Academy cash switch

28th September 2007 at 01:00
One Vardy school diverted pound;26,435 to another and failed to advertise tendering.

An academy awarded a contract involving pound;20 million of public money to a company owned by its sponsor without offering it to other bidders, a TES investigation has revealed. The deal, agreed by Trinity Academy, near Doncaster, included a pound;71,942 annual salary package paid to David Vardy, brother of the academy's sponsor Sir Peter Vardy, for overseeing the school's construction.

It is the second time The TES has uncovered Vardy academies paying organisations or individuals with connections to Sir Peter for work that has not been put out to tender, as the Government recommends.

The latest deal allowed Sir Peter's charity, the Emmanuel Schools Foundation, to channel pound;304,435 of Trinity's funding into its own coffers through a subsidiary company called EC Educational Services (ECES).

Most of this money ended up back in the Yorkshire school that it was meant for. But The TES has found that pound;26,435 of it was diverted, through a charitable donation to help pay for a games area, to the Vardy-sponsored Emmanuel College in Gateshead.

The foundation describes the donation to the city technology college as coming from "interest accrued and from prudent financial management". And the Department for Children, Schools and Families said the pound;26,435 was made up of funds not earmarked for any particular institution.

But ECES accounts show that in 2005 the company received interest payments of only pound;2,944 and that it had no other income apart from the money paid by Trinity. A written answer from the foundation to questions posed by The TES confirms that the donations originated as Trinity Academy funding.

Martin Williams, Doncaster councillor for Thorne, where Trinity is the only secondary school, said: "If this money was earmarked for Trinity Academy, then it should go there and not to a school in Gateshead. People should be asking questions about this. I want the money paid back."

ECES accounts show that between 2004 and 2005 it was paid pound;21,800,968 in Trinity Academy funding in a deal to project- manage the school's design and construction. The Government recommends that academies, like normal state schools, obtain at least three quotations before purchasing services to ensure the taxpayer is getting value for money.

Asked whether this had happened, the foundation eventually replied: "EC Educational Services is very well-informed regarding the professional consultancy costs charged by others, and therefore extremely confident that it provides excellent value for money."

It said the then Department for Education had agreed that the project should be managed "in-house", which the department confirmed. This was because "it was more efficient and offered better value, ensuring the project was completed on time and on budget".

In 2004, The TES revealed that another Vardy school, King's Academy in Middlesbrough, was billed a total of pound;290,214 by four separate organisations and individuals with connections to Sir Peter.

None of the works for those payments was put out to tender. They included pound;14,039 for academy work carried out by David Vardy. This money was paid to the Billy Graham Evangelistic Association, the organisation he then worked for.

Asked to comment on David Vardy's latest payments, the foundation said the money was his only income and was "commensurate with the salary expected for the director of a project management team running projects of this scale".

The foundation says ECES was set up so that its academy project management expertise could be shared with other organisations. But to date it has only managed Vardy-sponsored projects, although the foundation says it has shared its expertise free of charge with other sponsors.

It says ECES is planning to seek inclusion on the DCSF's approved list of academy project managers, set up for all future contracts.

The TES contacted other sponsors of multiple academies but could not find any that had set up separate commercial project management companies.

WHERE THE CASH WENT

ECES accounts show that in 2005 the "cost of sales" it made to Trinity Academy was pound;16,367,030.

But the academy was actually charged a bigger bill of pound;16,687,089 which, the foundation told The TES, was paid with funding for the feasibility, construction and implementation stages of Trinity. This left ECES with a "gross profit" of pound;320,059 from the Trinity deal.

Most of this money was used to cover "administrative expenses" of Pounds 313,348. The figure represented a massive 4,182 per cent rise in the company's administrative expense bill, from just pound;7,317 in 2004. Asked what the 2005 expenses consisted of, the foundation said: "The admin expenses related to donations of pound;304,435, external accountancy and audit fees, software costs, subscriptions and sundry expenses."

Of the pound;304,435 donations, ECES accounts show that pound;278,000 was given to the foundation, which it says was all passed on to Trinity Academy to help pay for a pupil referral unit and a floodlit all-weather sports pitch. The accounts show the remaining pound;26,435 went to Emmanuel College.

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