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Accounts reveal shocking financial mismanagement at defunct academy trust

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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.



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8 Comments

  1. This case raises questions. What steps, if any, will be taken to claw back the ‘inappropriately used’ capital funding? Is there any criminal liability? Was the ‘additional cash’ awarded to the new leadership part of any rebrokerage? If so, will we ever know because the DfE appears to be trying to hide academy transfer costs? (See Schools Week and Local Schools Network). And why was the EFA so negligent as to award Lilac Sky a contract to advise RSCs? Contracts were supposed to be ‘high-calibre-contractors with a proven track record in developing and leading outstanding schools’ but Lilac Sky’s Tabor Academy had been rebrokered after being judged inadequate.
    http://www.localschoolsnetwork.org.uk/2015/12/dfe-appoints-93-contractors-to-deploy-advisers-to-rscs-some-previous-brokers-are-among-them

  2. I’m trying to see this through your commentator Mark Watson’s well-balanced stereoscopic vision. Clearly, you’ve deliberately and misleadingly picked on a very rare example of financial mismanagement in an academy trust, you rabid pinko lefties, ignoring the fact that the DfE constantly tells us that the financial oversight of academies is so much better than that by Councils of maintained schools. Why would they lie to us? Don’t you people read the Daily Mail? And you’re totally ignoring Diane Abbott. Typical!

    • Mark Watson

      Ignoring your childish ‘humour’, and presuming that you’re referring to my comments on John McDonnell, what do you think of the hypocrisy in him supporting a free school application in his constituency which was turned down because there was no need for extra school places?

      • Mark – McDonnell’s constituency, Hayes and Harlington, is in the London borough of Hillingdon. The local paper said the proposed free school, Gates Academy, was needed to meet local demand. http://www.getwestlondon.co.uk/news/west-london-news/new-secondary-school-could-built-10137554
        Hillingdon’s School Capital Programme update Cabinet Report February 2017 details school expansion in Hillindon to ‘address the impact of population increase’.
        Gates Academy doesn’t appear to have been turned down yet. It is listed in Wave 11 Free School applications dated April 2017 and is not highlighted as being withdrawn during assessment. Of course, it may have been turned down since April but I couldn’t find any info.
        It appears that McDonnell was supporting a bid for a school which the council agreed would meet rising need for places. At the present time the only way an area can get a new school is if it’s a free school.
        (You’ll need to search on-line for the Hillingdon Cabinet Report and details of Wave 11 applications – if I provide links my comment will be held up in moderation).

        • Mark – further to my comment above, Purdah prevented decisions being made re free school applications from beginning of June so Gates Academy would still be on the application list unless rejected in April/May after the Wave 11 list was published but before Purdah began.

  3. Mark Watson

    No at all dear Sir. I think this is scandalous, needs to be investigated fully and any guilty parties punished to the full extent possible.
    According to what’s set out above Mr Averre-Beeson seems to have milked everything he can out of the system. Corruption is corruption whether in the academy sector or not and needs to be stamped out.
    Whilst I often feel it necessary to provide an alternative viewpoint when I see the relentless politically-driven bashing of the academy sector, I have posted numerous comments that criticise the academy sector where criticism is warranted (Durand Academy Trust comes to mind).
    I would also point out that I would be subject to a wave of criticism if I had posted anything coming close to such a personal attack on someone else’s views.
    Finally I wonder if this post will get published. After having commented for many months on these pages, and having had a number of “Replies of the Week” (my stockpile of SchoolsWeek mugs is building nicely), my comments on the ‘Oasis Academy’ story have been held for moderation for over two and half days now. I wonder if it had anything to do with picking up the errors in the article and ascribing a political motivation to the reporting …

    • Mark – I find my comments have been stuck in moderation if they contain more than one link. Your comment (8 June) says this might be the case. You also said you’d resubmitted the comments separately with one link per comment. In that case, the comments should have appeared.