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School money not used properly: EFA
One of the Government's flagship free schools claimed tens of thousands of pounds in public money which was not used for its intended purposes, it has been revealed.
An investigation by the Education Funding Agency (EFA) has found "serious failings" in the financial management of King's Science Academy in Bradford.
The Department for Education (DfE) insisted that a plan has been put in place to recover funds and that the school has been asked to address concerns urgently.
King's Science Academy (KSA) was one of the first free schools to open in September 2011 and was praised by Prime Minister David Cameron on a visit last year.
It was judged to "require improvement" by Ofsted following an inspection in February.
An inquiry was launched at the beginning of the year following allegations raised by a whistleblower about the way the school was being governed.
A planned visit to the Academy and concerns raised by accountants hired by the school itself led to the "forensic" investigation.
The EFA's final report, published today, found that out of a £182,933 grant made to the school before it opened, £86,335 had not been used for its intended purposes.
Invoices worth £59, 560 were not supported by any evidence of payments being made. This included "fabricated" invoices to the sum of £10,800 to cover rent for office accommodation.
A total of £26,775 had been over-paid against legitimate payments.
The report said: "Invoices have been submitted to the Department which have never been paid by the Trust."
It adds that it has been admitted that "some of the invoices submitted to the Department to support the claim for lead-in grant were fabricated invoices. These invoices were created by the Trust to claim for rent that they did not have to pay."
The DfE said that the police were informed of the allegations in April and no action was taken.
The school was issued with a warning notice in May and has since implemented an action plan to restructure its governing body, appoint an experienced finance director, overhaul its financial management systems, recruit new governors and pay back the money they owe.
A DfE spokesman said: " We found serious failings in financial management at the Kings Science Academy (KSA).
"We informed the police who decided no further action was necessary. We required KSA to address these failings urgently.
"A plan is in place to recover funds and the school is undertaking its own investigation. Any necessary disciplinary action is a matter for the school."
He insisted that academies and free schools are subject to tougher financial accountability measures that other state schools.
He added: " Unfortunately no system of financial accountability for any school can guarantee it will prevent all wrongdoing.
"However, we take swift action when concerns are raised - academies and free schools cannot hide from their financial responsibilities and are held to account for their actions."
An undated statement from the chair of governors on the school's website says that since becoming aware of issues in a draft report, the governing body has taken "robust" action.
" The significant changes in membership has seen governors with expertise in finance, HR and education appointed to the governing body," it said.
"This now means that governors are able to effectively challenge the academy leadership, by having in place robust, accountable, systems and procedures which are constantly reviewed.
"This has led to significant improvements in governance which has been recognised by the EFA and in independent reviews.
"The governing body are committed to ensuring that all areas of the academy continue to improve to ensure outstanding outcomes for all our children."
The findings come at a time when free schools have been under the spotlight.
At the weekend, Deputy Prime Minister and Liberal Democrat leader Nick Clegg opened coalition dividing lines by publicly insisting that all teachers, including those at free schools, should be qualified.
Two free schools - the Al-Madinah School in Derby and Discovery New School in West Sussex - have been rated inadequate by Ofsted.
It was announced last month that Annaliese Briggs, who was appointed to run Pimlico Primary, a free school in central London, despite having little experience or teaching qualifications, was leaving the job just weeks after the school opened.
Shadow education secretary Tristram Hunt said: "This case represents another deeply concerning episode in a string of failings of David Cameron's Free School programme.
"Labour has long warned of the dangers that a lack of financial oversight and allowing unqualified teachers to teach in our classrooms on a permanent basis would cause.
"The case of KSA Free School further exposes David Cameron's weakness on school standards. It proves yet again that it is not possible for thousands of schools to be run directly from Whitehall and is further proof that this out-of-touch Government has no plan to deliver for all children."