Former Academy Trust CEO Barred From School Management

• Published date: 02 October 2020
• Subject Matter: Corporate/Commercial Law, Consumer Protection, Compliance, Corporate and Company Law, Education
• Law Firm: Wrigleys Solicitors
• Author: Mr Graham Shaw

As a former academy trust CEO is barred from school management, we look at the lessons that can be learned.

Background

The Secretary of State has published a prohibition notice barring Nardeep Sharma, former CEO of The Thrive Partnership Academy Trust, from taking part in the management of an independent school (including an academy or free school), which also disqualifies him from being a governor of a maintained school. Nardeep Sharma has three months to appeal.

The prohibition notice follows an investigation report by the Education and Skills Funding Agency (ESFA) which identified 'failings and weaknesses in financial management and governance' including

• poor procurement practices, with one contract awarded to the most expensive of three suppliers with a personal connection to the Trust, in breach of the Academies Financial Handbook (AFH) 2017, advice from external auditors and Trust policy,
• irregular expenditure on hampers (some with wine) requested by the CEO as gifts for an employee, previous trustee and former chairs, in breach of the Trust's code of conduct,
• lack of governance oversight, with the CEO and Executive Principal making proposals to the finance and audit committee, including to override the external auditor, in breach of the committee's function of objective and independent assurance under AFH 2017,
• recruitment, which involved a change to the staffing structure, without board approval and in breach of Trust policy and standard practice
• severance payments to staff with capability or absence issues without formal approval or legal advice and in breach of special severance payment provisions of AFH 2017 and
• lack of transparency in reporting the Trust's governance arrangements on its website and on Get Information About Schools (GIAS) and inconsistency with Companies House.

So what lessons can be learned by current academy trusts and their CEOs?

It's not a one off

The prohibition notice is the third such notice published by the Secretary of State in relation to former academy trust leaders, with all three published this month. This marks a greater focus by the Secretary of State and the ESFA on holding academy trust leaders to account.

It's personal

The prohibition notice is a stark reminder that CEOs, as accounting officers, are personally responsible to Parliament and ESFA's accounting officer, under AFH 2020, for their trust's financial resources. They are also personally responsible for assuring their board that there is compliance...