A REVIEW of an academy trust found a number of "contentious" expenses were approved.

Anonymous allegations about Leading Learners Multi Academy Trust, which is in charge of Tyldesley Primary School, were made to the Education and Skills Funding Agency (ESFA) in April 2017.

There were a number of claims made including the "Chief Executive Officer’s (CFO) use of expenses and compliance with trust policies".

A review between May 31 and June 2, 2017, "identified a number of significant failings and weaknesses in governance arrangements that breach the Academies Financial Handbook (AFH)."

A formal financial management and governance review was then ordered.

Key findings from this include the trust's charge card expenditure for 2015/16 and 2016/17 which found "contentious and potentially irregular expenditure was identified, including £1,888 spent on alcohol/bar drinks".

Hotels stays including three rooms at £277.44 per room per night were identified. No evidence was offered to "suggest cheaper alternatives had been considered".

A "trustee Xmas" on December 20, 2016, which cost £451,83, paid for a dinner for trustees and the senior management team.

Jewellery to the value of £164.50 and a £100 John Lewis Gift Card was also published in the report.

ESFA "found no evidence of formal checks on senior staff expenses incurred (including the AO) on trust charge cards.

"The review identified that charge cards incur the bulk of senior management team (SMT) travel and hospitality expenses."

The report revealed that the trust did not have a travel and subsistence policy or "or formal oversight covering this expenditure and could not adequately demonstrate regularity, propriety or value for money". This also breaches AFH policy.

The review "found no evidence of formal checks on senior staff expenses".

"Internal (financial) control arrangements at the trust have been inadequate" in another breach.

The ESFA report, published earlier this month, said "the total expenditure is potentially higher as VAT receipts were not always available to identify spend".

ESFA pointed out that this caused a breach which relates "to the responsibilities of trustees and the accounting officer to demonstrate proper stewardship and probity in management of public funds".

Another breach was identified in concluding that the "financial oversight and scrutiny at the trust has been inadequate".

"This includes a lack of consolidated financial reporting, lack of financial skillsets amongst the board/AO and capacity shortage in the finance function internal control arrangements at the trust have been inadequate".

The report found the trust "had four separate persons occupying the role of CFO, or equivalent, in the space of 12 months.

"The current CFO is not permanently employed but on a short term contract of employment."

"The level of financial resource currently available at the multi academy trust (MAT) central function appears insufficient for current demands", according to the report.

This trust also did not have an audit committee or internal control checks.

The report stated: "Trust member and trustee appointments are unclear, not appropriately reported and board separation does not appear to have been in line with AFH best practice guidelines."

Five educational consultants were used including a national leader of education but four of these did not have a contract for services.

"No evidence of a proper procurement exercise was available for this expense", according to the report," which was deemed to be a breach of MAT rules too.

Financial statements confirmed that all trust members were also directors.

The report stated: "The AO was a member, director and employee until resigning as a member on April 27, 2016 according to trust minutes of the same date.

"But the AO continued to sign documentation, including the MAT articles on May 20, 2016 and the 2015/16 financial statements on December 31, 2016 suggesting her role as member continued after the resignation date.

"A review of Edubase (an education register) on July 31, 2017 also confirmed all current members are also directors as per Companies House.

"This is not in line with best practice requirements set out in the AFH which states 'governance structures in which members are also employees are not considered by DfE to be best practice'.

"Although members can also be trustees, retaining 'some distinction between the two layers ensures that members, independent of trustees, provide oversight and challenge'.

"In addition the list of trustees on Edubase does not reconcile with Companies House information."

"Not updating Edubase in a timely manner" is also a breach of AFH regulations.

In an interview, the chair of the board confirmed that he conducts performance management of the AO but was not aware anyone on the board should be approving travel and subsistence expenses.

The report said "he was also not aware of anyone approving expenses to date".

"The review team confirmed that approvals should be conducted by the person conducting performance management and by an independent person."

Furthermore trust finance systems were not available at the time of the review.

The report concluded that the trust "needs to take urgent action to resolve the issues, including greater consideration given to the robustness of financial management and governance

arrangements by the board and AO".

"The board must produce and approve comprehensive policy/procedures on expenses, which is in line with applicable frameworks such as the AFH and Charity Commission.

"In addition, they should include robust independent methods of approval, particularly for senior MAT staff."

It added that an independent review of financial management and governance covering the trust should be commissioned to identify all issues that need to be resolved.

As well as Tyldesley Primary School, the trust operates two other schools and an academy, all based in Yorkshire.

In response to the report, Leading Learners Multi Academy Trust chair Brian Wilson said: "We are pleased that the final report into the financial management of the trust, which was conducted nearly two years ago, has now been made public by ESFA.

"The report rightly recognises that there were issues with our financial management at that time of their review.

"As we have stated before, this is not something that we have ever shied away from.

"When we grew from one to four schools, our financial expertise, systems and processes did not strengthen at the same rate as our education improvement.

"While changes were being made to enhance our financial governance prior to the visit from the ESFA, we have continued to strengthen this area of the trust at pace over the last two years.

"In June 2017 we recruited a director of finance who trained at a leading international audit company.

"A new financial management system for the whole trust has been rolled out so that there can be greater scrutiny of accounts, we have amended our governance structures and commissioned our own governance review.

"It is also important to stress that the ESFA are not issuing a financial notice to improve to the trust, reflecting that they are happy that we have properly addressed the specific recommendations laid out in the report. 

"In fact, our latest audit report for the financial year ending August 2018 found that there were 'no significant findings to bring to the attention of trustees' and that there were 'no regularity, propriety and compliance matters that we became aware of during the audit'.