Lord Nash says that financial regulation of academies is tighter than in maintained schools
In response to claims that academies have lax financial regulation, Lord Nash said in the Lords on 27 October that “…academies are subject to considerably more rigorous financial regulation than local authority maintained schools. For example, they have to publish annual, independently audited accounts; local authority maintained schools do not. They are subject to the rigorous oversight of the Education Funding Agency and anyone in a governing relationship with an academy, or an organisation closely linked to it, can provide services to a local authority maintained school at a profit; they cannot to an academy”
He was dismissive of criticisms from Labour Peers, reminding them “that 36 of the 55 pre-warning notices that this Government have issued to academy sponsors have been to sponsors approved under the previous Government. This Government have considerably tightened up financial oversight and improved things such as control of grants. Of course, these figures are but nothing compared to the £10 billion overspend the National Audit Office tells us that the previous Government were heading for under the Building Schools for the Future programme.”
Fraud and financial irregularities, of course ,are not the sole preserve of academies. Lord Nash pointed out, tellingly, that “The EFA has investigated 35 cases of fraud in academies in two years. That compares to 191 reported in maintained schools over one year. If we feel that there are causes for concern we will inform the police or, in more minor cases, introduce a financial notice to improve”
But, stepping aside from arguments about whether or not academies have less financial accountability than maintained schools (the evidence in any case is hardly compelling), it is pretty clear now that the direction of travel is towards greater scrutiny of schools financial management and accountability. A steady trickle of stories about schools reckless and inappropriate spending, and a rather cavalier attitude to public funds among some Heads and governors, albeit a small minority, whether in academies or maintained schools, serves to undermine confidence that taxpayers money is being well protected in the schools system . Its seems likely that this issue will be on agenda after the election next year.