Monday 3 September 2012

Financial management of Brent schools in the spotlight again

Brent headteachers getting ready for the start of the new term were greeted with further press coverage of alleged school financial mismanagement at the weekend. The Times Education Supplement of September 1st  had extensive coverage of the situation in the borough LINK.  The situation had already been extensively covered here in July LINK and I returned to it later in the month LINK

The TES quotes Clive Heaphy as warning that academy conversions could make things worse:

Clive Heaphy, Brent Council’s finance director, argues that the current vast expansion of academies is going to make the problem much worse.

“Inevitably there is a recipe there for difficult times ahead and potentially for some mismanagement issues and possibly some fraud issues,” he told TES, adding that increased autonomy for local authority schools had already made it much harder for town halls to guard against them misusing public money.
“I still retain personal accountability for schools’ finances and yet I see less and less data and have fewer and fewer levers to be able to do anything about it,” Mr Heaphy said. “There is very little action in reality you can take.”

On academies he said: “The only watchdog over them is the Department for Education itself. We have no relationship with them, but who does?”
The TES reveals details about the amount of debt accumulated by two Brent primary schools through exploitative financing arrangements:
Furness Primary is being sued by a finance company for £301,083 plus interest calculated at £14,579 in April and still rising. But Brent Council said the equipment involved was worth just £9,150 when it was sold off by the finance company in February.

Kensal Rise Primary is being sued by the same company for £287,000. Both schools have made counterclaims for money they say they have already paid “in error” - £805,000 in the case of Kensal Rise. The same school has also received a more recent claim from a second finance company for £253,000.

Brent says schools have been tempted into such deals by offers of up to £15,000 “cash back” a quarter from equipment suppliers that make initial lease repayments appear more favourable than the real long-term cost. Clive Heaphy, the authority’s finance director, said that primary heads were not always “business savvy” and cannot always “see through” such offers.


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