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.