Minister reveals scale of fraud inquiries

The Education Funding Agency, responsible for academies and free schools, has carried out 13 formal investigations in under two years with just under half of these still ongoing.

A written answer from Education Minister Edward Timpson says that in three cases investigation reports have been published and that there were four others where no financial impropriety was found.

Reports into these four schools have not been published.

The statement was made in response to a question from Labour Minister Kevin Brennan amid mounting controversy surrounding financial scandals at academies and free schools.

However Mr Timpson also points out that there were 191 cases of fraud reported in local authority schools last year.

The Kings Science Academy, in Bradford, one of the first 24 free schools to be set up in 2011, is now being investigated by West Yorkshire Police over allegations that fabricated invoices had been submitted to claim just over £10,000 of public money from the DfE while the school was being set up.

Last Friday the DfE published a new investigation report into financial concerns at a special educational needs school in the North East which is now being investigated by the police.

The report into the Glendene Arts Academy in Easington Colliery in County Durham, revealed concerns about £162,000 of money being spent subsiding a private company.

It says: “We cannot identify any discernible benefit from the academy in this arrangement; it has resulted in the loss of over £162,00 that should have been used for the benefit of academy pupils.”

Nobody was available for comment at the academy yesterday as the school is on half-term.

The figures provided in the DfE answer by Mr Timpson show that whistleblowers have reported alleged impropriety to the Education Funding Agency on 36 occasions since it was set up as part of the DfE in April 2012.

Mr Timpson said there were ten cases from 2012 to 2013 and a further 26 from 2013 to 2014.

He added: “We looked at each of these cases closely. Of these, 13 have resulted in a formal investigation and six are currently being assessed. In the other 17 cases, there was no evidence of financial impropriety. Appropriate advice or follow-up work was undertaken to address any residual concerns. For comparison, 191 cases of fraud in local authority schools were reported to the Audit Commission last year.”

He added: “In 2012-13, there were six investigations and, to date, in 2013-14 there have been seven investigations. Of these 13 cases, to date three have published investigation reports available online. Six cases are ongoing. In the remaining four cases, no financial impropriety was found. These four investigations were completed before new requirements came into force in the Academies Financial Handbook on 1 September 2013, stating that ‘the EFA will publish reports into investigations it undertakes”.

The Kings Science Academy case in Bradford is one of those where the DfE has published the report. However this was only done after a draft of it was leaked to Newsnight. The DfE published a redacted version hours before a programme was due to be broadcast on October 25 last year.

Within a week West Yorkshire Police launched an investigation and it emerged that although the DfE had contacted the fraud authorities in April, no police investigation had been carried out at that point because the matter had been wrongly classified as an information report by Action Fraud – a national centre for reporting cases. The school’s principal Sajid Raza has been arrested and released on bail.