Agenda item

This report provides an overview of the current situation regarding financial management in Brent’s schools, and offers good assurance that this is improving in schools.

Sara Williams (Acting Director of Children and Families) and Simon Lane (Head of Audit and Investigations) presented a report to the committee which provided an overview of financial management in Brent’s schools, with detailed updates on audit outcomes and leasing arrangements. It was explained that though governing bodies held responsibility for the financial management of their respective schools, the Council was required to ensure value for money was being sought and sound financial systems and controls were in place. Simon Lane advised that there had been improvement in the financial management in Brent’s schools since 2011/12 and drew members’ attention to the audit outcomes provided for the current and previous three years. Assurance levels had improved in 2012/13 and the level of substantial assurance reports issued was currently 83% for 2013/14. It was noted this figure had increased from that reported as two further schools had been audited since the report had been written. Though two schools remained to be audited, no schools had yet been awarded a nil assurance rating for 2013/14.

Sara Williams highlighted the common weaknesses identified during audit work and explained that there were numerous systems in place to address these and support continued improvement. These included the provision of regular information and guidance via the Schools’ Extranet, termly Bursar meetings, and a comprehensive training programme compiled using feedback from schools and in accordance with the council’s evaluation of training needs. A review of the financial management services available for schools to buy-in from the council was also being undertaken to ensure schools were receiving the support they needed in carrying out their day-to-day financial management duties.

Turning to the subject of leasing arrangements, Simon Lane advised that the Council had in 2010 identified that a number of schools had entered into very unfavourable leasing arrangements with large finance companies for the hire of equipment such as photocopiers. The Council was of the view that these leases should be treated as being void from the outset, as the schools in question did not have the legal power to enter into them.  Subsequently, an action plan had been established to help to extricate the worst affected schools from the disadvantageous leases. Six schools had since stopped paying the fees purportedly due to the finance companies, with the support of Brent Council.  Legal action had been pursued by several of the finance companies; the majority of these cases had been settled, with favourable outcomes for the schools in question. There remained one case on-going before the High Court. It was emphasised that the council would continue its approach of taking a robust overt position regarding any legal action, whilst at the same time negotiating behind the scenes where appropriate. 

During members discussion it was queried whether the audit team conducted follow up assessments to ensure that particular weaknesses identified during the audit were subsequently addressed by the schools. It was also queried whether the minutes of governing bodies’ financial committees were reviewed during an audit. Information was sought on the attendance of schools at the termly bursars meetings and the uptake of the financial package offered to schools as a traded service. A query was raised regarding responsibility for audits of other aspects of the management of a schools, such as health and safety.

Responding to the issues raised, Simon Lane explained that follow up visits were conducted after a period of about 6 months and the council would take action within this period to ensure that common areas of weakness were addressed with all schools. Audits did include both a general review of the minutes of a school’s financial committee, as well as a cross referencing activity with records of significant expenditure to ensure that that approval had been granted by the committee. Sara Williams informed the committee that attendance at the termly bursar meetings was good and that the council had a good relationship with schools. More detailed information regarding this matter and the uptake of the financial package could be circulated to the committee.  The council was responsible for the health and safety of community schools. In meeting this duty, the council required all community schools to complete a health and safety self assessment, which was then scrutinised by the council’s Health and Safety Officer and Health and Safety Committee.  Schools could also buy in the services of the council’s Health and Safety Officer for specific pieces of work.

The committee thanked the officers for their responses.

RESOLVED:

That the report be noted.