Academies

ESFA probes trust forced to up top-slice after overspend

Documents suggest the Oval trust 'set a deficit budget, miscalculated income...and overspent', while a new board came in after a row with the diocese

Documents suggest the Oval trust 'set a deficit budget, miscalculated income...and overspent', while a new board came in after a row with the diocese

23 Oct 2021, 5:00

More from this author

Exclusive

A trust that had to top-slice more cash from schools than it had planned because it had overspent is now under investigation by the government.

Experts said it was “disheartening” to see another controversy about a trust’s finances, and called for more transparency over the ex-CEO’s settlement package.

A spokesperson for Oval Learning Trust, which runs five small Leicestershire primaries, said leadership had now been “stabilised” and school budgets brought into surplus under the new board this year. It also plans to join the Rise trust.

But board minutes reveal worries among new trustees and senior leaders about the financial situation inherited after multiple departures at the start of the year. They also reveal an Education and Skills Funding Agency probe, with the trust still awaiting the outcome.

Interim CEO Mark Cole warned in January that a “settlement” reached with his predecessor Donna Moulds, a new employee plus legal costs had had a “large negative impact on the central budget”. 

Chief financial officer Stephen Mitchell then presented a “list of concerns” regarding compliance with academy funding rules in February. He said recent payroll journals had not been properly recorded, bringing trust systems “into doubt”.

It was felt there had previously “not been any meaningful level of internal scrutiny”.

Cole said he was “uncomfortable” over the finances, but agreed with others that transparency to ESFA was key. 

In a March meeting discussing similar planned transparency with schools, Cole said they should be told “the trust had set a deficit budget, miscalculated income…and overspent”.

Schools would face a top-slice of 6.5 per cent of general annual grant funds, not the five per cent budgeted, minutes add.

Governance expert Raj Unsworth said it felt “unfair” that small rural schools appeared saddled with higher charges, “taking away from education when it’s needed most”.

Unsworth said unanswered questions remained, including why the CEO received a settlement.

The March meeting also saw “much concern expressed about an ex-CEO obtaining a post so rapidly after resigning, and the supportive reference by the previous board.” 

The Astrea trust announced Moulds’ appointment as a regional director in late January.

A statement sent on behalf of Moulds said the founding CEO had left to seek new career opportunities as Oval “moved into its next stage”. It said regulators had not flagged any concerns with her over her financial oversight, and she could not comment on trust activities since her departure.

A government spokesperson said it could not comment on ongoing investigations. “Any type of financial mismanagement in schools is completely unacceptable,” the spokesperson added.

Where intervention is required, the government acts to “protect education provision and hold those responsible for any wrongdoing accountable”.

Moulds and three trustees had quit at the turn of the year, with another declining to extend their term. 

Minutes show this followed a row with the Diocese of Leicester, whose director of education had ordered the removal of “the named board of directors” by January 7.

Reasons are not spelled out, but the diocese is said to have previously warned that Oval’s complaints policy did not meet Academies Financial Handbook rules. December minutes also recorded a £36,000 central services deficit and “irregularity” over management accounts.

Trustees had demanded the diocese explain its decision, with minutes referencing legal advice that it was “illegal”. One trustee warned dismissal did not reflect the MAT’s “Christian values”.

Unsworth said it is “disheartening to see these kinds of issues continue” in the academy sector. 

Chair Patrick Rendall said Oval had achieved “a great deal” this year. The new board was focused on supporting schools, as well as any ESFA investigation into the recent past, he added.

Latest education roles from

Lead Practitioner in Maths

Lead Practitioner in Maths

Bolton College

Head of Apprenticeship Quality

Head of Apprenticeship Quality

Manchester Metropolitan University

Chief Executive Officer

Chief Executive Officer

Brooke Weston Trust

Chief Financial Officer – Lighthouse Learning Trust

Chief Financial Officer – Lighthouse Learning Trust

FEA

Sponsored posts

Sponsored post

From lesson plans to financial plans: Helping teachers prepare for the Autumn budget and beyond

Specialist Financial Adviser, William Adams, from Wesleyan Financial Services explains why financial planning will be key to preparing for...

SWAdvertorial
Sponsored post

IncludEd Conference: Get Inclusion Ready

As we all clamber to make sense of the new Ofsted framework, it can be hard to know where...

SWAdvertorial
Sponsored post

Helping every learner use AI responsibly

AI didn’t wait to be invited into the classroom. It burst in mid-lesson. Across UK schools, pupils are already...

SWAdvertorial
Sponsored post

Retire Early, Live Fully: What Teachers Need to Consider First

Specialist Financial Adviser, William Adams, from Wesleyan Financial Services discusses what teachers should be considering when it comes to...

SWAdvertorial

More from this theme

Academies

Ormiston trust gives up founding school

The academy chain plans to hand the school over to a trust 'with strong local presence and capacity'

Jack Dyson
Academies

‘The best-kept secret in education’: Hobby on his new TKAT vocation

Halfway through his tour of the trust’s 45 schools, Hobby reveals what challenges await him in his new role

Jack Dyson
Academies

Free schools update ‘later this year’, and 3 other things we learned from ministers

The education secretary and her team answered MPs' questions in Parliament today

Jack Dyson
Academies

More standalone schools on the brink as deficits grow

Seventy-five trusts – one with a deficit of almost £6 million – raised concerns about their ability to continue...

Jack Dyson

Your thoughts

Leave a Reply

Your email address will not be published. Required fields are marked *