A ‘supersized’ trust was investigated by the government over allegations relating to financial management just 14 months after opening from scratch with 10 schools.
The Education and Skills Funding Agency investigated the Galileo Multi-Academy Trust in June last year following concerns over its finance and governance, it has emerged.
Business interests were not always recorded and transactions with related parties were not at cost
The trust had been given government approval to open in April 2018 from scratch with 10 primary schools across the Redcar and Cleveland area.
The report is yet to be published. But annual accounts for last year state the trust broke rules over a “for-profit” contract with a firm linked to one of its directors.
The name of the firm or director in question is not named. The trust, which is listed as having “strong connections” with the Diocese of York, would not reveal which company the auditor’s conclusion related to.
In the accounts, Heather O’Driscoll, from Waltons Clark Whitehall auditors, said they found the trusts’ procurement processes “were not adhered to when procuring services from related parties”.
“Business interests were not always recorded or declared at trustee’s meetings and transactions with related parties were not at cost,” she added.
The trust featured in a Schools Week investigation into “super-sized” trusts in 2018. We revealed 31 trusts had taken on five or more schools in the year – compared with 20 in 2016-17.
Four trusts – of which Galileo was one – actually opened from scratch with ten or more schools.
The ESFA visited the trust in late June last year to “carry out a fact finding visit following allegations relating to financial management and governance”, according to annual accounts. The allegations related to between March and May last year.
The accounts added: “It is anticipated that the ESFA will publish a report under its financial management and governance review process in due course.”
Since then, Galileo has seen a churn of trustees. Seven left between September 20 and November 4. One of them was former England rugby league captain Jamie Peacock.
None of the nine trustees listed in the trust’s first annual accounts for the year ending August 31, 2018 are still in position.
Chief executive Anna Coulson also left the trust in April this year.
Prior to Easter, Galileo appointed experienced education practitioner Les Walton, currently chair of the Northern Education Trust, as interim chair to “get the trust on the right footing for the future”.
Walton, a former chair of the Education Funding Agency advisory group, said the trust board’s “prime concern” is to “ensure the best interests of the children are met. Their interests are paramount.
“This includes ensuring that good governance is front and centre of our board’s aims, approving and implementing key policies, reviewing key procurement service level agreements and contracts and implementing an appropriate staffing structure.”
An internal review, commissioned by the trust and led by a third party, has been completed following concerns from headteachers and the ESFA investigation.
The prime concern of the trust board is to ensure the best interests of the children are met
Actions taken by the trust include appointing new trustees, developing governance committee structures and restructuring the central team.
New contract tendering is also taking place for services including an internal auditor, HR, IT, catering and governance.
Galileo said that financial scrutiny is now a “central feature of the new trust board”.
Many in the sector believe early academy sponsors such as E-act and Academies Enterprise Trust ran into difficulties because the were allowed by the government to expand too quickly in their early years.
It’s not clear whether such concerns were raised when the schools were given approval to join the Galileo trust at the headteacher board meeting in January 2017.
The meeting’s minutes just state that for each conversion “key discussion points” were Ofsted, school improvement, performance and finance, with no further information.
Schools Week reported in 2018 that the trust’s schools had worked together within a teaching schools alliance before breaking away to form the trust.
Debra de Muschamp, Galileo’s interim chief executive, said this week: “Now we have a new team at the helm to drive change, we can look positively towards the future, rebuilding confidence in areas where it may have been lost and ensuring that the Galileo Multi-Academy Trust goes from strength to strength.”
The Department for Education has not responded to a request for comment.
Another rapidly-expanding trust hits problems despite the track record of trusts being allowed to grow too quickly. Michael Gove, when education secretary, said he would allow trusts to grow as quickly as possible. But due diligence is too often overlooked when trusts take on too many schools too hastily.