An academy trust that is being wound up has been told to investigate grant advances it made to two private companies because of concerns they breached government rules.
A financial notice to improve issued to the St Neots Learning Partnership in Cambridgeshire also raises concerns about “potential conflicts of interest in recruiting staff” and “ineffective financial management and governance”.
The trust has two secondary schools in Cambridgeshire, which are in the process of being re-brokered to the Astrea academy trust.
In February, St Neots Learning Partnership received a pre-termination warning notice regarding Ernulf Academy because of “unacceptably low” standards of pupil performance.
The financial notice to improve, issued by Mike Pettifer of the Education and Skills Funding Agency (ESFA) on 1 August, and published today, says: “I am concerned about the leadership and management of the trust and am not convinced that it can effectively address the issues raised with you.”
It highlights "concerns regarding grant advances for a 10 year period to two private companies breaching the Academies Financial Handbook".
It says the investigation into these “should have independent input, have the scope cleared with ESFA, along with any interim executive arrangements that may be necessary during the conduct of the review, and be completed by 31 August 2018”.
The probe must examine whether advances were in line with the purposes the money was intended for when the partnership received it.
The notice strips the partnership of a number of delegated powers, and says that “all transactions by the trust previously covered by these delegations (regardless of size) must first come to the ESFA for approval”.