Neil Carmichael MP made the comments in response to the National Audit Office’s (NAO) damning verdict on the DfE’s financial accounts for 2014/15, which were laid before Parliament last week.
Sir Amyas Morse, the comptroller and auditor general at the NAO, has provided an “adverse opinion on the truth and fairness of the DfE’s group financial statements”.
On April 20, he 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. As a result, I have today provided an adverse opinion on the truth and fairness of its financial statements.”
It is the second year in a row Sir Amyas has delivered an adverse opinion on the DfE’s financial accounts. The 2014/15 accounts, which were submitted nine months late after the DfE sought an extension to the statutory deadline for submission, include the financial statements of 2,824 academy trusts operating 4,900 schools.
The continued criticism is particularly notable in the context of the government’s plan to academise every school in the country by 2022. The NAO highlights a key problem in that academy trusts’ financial year ends in August, whereas the DfE’s ends in March. In the bid to bridge the gap, the DfE has taken academy financial statements from August 2014 and then made “adjustments using centrally collated information where necessary”.
In his report, Sir Amyas states: “I consider the impact on the financial statements of this non-compliance with International Financial Reporting Standard 10 to be material and pervasive, and as such, the financial statements as a whole do not present a true and fair view.”
However, the NAO added that it had not identified “material inaccuracies in the financial statements of the individual bodies making up the group”.
The NAO has been working with the DfE and the Treasury to find an alternative approach to reporting academies’ spending – with the preferred option being the filing of a separate Sector Account for academies as at August 31 each year.
Sir Amyas added: “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.”
Responding to the NAO report, Mr Carmichael said: “At a time of continued pressure on public spending, it is vital government departments file their accounts on time to enable proper, effective public scrutiny. We recently questioned senior civil servants at the DfE on financial management and we shall continue to keep a close eye on this area.
“In providing an adverse opinion on the DfE’s group financial statements, the comptroller and auditor general has given us serious reason to question the DfE’s ability to manage its programme of educational reform.”