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Spate of academies fraud rings alarm bells

4 June 2015

The recent arrests for offences of false accounting and abuse of position in the academy sector must signal a step change in the education policymakers’ views on financial governance. Whilst internal or employee fraud including so called ‘financial irregularities’ could be reduced considerably by tightening controls and suitable management oversight, what of senior management?

Theft by those in trusted positions such as Kathryn Nethersole who stole £120,000 from Two Mile Ash School, Milton Keynes, is a wakeup call. The EFA and academies should consider introducing a robust ‘fit and proper persons test’ for all senior posts, to minimise exposure to losses the public sector can ill afford.

The increasing prevalence of fraudsters targeting schools by phishing, ID theft and invoice fraud suggest they are seen as a soft target. Clyst Vale Community College were victim to a scam which led to the diversion of funds ring fenced for a building project to a bogus contractor after a phone call advising the school of its change of bank details. Academies must be on high alert and ensure due diligence checks on all financial transactions to external suppliers.

The bad press academies are getting does not do justice to the often unheralded good work and achievements in raising standards. But concerns remain.

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