An academy trust that runs four schools has been told to “urgently address weaknesses in financial management” in a financial notice to improve issued today.
A letter from the Education and Skills Funding Agency (ESFA) to the SchoolsCompany Trust, which has three schools in Devon and one in Kent, flags up “short notice and urgent requests for additional funding”.
The agency says its continued concerns had been “highlighted again by the failure to produce a recovery plan by the revised deadline of 17 July”.
The trust has been told to prove that “every possible economy” is being made to achieve a balanced budget – including considering the trust-wide senior management team structure.
The formal notice strips the trust of all delegated authorities, and says all such transactions previously allowed by the Academies Financial Handbook must now be approved by the ESFA.
The agency specifically says this includes “committing spending on public relations or legal advice without prior approval”.
The letter, from Mike Pettifer, the ESFA’s acting director, academies and free schools, warns that failure to comply with the notice could trigger the termination of the trust’s finding agreement.
The financial notice to improve says the ESFA decided to take action because of the trust’s failure to:
- ensure good financial management and effective internal controls;
- have sufficient oversight over financial management and governance;
- take sufficient action to avoid the trust’s current cash-flow deficit position;
- maintain and provide the ESFA with accurate/robust budget forecasts; and
- meet the conditions of the additional grant funding as agreed in May 2016 and detailed in the grant letter of 21 June 2016.
The notice requires the trust to carry out an urgent review of all central trust income and expenditure, and “urgently seek independent verification on the closing position of the 2016/17 end year budget forecast position”.
Tes has contacted the trust for comment.