Accounts reveal shocking financial mismanagement at defunct academy trust

Accounts reveal shocking financial mismanagement at defunct academy trust

A new report has exposed how an academy trust under investigation by the government has repeatedly breached finance rules – including paying staff severance cash before re-employing them the next day, and spending public money on “luxury” booze.

The overdue annual accounts for the Lilac Sky Schools Academy Trust (LSSAT), published this week, reveal that the Education Funding Agency has been informed of numerous alarming instances of financial “impropriety”.

The issues only came to light after the government ordered it to close down, and new trustees were appointed to oversee the transfer of its nine schools.

The disclosures also follow several investigations by Schools Week into the trust and its leadership.

Annual accounts for the year ending 2016 show the government was informed that rules were breached after:

  • Advance payments were made to a firm owned by trust founder Trevor Averre-Beeson for services not yet provided, with a standing order set up for future services
  • Expenditure totalling more than £200,000 was paid to that firm without meeting the government funding rules
  • Local authority grants were paid straight into the bank account of an education consultancy firm owned by Averre-Beeson. Although the money was repaid over time, this was “not performing immediately”
  • An application of capital funding for four new academies was inappropriately used, forcing the new leadership to seek additional cash to ensure that classrooms could open “with the necessary basic equipment and furniture”
  • Money had to be repaid from the founder after an “inappropriate use of public funding” to buy a selection of luxury alcoholic beverages at an annual awards evening
  • Severance payments were handed to trust staff who were then immediately re-employed. No evidence could be found to show discussions took place on whether these represented value for money. The actual amount for these settlements is not included – but other parts of the accounts show a total of £250,107 was paid out in severance in 2015, and another £104,637 in 2016
  • An academy trust credit card was used by someone not employed by the trust

The accounts also stated the trust continued to buy services from companies related to the trust’s sponsors – despite being ordered to cease by the government in April 2015.

The report states the payments continued to three firms where Averre-Beeson is a director – Lilac Sky Schools, Lilac Sky Outstanding Education Services, and Corporate Bespoke Services. Schools Week has previously revealed how payments between the trust and these firms totalled more than £1 million.

Averre-Beeson founded LSSAT, but stood down as chief executive in April 2015. However the annual accounts state he became the “named internal auditor for the trust academies”.

Last year, the trust was informed by schools commissioner Dominic Herrington that it was to be wound up over the concerns. Its schools have been rebrokered to other trusts.

Meanwhile, an EFA investigation is still ongoing.

However Schools Week revealed that the education consultancy firm owned by the trust’s founders was given a two-year contract to provide advisers to help schools commissioners.

We also revealed how Averre-Beeson took over the Henriette Le Forestier private school in Croydon after stepping down from LSSAT. The school closed down in March, just six months after the takeover – leaving 80 pupils stranded.

The firm which ran the private school, HLF Schools, has now been put into liquidation, with a liquidator appointed.

Documents filed at Companies House last month show the private company still owes staff £231,000, and the private school’s landlord – the Our Lady of Fidelity Convent – £375,000.

HLF Schools also owes Lilac Sky academy trust over £2,000 for outstanding invoices.

Schools Week has approached Averre-Beeson for comment. LSSAT’s new trustees and the EFA have also both been approached.