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News - 12 May 2014

The Public Accounts Committee questions Free Schools financial management

 The Public Accounts Committee, a cross-party group of MPs says that financial management of some free schools is inadequate, and that high-profile failures of three free schools show that not enough is being done to ensure that public money is being used properly

 
PAC chairwoman Margaret Hodge said "recent high-profile failures", at Al-Madinah School in Derby, Discovery New School in Crawley and Kings Science Academy in Bradford, highlighted the case for better monitoring. 
 
However, the government said many of the PAC's concerns were "misplaced".
 
Tonmoy Kumar, Manager of the Accounts Department of ABDS and an active school governor comments:
“The report says the government's light-touch governance model "requires high levels of compliance by schools,” yet fewer than half of free schools submitted their required financial returns for 2011-12 on time. It also says that the system is "overly reliant" on whistleblowers to uncover financial scandals which should have been found through official audit and review processes.”
 
The report recognises that the government has made progress in establishing free schools quickly but warns that opening new kinds of schools at speed gives rise to risks, and recommends the government should evaluate audit and accountability processes to ensure they "fully address the risks in the programme". 
 
The report also criticised the fact that applications to set up free schools are not emerging from areas with the greatest forecast need and calls on the government to set out "how and by when it will encourage applications" from these areas, and address the free schools programme's "escalating capital costs", with the government having budgeted to spend £1.5bn to March 2015. 
 
A DfE spokesman said free schools were subject to greater scrutiny than council-run schools and that by 2012-13 the number of free schools to have submitted their audited accounts on time was 86%. He added that construction costs were 45% lower than under the previous government.
 
Natalie Evans, director of The New Schools Network said "focusing on the 1% of free schools" with problems was "a short-sighted way to draw conclusions about a programme that has enabled the creation of hundreds of new schools in just three years. 
 
Labour's Shadow Education Secretary Tristram Hunt said the report was "yet more evidence" that the free school programme was "diverting precious resources from areas in dire need of more school places, contributing to the primary places crisis this Tory-led government is overseeing". 
 
If you need any help and advice with Free Schools, Academy Schools or Charities, contact Lavinia Newman or Peter Ham now to discuss how ABDS can help bring their experience to these matters.
 
ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900 E-mail: abds@netaccountants.net
 
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Great with people  
Clear and precise with advice
Timely and cost effective
In touch with issues that face our clients
Mindful of our client’s long term strategic goals
 
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