Academy Schools, fraud and public procurement rules

We've written before about procurement in the UK schools system, and the unfortunate and occasional (well, maybe not that occasional) incidents of fraud and poor procurement practice.

A couple more have hit the press recently. Last week, we saw this.

Police investigating allegations of fraud at a flagship free school arrested a 41-year-old man on Thursday. The Kings Science Academy in Bradford, is at the centre of allegations of "serious failings" in its financial management.

It was alleged last year that the school claimed tens of thousands of pounds in public money that was not used for its intended purposes. There were also claims of nepotism. An investigation by the Education Funding Agency (EFA) found "serious failings" in the financial management of the school”.

Then we had the Guardian newspaper again, which featured a major article based on their freedom of information requests to a range of Academies. These schools are privately sponsored, and the newspaper found large amounts of Academy funds ending up in the hands of people and firms with connections to these sponsors. For instance:

Grace Academy, which runs three schools in the Midlands and was set up by the Tory donor Lord Edmiston, has paid more than £1m either directly to or through companies owned or controlled by Edmiston, trustees' relatives and to members of the board of trustees… Aurora Academies Trust has paid £213,015 to Mosaica Education for educational services, reimbursement of travel expenses and for use of the Paragon curriculum resource. At least three Aurora directors currently have a direct or indirect interest in Mosaica Education.

Now the Guardian was quick to point out that there was no evidence of improper or fraudulent behaviour. Perhaps it is not unreasonable, for instance, that some management or other services might be bought from the businesses that are sponsoring the schools. But pretty much anyone who read this would be left with some niggling doubts or worse about this whole situation.

And of course, as a procurement person, there are some obvious questions about the expertise, processes and tools available in these Academies to spend money well and wisely. But my main thought was around public procurement rules. Basically, shouldn't they apply to Academies just as they do to all 'normal' schools?

Now, there are some complex rules around organisations and whether or not they count as public bodies and therefore are deemed to be 'contracting authorities'. But Academies still, I believe, get the majority of their funding from the government, so doesn't that mean that they are contracting authorities? I have always understood that if 50% plus of your funding comes from government, you are caught by the Regulations unless there is some very strong reason why not.

Now, I haven't to be honest done a lot of research on this, so I'm hoping our knowledgeable readers will be able to chip in and explain this to us. You know who you are… Because if EU procurement regulations do apply, some of the examples given by the Guardian seem to indicate that the appropriate processes and behaviours are not being followed.

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