137 academy trusts miss EFA’s accounts deadline

Nearly 140 academy trusts failed to submit their accounts on time in the past financial year.

Trusts must submit audited accounts to the Education Funding Agency (EFA) by December 31 each year, under rules in the Academies Handbook.

However, a Freedom of Information (FOI) request by the Local Schools Network has revealed 137 trusts did not meet the deadline.

These include one of the largest chains, REAch2, which says it struggled because of its exceptional growth, as well as trusts in financial trouble and due to close. Ten university technical colleges were also on the list.

The Department for Education (DfE) said trusts that missed the deadline had “subsequently submitted and continue to submit” their accounts.

Trusts that do not comply with the requirement face intervention. The departments say this is “always proportionate and risk-based and preserves the effective education of children”.

The DfE would not confirm whether any action had been taken.

Mary Bousted, the general secretary of the Association of Teachers and Lecturers, said the late filing of accounts was “another demonstration that academies are not being properly held to account for the use of public money”.

But REAch2, which now runs 55 schools, said its late filing followed an “exceptional year” in which it changed its model.

Late filing of accounts followed an unexpected change in the staffing of our finance manager and a subsequent overrun with the auditors

Originally developed as a network of standalone academy trusts – in an increasingly defunct arrangement known as an “umbrella trust” – the group had to move 11 individual academies into one set of accounts.

A spokesperson told Schools Week: “The process took much longer than usual and the trust sought an extension from EFA.” The trust submitted its accounts on January 16.

The Ridings’ Federation of Academies was delayed by ongoing financial troubles.

Its two schools – Winterbourne International and Yate International – are due to be transferred to another trust from September. Discussions are ongoing as to who will take over.

The trust’s interim chief executive, Dave Baker, said the deficit, coupled with the turbulence of three chief executives last year and an overhaul of the governing body, meant the accounts could not be submitted by December 31.

He told Schools Week the trust was confident it would submit the accounts by the end of May and the EFA was aware of the situation.

Chris Mitchell, principal of Elstree UTC, said the late filing of accounts at his school followed an “unexpected change in the staffing of our finance manager and a subsequent overrun with the auditors”.

He added: “All accounts have now been appropriately audited and submitted.”

Another trust told Schools Week its accounts were delayed by the long-term sick leave of key staff during the accounts period.

The DfE has also had its own problems with filing accounts. The National Audit Office, the government’s spending watchdog, issued an “adverse opinion” on the DfE’s accounts for the second year running in December.

Last year the department also extended the deadline for presenting its own financial statements to parliament by three months due to the complications of consolidating thousands of accounts submitted by academy trusts.

Janet Downs, from the Local Schools Network campaign group, said the whole procedure of academy accounts was “a mess”.

The DfE could not comment due to purdah restrictions.

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    • Mark Watson

      I’m sure that’s correct for a number of them. However, 20 second of googling produced the following:
      1. In 2016 the legal deadline for local authorities to have produced a final transition Education Health Care plan for children with special educational needs was 15 February. 111 local authorities missed the deadline for 3,812 children.
      2. 10,818 charities, including around 149 in the £1m or more income bracket, failed to file their annual accounts or annual return with the Charity Commission this year.
      So guess what, incompetence seems to rear its head all over the place. Do you think that academy trusts are more incompetent than other organisations?
      Or is this just another chance to push your “the Academies model is disgusting” agenda?

    • Opal – to be fair to academy trusts, the DfE system regarding academy accounts is a mess. The financial year for academy trusts ends on 31 August. Academy trusts are companies. Companies House gives companies 21 months after company registration to file first annual accounts and nine months after the end of their financial year to file subsequent accounts (31 May for companies with financial years ending 31 August). But the DfE requires academy trusts to submit their annual accounts to the EFA in just four months. This may or may not be reasonable – most academy trusts manage it but Companies House doesn’t require such a tight timescale.
      However, there’s an anomaly. Some MATs appear to stick to the nine month deadline for posting accounts with Companies House. And some don’t post their accounts on their websites by end of January as required by the Academies Handbook. West London Free School was one such when I checked at the end of last week. That’s not to say WLFS hasn’t submitted its accounts to the EFA – it may have done so. But they’re still not listed as being received by Companies House although the accounts have just appeared on its website.
      What makes it worse is that the academy financial year doesn’t correspond with the DfE financial year. According to the National Audit Office, this presents a significant challenge to the DfE when presenting its departmental accounts (academy trust accounts were ‘consolidated’ into DfE accounts).
      As I said, it’s a mess.

  1. Schools Week print edition says REAch2 missed the deadline as it had ‘struggled because of its exceptional growth’. Expansion is something that is surely in the control of MATs. But the article above gives a different reason – restructuring.
    According to DfE Sponsor Profile (May 2014), REAch2 said an ‘overarching umbrella trust’ would be more efficient in managing academies spread over a wide area.
    Now it appears the umbrella trust wasn’t a ‘more efficient’ management system and has been changed. According to accounts (y/e 31/8/2015) for REAch2 Limited, parent of REAch2Academy Trust, the academy trusts under the umbrella would move to a single MAT from 1 September 2015. According to accounts (y/e 31/8/2105) for these MATs, they ceased trading on 1 September 2015. They are, however, still listed as companies at Companies House.

  2. Mark Watson

    Another go-to-quote from Janet Downs of the Local Schools Network campaign group.
    This would be related to The Local Schools Network C.I.C. I believe. A company that has a legal duty to file its Annual Return by a fixed date. As I understand it (and I’m not expert so I’m happy to be corrected), the deadline for filing its Annual Return in 2016 was 14 June 2016. However according to Companies House the Return was filed on 4 July 2016. Apparently it is a criminal offence not to deliver the annual return on time.
    The cliche about not throwing stones if you live in glass houses comes to mind…

    • Mark Watson

      BTW, this isn’t meant to be a criticism or slur against The Local Schools Network C.I.C. (which on re-reading it does come across as).
      It’s simply showing that missing filing deadlines happens.

  3. Wimmy

    The articles on this site are poor to say the least, and this a fine example of the non news being reported. Lazy stories, trying to sensationalize something that inst there. Re the article, Never mind the fact the EFA change for formatting for account returns every year? it is actually a mammoth task for academies to complete and LA it seems, anyone in industry is aware of that. Also I am bemused at the people being asked question or opinions?? it is vulgar to voice an opinion on something you have second hand knowledge from a “reporter” and looks foolish actually.