A number of academies have been found to be engaged in serious financial impropriety. What can we do about it?

Last month the government found the Perry Beeches academy in Birmingham guilty of serious financial impropriety having used a company to undertake a health and safety audit which was run by the wife of a member of the committee that awarded the business contract.

According to the Guardian, “This is not a unique case. Across the country, academies have been plagued by allegations of financial impropriety, conflicts of interest and even corruption.”

Academies, being outside Local Authority control, take care of their own financial management and their own accountability. Yet it seems this independence has resulted in things going rather awry in some cases.

The 2014 parliamentary report on the issue said that “conflicts of interest are common… There is a broader sense that the academy system lacks transparency.” The Public Accounts Committee noted that “individuals with connections to both academy trusts and private companies may have benefited personally or their companies may have benefited from their position when providing the trust with goods and services”.

In another investigation the Guardian found that various academy chains had paid millions to private businesses run by the “schools’ directors, trustees and their relatives.” Late last year the Department for Education opened an investigation into 19 academies that had allegedly broken transparency rules, but the Guardian claims that “the true number of academies breaching transparency rules may be far higher – these findings were only based on a sample of 100 schools.”

In short 19% of academies were found to be worth investigating in terms of transparency rules.

In addition they say that “those failing to publish a register of interests include some of the largest multi-academy trusts”. The Campaign for Real Education called the academy system “a green light for corruption.”

Mary Bousted, of the Association of Teachers and Lecturers union, blames the string of financial controversies on “the mushrooming of academy and free school systems, without proper checks and balances”.

And indeed in my own work with the School of Educational Administration and Management, I have come across numerous reports from administrators and managers within schools relating to issues of corruption that they see, which are not being challenged by governors who appear to be complicit.

Of course, such practices are not to the benefit of the school. Mary Bousted added that “There’s a steady stream of questionable or downright unethical practice coming out of some academies. That’s including companies becoming sponsors of academies and then using them as a cash cow. If unscrupulous people want to make money out of free schools and academies, there are still too many opportunities to allow them to do so.””

Academies are subject to the normal public standards of accountability. So their dealings with private businesses should be as open as they are in other state bodies. Yet when the Guardian put in a freedom of information request about payments of over £5000 made to suppliers some questioned the need for transparency. It is as if the governing bodies and senior management feel that the normal rules don’t apply to them.

According to the Guardian one school replied claiming that it was “unhelpful, inconsiderate and, in my view, unnecessary” to ask to view the school’s finance data. Others refused to release the records on grounds of commercial sensitivity.

As Mary Bousted said, “Because there aren’t enough checks and balances – and because there isn’t anything like enough early intervention – things can get to a bad state before anything is done about it. And during that time, morale suffers. Teachers notice that they’re not getting the resources they need.”

The good news, however, is that slowly pressure by publications such as the Guardian, and by the unions, is forcing the government to act so that these secret deals are not continuing, and that more and more contracts are genuinely open to all suppliers.

The government encourages everyone in the country to be acting in reporting malpractice - indeed it even has a website for whistleblowers who report issues within their own area of employment. But that does not mean that one has to be employed in a trust to be able to report possible wrongdoing. One can still do it from the outside.

I’ll come clean and say that I have done this once, in relation to a finance officer who was paying himself as a self-employed person (and thus deducting significant amounts of “expenses” from his income) when he was quite clearly a full time employee. I suspected his duplicity went much further and so I told Revenue and Customs (who again have a website just for this) and within a matter of months not only had the employee been found out, but investigations unravelled further malpractice. And from what I witnessed when Revenue and Customs get going they don’t muck about.

Some, of course, will criticise such activity on my part saying it was none of my business - my personal view was that it very much is my business since I am a taxpayer. But of course it is a personal decision.

Most academies are of course utterly professional and go to great lengths to make sure they do everything by the book. That’s why, in my very personal view, it is worth outing those who don’t play by the rules and somehow think that they can use public money without saying where it went.