MPs ON PUBLIC ACCOUNTS COMMITTEE- WORRIED ABOUT SCHOOLS FINANCIAL ACCOUNTABILITY

They are not the only ones

Comment

The Public Accounts Select Committee, chaired by Margaret Hodge MP,  in its latest report ‘Department for Education: accountability and oversight of education and children’s services’ expresses its concern ‘ about the Department’s (DFE) ability to pick up warning signs of improper spending or poor value for money for the taxpayer.’

The report said that  it  is not clear whether existing monitoring and accountability mechanisms do enough to flag up concerns that should be investigated. For example, some academies have paid very high salaries to their senior staff and incurred expenditure of questionable value. Where reports emerge of individual failings, the Department must consider whether they indicate wider problems with financial management and governance, and deal with the underlying system-wide causes.’

The Committees adds that ‘The Department must set out how it will ensure local monitoring mechanisms promptly pick up any concerns about the regularity, propriety and value for money of spending within all schools. At present too much reliance is placed on whistle-blowers. The Department and its agencies must ensure that they have arrangements in place to address concerns identified by whistle-blowers, but it is also crucial that systems are sufficiently robust to enable those responsible to identify problems early.’

The Committee also said that ‘The Department has only a limited understanding of why some local authority maintained schools are persistently in deficit or surplus. The Department needs to undertake work to better understand the causes and consequences of persistent deficits and excessive surpluses. It should analyse the extent of deficits and surpluses among those schools under local authority control, and work with the Department for Communities and Local Government to get local authorities that have failed to resolve long-standing financial problems in their schools to address these.’

The Committee is also worried about who is responsible for securing value for money within the schools system.  The report states ‘Responsibility for value for money is shared by the Department with the Department for Communities and Local Government, individual schools, academy trusts, local authorities and the YPLA. However, the specific responsibilities of each for achieving value for money, and how they interact to drive value for money, are not clear.’  Recent scandals involving the mismanagement of school funds, most recently in Lincolnshire, cast a spotlight on schools financial accountability. Critics of the academies scheme say that the increased autonomy these schools enjoy will increase the instances of financial mismanagement.

However, most of the cases of financial mismanagement discovered, so far, involve maintained schools, under local authority control.  Three  heads ,for example,  have  been suspended  recently by Brent Council over separate allegations of financial mismanagement. So it would be unwise, surely, to use this as a stick with which to beat academies.

Local authorities have not been publishing,  for a while now ,systematic data to demonstrate how they are monitoring schools’ financial management and intervening where necessary when they have concerns. It is true that many in education  believe that   a  much brighter light should be shone on how schools manage their finances. Weak financial management and weak academic performance often go hand in hand.  And, there is a lot of taxpayers money tied up in schools. Being cavalier with taxpayers money is now frowned on, or at least in principle . The trend, if anything, is for much less scrutiny and  a reduction in the bureaucratic burden   placed on schools.  An example , from January this year , Ofsted’s new inspection regime no longer includes a value-for-money assessment.  So, it will be interesting to see how the government reacts to this report. There  are,   on the face of it, conflicting forces at work. The drive to give schools more autonomy, with less red tape and a lighter regulatory regime  is on one side  of the equation-with the desire for   greater transparency, accountability, the pursuit of best value and  cutting waste, on the other. Can a compromise be found?

http://www.publications.parliament.uk/pa/cm201012/cmselect/cmpubacc/1957/195704.htm

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