You may have recently read that Wakefield City Academy Trust is to be wound up after it’s schools lost £2 million, it certainly shocked us. If you’re interested in what happened, or how you as Head teacher, SBM or trustees could prevent it happening in your trust, read on.
What was the problem at Wakefield City Academy trust?
Firstly let me say that I have no knowledge about this case, other than the information I read on the BBC website. My purpose is writing this article is to look at things that could make this type of incident less likely to happen again and things that you as the School Business Manager or Headteacher should consider putting into place in your Academy.
In simple terms it appears that the trust was taking advantage of it’s schools and too much money was spent on items that didn’t add value to the schools in the trust. As a result they had insufficient cash.
In addition a trustee (who happened to be an Accountant) appears to have been fired, possibly for raising concerns.
What is in place to stop this happening?
There are two things that are now in place
- ESFA requires you to disclose any salaries of over £150k. This means it’s harder for the reported salary of the chief executive to be as high as £270,000.
- ESFA rules on related party transactions. The news article reports that a tender process was “orchestrated” to let Mr Ramsay’s daughter get a contract for clerking services worth £123,000.
It would be harder for these to happen under ESFA guidelines from the ESFA governance handbook of March 2019
What can you do to prevent these problems in your school?
The purpose of sound financial process and procedures is to prevent this type of thing from happening, which in conjunction with tightened ESFA guidance mentioned above should make it impossible. But you could check that you have the following in place:
- Educate your trustees on what to look for and listen to them, making it easier for them to report their concerns. Presenting financial information has helpful ideas on how to present to non financial trustees more easily, or you might consider getting a financial expert to present financial statement to trustees instead
- Check you are complying with ESFA guidelines from the 2019 governance handbook
- Keep financial records up to date, ensure that oversight procedures are in place. If you are unhappy with what’s going on report them to your auditors or the person nominated in your trust for financial oversight.
Would you like your trustees to understand more?
We are in the process of setting up a monthly webinar to educate trustees from academies on financial matters. These webinars will be free and with no obligation to take any of our services. If you are interested in more information or would like your trustees (or you) to be invited, please email Karen@AlanPatient.co.uk or phone us (number at the top of the page).
Wakefield City Academy Trust is being wound up and the main lessons you can learn are to ensure you educate and listen to trustees, check your Academy is within ESFA guidelines and raise concerns with your school’s auditors on named person responsible for financial issues.