Matrix Academy Trust ordered to review governance after ESFA investigation

The Matrix Academy Trust has been ordered to review its governance arrangements and financial management after a government review found it could not justify costly staff trips and had not ensured separation of powers between its members and directors.

The investigation was prompted by “anonymous allegations” made against it in October 2016, relating to “potentially inappropriate use of public funds and breaches of the academies financial handbook”.

The review, by the Education and Skills Funding Agency, concluded that while there were “no regularity issues” and the trust was in a “relatively healthy” financial position, there were some weaknesses in financial management and governance to be “urgently addressed”.

It found numerous, expensive development days for staff, which cost £17,205 in 2015 and £16,075 in 2016 – as well as £2,440 spent on a residential trip abroad for newly qualified teachers in 2016. What it did not find, though, was any “formal documentation” to show how this expenditure related to business activities.

The ESFA found trust members who were also directors, including the accounting officer, a set-up particularly frowned upon by officials.

The trust comprises three secondary academies, the Barr Beacon School, Etone College and Dame Elizabeth Cadbury School, and an all-through school, Bloxwich Academy.

The Barr School is rated ‘outstanding’ by Ofsted, while Etone College is rated ‘good’. Bloxwich Academy was placed in special measures in July 2017. Dame Elizabeth Cadbury converted to an academy in 2016, but as a maintained school it was rated ‘good’ in 2012.

Some contracts of employment were missing from the trust’s records. At the same time, no member of central staff at the trust held a full accountancy qualification and the audit committee had just two members. Both were directors.

“Our work on site identified some weaknesses in financial management and governance, and that impact upon the adequacy of internal control and compliance with best-practice guidelines set out in the academies financial handbook,” the review said. “The findings have been raised and discussed with senior management at the trust, and the chair of the board of trustees.

“The trust has acknowledged that these issues need to be urgently addressed to ensure internal control arrangements within the trust are operating effectively and assure the safeguarding of public funds.”

The ESFA has requested a full independent review of the trust’s governance arrangements by December 1, which must cover the issues highlighted in its report.

“The commissioning process, terms of reference and scope for the review of governance should be agreed with the ESFA in advance,” it said, giving a deadline of October 16.

This should also be followed by the submission of an action plan explaining “how the required improvements will be managed and implemented”. All actions are to be completed by December 20.

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  1. Bloxwich Academy (formerly The Mirius Academy) and Etone College were academies transferred to Matrix Academy Trust in 2014/2015. Matrix received £0 in rebrokerage for The Mirius Academy and £57,900 for Etone College according to FoI response I received.

    The weaknesses in financial governance weren’t spotted by external auditors who signed off the Trust’s accounts for y/e 31 August 2016.

  2. Mark Watson

    If you weren’t seemingly so intent on doing a hatchet job you might so easily have reported on this differently.
    The headline seems to imply that “here’s another MAT that’s extravagantly spending public money on jollies for the staff”, with presumably a whiff of self-interest thrown in for good measure.
    You refer to “numerous, expensive development days for staff, which cost £17,205 in 2015 and £16,075 in 2016”. In reality, as the report makes clear, these costs relate to “an annual corporate activity and staff development day”. Once a year is hardly “numerous” is it?
    It’s also noteworthy that although the report made clear that (in 2016) these costs covered 366 staff at an average cost of £43.92 per head this story doesn’t give that context. Is it an unintended oversight that someone reading this story might thing the SLT had spent £16k on away days for themselves at fancy London hotels?
    In the same vein of unnecessarily ambiguous reporting, you refer to “£2,440 spent on a residential trip abroad for newly qualified teachers in 2016”. Surely the context that this covered 16 staff over four days of accommodation is worth including – with this information I can see that the cost per member of staff per day (flights and accommodation) was £38.
    I’m not saying that this is definitively money well spent, but the ESFA said the MAT should “formally document in a business case how this type of expenditure achieves value for money for the public purse”. That seems unarguable and common sense, but what they weren’t saying is that the expense was unjustifiable.
    Your statement that “The ESFA found trust members who were also directors, including the accounting officer, a set-up particularly frowned upon by officials” is also misleading. Yes it is correct that current guidance is that the AO should not be a member (although this was not the case when Matrix Academies Trust was established). However in relation to the wider membership, the reality is that the current Academies Financial Handbook states “The Department’s recommendation is for a majority of members to be independent of the board of trustees”. So although the set up at Matrix Academy Trust doesn’t seem to follow current guidance, there is absolutely no problem in having trust members who are also directors as long as there is “a significant degree of separation between the individuals who are members and those who are trustees”.
    Is it too much to ask for objective and accurate reporting?