Academies: Spending watchdog warns of ‘pervasive’ errors in DfE accounts

National Audit Office publishes highly critical report and says department is failing to give Parliament a clear view of academies’ spending

Public spending watchdog the National Audit Office has published a highly critical report on the Department for Education’s financial statements, warning that the department is “failing” to provide Parliament with a clear view of academy trusts’ spending.

The NAO warned today that the level of “error and uncertainty” in the department’s financial statements was “both material and pervasive”.

The DfE responded to the report claiming the consolidation of the accounts of thousands of academies was “one of the largest and most complex procedures of its kind”.

It is the second time the watchdog has issued a warning about the department’s accounts. Last year it said the department’s figures did not give a “true and fair” reflection of its financial activity.

Amyas Morse, head of the National Audit Office, said: “Providing Parliament with a clear view of academy trusts’ spending is a vital part of the Department for Education’s work – yet it is failing to do this.

“As a result, I have today provided an adverse opinion on the truth and fairness of its financial statements.

“The department will have to work hard in the coming months, if it is to present Parliament with a better picture of academy trusts’ spending … in 2017.”

A spokesman for the department said:“Academies are subject to a rigorous system of accountability and oversight, tougher and more transparent than maintained schools. This is reflected in the NAO’s finding that there are no material inaccuracies in individual academies’ statements. However, the consolidation of thousands of those accounts into the format required by Parliament is one of the largest and most complex procedures of its kind.

“All of these accounts are published individually by trusts ensuring they can be held to account by the department and the public.

“We recognise the challenges with the current format and have developed a new methodology for the 2016/17 financial year, which the NAO has said will provide a solution to a number of these issues. With the Education Funding Agency’s rigorous oversight of the academy system and the expanding role of the Regional School Commissioner we are confident that the accountability system for the expanding academies programme is robust and fit for purpose.”

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