Still no investigation into trust that spent £100k repairs cash on staff salaries

Ministers are still deciding whether to investigate a trust that spent £100,000 of cash for building repairs on staff salaries and paid for an employee’s parking ticket – nine months after the misdemeanors surfaced.

The Dunham Trust also paid £22,632 to legal firm Eversheds Sutherland for advice which was not provided at cost, while a senior partner at the firm was married to the head of one of Dunham’s primary schools. Payment of £3,777 to a trustee to provide IT services, again not at cost, was also raised. Both failed to comply with academy funding rules.

The trust, which runs five primary schools in Trafford, Greater Manchester, also paid £1,100 for two staff to attend a “compassion summit conference course” in Amman, Jordan. A £40 parking fine was paid for one staff member and £325 spent on gifts and flowers.

The Education and Skills Funding Agency (ESFA) is considering whether the findings warrant an investigation. The concerns were raised when the trust’s accounts were published in January.

Dr Mary Bousted, joint general secretary of the National Education Union, said it was “particularly concerning that public money destined to improve school buildings has simply disappeared into the central coffers of a multi-academy trust”.

“The government should commit to ensuring the funds are returned and used for their original purpose,” she said.

Barton Clough Primary School joined the trust in March last year, with £140,000 from Trafford Council’s school condition allocation for use to either improve the school building or help rebuild it.

However, Dunham’s accounts reveal that £100,000 of this was transferred into the trust’s central bank account and spent on the staff costs of its central team.

The central account had a deficit of £61,000 at the end of the financial year and could not afford to return the money to Barton Clough, despite charging a 6 per cent top slice to all its schools.

A spokesperson for the Dunham Trust said the £100,000 was “made available” to Barton Clough over the summer, with £80,000 spent on classroom refurbishment and the remaining £20,000 used as the school’s contribution to a conditional improvement fund bid made by the trust for new windows. The bid was successful and the school was awarded almost £265,500, and the new windows were installed over the summer.

A spokesman for Trafford Council said they were “clearly keen to see public funds are used for the best interests of children”. They would expect the government to be “fully aware of these concerns and to be offering appropriate support and challenge to the academy”.

Academies minister Lord Agnew has previously said that the government’s “robust processes” allow them to “spot financial mismanagement quickly and intervene”. However, the ESFA is still reviewing the situation at Dunham.

Schools Week understands that a decision on action – including whether to formally investigate – is due before Christmas, almost a year after the financial irregularities were published by Companies House.

A spokesperson for the Department for Education insisted that the ESFA “continues to scrutinise the system on an annual basis, responding quickly to any concerns raised and taking appropriate action”.

Trust accounts also show that an “enhanced severance payment” was made to a staff member without the approval of trustees. The trust spent £89,000 on severance payments in 2017-18, up from £22,000 the year before.

“Such transactions might give rise to criticism of the trust by Parliament, the public and the media,” Jo Appleyard, the former chief executive and accounting officer, noted in the accounts.

A spokesperson for the Dunham Trust said the issues raised in the accounts “have had the trust’s full attention and have been addressed with enhanced financial processes and greater financial controls provided by new personnel”.

They added: “The Dunham Trust has made significant progress towards achieving rigorous financial management.”

Edit: Updated to reflect the money that has gone back into Barton Clough Primary School based on information provided by the trust after publication