An investigation into a multi-academy trust has uncovered a raft of financial failings including “questionable transactions”, a “weak” expenses policy and a possible conflict of interest.
The Education and Skills Funding Agency has issued a financial notice to improve to Washwood Heath multi-academy trust, in Birmingham, which has been told that its funding agreement could be terminated if it does not comply.
This follows an investigation by the agency which reveals that the trust failed to meet spending rules through a contract with a company called Mindful Healthcare Ltd, which had links to its own chief executive and her family.
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The ESFA report also raises concerns over the trust’s procurement processes and its expense claims.
And it warns of a conflict of interest when the trust’s chief executive, Bev Mabey, authorised her son’s mileage expenses over 19 months.
Financial failings at multi-academy trust
The ESFA said that Washwood Heath’s transactions with Mindful Healthcare Ltd were not compliant with the government’s Academies Financial Handbook rules on related-party transactions.
In the financial notice to improve, the ESFA says Washwood Heath’s chief executive was a director at Mindful and had been involved in the decision to appoint the company.
The investigation also found that the chief’s executive’s daughter was a “delivery practitioner” at Mindful and a shareholder of the company.
In the warning notice issued to the trust, the ESFA said: “The investigation established that the trust’s dealings with Mindful Healthcare Ltd did not demonstrate that the trust had carried out a procurement exercise before appointing the supplier; considered the at-cost requirement; discussed this at board level, other than the agreement being signed off by the chair without full consideration by other trustees.”
The ESFA investigation says that in a business interests form, Ms Mabey had declared that she was a director of Mindful.
However, it says that she has never been listed as a director of the firm at Companies House and that at the time Mindful’s services were procured by the MAT, the firm had listed her and Washwood Heath’s deputy chief executive as advisers - but that this was not now the case.
The report does not make clear what services were provided to the trust by Mindful Healthcare.
On the company’s website, it says: “This service is ideal for anyone experiencing anxiety. It provides coping strategies and suggests further help for those in need.”
The ESFA investigation report adds that the trust has since stated that no payments have been made to Mindful but also says: “However, they have not provided any evidence to support this and the fact that a contractual relationship was entered into still stands.”
The ESFA report also raises concerns about procurement within the trust.
It says it found a failure to obtain quotes or tenders and the necessary approvals for procurement from seven different suppliers.
And the ESFA found that that “controls over the claiming of and authorisation of expense claims are weak as there is no current and robust expense policy”:
It found that staff were signing off their own expenditure, that there were missing receipts, there was a lack of detail as to why the expenditure was incurred, and gifts or questionable transactions were identified as being claimed for.
Washwood multi-academy trust runs seven schools in Birmingham.
Tes has approached the trust for a comment.