MAT is criticised for poor financial management after funding overseas trips

News Article

A multi academy trust (MAT) has been the subject of an investigation by the Education and Skills Funding Agency, following concerns relating to financial management and governance.

Serious failings were uncovered at London-based Silver Birch Academy Trust which included costly trips by the School’s CEO and Deputy to Shanghai and New Zealand.

The trust, which runs four primary schools in Walthamstow, Chingford and Redbridge, was the subject of an ESFA investigation following “multiple allegations” into the trust’s financial management.

The ESFA found “instances of novel or contentious payments”. The report highlighted trips to Shanghai and New Zealand, which were originally budgeted at £7,500 but as a result of additional hotel costs and expenses went substantially over budget, costing £12,117.

To support the cost of the trip, the trust had received Government funding through the National Leaders of Education programme, but this only covered £6,000.

Questions were also put to the trust after evidence came to light that a caretaker had been allowed to live on-site rent-free. A tenancy agreement for the refurbished caretaker’s house, stated monthly rent would be deducted from the tenant’s salary but it was discovered that no deductions had been made.

The trust had all of its members registered as trustees, against government advice that the two roles should be kept separate. Members’ and trustees’ financial interests had also not been fully declared or published, though this situation has now been rectified.

The ESFA also highlighted governance concerns as the trust had no separate audit or financial committees. Instead finance matters were dealt with during main board meetings, which breaches governing funding rules.

The trust was also found to be operating without a Chief Financial Officer, with the roles of Chief Operating Officer and Financial Director handled by consultants who had been in post for more than a year.

Following the ESFA’s findings the Government has now demanded that the trust takes “urgent action to resolve the issues” and “commission an independent review of financial management and governance covering the entire trust to fully identify any further issues”.

Carla Jones, an Associate with Palmers, who specialises in debt advice and financial management issues for the education sector, said: “Where financial irregularities become an issue, it is crucial to get advice at an early stage in order to put in place measures which will help to secure the recovery of the educational establishment’s reputation and restore good governance.

“Seeking advice from a legal professional who has experience of financial compliance and governance issues relating to the education sector is particularly important.”

To find out how we can help, please contact us.