The government has written off more than £500,000 it is owed by the now defunct Lilac Sky Schools Academy Trust.
The trust is in the process of being liquidated after the government stepped in to remove all of its nine schools following finance concerns.
Schools Week has previously revealed the government was alerted over allegations the trust paid staff severance deals before re-employing them the next day, and had spent public money on luxury booze.
Now Education and Skills Funding Agency (ESFA) accounts have revealed the government has written off £537,440 of funding it doesn’t believe it can recover.
“In order for the academies to transfer to their new trusts without a deficit, the advances have been moved to non-recoverable funding which represents a write-off,” it said.
The accounts also reveal two other write-offs of over £300,000 – however these were classed as bookkeeping losses, rather than cash losses.
These include a £501,845 accounting loss made on a site purchased in Waltham Forest to house two free schools – an Oasis secondary and Big Creative Academy.
The Oasis proposal was cancelled, meaning the site, Webbs Industrial Estate, was larger than needed.
The site was sold, but below the “carrying value” – which caused the loss. The EfSA said: “This was considered acceptable given the overall improvement in value for money we achieved by pursuing an alternative site.”
A site bought in Reading in 2012 for the Wren School also had to be sold after a better site was found for the school, resulting in an accounting loss of £1.1 million.