An academy has been issued with a financial notice to improve after the Department for Education raised concerns about the urgency of its request for financial support.

A letter to St Michael’s Academy in Yeovil, Somerset, cites four grounds for issuing the financial notice to improve:

• Failure to ensure robust governance arrangements.

• Failure to ensure good financial management and effective internal controls.

• Failure to ensure effective planning and oversight of capital project.

• Failure to ensure spending has been for the purpose intended and there is probity in the use of public funds.

The letter from Mike Pettifer, acting director, Academies and Maintained Schools, at the Education and Skills Funding Agency (ESFA), says: “The ESFA remains concerned by the urgency of the request for financial support and is not sufficiently confident in the trust’s ability improve its financial position without support.”

It points out the requirement that academies set balanced budgets for each year, warning that “such non-compliance is often indicative of serious financial and/or governance issues”.

It adds that the financial notice to improve “reflects the continued concerns regarding the financial controls, governance and oversight of financial management at the trust”.

Under the terms of the notice, the trust has been stripped of its delegated authority over a range of financial issues, including write-offs and staff severance payments.

It has been told to commission “a full and independent review of financial management and governance across the trust”, which must include the option of joining a multi-academy trust (MAT). 

The letter warns that if the academy fails to meet the requirements of the notice, its funding agreement could be terminated.

Meanwhile, the DfE told The Ridings Federation of Academies Trust in Bristol that its financial notice to improve, which was issued in November 2016, has been lifted.

A letter from the ESFA, published this afternoon, says: “I am grateful for the assurances provided regarding the improvement of financial management, control and governance at the trust. As a result, the financial notice to improve will be lifted, with effect from the date of this letter.”

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