An academy trust that paid its former executive principal almost £200,000 a year while it had a £1.3 million deficit has been criticised by Ofsted over the state of its finances.
The watchdog said challenges at the Heath Family (North West) academy trust had been “compounded by poor financial management”. This was “epitomised by the high salary that was paid to the previous CEO”, the report concluded.
It comes as Ofsted prepares to trial deeper investigations by inspectors into the finances of schools (see below).
The Heath Family trust, which runs nine schools, was issued a financial notice to improve in 2018 and received bail-out funding totalling £1.5 million from the Education and Skills Funding Agency.
It was also one of the trusts visited by a Department for Education cost-cutting consultant.
Schools Week revealed last year that a school resource management adviser had advised the trust to replace experienced teachers with newer staff to save money.
According to accounts, Heather Mullaney, the former executive principal of the trust and its predecessor The Heath School was paid a salary of between £185,000 and £190,000 in 2016-17, the year before she stood down.
That same year, the trust reported a revenue funds deficit of £1.38 million.
In a summary evaluation report published this week, Ofsted criticised the trust’s financial management, and warned that leaders had not managed the expansion of the trust effectively.
The watchdog also said that “considerable” extra funds handed to the trust to improve the attainment of disadvantaged pupils is “not well used”.
The chain receives around £1.5 million annually in pupil premium cash.
But inspectors did recognise recent improvements in the trust’s fortunes, and praised new chief executive David Donnelly for stabilising the organisation and making its finances “more secure”.
Of the nine schools in the trust, three are rated ‘good’, three are ‘requires improvement’ and one is ‘inadequate’. The remaining two have not been inspected since they joined.
In the report, inspector Will Smith said Donnelly had become CEO “in the midst of the trust’s difficulties” and had “set about stabilising the trust by putting its finances back on a firm footing”.
Donnelly told Schools Week it was “pleasing that the inspectors recognised that progress is being made at nearly every level of the trust”.
“There is, however, still a great deal to do, and the challenges that Ofsted has highlighted are the challenges that we wholly agree with and are already working to address.”