Trust rapped for £1.9k booze bill

An academy trust broke funding rules over £1,900 expenses on alcoholic drinks and a £450 Christmas meal for trustees, a government investigation has found.

Leading Learners Multi-Academy Trust also spent over £50,000 on education consultants without going through any tendering process.

Allegations about poor financial management at the Leading Learners prompted an investigation by the Education and Skills Funding Agency back in May 2017.

The allegations about the trust, which runs four primary schools in Manchester and Bradford, related to the CEO’s use of expenses, the trust’s use of consultancy services, asset disposal and the transparency of financial management at board level.

The report, published today, warned of “contentious and potentially irregular expenditure”, including £1,888 spent on alcohol and bar drinks and money spent on “expensive hotel stays and hospitality”, including three rooms in London at £277 per night – totalling £831 –  despite the fact the trust had no travel or subsistence policy.

The trust’s charge card for 2015-16 and 2016-17 also showed £164.50 being spent on jewellery as gifts, £100 on a John Lewis gift card and £451 on a Christmas dinner for trustees and the senior management team. There was no evidence of formal checks on senior staff expenses.

The trust also employed five educational consultants, including a national leader of education and a secondee.

One had a two-year contract that guaranteed a minimum of 70 days work at £550 a day in the first year, equating to at least £38,500. The remaining four consultants did not have contracts, but one was paid £23,775 during 2016-17.  Although all five were known to the accounting officer, no tendering process or management of conflicts of interest took place.

Leading Learners said the consultants were related to specific school improvement work that took place in 2016, after three schools joined the trust in the space of two months. The fees were covered by conversion grants and the school’s budgets.

The ESFA also raised serious concerns about the lack of financial reporting and financial skillsets at the trust, and said it was unable to fully verify the trust’s financial position because of the “lack of available financial information historically, as well as at the time of our review, and the draft nature of the budget provided after the review”.

Leading Learners was unable to provide the ESFA with detailed MAT-level financial data, financial forecasts or robust assurances about the financial position of the MAT, and investigators found that the accounting officer and chair of trustees “demonstrated a lack of understanding of finance and governance”.

At the time of the visit, the trust had gone through four separate chief financial officers in the space of 12 months. All of the trust members were also listed as directors, against government advice, and the board of trustees reviewed governance, finance and audit without separate committees from April 2016.

Brian Wilson, chair of the trust, said the ESFA’s report “rightly recognises that there were issues with our financial management at that time of their review.

“This is not something that we have ever shied away from. When we grew from one to four schools, our financial expertise, systems and processes did not strengthen at the same rate as our education improvement.

“The purchase of alcohol was primarily to support PTA events, where the money was recouped through fundraising, and to provide a glass of wine at a gala event to launch our new building – which so many members of our community had worked so hard to support.

“We acknowledge that this was not best practice, and prior to the visit by the ESFA nearly two years ago had already put in place policies to stop this happening.”

He added that the trust has strengthened its financial governance since the ESFA’s visit, including recruiting a director of finance and rolling out a new financial management system across the trust.

The report said Leading Learners must take “urgent action” to resolve the issues, including commissioning an independent review of financial management and governance across the MAT. This has now been completed .