London secondary school hit with financial notice to improve over failure to balance budget

A secondary school in Richmond upon Thames has been handed a financial notice to improve by the Education and Skills Funding Agency (ESFA), after failing to set a balanced budget for 2017-18.

The school, rated ‘requires improvement’ by Ofsted after an inspection in January, has also failed to “establish strong internal financial controls”, according to a letter sent from the ESFA to chair of governors Juliet Hartridge on September 7 and published online today.

Schools subject to financial notices to improve have most of their spending powers suspended, and must run most decisions past the government.

Mike Pettifer, director of the academies and maintained schools group at the ESFA, wrote that the agency has been monitoring Teddington School, which is run by a single academy trust, since March 2018.

“I recognise the cooperation and extensive discussions that have taken place between the trust and officials; however, my concerns remain in relation to the weak financial position and financial management at the trust,” he said.

The notice also explained that the school needed financial support from the ESFA in 2017-18, which must be paid back by August 31, 2025.

In order to meet the requirements of the financial notice to improve the school must work with its school resource management adviser to produce a new financial recovery plan by October 1.

Teddington also has to show it can set in-year balanced budgets from 2018-19 onwards, provide evidence that it is using “school resource management tools to improve its financial position, and make sure executive pay follows “a robust evidence-based process and are reflective of the individual’s role and responsibilities”.

The notice indicates that the school has been working with representatives from the regional schools commissioner’s office, and must continue to do so in order to “formalise a partner school/academy/trust” to support it with “financial and educational improvements”. The school has also been advised to look at joining a multi academy trust.

It is required to implement recommendations that were made in a external governance review from May by November, and arrange a new independent review to assess its progress by December 1.

An academy ambassador with financial expertise must be appointed by November, and the board must ensure that its members have the appropriate skills and processes in place to challenge and hold to account the accounting officer, finance officer and other members of the executive management team.

The trust also needs to provide monthly management accounts and cash flow reports to the ESFA each month, for at least a year.

If Teddington School fails to meet the requirements of the notice to improve it will be at risk of having its funding agreement terminated by the government.

It won’t be considered to have complied with the notice until it can show that adequate financial recovery has been sustained up to December 2021.

On behalf of the board of trustees, Hartridge said: “The leadership of the school approached the ESFA for assistance in early 2018 as a result of concerns that the school would not remain financially viable in the short term.

“As a result of these and other concerns the governors commissioned a full leadership review so that it could ensure that the school had the necessary capacity to make the rapid progress required.

“We are confident that we are beginning to recover the performance of the school and the requirements of the financial notice to improve will support the school by keeping it on track and assisting us in speeding up the process of recovery.”