Five warnings to academies re finances in two months, two lifted

Janet Downs's picture
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Five warnings to academy trusts were published by the Education and Skills Funding Agency (ESFA) in June and July.

DRB Ignite Multi Academy Trust runs eight primary schools.  A Financial Notice to Improve {FNtI) was issued on 21 July following  an ESFA probe in March.    ESFA found significant weaknesses including having no policy for managing related party transactions.  These totalled £439k and didn’t comply with ‘at cost’ requirements’.   There was also ‘inadequate separation’ between a limited company DRB Ignite Limited and the trust.  (See Schools Week for summary  )

Lilac Sky Schools Academy Trust received its FNtI on 22 August 2016 but it wasn’t made public until 30 June 2017.     ESFA found ‘significant irregular financial and governance practice over a number of years’.     These included failing to stop one individual dominating the Trust, failing to stop ‘irregular practices’ and failing to manage conflicts of interest.

LSSAT’s accounts (y/e 31 August 2016) show LSSAT’s board was reconstituted on 8 June 2016.  The new Board, who the accounts state 'were not in any way involved or responsible for the outcomes of the 2015/16 academic year financial position', found the Trust had bought services from three companies related to LSSAT’s former CEO, Trevor Averre-Beeson, during the academic year ending 31 August 2016 despite having been ordered to cease this practice on 1 April 2015. 

The related parties named in the accounts included Trevor Averre-Beeson’s wife, two daughters, his sister and sister-in-law. 

Schools Week reports that ESFA’s own accounts show £537,440 of funding to LSSAT has been written off  to allow LSSAT academies to transfer without a deficit. 

Enquire Learning Trust runs 27 primary academies.  An ESFA investigation seen by Schools Week found four senior leaders were being paid ‘off payroll’.   ESFA discovered no formal contract between the Trust and the Trust’s sponsor Enquire Ltd for ‘leadership, management and school improvement’ costing £1m over five years.  Trustees’ lack of financial know-how posed a ‘significant risk’.  Spending hadn’t been properly authorised and there’d been a ‘substantial amount of spend’ on Trust credit cards which couldn’t be accounted for.

De La Salle Academy Trust runs a Catholic boys’ academy in Liverpool, currently under capacity.  ESFA advanced extra funds to the Trust in June 2016 but the Trust continued in financial difficulties.  An FNtI was issued on 10 July 2017.   The accounting office for De La Salle named in company accounts (y/e 31 August 2016) is Principal David Hayes.  He is also a Member and Trustee.  The Governance Handbook for academies says ‘Employees of the trust cannot be appointed as Members’.  It would appear De La Salle is in breach of academy governance rules.  

Avonbourne Business and Enterprise Trust was the subject of my article yesterday. 

Lifted Financial Notices to Improve

Two FNtI were lifted as the trusts concerned had met requirements.  These were AET and Buckinghamshire UTC.

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