One of England’s largest academy chains has been issued with a financial notice to improve by the Education and Skills Funding Agency.
Plymouth CAST, an academy trust that runs 35 schools, has had its spending powers restricted and been ordered to address “weak financial management and inadequate governance”.
The trust, which is one of the government’s “system leader” chains, must now put together an action plan to address the ESFA’s concerns and prepare a financial recovery plan.
It has experienced a turbulent year in which it has also faced criticism over its performance.
My concerns remain in relation to the weak financial management and inadequate governance at the trust
Last November, it was criticised by Ofsted for leadership and safeguarding failings after nearly two thirds of its schools that were visited as part of a focused inspection were rated ‘inadequate’ or ‘requires improvement’.
Inspectors found that senior trust staff did not have a “sufficient understanding” of school performance, some schools have seen a “significant decline” since joining the trust, and until recently there was no strategy to monitor safeguarding procedures.
The trust was issued with a warning notice by Rebecca Clark, the regional schools commissioner for the south-west of England, in December.
Under the terms of the financial notice to improve, Plymouth CAST must now run most of its spending decisions past the ESFA, and will only get these spending powers back once it has met the agency’s requirements.
Leaders must submit their action plan to the ESFA by October 20, and prepare a financial recovery plan by November 17. If it does not meet those deadlines, the trust faces potential termination of its funding for failing to comply with the academies financial handbook.
Kate Griffin, the trust’s interim chief executive, said there had been “no suggestion” of financial impropriety at the trust, and insisted it had referred itself to the ESFA in June after its new directors and leaders “identified medium term concerns relating to the trust’s financial operating model”.
“The board has already taken swift and decisive action to address these concerns, including a complete financial management review of the trust by an independent auditor and the rapid introduction of a new electronic financial management system,” she said.
“We will continue to work closely with the ESFA over the coming months to provide further assurance and improvement so that all pupils in our schools receive the best possible Catholic education in a safe, caring and supportive environment.”
The trust has also been told to implement new financial management and monitoring structures, and undertake further actions to “strengthen challenge in managing the budget and finances”.
As part of these requirements, the trust has been told it must ensure all trustees are aware of their responsibilities as directors.
It must also make sure that effective processes are in place for the trust to monitor financial performance and financial risks to its operation.
These requirements must be “exemplified” in a written report, due to be submitted by the trust by November 10.
The ESFA has also demanded that the trust provide it with monthly revenue income and expenditure reports, balance sheets and cash flow forecasts.