Academy schools asset-stripped of millions before being ditched by the their sponsor

[noblegiraffe]

www.theguardian.com/education/2017/oct/21/collapsing-wakefield-city-academies-trust-asset-stripped-schools-millions-say-furious-parents

I thought it was bad enough when the Wakefield City Academies Trust just ditched its 21 schools, but now it turns out that as well as paying himself £82,000 for 15 weeks work and a nice bit of nepotism (£440,000 to companies owned by himself and his daughter) the CEO Mike Ramsay was also in charge of a trust which took rainy-day surpluses from schools that were planning from the future, and what looks like money raised by the PTA(?) to put into general trust funds which were lost when the trust collapsed.

The DfE are (as is usual for them) refusing Freedom of Information requests about the finances and have (as is usual for them) released a bland statement about how everything is fine really.

I repeat, detection rates in the public sector appear to be much the same as they are in the private sector.
Don't forget that a Companies Act audit does not in fact set out to detect fraud. Its in the engagement letters - the joy of the 'expectation gap'.

LaLa - if you have concerns about an academy you can report them to your Regional Schools Commissioner

Before everybody gets too carried away, I think that it is necessary for a proper examination of this Trusts accounts to be carried out to establish exactly what has gone on.
Clearly if the trust Board and senior executives have blown through all their funding and the funding got from constituent schools in the Trust then something has gone very wrong and needs to be made public.
As PRH says there has always been issues over finances in schools and trusted staff, including plenty of head teachers, found guilty of theft. It just seem that there is "extra" publicity if it involves and academy.

Don't forget that a Companies Act audit does not in fact set out to detect fraud

So why aren't public sector auditors doing a better job than private sector ones of detecting fraud?

prh
The answer to your last question is
Eric Pickles
I wish I was joking, but sadly his rushed ill thought out abolition of the Audit commission brought VFM and controls testing work at a local level to a shuddering halt in 2010.
I suspect that the current growing level of governance failings will allow the remit of the replacement body to be widened.
Certainly that is the 'vibe' coming out of the auditor chat groups.

It predates Pickles but it doesn't really matter. I am not in any way denigrating auditors. Most of them seem to do a good job. However, a competent fraudster is able to hide their tracks well enough to evade detection by auditors.

The statistics show that fraudsters are most commonly caught following tip offs from employees, accounting for over 40% of detections. That has been the case for at least 15 years, probably much longer. Similarly, the percentage of fraudsters caught by external audit has hovered at around 3-4% for a long time in both public and private sectors.