Funds' mismanaged' at Kings Science Academy free school
One of the country's flagship free schools has been accused of serious financial mismanagement.
An Education Funding Agency (EFA) report reveals allegations of financial irregularities and even possible fraud at Kings Science Academy in Bradford.
As a free school it is state funded but not under local authority control.
In a statement to Newsnight the school admitted there were problems in the few months after the school was set up, but said those problems had been addressed.
Kings Science Academy, which is a co-educational school for 11 to 18-year-olds, opened in September 2011 and was one of England's first free schools.
Newsnight spoke to a former staff member and also the school's ex-finance director both of whom voiced concerns about the running of the school.
It was set up by Bradford-born teacher Sajid Raza, also known as Sajid Hussain, who is now the school's headteacher. Mr Raza said he wanted to provide a first class education to some of the city's most deprived children.
The school has been praised by Prime Minister David Cameron and Education Secretary Michael Gove, both of whom have visited it.
Alan Lewis, a successful businessman and the Conservative Party's vice-chairman, was a key benefactor and supporter. And the school is built on land owned by Mr Lewis and leased to the academy by his company at a cost of £296,000 a year for 20 years.
A draft EFA report was leaked to the BBC's Newsnight programme and the Department for Education (DfE) has now published a redacted final version of it on its website.
In a statement attached to the redacted report the DfE 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."
The DfE said that concerns about governance arrangements at the school had been flagged up to them by a whistle-blower in late 2012, and that they had examined the allegations on an already scheduled visit, arranged to look at the school's financial management.
The findings of that visit combined with the school's own review of its accounting triggered a forensic investigation in early 2013, the DfE added.
The school was paid a £182,933 grant when it opened in September 2011.
The EFA investigation found that £59,560 of payments were not supported by any evidence of payments being made, and £10,800 of this was supported by fabricated invoices for rent.
There was also a total of £26,775 which had been over-claimed against payments which had been made legitimately.
And that therefore, there was a total of £86,335 which had not been used for its intended purpose.
The DfE said that when the academy was spoken to about the discrepancies they were able to provide some evidence of legitimate payments which resulted in the total amount which could not be justified being reduced to £76,933.
The DfE says there is a plan in place for the school to pay back that amount.
The report also flagged up the fact that a number of Mr Raza's family members were hired to work at the school. His brother was on the board of governors, his sister was a senior teacher at the school, his wife also worked there and his father drove the school bus.
Speaking on condition of anonymity a former staff member spoke to Newsnight about their time at the academy.
"I think with the benefit of hindsight now looking back on it it's fair to say certainly the key decisions or the key power and authority was based around his family," they said.
The EFA report does not say whether Mr Raza's family members were appointed through the usual processes or not. However, it did flag up that some staff were appointed without interviews.
"We were informed that a small number of staff were employed by the academy without applying for posts, although they were interviewed by the governing board members to ensure their suitability," the report said.
The school's former finance director Daud Khan also spoke to Newsnight.
"Sajid would do a lot of things behind closed doors. He wouldn't get me involved or anybody else. And I don't know how much he was telling the governors and even if he was telling them the majority of them were all their friends anyway, so they would back him up," Mr Khan said.
A statement issued on behalf of Mr Raza and the school said that the issues raised by Newsnight related to a period two years ago.
"We acknowledge that there were poor governance issues during the start-up due to the pace of setting the new school up in two to three months," it said
"These have since been addressed with the support of external auditors and accountants Deloittes and Crowe Clark Whitehill. All payments received from the DfE have been fully accounted for by the academy and any sums incorrectly claimed have been repaid."
It added that the latest reviews by the local authority had been positive.
A statement issued by Mr's Lewis' company said: "His contribution to the academy has been that of a benefactor. At no time has Mr Lewis had responsibility for the financial management of the academy."