A junior school in Somerset has been hit with a financial notice to improve from the government after it failed to set a balanced budget.
The Education and Skills Funding Agency has issued St Michael’s Academy in Yeovil with a financial notice to improve. Under the terms of the notice, many of the school’s spending powers are suspended, and decisions have to be run past officials.
The ESFA pointed out the school’s failure to set a balanced budget put it in breach of the academies financial handbook – the rules that govern academy finances – and that such non-compliance “is often indicative of serious financial and/or governance issues”.
The agency also warned that the academy had failed to “ensure robust governance arrangements” and “good financial management and effective internal controls”. It has also not ensured “effective planning and oversight of capital projects”, and failed to ensure spending has been “for the purpose intended”.
Officials are also concerned about a request for emergency funding from the school.
In a letter to Ed Pike, the school’s chair of governors, Mike Pettifer, the ESFA’s acting director for academies and maintained schools, said his agency “remains concerned” by the urgency of a request from the school for financial support. The agency is also “not sufficiently confident” in the trust’s ability [to] “improve its financial position without support”, he said.
The school must now commission a “full and independent review” of financial management and governance and submit an action plan, detailing the steps it will take to address any issues identified in the probe, to officials in order to get the notice lifted.
It must also prepare a revised financial recovery plan and meet several other conditions in order to comply with the notice. If it does not comply within the timescales set out by the ESFA, the school risks having its funding agreement terminated and being rebrokered to a new sponsor.
Last year, the school was told by Ofsted that it ‘requires improvement’. It was previously rated as ‘good’.
Ed Pyke, the school’s chair of governors, told Schools Week the deterioration in the academy’s finances over the last 12 months had happened “for several reasons”.
These included an unfunded increase in pupil numbers, which required the school to create an additional class and therefore hire extra teaching staff, he said.
“In addition, the academy incurred extra costs on its summer works, which included some essential safeguarding to the car park and playground as well as improvements to the kitchen to allow all children to benefit from a daily hot meal.
“The academy is working hard with the ESFA to resolve the issues; the revised budget will be aided by increased funding next year owing to the increase in pupil numbers. The academy will continue to provide three classes in each year group and no disruption is expected to the quality of the children’s education.”