Free schools and academies are subject to intense scrutiny, says SoS, while LA schools aren’t properly regulated. Really?

Janet Downs's picture
“There we have it: academies are properly regulated whereas local authority schools are not, according to the National Audit Office, regulated with anything like the same degree of intensity.”

Michael Gove, House of Commons, 30 October 2013

The Education Secretary was responding to accusations about lack of accountability which led to financial irregularities at Kings Science Academy, Bradford. He said academies and free schools faced greater scrutiny because they had to “face an annual audit from the Education Funding Agency”.

This implies the EFA visits every academy and free school to audit their accounts. But this isn’t so. Academies and free schools have to submit their externally audited accounts to the EFA – they don’t all receive flying visits.

Gove also implies that local authority (LA) schools are exempt from similar arrangements. But, each LA is responsible for ensuring the provision of an adequate and effective internal audit. It’s their statutory duty (1996 Accounts and Audit Regulations)*. School accounts form part of each LA’s overall accounting arrangements and are covered by the same internal and external audit arrangements applying to the LA as a whole.

The Education Secretary must be aware of these statutory duties, surely?

Gove gave the impression that LAs are lax in their oversight of schools. He quoted from a National Audit Office Report published in 2011 which said:

“Local authorities do not publish systematic data to demonstrate how they are monitoring schools’ financial management and that they are intervening where necessary.”

But from 2011/12, LAs have had to include assurance about their system of audit for schools in the annual statements sent to the Department for Education (DfE) from local authority Chief Finance Officers. The DfE also introduced a new Schools Financial Value Standard which the NAO believed was an improvement on the previous Standard because it was more focussed.

So, it was misleading for Gove to say the finances of academies and free schools are more tightly regulated than LA schools because the latter still have to submit accounts for audit. It was disingenuous of him to quote from a report when that same report said procedures were being tightened up. And it was dishonest to say LA schools are not properly regulated.


*Information about auditing LA schools’ accounts came from Lincolnshire County Council handbook, “Scheme for Financing Schools”.
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