Financial practices in schools attacked: Commission highlights accountability 'failures'

FINANCIAL accountability is either weak or non-existent in 40 per cent of schools, according to a report by the Audit Commission.

The survey revealed questionable practices in a 'small but noticeable' number of schools. In one case, a head teacher had awarded more than pounds 3,000 of work to her husband without getting competitive quotations or discussing it with the governors. Another head teacher had employed her daughter to help with school administration at a much higher rate than normal, without reporting this to the governors.

Most schools in England and Wales now manage 85 per cent or more of their budgets, which in 1992-93 amounted to pounds 11.6bn of public money. School governors are responsible for budgets, although they usually delegate day-to-day management to head teachers.

However, the Audit Commission's survey of 100 primary and secondary schools, Adding up the Sums, found evidence of 'serious inefficiency' and 'questionable financial practices' in a number of schools.

In 40 per cent of schools, where accountability was inadequate, governors were often found to be ill-informed about financial issues, leaving responsibility for major financial decisions almost entirely in the hands of the head teacher.

'Without proper attention, time may lead to a further deterioration in accountability. If scandals emerge, they will undermine the credibility of local management and weaken public confidence in the education service,' the report warns.

In 25 per cent of schools, voluntary funds were administered in ways which, if public money was involved, would require 'corrective action' - for instance, not submitting accounts for independent review and paying employees 'cash in hand'.

The report said some head teachers with high levels of administrative staff spent 60 per cent of their week managing the budget, while others in similar schools spent less than half this time. But while some were criticised for lack of delegation, many secondary heads delegated too much and did not properly review patterns of expenditure.

Eric Forth, Parliamentary Under- Secretary of State for Education, welcomed the fact that 'the great majority of schools' had taken well to managing their own finances and that almost all had managed to keep within their budgets. But he added that any cases of possible impropriety must be taken seriously.

Adding up the Sums: Schools' Management of their Finances; HMSO; pounds 8.