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DfE to consult on bringing LA school transparency ‘in line’ with academies



The Department for Education will consult on plans to bring the transparency of spending in local authority maintained schools in line with that of academies, it has been announced.

The government will shortly publish a consultation “to address the disparity between transparency of financial reporting in local authority schools and academies”, a spokesperson said.

Ministers have for some time been working on a plan to increase transparency in the LA-maintained sector. As previously revealed by Schools Week, academies minister Lord Agnew is working on an “accountability matrix” between council and academies to show the difference in approach.

The government says academies are more transparent because their sponsors have to publish detailed annual accounts, but opponents say the academies sector is less accountable to parents and communities.

It comes after Schools Week revealed last December how thousands of council schools have not had their finances independently scrutinised for more than five years. This includes three that were last audited by their local authority nearly 20 years ago.

In a statement today, the DfE said: “To further build on the government’s ambition to improve how all types of schools across the country are run and ensure transparency is consistent across the education system, the department will also shortly be publishing a new consultation to address the disparity between transparency of financial reporting in local authority schools and academies.

“This will aim to strengthen local authority schools by bringing them in line with the accountability and transparency standards that academies are already required to meet.”

Agnew told Schools Week last year that the “playing field” of transparency between council and academy schools “should be more level”.

He said the government was “considering how this might be best achieved without creating unnecessary burdens.

“It has always been the case that academy trusts have to be more transparent than maintained schools, and are subject to financial and governance-related scrutiny by the department and the Education and Skills Funding Agency.”

 



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5 Comments

  1. Academy trusts, rightly, have their account audited (although this doesn’t always pick up financial wrongdoing if they’re hidden). Individual academies do not have to as their accounts are consolidated into the trust accounts. Trusts, however, are supposed to name any of their academies in deficit.
    Local authorities similarly have their accounts audited. Unfortunately from a school financial transparency point of view, LAs offer a far wider service than just education. It would be an extra burden if LAs had to publish accounts for each non-academy school especially when academy trusts don’t have to do so.
    That doesn’t mean, however, that LAs shouldn’t publish names of schools in deficit. Nor that LAs shouldn’t check carefully what non-academies are doing with their money. Financial wrongdoing at Sawtry Community College and Kynaston, for example, began before they became academies.

    • Mark Watson

      Agreed, except that about two thirds of academy trusts only have one academy so those accounts are specific to a single academy.

      But this is not just about deficits. As the previous Schools Week article said “council schools have been breaking rules over tax checks, issuing contracts and unauthorised pay rises for staff”. Related party contracts is another area where not enough checking is going on.

      Imposing greater transparency on Council schools will indeed be an additional burden, but it seems to be appropriate.

      • If two-thirds of LAs only had one school then it would indeed be appropriate for them to publish accounts for that one school. But LAs, like multi-academy trusts have more than one school. Some have hundreds. MATs are not required to publish accounts for individual schools (although they are supposed to name any of their academies in deficit and the amount). It would be an unacceptable strain on already-stretched LAs to have to publish audited accounts for each of their LA-maintained schools.
        That said, the NAO said in 2014 maintained schools may be at greater risk of internal fraud than larger organisations because they may not have the same level of supervisory checks. The NAO expected the number of reported cases to rise once LAs had had time to “embed data collection arrangements for fraud committed against schools”. At the same time, the NAO warned the ability of LAs to oversee schools’ finances could fall because some were planning to decrease staff time allocated to this.
        This means LAs, like the ESFA, having to rely too heavily on whistleblowers. That’s not acceptable either.
        https://www.localschoolsnetwork.org.uk/2014/01/local-authorities-found-2-3m-worth-of-fraud-in-schools-but-do-they-like-the-efa-rely-too-much-on-whistleblowers

        • Mark Watson

          So if it’s not acceptable then presumably you agree something should be done?

          I’m not saying that LAs should publish audited accounts for every school, but there needs to be something done to address the reality of the situation where “at least 2,200” schools haven’t been audited for over 5 years (according to Schools Week).

          Simply saying it would take time / be expensive is not good enough to avoid doing something. Academy Trusts are under significant financial pressure, and yet still have to fork out thousands each year to auditors. (Quite rightly in my view.)