Financial warning for the academy trust that sent leaders to New Zealand

An academy trust that spent over £12,000 on a trip abroad for two of its leaders has been handed a financial notice to improve by the government.

Silver Birch Academy Trust now has to run most of its spending decisions past the government and must make changes to the way it is run to avoid closure.

The notice has been published a week after the government revealed details of a damning review of financial management and governance at the London chain. 

The Education and Skills Funding Agency meanwhile wants an independent investigation into the role of the executive and board members.

The trust, which runs four primary schools in Walthamstow, Chingford and Redbridge, was visited by ESFA officials in February after “multiple allegations” raising concerns about financial management and governance were made in December.

These included evidence of a visit by the trust’s chief executive and her deputy to Shanghai and New Zealand in October 2015, which cost almost twice as much as it was supposed to.

They had no recruitment and selection policy or procurement policy in place, and failed to properly declare members’ and trustees’ financial interests.

In the notice, the ESFA demanded a “two-stage independent review of the trust’s structure and governance arrangements” which must be agreed by July 20.

Interim executive arrangements must be also agreed with the ESFA and a regional schools commissioner by June 29, and the trust needs to appoint three new independent trustees “with the appropriate skills and experience” to its board by June 18.

By September 30, Silver Birch must have reviewed its executive costs and pay and performance management policies.

An action plan must also be provided that identifies the improvements the trust will make in order to address all of the issues from both the review and the notice, and monthly management accounts must be submitted from July onwards.

“I recognise the trust’s cooperation and extensive discussions that have taken place between the trust and officials in addressing the recommendations highlighted in the report,” wrote the ESFA’s Mike Pettifer in a letter to the trust’s chair of governors.

“However, I remain concerned about the leadership and management of the trust and am not convinced that it can effectively address the breadth of governance and financial management issues identified.”

The trust faces the termination of its funding agreement, and ultimately closure, if it does not comply fully with the requirements set out by the ESFA.