A private school that converted to the state sector under the government’s free-school policy has been ordered to get its finances in order by the Department for Education. 

Grindon Hall Christian School in Sunderland has been hit with a “financial notice to improve” by the Education Funding Agency, which oversees funding for free schools and academies for the DfE.

The religious school become a state-funded free school in September 2012 amid major controversy, sparked by accusations that it had taught creationism until just before it joined the state sector.

In a letter sent out this week, the EFA ordered Grindon Hall’s principal and accounting officer Chris Gray to balance the school’s books as a requirement of bailing the school out in the short term.

“The financial health of the school has deteriorated since opening and the trust has now requested recoverable financial support from the Education Funding Agency,” the letter reads.

The financial warning comes as a surprise because the free school had hoped in January last year to open a second school to “cope with parental demand”. 

The EFA has asked the school to put together a financial recovery plan setting out its intentions to balance the books, but the agency may still need to provide more funds “for the remainder of the academic year”. 

Grindon Hall is the latest in a raft of free schools and academies to be warned over its finances, with some of the country’s largest academy sponsors, such as E-Act and the Academies Enterprise Trust, also falling foul of EFA officials.

The financial notice is yet another setback for the former private school, which was judged to require improvement by Ofsted back in March, although a monitoring inspection in October showed signs of progress.

Under the EFA’s conditions, Grindon Hall must supply monthly financial updates to the agency and details of its monthly cashflow, as well as forecasts for the next calendar year.

According to the letter, the free school has, as part of its recovery plan, pledged to “increase pupil numbers and some income; as well as making significant savings, to secure the trust’s long-term viability”.

Back in 2013, another private school that joined the state sector, Batley Grammar in Yorkshire, was deemed to require improvement by Ofsted inspectors.