The Department for Education (DfE) breached its annual spending limit set by Parliament by £63 million, the National Audit Office (NAO) has discovered. The NAO didn’t give reasons for this overspend but perhaps if the DfE hadn’t flung money at free schools in areas where there is no need for further school places then some of this £63 million could have been saved.
The NAO also refused to sign off the accounts of the Young People’s Learning Agency (YPLA) which was responsible for funding academies and ensuring that grants were spent properly. The YPLA had found 14 cases in nine academies where extra-contractual severance payments had been made – these should have had advance Treasury approval. The Treasury provided retrospective permission but the NAO was concerned that other such payments had gone undetected. NAO found that the YPLA’s assurance framework was not robust enough to find all such cases and concluded, “The assurance framework does not cover the full requirements for regularity set out in Managing Public Money
NAO found that 21% of the academies which were required to prepare audited financial statements by 31 August 2011 had not done so although all had been received by the end of June 2012 (nine months later). 54% of the expected Financial Management and Governance Evaluation (FMGE) self-assessment forms were also submitted late.
The YPLA closed earlier this year and its functions have been taken over by the Education Funding Agency (EFA). NAO said the number of open academies had grown significantly in 2011/12 and expects this expansion to continue. It recommends improvements that the DfE should consider in order to manage this future growth more effectively:
1. The EFA should discuss with the Treasury how to ensure compliance with rules surrounding the management of public money. NAO warns that it will not sign off EFA accounts next year unless the EFA resolves this issue.
2. The EFA must consider how to make sure that academies submit their financial paperwork on time.
3. The Academies Financial Handbook requires academies to have their accounts audited. However, the NAO is concerned that the auditor’s opinion only need cover whether academies have complied with their funding agreements. This does not take into account other important considerations such as managing public money properly. NAO recommends that the EFA should consider demanding a more robust audit code.
It is clear that proper arrangements were not in place for the YPLA to manage the rapid growth of academies and that the problems found by the NAO will continue as more schools convert. The extra responsibilities which academies have to take on are not minor – these were highlighted in an earlier LSN thread
I wrote before, “They create a prison and call it freedom
.” Now it appears that they didn’t even put sufficient monitoring in place to make sure the “prisons” manage their grants properly.
The NAO summary and links to the longer NAO report are available here.