Anyone know about governors making money by providing goods/services to schools?

[Runoutofideas]

I am the treasurer of a school PTA. The head wants to use some of the money we have in the pot to create a special area at school. One of the governor's business is in this area (sorry am being vague to retain confidentiality). He has quoted to provide what school have requested, however in my view it is expensive, and he doesn't appear to be offering any reduction in light of being a governor at the school.

The money has all been hard won by fundraising and I'm not sure the parents will be too keen on seeing their efforts going towards lining a governor's pockets, even if he has provided what school were looking for. Is this ethical? I understand he has to declare "a pecuniary interest" but I'm not sure what this means in reality. Can anyone advise? Thanks

I don't understand, why can't you simply shop around in the same way as you would with any other product or service?

We can. I have asked the head to get further quotes, but even if his is the cheapest I still feel slightly uneasy about him making money from a school where he is a governor....

The PTA should follow typical best practice and secure at least 3 quotations, and then go for the one that offers best vfm.

Get 3 other quotes, hold a school parents meeting, get pictures of the project, be up front re. Quotes, allow the parents to decide.
The governor can't be expected to drops prices, it's a difficult time for businesses, but he does have a duty to be competitive.

Thanks all. Does anyone know about the "declaring pecuniary interest"? Is that simply a public admission that he is making money and has a link to the school, or are there rules regarding it?

AFAIK, he just has to declare that he is a governor and that he has provided the quote to the school. I am a school governor, and we have to declare any pecuniary interest in any item on the agenda of a meeting. It doesn't involve most of us as we are not in the sort of businesses required. He would not be able to take part in any discussions about the item in which he had declared an interest and would have to leave the room. I don't think this is the case in your situation because the governors do not have any say in the PTA spending.

However, in your situation, he has done nothing wrong. He's provided the quote, it's clear he has a position on the school governing body, you don't have to take his quote up. As the other posters have said, get a minimum of 3 quotes and choose from there.

Why should he drop his price for the school? Governors already give their time free. Is there some reason you don't trust him?

Put it this way, I wouldn't put it past him to recognise it as a juicy business opportunity and to make the most out of it for himself. I feel my role is to ensure that the hard earned PTA money is spent wisely and with the support of the parents. I completely understand that he has a business to run and as such it should be a commercially competitive quote. I feel that the Head may favour using him as she knows him, despite other quotes being cheaper, which is a battle to fight in the near future I think. I just wanted to arm myself with the legalities of it in advance, just in case there was some "governors must not make profit from the schools they are working with" clause that I was missing. Thanks

If you don't like the price, surely you're under no obligation to select his product? Get the best value you can. I agree with others who have said that equally the governor isn't obliged to offer the PTA any special discount. He voulnteers his time to do his bit for the school, just the same as the PTA do. He wouldn't be allowed to elect to use his own company even if the governing body were making the decision about this purchase.

As a governor with a pecuniary interest he should hold no part in the decision making process about which contractor to engage. I was a governor for a number of years and any governor with a pecuniary interest was asked to leave the meeting while the subject was discussed and decided upon ? if that?s not the case then I would be worried about the independence of the outcome.

There are two issues here. The first is that as a PTA you have raised the money and it is for you to decide what you spend the money on. If you do not like the idea put forward by the school then say you do not want to give them the money for that. You are not obliged to just hand over the money, it is for you as a PTA to spend the money as you see fit. Obviously in normal circumstances this would be a joint decision with the school.
As far as the governor is concerned. There is nothing which says that they should work for a cut price for the school, nor is there anything that says that they cannot tender for work at the school and get it. However they do then have to declare a pecuniary interest and take no part in the decision making process as to who gets the contract. From the school's perspective they have to firstly accept that the funding from the PTA has to be spent as they dictate. Secondly with any spending of funds they will have to abide by what is called the Manual of Internal Procedures. That should state what has to happen and in such a case, assuming we are talking about a few thousand pounds of expenditure, that three quotes would be necessary. The school then has to choose the quote that provides best value. That could easily be the one provided by the governor's company but at least the correct procedure has been followed. It could well be depending on the size of the contract that the governing body will not have anything to do with the decision, it may well be delegated to the head teacher, if it is within their spending limits.

Thanks admission - that's what I thought, but you have summarised it very clearly. We are indeed talking a couple/possibly up to ten thousand pounds so it needs to be done properly. The head now has another 2 quotes and we are meeting to discuss it next week.