Education written question – answered on 21st January 2014.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

To ask the Secretary of State for Education if he will bring forward proposals to require the auditors of free schools and academies to report on which (a) services have been bought from, (b) fees have been paid to and (c) payments have been made to friends, relatives and business associates of school heads and governors.

Photo of Edward Timpson Edward Timpson The Parliamentary Under-Secretary of State for Education

The level of transparency and scrutiny is more rigorous and transparent in academies than in maintained schools.

Under company law, academy trusts, including those operating free schools, have always been required to disclose transactions with related parties in their annual accounts, the accounts must be audited by an external auditor annually. The auditor is required to provide their opinion on the truth and fairness of the accounts, including the related party transactions note, and also to report on the regularity and propriety of income and expenditure. The academies financial handbook requires trusts to publish the accounts, including the auditors’ opinions, on their website, so details of related party transactions are transparent.

The handbook also requires that trusts have a competitive purchasing policy and avoid conflicts of interest when entering into contracts and other business. Our no-profit policy also means that trusts can pay no more than cost for goods and services from individuals and organisations with which they have a significant relationship.

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No2 people think not

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