is a required attachment to both the Salix application and the PSDS bid.
Energy savings auditability
ESFA Post-16 Audit Code requires that financial benefits claimed on capital projects are auditable — i.e., the methodology must be transparent, the input data must be evidenceable, and the projection must be defensible.
For Salix loan applications this means:
- 12+ months of half-hourly meter data as the auditable baseline electricity consumption
- Modelled generation using accepted PV simulation tools — PVsyst, PV*Sol, or Salix-approved equivalents
- Realistic self-consumption assumption per campus use pattern (not best-case)
- 25-year operational projection including modest panel degradation (typically 0.5-0.7% per year)
- Real-world price assumptions for grid imports and SEG exports
Our Salix energy savings calculations are designed to pass ESFA audit scrutiny — conservative self-consumption, realistic degradation, no aspirational electricity price inflation. Salix has rejected applications using over-optimistic assumptions; conservative modelling protects the corporation.
Asset register treatment
Solar PV systems are tangible fixed assets — the corporation must include them on the asset register from commissioning. ESFA Post-16 Audit Code requires:
- Asset registration with cost, commissioning date, expected useful life (typically 25 years for solar PV, 10-12 years for batteries)
- Annual depreciation — straight-line over the useful life
- Periodic impairment review — if generation falls significantly below modelled, impairment may need recognising
- Capital allowance treatment — solar PV is plant and machinery for capital allowance purposes (relevant where the corporation has any commercial activity within charity reporting boundaries)
For batteries, the useful life is shorter (typically 10-12 years with capacity retention to 70%); accounting treatment recognises this through faster depreciation.
Procurement compliance
ESFA Post-16 Audit Code expects competitive procurement on capital projects. For solar projects this typically means:
- Tender process — minimum 3 quotes from MCS-certified installers for projects above £100k
- Award documentation — clear rationale for the selected installer, scored against quality, price, programme, and post-install service criteria
- Conflict of interest register — confirmation that no board member or senior leader has a material conflict with the awarded installer
- Contract documentation — JCT or NEC standard form contract, or MCS-recommended framework
Where the FE corporation uses an existing framework agreement (e.g. CCS, ESPO, YPO), the framework procurement counts as the competitive process — single appointment from the framework is then permissible.
Post-completion audit
After commissioning, ESFA Post-16 Audit Code requires:
- Year-1 performance review comparing modelled vs actual generation and energy savings
- Material variance reporting if actuals diverge from model by more than 10%
- Lessons-learned register for future capital projects
- Asset condition review at 5, 10, 15, 20 year intervals
For Salix-funded projects, this performance reporting also feeds back to Salix Finance — a deliberately positive feedback loop ensuring the modelling methodology improves over time across the sector.
Practical implication for Sustainability Leads
The ESFA Post-16 Audit Code is not an obstacle to FE solar projects — it’s a framework that ensures projects are properly governed and properly evidenced. Sustainability Leads who treat it as friction tend to slip on board approval timelines and rework Salix bids; those who build the Audit Code into the project plan from day one move faster overall.
The mental model: every Salix bid and every PSDS bid is, in effect, an Audit Code-compliant capital paper presented to the corporation board with energy data attached. The bid IS the governance documentation.