Flagship West London Free School didn’t comply with Academies’ financial rules, says auditor

Janet Downs's picture
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The West London Free School Academy Trust, which opened one of the first free schools, West London Free School (WLFS) in September 2011, did not comply with terms and conditions of funding, says the auditor of the Trust’s accounts for the year ending 31 August 2014. Neither did it comply with the Academies Financial Handbook 2013.

The auditor found breaches concerning:

1Procurement. The auditor reviewed 25 purchase orders and found eight didn’t comply with the ‘Academy’s financial procedures’. The auditor couldn’t trace one of these 25 transactions and couldn’t therefore verify whether it had been authorised. The auditor found other instances where the Academy hadn’t followed tendering requirements for purchases over £10,000.
2Bank reconciliations. The Academies Financial Handbook 2013 requires bank accounts to be reconciled regularly. The auditor found West London Free School Primary (WLFS Primary), which opened in September 2013, hadn’t produced bank reconciliations between September 2013 and January 2014. WLFS also did not produce bank reconciliations during the same period.
3Management accounts. The auditor found WLFS Primary hadn’t prepared monthly management accounts during the period September 2013 to January 2014 as required by the Academies Financial Handbook 2013. WLFS didn’t produce management accounts in February or April 2014.

The Trust says it is addressing the weakness discovered by the auditor. Toby Young, who resigned as the Trust’s chair on 7 January 2014, became the Trust’s Chief Executive Officer and Accounting Officer on that date. He confirms the Educational Funding Agency (EFA) has been informed of the irregularities.

The Statement by the Trust’s Accounting Office said there were twelve instances of spending at WLFS where the amount spent was more than £10,000 but where no formal tendering had taken place. Suppliers in seven of these instances had been chosen before the start of the school financial year. Spending had exceeded £40,000 in one of the twelve instances. This was for coach travel and the supplier had been chosen before the financial year.

But choosing a supplier before a financial year would surely have required formal tendering.

At WLFS Primary, there had been four instances of spending above £10,000 where no formal tendering had taken place, the Statement explained. One of these was for educational supplies where the Trust had permission from the EFA to use a particular supplier without going through tendering. Two instances were for purchase of reading schemes from sole suppliers. The fourth item where no tendering took place was for supply teachers where the expenditure eventually exceeded £40,000. This spending is excused on the grounds the Trust hadn’t anticipating spending more than £10,000 on supply teachers from the same agency.

The lack of bank reconciliations is explained away by saying there was ‘under-capacity in the schools’ finance departments’. This, the Statement says, has been rectified by appointing a Trust Finance Director and additional staff. This raises the question why there was not sufficient staff in place before the Trust increased the number of schools it runs.

The accounts reveal the Trust hopes to open six schools in total: two secondary schools and four primaries. At present it has one secondary, WLFS, and two primaries: WLFS Primary and Earl’s Court Free School Primary. Kensington Primary Academy is planned to open in September 2016.





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ben taylor's picture
Tue, 27/10/2015 - 00:30

Of only our local authorities were so well examined

Janet Downs's picture
Tue, 27/10/2015 - 08:12

Ben - schools under the stewardship of local authorities have their accounts publicly audited. Auditors are obliged to make public any concerns they find. This differs from the situation in academies and free schools. It is the responsibility of the academy trustees to inform the Education Funding Agency if the auditor finds problems. This was done in the case above.

That said, academy/free school auditors don't have to comment on value for money. And they can miss things such as extravagant spending on, say, an office desk, inappropriate use of funds, insufficient monitoring of credit card expenditure, or whether whether the pay of the executive principal is excessive. All these were found in academies after they had passed auditing.

That's not to say such things don't happen in schools under LA stewardship but it would be more difficult to hide. For example, Sutton Council ordered the reduction of the salary of a head where the school's governing body had agreed a high pay package.






agov's picture
Tue, 27/10/2015 - 09:41

Perhaps Ben means that community schools should have the same freedom as academy schools to choose whether to comply with requirements and report problems to the funding body. Or that local authorities should get to choose whether to comply with the audit requirements -

https://www.gov.uk/government/collections/local-audit-framework-replacin...

Bobby's picture
Tue, 27/10/2015 - 09:59

Oh dear, I do hope they're not playing fast and loose with my money and that it's as safe as being in a bank . . . well maybe not a bank with their track record, I mean a mattress ! :)

David Barry's picture
Tue, 27/10/2015 - 14:16

What jumped out at me was this:


"Toby Young, who resigned as the Trust’s chair on 7 January 2014, became the Trust’s Chief Executive Officer and Accounting Officer on that date."

In other words Toby Young, who used to make much of being a selfless volunteer seeking to improve the education of children, and was serving in the important, but unpaid role as Chair of the Trust, appears to have APPOINTED HIMSELF to the paid, pensionable, position of CEO and Chief Accounting Officer.

This reminds us that while there are problems with how financially accountable Academies and Free Schools actually are (compared to LEA schools), there are also issues with employment practices where public money is being spent on appointments which are being treated as private property.

Barry Wise's picture
Wed, 28/10/2015 - 10:26

David

That's an extraordinary accusation to make. Where is your evidence for Young 'appointing himself'? Presumably there is a board of directors, and behind them members or trustees? The DfE also surely requires conflict of interest procedures to come into play in such circumstances. Have you any reason to say they were not properly observed?

Trevor Fisher's picture
Wed, 28/10/2015 - 10:35

the Birmingham mail on 12th October reported the Perry Beeches Trust is being investigated over financial irregularities. no further details, but it is clear on the system overall that money is being moved around with no effective checks.

The Public Acoonts select committee and national audit office have long called for tighter checks.

It is essential that ofsted and others inspect chains, something the government refuses to allow the inspectors to do, as we have noted in the current SOSS briefing.

trevor fisher
convenor SOSS.

rosie fergusson's picture
Fri, 30/10/2015 - 15:52

I completed the very basic School BUSiness Managers financial course under the Government's National College in 2013 and the errors cited above are shocking in their basic ineptitude. Local Authorities are audited closely for their scrutiny of LA school finances ( Bradford got a major telling off in the mid noughties and now only allow 5 to 8% surplus ( Leeds is 15%) ; schools procure support from the LA's finance officers who audit an advise . IN contrast Gove and CO originally proposed that the over worked charities commission should audit the new free schools and academies [ and this was only after Keith Vaz challenged them on financial probity measures when the academy bill was first mooted with the Education Select Committee].
Still at least WLFS isn't as flawed as Bradford' Kings Science Academy....though the salaries of the CEO and Board of the expanding WLFS might be worth some scrutiny.

rosie fergusson's picture
Fri, 30/10/2015 - 15:55

It would indeed be nice if the WLFS would release the full documentation for the appointment which shows a completely open appointment process....what candidates were considered etc the interview questions, the responses , the equality and diversity process ? THis is what all LA schools have to b able to demonstrate. We could ask I suppose

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