Academy finances: Neither transparent nor accountable

Henry Stewart's picture
 1
The Department for Education claims that "academies are far more transparent and accountable, as they are obliged to publish annual audited accounts unlike local authority-maintained schools." This is nonsense. The DfE must know it, as a simple check of the Performance Tables on their own web site shows the contrast between academies and non-academies.

Maintained Schools: Simple per-pupil data



If you want to know how your local maintained school is spending its money, you can check the DfE's Performance Tables. Each non-academy has straightforward per-pupil data for all main expenditure areas, with helpful comparisons to the midpoints for the local authority, the region and England as a whole. For example:



Academies: No per-pupil information at all



However check an academy listing and you will see only the message "No 2012-2013 Consistent Financial Reporting data".



It is possible, from this page, to download the previous year’s audited accounts. However you will not find any simple display of information, equivalent to the maintained school above. Instead you will find a long and complex financial document. Mossbourne’s is fairly typical with 59 pages of figures that really only make sense to an accountant.

Does the fact they “held fund balances” of £34,295,805 mean they have over £30 million in the bank? (Almost certainly not, it must be the value of the school building itself.) And what is the £1.07 million for depreciation, an item that never normally exists in school accounts. Depreciation is a sensible device for spreading capital expenditure over several years but this figure is so high because they are depreciating the cost of the school building. So the accounts contain £1 million of “expenditure” for an element the school never paid for and never will have to pay to anybody. (This is not specific to Mossbourne but quite common in academy accounts.)

In breach of Cameron’s promise



So, no, academy accounts are not transparent. To produce the equivalent of the simple per-pupil table displayed above would take a strong financial understanding and a fair amount of calculation. If the DfE has not been able to produce the information for its own web site, how can the average parent be expected to calculate it?

This is a direct breach of the promise made by David Cameron to the House of Commons Liaison Committee in March 2012. He promised per pupil information on the money going into each school and the results coming out. Two years on, the DfE continues to fail to meet this simple promise.

DfE in defiance of the Public Accounts Committee demand



The accounts for the academy chains, now responsible for over 400 of England’s secondary schools,  are even less transparent. Again you will find "No 2012-2013 Consistent Financial Reporting data" on the Performance Table. And, in the case of academy chains, most do not contain any information on how the individual schools spend their money. Download the audited accounts for one of Ormiston's schools, for example, and you will find £77 million of public money that is not broken down by school in any way. (Accounts available from each Ormiston school page, such as here)

The Public Accounts Committee last April demanded that this situation change:

"the Department must insist that every Academy Trust provides it with data showing school level expenditure, including per-pupil costs, and with a level of detail comparable to that available for maintained schools. The Department must then publish this data so that proper judgements and comparisons can be made by Parliament and the public."

This demand seems to have been completely ignored and no school level expenditure is available, or shows any signs of becoming available, for chains.

A bit of a mess



As Janet Downs has reported, the National Audit Office "qualified" the DfE accounts – meaning they refused to sign them off. This is the accounting equivalent of or even “unsatisfactory”. As the Municipal Journal noted, "Mr Morse, the comptroller auditor general, found the EFA's methodology was riddled with so many errors and so much uncertainty that it could not be untangled. " He qualified the DfE accounts because "the department could not prove academies had spent the cash given to them up to August 2012 in line with Treasury guidelines for managing public money." The Public Accounts Committee is to take evidence on the accounts in early March.

So we have simple, clear and transparent per-pupil data for maintained schools. And we have complex financial accounts for academies, breaking Cameron’s promise, in defiance of the Public Accounts Committee demands and not of a good enough standard for the National Audit Office to sign off. This is what the Department for Education apparently regards as a higher standard of transparency and accountability.
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Freya Findlay's picture
Mon, 24/02/2014 - 10:43

Hi Henry,

I work for the website everythingfreeschools.co.uk and would be interested in talking to you about this issue. Could you possibly email me to work out a time when we could chat about it? everythingfreeschools@gmail.com

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