RegulationAccounting StandardsError in Department for Education’s financial statements ‘material and pervasive’

Error in Department for Education’s financial statements ‘material and pervasive’

National Audit Office report critical of Department for Education's financial statements, amid huge expansion of academies across England

THE LEVEL OF ERROR and uncertainty in the financial statements of the Department of Education is “both material and pervasive”, according to the National Audit Office.

The department has just published its accounts for 2014-15, nine months after every other government department.

Amyas Morse, the comptroller and auditor general, has given an “adverse opinion on the truth and fairness” of the DfE’s group financial statements. He has also qualified his regularity opinion because the department has exceeded three of its expenditure limits authorised by parliament.

Although there is no suggestion of misspending of public money, the report warns the rapid expansion of the academy programme in England has made it challenging to follow. It’s a situation, the NAO claims, that is likely to worsen given the government’s drive to turn all schools into academies by 2020.

“The department’s policy of autonomy for academies brings with it significant risks if the financial capability of the department and academies are not strengthened,” the NAO report reads.

“And the financial statements do not present a true and fair view and meet the accountability requirements of parliament. This will become even more significant in the context of the planned expansion of the academy sector.”

Alongside that, the NAO criticised the department for failing to get its accounts signed off on time.

Amyas Morse said: “Providing Parliament with a clear view of academy trusts’ spending is a vital part of the Department for Education’s work – yet it is failing to do this… The department will have to work hard in the coming months, if it is to present parliament with a better picture of academy trusts’ spending through the planned new sector account in 2017.”

In a statement, the DfE said: “Academies are subject to a rigorous system of accountability and oversight, tougher and more transparent than maintained schools. This is reflected in the NAO’s finding that there are no material inaccuracies in individual academies’ statements. However, the consolidation of thousands of those accounts into the format required by parliament is one of the largest and most complex procedures of its kind.

“All of these accounts are published individually by trusts ensuring they can be held to account by the department and the public.

“We recognise the challenges with the current format and have developed a new methodology for the 2016/17 financial year, which the NAO has said will provide a solution to a number of these issues. With the Education Funding Agency’s rigorous oversight of the academy system and the expanding role of the Regional School Commissioner we are confident that the accountability system for the expanding academies programme is robust and fit for purpose.”

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