Reposted from Accountingweb
The government-run agency distributes £54bn of funding a year to education providers, including local authorities, academies and academy trusts.
It however “does not spot risks or intervene in schools quickly enough,” said PAC chair Margaret Hodge in a recent report on the agency and the Department for Education financial statements.
Although the agency, set up in 2012, has succeeded in getting money out to schools on time, it has “not yet got to grips with effective oversight of how that money is spent,” she added.
Hodge said the committee was concerned that individuals with connections to both academy trusts and private companies may have benefitted from their position when providing trusts with goods and services: “The agency has reviewed 12 such cases but it is likely that many more exist and have gone unchallenged.”
Other criticisms of the performance of the agency and Department for Education include:
- It needs complete, accurate and timely data on, for example, academies’ finances, and needs to be more robust in relation to academies that fail to comply with financial reporting requirements
- The agency needs some education providers, i.e. academies, to submit financial returns and other information in line with funding agreements. But a number of providers still do not comply with the conditions of their funding agreements
- The agency’s knowledge of poor financial management or governance in schools does not come from a “systematic or forensic” analysis of the data it holds in order to identify risks. Instead, it relies on broad desk-based reviews that are not sufficiently risk focused
- There are flaws in the methodology used to consolidate the academies’ accounts, as well as data quality issues, which undermine accountability. In 2012-13 the department and the agency consolidated academies into their financial statements for the first time, and the C&AG qualified his opinion on a number of grounds, relating to methodology and poor data
The committee’s recommendations include:
- The agency needs a “clear information strategy”, which specifies the data it needs to collect and use to provide transparency and accountability and improve efficiency in the education sector
- The Department for Education and agency should set out how and when they will develop a capability to spot risks and target their interventions early
The Department for Education said it did not agree with the PAC’s interpretation.
“The EFA is in fact faster at intervening in failing schools than many local authorities,” the department said in a statement, “Of course we are constantly trying to improve the EFA’s performance and we will consider the PAC’s recommendations in that light.”