Nearly £400,000 of work commissioned by a school went to business associates and family of senior leaders, an investigation found.
Essex County Council investigated Wells Park boarding school, for primary-age children with behavioural issues, following whistleblower allegations.
It found payments for unnecessary work and a lack of competitive tendering.
The trust that has since taken over the school, in Chigwell, said robust financial systems were now in place.
The state-funded school provides weekday residential education for about 40 pupils, aged five to 11, who have social, emotional and mental health difficulties, and it also has about 15 non-residential pupils.
Not ‘fit for purpose’
The council’s audit team began an investigation in October 2020.
An internal report the following April, made public after a Freedom of Information Act request, highlighted transactions with four companies.
It concluded the way services were procured was not transparent, there was a failure to demonstrate value for money, and there was no evidence of tendering.
The school’s contract register was declared “not fit for purpose” and that the “governing body and leadership team have interests in some of the companies procured to provide services”.
A company called Kaizen Now Ltd, owned by the brother of the school’s director of strategy Carol Mitchell, was paid more than £27,000 to provide general data protection regulation (GDPR) work.
The school was already receiving the same services from the council at a fraction of the cost.
The auditors said they could not find any details of the services the company provided.
John Burke, who owns the company, did not reply when approached for comment.
Carol Mitchell did not provide a formal response when asked by the IPGCE.
Two other companies, Barker Richmond Ltd and Jell Amalgamation Ltd, provided building maintenance and cleaning services costing more than £370,000 between 2017 and 2020.
They were owned by Stuart Leigh, a business partner of one of the school’s then governors, Jason Cornish.
Mr Cornish did not record this on declaration of interest forms until February 2021, after auditors began their work.
No longer a governor, he told the IPGCE his links with Mr Leigh were disclosed at “all meetings”.
“I was not involved in any tender selections and it will have to be discussed with Wells Park finance,” he said.
The report also stated that orders with Barker Richmond Ltd were recorded separately on the school’s financial accounting system.
Auditors said that this indicated it was done “to avoid procuring goods via the proper procurement route, or to avoid attaining the relevant level of authorisation to spend”.
No ‘scrutiny or approval’
The report also detailed other irregularities at Wells Park School to do with its contract annual register.
The register did not record “expected contract information” such as start and end dates, value of the contract and descriptions of services.
Jell Amalgamation Ltd was paid £229,000, but its contract did not identify what cleaning works were to be undertaken and “there was no evidence of governor review, scrutiny or approval” according to the auditors.
For Barker Richmond, which was paid more than £142,000 for building maintenance during the period in question, the auditors could find no contract.
The report said they would expect the school to have sought three quotations for the work from different firms, but these had not been obtained.
Auditors also highlighted as a “major issue” concerns over “a significant amount of the non-staffing budget… used to procure goods and services that are owned either fully or partially by one individual”.
This was a reference to Mr Leigh, who did not provide a statement to the IPGCE.
Michelle Kelly, a former head teacher who left in 2016, said Carol Mitchell was effectively in charge.
Ms Kelly departed after filing a complaint with the governors alleging she had been excluded from making key decisions.
She said: “When I was appointed as acting head teacher, and then in the substantive post as head teacher, Carol Mitchell was in charge of all finances.
“She was responsible for hiring all workers that provided services. It was only with her agreement that anyone in the building could order works or goods.”
Invoices and other documentation addressed to Ms Mitchell and reviewed by the IPGCE show she signed off on many of them to authorise payments.
Ms Mitchell also occupied a house on the premises at a reduced rent, which had been authorised by a previous head teacher.
In an email forwarded to the audit team, a representative from the council’s property agents stated: “I do not see how it could be appropriate in any circumstances for the tenants [Wells Park School] to be setting their own charges”.
The school is no longer under council control as it joined the Beckmead Trust academy group in June this year.
Ms Mitchell is currently employed by the trust in an unknown capacity.
A spokesperson for the local authority said: “Essex County Council has stringent systems in place to ensure all of its maintained schools are financially sound and minimise the risk of any improper use of public money and assets.
“Due to concerns raised anonymously regarding financial irregularities… the council carried out a robust internal audit process.
“Following the conclusion of this audit in April 2021, weaknesses in the governance and decision-making arrangements around procurement procedures were identified and recommendations were made to improve the overall transparency of these processes.”
A spokesperson for Beckmead said: “We carried out robust due diligence and legal processes before taking the school on, and this included conversations with Essex Local Authority [the county council]. Our lawyers received the important reassurances they needed.
“Beckmead has robust systems in place to ensure the trust and all its schools are financially sound and that there are clear lines of accountability and sound governance.”
A Department for Education spokesperson said: “Any type of financial mismanagement in schools is completely unacceptable.
“We provide guidance to support local authorities, but it is ultimately their responsibility to oversee the finances of their maintained schools.”