This is what can happen when you give schools too much freedom

Fiona Millar's picture
This won't be a long post. I would urge you all to read this story and also this report from the DFE on what was going on at the Priory Academy Trust in Lincolnshire. I understand from local parents that the government was reluctant to release the report, and I can see why given the appalling misuse of public money by the Trust's CEO and his family , but the local outcry made publication inevitable.

We have been asking for some time for more transparency about academy schools' funding and budgets. I am willing to bet this won't be the only story in this vein but the government should act swiftly now to say how much money per pupil academies receive and explain how the new Education Funding Agency can possibly hold thousands of schools to account for how they spend that money.
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Tim Bidie's picture
Fri, 27/04/2012 - 15:42

The level of Academy accountability, the levels of freedom given to academies, is not related to the malpractices within the Priory Academy Trust.

No system of regulation is foolproof.

A Department for Education spokesman said:

“The Department’s investigation into the Priory Federation revealed serious failings of key individuals in relation to financial management. The Trust has accepted responsibility and the CEO has now left.

“Unfortunately no system of financial audit can guarantee it will prevent all wrongdoing. When concerns were raised, the Department carried out a full investigation......

“The financial accountability systems in place for Academies are more rigorous than those for maintained schools. Unlike maintained schools, Academies must have their accounts externally audited. But lessons can always be learned and we will consider whether we need to strengthen our systems at Federation level.”

No matter how detailed the level of accountability in schools may be, problems will, from time to time occur, for example in the Misbourne School

The Misbourne School is a co-educational secondary school in Great Missenden, Buckinghamshire. It is a community school, run by the local authority:

'Senior Leadership Scandal

In July 2009 17 members of staff compiled an anonymous dossier with serious allegations surrounding the head Jon Howard-Drake's relationship with the deputy head Bea Bates the allegations were as follows: ‘The head and deputy live together as man and wife and share the same authoritarian management style’,Staff were sometimes ‘refused permission to attend medical appointments and funerals’, but the head and deputy had been known to ‘take half days before a school holiday to facilitate holiday arrangements, and leave early to go away for the weekend’,‘The head and deputy have a strict policy not to meet or talk to parents’,The head used ‘foul language’ while the deputy sometimes ‘berates staff in front of colleagues and students’, When Ofsted was due to visit, ‘all staff were warned not to speak to the inspectors’, Staff were told there was no training budget, but the head allegedly went on a course in America, and the deputy went on one in South Africa, The head refused to close the school when there was a rat infestation.

These allegations were widely thought to have led to the resignation of the head Jon Howard-Drake and deputy Bea Bates. This controversy attracted national media attention.'

However, unaccountable schools can provide both education and ethical standards of the highest calibre:

'As for accountability of teachers and administrators, Sahlberg shrugs. "There's no word for accountability in Finnish," he later told an audience at the Teachers College of Columbia University. "Accountability is something that is left when responsibility has been subtracted."

Janet Downs's picture
Sat, 28/04/2012 - 09:21

Tim – you are again confusing accountability for educational outcomes with accountability for something else. It was school meals on the other thread, now it’s financial probity.

Accountability in the context of Finnish schools is accountability for students’ learning progress. This is based on measuring a pupil’s advancement against prior achievement and the performance of other students respectively. It is, therefore, misleading to use this definition of accountability to anything other than learning outcomes.

It is also misleading to equate the Finnish idea of accountability with being unaccountable.

Janet Downs's picture
Fri, 27/04/2012 - 16:31

"The financial management of the Federation has not been of a standard necessary for an organisation of its current size. Regularity and transparency in the use of public funds has not been demonstrated."

That's the dry but damning assessment of the activities at the Federation. Financial irregularities included £45,000 to decorate an apartment at the Federation's equestrian centre for the CEO to live in (he didn't in the end because of tax implications); issues around procurement; possible conflicts of interest in suppliers used; employment of relatives; paying for training for the CEO's son; payment for personal tax advice to CEO; establishment of a private apartment at the Federation's centre in France; use of the French centre by family members for activities not related to Federation business; purchase of Federation laptops and personal purchases using Federation credit cards (these included sex games and supplements which were delivered to a school site).

The local Tory MP, Karl McCartney, said the report should not be published until "due process" had been followed. It is unclear what that "due process" is. Neither is it clear why this "due process" should prevent public disclosure. Mr McCartney also said he'd discussed the report with the school's minister.

Perhaps Mr Gove, or Mr Gibb, could throw some light on what this "due process" is and why it trumps transparency and disclosure.

Tim Bidie's picture
Fri, 27/04/2012 - 16:44

Intriguing that my comment is awaiting moderation, yet yours is not.

Perhaps a bit more transparency and disclosure required on this website?

Sarah's picture
Fri, 27/04/2012 - 16:51

Truly shocking Fiona.

Tim Bidie's picture
Fri, 27/04/2012 - 17:07

I see my entirely innocuous comment is still awaiting moderation.

Tim Bidie's picture
Fri, 27/04/2012 - 19:02

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.

WILLIAM PITT, speech, Nov. 18, 1783

Rebecca Hanson's picture
Fri, 27/04/2012 - 19:30

Tim this forum seems to have its parameters set so that if you include two or more hyperlinks in your post it goes to moderation. It usually comes up within a day. That catches me out all the time as I tend to reference my comments and have had to learn to reference them less (although I still keep forgetting).

I'd assume it's that or that you have triggered a key word. Forums are a hassle to run and this lot are doing it for free. If it's not up by Monday I'd message them and ask.

Tim Bidie's picture
Fri, 27/04/2012 - 20:18


Many thanks.

Fiona kindly made the same point on another thread.

I now know why Janet keeps asking me for my evidence!

Janet, It's the weekend. Here are your revision questions:


Up to the End of Henry III *

1. Give the dates of at least two of the following: (1) William the Conqueror. (2) 1066. *

2. What is a Plantagenet? Do you agree?

3. Trace by means of graphs, etc., (1) The incidence of scurvy in the Chiltern Hundreds during the reign of Rufus. (2) The Bosom of the Pope. (Squared paper, compasses, etc., may be used.)

4. Expostulate (chiefly) on (a) The Curfew, (b) Gray's Energy in the Country Churchyard.

5. Estimate the size of (1) Little Arthur. (2) Friar Puck. (3) Magna Charta.

6. Fill in the names of at least some of the following: (1) . (2) . (3) Simon de Montfort.

7. King John had no redeeming features. (Illustrate.)

8. Arrange in this order: (1) Henry I. (2) Henry II. (3) Henry III. (Do not attempt to answer more than once.)

9. (a) How far did the Lords Repellent drive Henry III into the arms of Pedro the Cruel? (Protractors may not be used.) (b) Matilda or Maud? (Write on one side of the paper only.)

10. How would you dispose of: (a) A Papal Bull? (b) Your nephews? (c) Your mother? (Be brutal.)

11. Which would you rather be: (1) The Sheriff of Nottingham? (2) A Weak King? (3) Put to the Sword?

*N.B. Candidates over thirty need not attempt questions 10, 2, 5, 3, 4, 11, 9, or 1.

agov's picture
Sat, 28/04/2012 - 09:35

Tim old chap, I've been reading your postings for a while now. You're a bit of a twat really, aren't you.

Andy's picture
Sat, 28/04/2012 - 15:20


Thinking of the descriptor you so ineolquently use may I suggest you re-examine your own motivation, which of course has absolutely nothing to do with the top page topic and everything to do a gross personal attack. This leave me wonder just who the real "twat" is?

Rebecca Hanson's picture
Sun, 29/04/2012 - 12:05

I find agov's comment repulsive and would like to explicitly dissociate myself from it.

Tim Bidie's picture
Tue, 01/05/2012 - 09:05

Ah! The unsanitary voice of the school lavatory scribbler and attendants.

'When I consider how my light is spent
Ere half my days in this dark world and wide,
And that one Talent which is death to hide
Lodged with me useless, though my soul more bent
To serve therewith my Maker, and present
My true account, lest He returning chide,
"Doth God exact day-labour, light denied?"
I fondly ask. But Patience, to prevent
That murmur, soon replies, "God doth not need
Either man's work or his own gifts. Who best
Bear his mild yoke, they serve him best. His state
Is kingly: thousands at his bidding speed,
And post o'er land and ocean without rest;
They also serve who only stand and wait.'

Andy's picture
Tue, 01/05/2012 - 09:27

Tim, you're surely not seriously implying that the SoS for Educ. is God incarnate and that we should all bow and leave him to his mighty works ...? ;D

Tim Bidie's picture
Tue, 01/05/2012 - 09:38

'Thus roving on
In confus'd march forlorn, th' adventrous Bands,
With shuddring horror pale, and eyes agast
View'd first thir lamentable lot, and found
No rest: '

John Milton (1608-1674). Paradise Lost (l. Bk. II, l. 614-628).

Andy's picture
Tue, 01/05/2012 - 09:58

My inclination is to receive your chosen tract as highlighting the impact of politicians on what should be good, honest and wholesome but which they constantly ravage for personal gain. Gosh I could almost be paralleling politicians with bankers ... :)

Janet Downs's picture
Sat, 28/04/2012 - 09:39

The Federation has also admitted to lying to the media about whether an investigation was taking place into their finances.

Janet Downs's picture
Sat, 28/04/2012 - 10:05

Tim is correct in saying that financial mismanagement can take place in any organisations. However, this supports the argument that there needs to be checks and balances in place. So-called "light-touch" regulation has resulted in the MPs' expenses scandal and far worse, the financial chicanery which nearly caused the world's global economy to collapse.

Janet Downs's picture
Sat, 28/04/2012 - 10:08

Academies, free schools and academy chains or federations are exempt charities and are not regulated by or registered with the Charities Commission. The principal regulator for "Academy proprietors (otherwise known as academy trusts or academy companies)" is "the Department for Education (DfE), assisted by the Young People's Learning Agency (YPLA) until March 2012 when that body is replaced by the Education Funding Agency (EFA)."

A principal regulator (in this case, the DfE) must ensure charity trustees comply with "their legal obligations to control and manage their charity" and "monitor charity law compliance". A principal regulator can ask the Commission to open an inquiry, if necessary, but cannot investigate charities itself, and "will work with the Commission to ensure that its exempt charities are accountable to the public."

My understanding of the above is that the DfE, as "principal regulator" should have asked the Charity Commission to investigate the Priory Federation. The EFA was thorough, but should the investigation have been undertaken by the Charity Commission?

It's interesting that the Charity Commission should initially describe academy trusts as "academy proprietors".

Janet Downs's picture
Sat, 28/04/2012 - 13:00

The DfE has issued a bland statement about the report into the Priory Federation. It says that the CEO resigned following the presentation of the report to the Federation.

What it doesn’t explain is why the report wasn’t made public until this week. The CEO resigned on 30 March 2012. It has taken nearly a month for the report to be placed in the public domain. Two Freedom of Information requests (18 and 20 April) to release the report were made on the What Do They Know website.

The statement said the matter had been referred to the police. It also said that the “financial accountability systems in place for Academies are more rigorous than those for maintained schools. Unlike maintained schools, Academies must have their accounts externally audited.”

What it didn’t say was that local authorities have to send annual statements to the DfE which have to include “confirmation of the assurance provided” by the LA’s audit system for schools. The DfE also publishes the expenditure data for LA schools on its website. No such data is available for academies. The National Audit Office (Oct 2012) recognised that the DfE had “set standards for financial management in maintained schools” and has an assurance framework in place. However, it warned that it was the DfE’s responsibility to ensure the framework was meeting its objectives.

Andy's picture
Sat, 28/04/2012 - 15:34

Sadly, where systems and processes are insufficiently robust the self-motivated and greedy will fall foul of temptation and attempt to gain personal advantage. This type of inciddent is not the exclusive domain of or limited to academies or Free Schools. Indeed, as has been pointed out in earlier comments, there have been far too many examples of this misuse/abuse/misappropriation of public funds from the Lords and MPs through to commercial enterprises and schools. It is not that long ago that a state Primary School Headteacher was found guilty of defrauding her school for personal trips and imitrating Imelda Marcos. lets also remember the enormous fraud that besets the EU, which has not had its financial probity signed of through formal auditors by decades.

So my message is lets keep this in perspective and not get precious about it happening in an Academy organisation. Yes, it is criminal and charges should follow. Yes, the auditors should have spotted it and questions must be asked about their processes and practice which allowed this go unnoticed. YES, it has happened across education and other enterprises for decades. No, its not exclusive to nor a reason to start a bandwagon against schools that are free from LA control. The latter of course have also be found wanting regarding fraudulent activities too.

Allan Beavis's picture
Sat, 28/04/2012 - 18:17

Andy - you're right that fraud can seep into any organisation. The problem really is that the government has unwisely promoted Academies and Free Schools as the the ultimate in good practice, achievement, reform. They are not of course and Gove should have realised by now that the spin is wearing thin. Fraud and malpractice is pretty common in Charter Schools, so it's not surprise to hear of the Priory scandal - Gove has imported the malpractices inherent in the Charter system lock, stock and barrel.

More on the Priory scandal here from Sarah Dodds

andy's picture
Mon, 30/04/2012 - 15:56

Allan - I am not persauded to change my mind on this. This type of fraudulent activity is not exclusive to Academies set up by this government nor to Charter schools in the USA. In that regard you attempt - wittingly or unwittingly - to draw a connection is illogical and spurious. There have been headteachers in state and independent schools who have been found with their fingers in the till. This does not per se mean that all headteachers are criminals or that all schools are hotbeds of fraud.

Essentially, there are two key factors at play here (1) the imperfections of humanity reflected in the particpants inability to resist tempation, and (2) a seriously flawed audit process that didn't bowl the issue out much earlier (not the least being the statutory declaration of personal interests.

By the way, neither the new style academies nor free schools are a direct read across from the USA Charter schools. I also suspect that you should be very careful in what you say as you directly imply that all Heads of Charter school in the US and all Academy and Free School leaders are criminal fraudsters.

So please let us not politicize the criminal activities of individuals just to try and score a point ...

Allan Beavis's picture
Mon, 30/04/2012 - 20:41

Andy -

I find it quite extraordinary that you make the bold claim that academies and free schools are not a direct read across from USA Charter Schools. It's an established fact that Gove has based his "reform" on the Charter mode. He ramped up his admiration of them once it dawned on him that the Swedish model, having failed, was being reassessed by the Swedish government. He has made speeches praising the Charter model and in the past year, faced with criticism that less than 20% of Charters perform as well as or better than regular public schools, he and his SPADS and supporters (including the NSN) have attempted to justify their ideology by claiming that Charters work by offering up some feeble evidence, which is that KIPP, HCZ, New Orleans and New York Charters have closed the achievement gap. It is arguable just how successful these chains and districts are but even if their success were entirely justified, they are in the small minority of charters that have contributed to raising attainment across the board, across all cities, towns, states and socio-economic groups. What about the rest?

I suspect you should be very careful in what you say about Charter Schools when you know so little about them. If you did, you might be more careful in your support of Gove's so-called radical reforms (in fact, his policies are a throwback to the dark ages of the 1950s) and wake up to the fact that in adopting the Charter system, he is importing a vastly expensive experiment that has failed the majority of American students. That being the case, there is a higher chance of him ruining English education than improving it. As for "criminal fraudsters", there are enough of those that might be worthy of the name lurking in government or linked to the government.

andy's picture
Mon, 30/04/2012 - 21:21

Wow, that touched a nerve.

I am not defending academies, free schools or US Charter school. My comments were and remain focused on the fraud at the academy. it is inherently wrong and untenable to hold that fraud in US schools has been imported into UK schools simply because they have some similarities. The UK audit regime could and should ahve bowled it out.

You introduced Charter schools and explicitly implied that academies and free schools are a direct read across, which they aren't. Yes, they are based on and, yes, there is an flavour of rthe Swedish schools but no the UK schools are not direct read across.

I do hope you feel better for your rant though

andy's picture
Mon, 30/04/2012 - 22:57

Flattery has nothing to do with it.

I make fundamently sound comments about the subject to hand - see the top page issue - and you go off on some political tirade about US Charter Schools and the educational philosophy and model being a direct read across to the UK. Just stick the top page issue.

The tenor of your comments reveals all to all. The fact that you cannot stick to the topic and want to force your views onto some else speaks for itself.

Andy's picture
Tue, 01/05/2012 - 09:54

Allan, strip away the modelling, based on strand and sticking to the financial irregularities I would invite your attention to the following information which evidences that there are concrete statutory financial auditory requirements that Academies (and for that matter Free Schools) must abide by. Yes, they are exempt from complying with the Charity Commission auditory reporting but they must be fully audited and file their audited financial reports with both Companies House and The DFE. Thus I return to my position, indeed will expand it. The failure arose from human failing linked to questionable audit practice/processes. My extension is that it may also prove fruitful to review the checks and controls applied in the selection/recruitment process used to appoint academy leaders (Principals and Trust CEOs/Chairs) and their financial staff:
The current financial accountability requirements for academies can be found in the Academies Financial Handbook. [See link below]
Academies are charitable trusts and companies limited by guarantee and are required to submit audited annual financial statements to Companies House. The form of the financial statements is set by the Companies Acts and the Charities’ Statement of Recommended Practice. Academies report in most cases to a 31 August academic year end. As central government bodies, academies are also required to complete by May 2011 an annual Whole of Government Accounts return for the financial year to 31 March 2011. The EFA is putting in place a requirement for academies to submit by September a three-year financial plan for the academic years 2011/14.

Taken from the ‘Dains’ advert for audit and accounting services to academies:

Academy Schools require annual external audit services in accordance with the Charities Act 1993, the Academies Act 2010 and the Companies Act 2006. We appreciate the needs of an Academy school are bespoke to the school and the sector. Dains provide a full service offering to include non-audit and audit support services pre-conversion and beyond. All staff working in the Dains Education Team receive specialist training and regular sector updates to ensure their skill and knowledge are relevant and appropriate for working with Academies. Our team is fully conversant with the Academies Financial Handbook which forms the framework for financial management of new Academies.

On the basis of these documents and the statutory requirements it follows that:

1.Criminal prosecutions should follow
2.The SoS/DFE should have red faces and be conducting a thorough review of existing financial practices/process linked to an external/independent audit review of a substantial number of accounts submitted by Academy organisations (schools and Trusts) to health check their accuracy and probity
3.A review be conducted into the selection and recruitment processes for key personnel

At no stage did I say that there was no link between the government’s academies and free school concept and that of Charter School. What I said was, there was no direct read across (i.e. transplanting of the Charter model lock stock and barrel in the UK). The UK model is a hybrid of Charter and Swedish models. It cannot be a read across from the US because our legislation (e.g. charitable status and education act) is radically different to theirs. Just to cloud the issue further there is no one single Charter model in the US and Gove seems to favour the KIPP version.

Allan Beavis's picture
Mon, 30/04/2012 - 21:49

No - you didn't touch a nerve, so please don't flatter yourself. You just exposed your ignorance, that's all. I do understand that you went in over your head there!

I was just taken aback at your breathtaking comment about Charter Schools and Free Schools. The only way the differ, Andy, is that America has a culture of corporate and individual philanthropy on a level completely unknown here. In the States, charitable acts are essential for salon doors to open. Here, you don't have to give to be accepted in high society. The more successul US Charters are those that are fiscally over endowed with money from the three main Foundations. The ideology of Charters and the way that they pave the way for proft-making companies is exactly the same. Do some googling please and refrain from accusing people of ranting when they have corrected your fundamental mistake.

Allan Beavis's picture
Tue, 01/05/2012 - 06:02

Andy -

The "top page issue" is how too much freedom - unfettered, unregulated, unaccountable to the local community - makes it easier for those in control of finances to misuse them. The government was reluctant to release the report because it shows that, despite government rhetoric, Academies are not the shining beacon of good practice. They would much rather push the Mossbourne line rather than disclose the academic failure of a significant number of Academies and they would rather bury unpleasant stories like this one because it shines a light on the impossibility of the centralised Education Funding Agency being able to hold thousands of schools to account for how they spend that money.

Charter schools are wholly relevant to the Free School/Academy debate. If they were not, the government itself would not be justifying their schools policy by persuading us of charter school "success", albeit by misrepresenting research and critics of Gove would not shine a light on how the failures of the charter school policy are already built into academies and free schools.

The top page issue is fraud and how that was committed in an Academy, whose funding and financial management is kept secret from the community of tax payers who fund it. Are there echoes of this in US Charters? You bet. There are numerous stories, far too long to list here, so let’s stick with a recent one in New York, reported everywhere but succinctly written up here in the New York Times:

When state investigators demanded last year to see personal tax returns filed by Eddie Calderon-Melendez, the founder and chief executive of a troubled network of charter high schools in Brooklyn, he produced them. One problem, according to the investigators, was that those state tax returns were falsified and had never been filed.

Then, when the investigators studied the books of one of the schools, Williamsburg Charter High School, they found that Mr. Calderon-Melendez had used a school credit card to pay for parts of a European vacation, including accommodations at a Paris hotel and some expenses in England. A jury in Brooklyn found Calderon-Melendez guilty of tax fraud, grand larceny and falsifying business records.

This level of “freedom” means that Mr. Calderon-Melendez had driven the school into debt while committing theft, paying himself a large salary and hiring outside consultants. Every bit as unsavoury as the Priory Academy story, which might have been avoided if our government had not adopted charter school practice virtually to the letter and passed legislation to make their new schools accountable and transparent.

Rob Shorrock's picture
Mon, 30/04/2012 - 14:05

The arguments the DfE others are making about oversight and accountability are banal. Of course, there are risks in any organisation where senior managers are corrupt. But the question here is the degree to which the current model removes oversight at a local level and how effective it can be managed through political delivery contracts at a national level.

What is striking in all this is that there are no systems in place. The EFA who carried out the investigation were not clear whether this was their remit. It was unclear about whether it would be published or not, and its is rather vague on what needs to be put right, apart from the obvious. If you compare this with Ofsted, all complaints are publically logged and all investigations are published within a system that enables a) people to complain and b) a school to be able to appeal, then it lacks rigour.

In many ways, this is a reflection of the early days of FE incorporation in the early 90s. As the government was trying to manage centralising all further education provision (at huge costs to colleges and their local communities) developing complex funding formula, colleges were having to restructure their governance. All of this creates risk that can be exploited by those that rely on the chaos of change to run rings around those that may want to hold them to account.

In the end it is the calibre of governors to challenge and interrogate the reports that makes the difference and in free standing businesses this is a big step up.

Janet Downs's picture
Tue, 01/05/2012 - 14:29

Andy - response to 1/5/12 9.54 am (no reply button). The Head of the National Audit Office (NAO) told the Public Accounts Committee in November 2011, “39% of academies had never submitted a return at all and 38% were in arrears” and expressed concern about light-touch regulation. (See my longer comment on the other Priory thread for more detail).

andy's picture
Tue, 01/05/2012 - 15:28

Thanks Janet.

I would not be least bit surprised to learn that the 39% referred to include pre-coalition academies. For me the situation smacks not of politics but lazy, lax near incompetence financial governance by the DfES/DFE and for that matter Companies House. The statutory regulation is clear and as such appropriate people should be held to account (no pun intended) for this lamentable situation. The Companies House rigour is that financial accounts must be fully audited and passed prior to submission to them. Hence specialist accountancy companies vie for trade amongst academies (as they also do in the indpendent school sector). The copy to DfES/DFE was/is supposed to be a safeguard and provide government with the ability to randomly sample the health (or otherwise) of the schools/Trusts involved.

For then this is an issue of statute and regulatory practice as opposed to an indictment of an educational model/concept.

Adrian Elliott's picture
Wed, 02/05/2012 - 07:38

'I would not be least bit surprised to learn that the 39% referred to include pre-coalition academies.'

Surely, many of the post coalition academies are too new to be expected to have completed a return.

I think Fiona's overall point still stands.Tim has picked out one example from a maintained school but until recently there were over 20,000 such schools. I think if you took a long view you would find that the instances of financial irregularity amongst these schools have been very small.

There is no doubt that there were a number of bad examples amongst grant maintained schools -forerunners of academies in the nineties (a much smaller group) the worst, a Catholic school in Kent whose head was subsequently given a long prison sentence.

The criminality had not been noticed by the central agency responsible for GM schools over several years but was discovered very quickly by the county auditors once the school reverted to VA status after 1997.

Janet Downs's picture
Wed, 02/05/2012 - 13:29

andy and Adrian - the returns refer to Income and Expenditure statements and the figures were published by the NAO in 2010. They would, therefore, have been referring to academies set up under Labour.

The NAO, again referring back to 2010, said that 92% of primary and secondary schools were compliant with the Financial Management Standard in Schools (now replaced) by the deadline of March 2010. After the election the new Government "stopped giving schools direct support for financial management and efficiency improvement" (NAO). Instead, it decided to influence schools through "guidance and signposting". In July 2011 the Government issued the Schools Financial Value Standard - the NAO regards this as an improvement on the previous standard. It relies on LA monitoring and the NAO is concerned that reduced funding will weaken this assessment. It recommends, therefore, that the DfE makes it clear how it will review how the system is working. At the same time it should be deciding what it will do if any LA school fails to meet the Schools Financial Value Standard.

andy's picture
Thu, 03/05/2012 - 17:23

Hi Janet, the foundation of my position is that irrespective of how DFE wish to make use of the accounting information they received from Academies there is an unavoidable legal requirements for the latter to produce annual independently audited financial accounts using authorised accountants.

The current financial accountability requirements for academies can be found in the Academies Financial Handbook.
Academies are charitable trusts and companies limited by guarantee and are required to submit audited annual financial statements to Companies House. The form of the financial statements is set by the Companies Acts and the Charities’ Statement of Recommended Practice. Academies report in most cases to a 31 August academic year end. As central government bodies, academies are also required to complete by May 2011 an annual Whole of Government Accounts return for the financial year to 31 March 2011. The EFA is putting in place a requirement for academies to submit by September a three-year financial plan for the academic years 2011/14.

Academies have been constituted as charitable companies limited by guarantee. Academies are also subject to a DfES Funding Agreement which is, in effect, a contract between the academy trust and the Secretary of State for Education and Skills setting out the arrangements to be followed as a condition of receiving grant from the Department.
This document is the Department’s financial guide for the governing bodies and managers of academies. Drawing on the overall financial requirements specified in academy Funding Agreements, it provides detailed guidance on a wide range of financial management, funding and accounting issues.
It sets out the overall governance framework for academies and describes the key systems and controls that should be in place. It describes the grants that the Department makes available and specifies the financial reporting/budget management arrangements that must be followed by academies to ensure accountability over the substantial amount of public funds that they control. It also discusses in detail the requirements for preparing an annual trustees report and accounts in order to comply with company law, accounting standards and Charity Commission expectations.
•Overall Financial Arrangements
•Financial Systems and Controls
•Funding from the DfES
•Financial Planning and Monitoring
•Annual Accounts

Annual Accounts

• annual financial statements must be prepared for each period ending 31 August and independently audited by a registered auditor;
• the financial statements must record the academy’s accounting policies which must be approved by the governing body;
• the audited financial statements and accounting policies must be submitted to the
Secretary of State by 31 December following the end of the period;
• the audited financial statements must be published as required by the Companies Act and must be filed with Companies House and the Charity Commission;
• statements of income and expenditure and balance sheets may be produced in such form and frequency as the Secretary of State may from time to time reasonably direct.

• annual accounts must be audited by independent, registered auditors appointed under arrangements approved by the Secretary of State;
• books, accounts and all relevant records must be made available to officials of the
Department for Education and Skills and the National Audit Office and their representatives and/or agents as requested;
• the Secretary of State may, at his expense, instruct auditors to report to him on the adequacy and effectiveness of the accounting systems and internal controls and to make recommendations for improving the financial management of the academy.

It follows then that irrespective of what DFE do or don't do with their copy the copy at Companies House is in the public domain and available. It also follows that standard accountancy regulations apply and irregulaties can (and often do) lead to criminal charges where fraud is suspected.

Adrian, I of course respect your opinion but for me I still believe the top page issue has a political agenda to it (e.g. slanted at the coalition and its academies which doesn't stack up for all the reasons aired between us). It would hold water if it were a criticism of the DFE and both last and current governments for their approach to making recipients of taxpayers money accountable for their use of it.

Rosie's picture
Mon, 07/05/2012 - 18:34

regarding funding use....anyone got any views on spending school funds on issuing ipads to every single child in a comprehensive?

Prince Henry's Otley ( 5% FSM) has recently had a governors conference where they proposed a pilot ( for year 8 and sixth form) with a view to eventually issuing every child with an ipad...( 1400 pupils) .

It was stated that the cost of ipads would be covered by the school but were vague about rentals or damage fees.

A similar pilot is being held at Harrogate Grammar where they propose to charge the parents £15 a month.

I'm not happy with :
a) being asked to rent the ipads
b) the school funding ipads out of school funds if they decide not to charge a rental- 1400 ipads at £300 each = £420 K ...thats quite a few teachers and teaching assistants
c) my child walking home with an ipad in his bag ( why don't they just tattoo "mug me" across his forehead?)
d) the amount of constant low level radiation from the wi-fi transmitters that will be installed around the school.
e) the fact that schools in inner leeds can't even allow the kids to take their exercise books home .

I fully support ipads for dyslexic kids ( of course no mention of that !!!)

Am I being a luddite?

andy's picture
Tue, 08/05/2012 - 06:43

Rosie: I would suggest that all schools have the option to allocate a section of their funding stream to educational based spending as they feel necessary/appropriate. However, to the best of my understanding they cannot force parents to pay to support such projects. Thus although they may propose a rental charge of £15 per month parents cannot be forced to either agree to take an ipad. With regard to the issue of loss/damage parents should ask direct question of the school before deciding whether to rent or not. In terms of the overall cost involved, and assuming all parents agree and pay the rental, the cost in the first year would be £168,000. Assuming no damages/losses/replacements this would mean that there would be a surplus of £84,000 at the end of year 2 and £336,000 in year 3. Clearly, with 1400 users the chances of zero damage/loss/replacements is extremely low but the costing profile indicates that by year 2 the rental income will cover this. That said, it may be that the rental includes an insurance element.

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