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News - 13 November 2014

Academy's business links investigated

The National Audit Office (NAO) has investigated a string of conflicts of interests in the way the Durand Academy Trust has managed its schools and its assets.

The Department for Education has now taken action to address these issues.

The NAO investigation revealed 17 other academy trusts were involved in irregular or improper transactions.

Durand Academy Trust runs an infant and a junior school in Stockwell, and a small Free State boarding school in Sussex, which opened this term. It also draws an income from leisure facilities and accommodation that it owns in south London.

The report said the association between the trust and its related organisations was "complex".
And it found individuals on the trust's board were also acting as directors or staff at companies from which the academy trust had purchased services.

The Commons Public Accounts Committee chairman Margaret Hodge said: "It feels just wrong that individuals sitting on the board of the Durand Academy Trust could set up such a complex web of organisations and companies some of which are selling goods and services to the academy.

Liz Kennett, Audit and Accounts Manager of ABDS, and a Schools and Charities specialist comments:
“Nearly 1,000 academy trusts had disclosed transactions worth £71m with related parties in their financial statements to the Education Funding Agency, which oversees academies. Of these, 54 cases were found to be a risk to value for money and needed follow up work, and the EFA went on to establish that transactions at 17 academy trusts were irregular or improper and is taking action to address this.”

A Department for Education spokesman said its academy system enabled the government to take "rapid and robust action" to ensure public money is being used appropriately.

It said it stepped in as soon as concerns emerged over Durand Academy Trust and that the NAO report was clear that it acted promptly.

"As a result the trust agreed to act to ensure transparency and remove potential conflicts of interest.”

If you need any help and advice with Free Schools, Academy Schools or Charities, contact Lavinia Newman, Peter Ham or Liz Kennett 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

Brilliant with numbers   
Great with people  
Clear and precise with advice
Timely and cost effective 
In touch with issues that face our clients and
mindful of their long term strategic goals

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