Council report reveals Wirral school hid debt problems
A Wirral school who has been in debt of more than half a million pounds has “hid” his money problems, according to a council report.
The Wirral Council Audit and Risk Management Committee discussed the huge financial problems at Woodchurch Road Primary School in Oxton.
The report presented to counselors showed that as of December 31, 2018, the school’s projected deficit for the year ending March 31, 2019 was £ 32,754.
But the actual deficit at the end of the year was £ 442,901, more than £ 400,000 more than the previous estimate.
For legal reasons, the council document does not identify the role of specific people in the budget fiasco.
The report said the main reason for the deficit was that since 2014/15, the school had inflated the amount of income it actually received on its books, as the report stated “the debtor and prepayments to the end of the year had been inflated “.
Detailing the huge impact of the error, the report said: “This resulted in a false increase in the level of income and a reduction in the level of expenditure for the current year, thus obscuring the true financial position in the financial reports of the companies. schools.
“This practice, and therefore the true financial situation, became evident in March 2019.”
One problem was that the school seemed to have overestimated budget control and was verifying a standard Service Level Agreement (SLA) with the Wirral Council’s Local Schools Management (LMS) finance team.
This meant that the school itself did not have any additional controls in place.
The school’s deficit increased further from £ 442,901 to £ 558,492 at the end of fiscal year 2019/20.
The report states that one of the main causes of this situation was the resolution of the issues in the 2018/19 fiscal year, which included “the identification of unaccounted-for liabilities and the reduction in revenue due to the falling rolls. [pupil numbers]; which together exceeded the savings made by the school during the year “.
The expression “identification of non-accrued commitments” in fact designates invoices not taken into account in one fiscal year which must be recorded in the following year.
The board document added that the school moved quickly to tighten controls once the true deficit became apparent in March 2019.
A number of actions, including more checks and balances and governors participating in council-led financial training, have been taken.
Cllr Stuart Kelly, who represents Oxton, said: “It is not the fault of the professionals, it is not the fault of the governors. There are errors in the processes.
“If someone is determined to cover something over a period of several years, it could have happened at one of our community schools or at one of the academies.”
The Lib Dem member added that there could be staff restructuring due to declining student numbers at any school, but that was not the main reason for job cuts. were a possibility at Woodchurch Road Primary.
Cllr Kelly continued, “This school has a particular problem that has nothing to do with falling rollers, most of the deficit is due to accrual accounting coverage, frankly.”
Shaer Halewood, Wirral Council’s director of resources, said there were many areas that had not been looked at properly by the school and that if any of them had been looked at more closely, the problem would have been detected more early.
Now that the issue has been discovered, a number of improvements have been made, with the checks and balances mentioned earlier, including the school’s purchase of the SLA of premium LMS funding and revised procedures for it. ensure they are fit for purpose.
On the issue of possible staff cuts at the school, union adviser Stuart Whittingham said it was “manifestly unfair” that people could lose their jobs and called on the council to work with the school to minimize the cuts. staff and the impact they would have on children. education.
Cllr Whittingham’s motion calling for the protection of educational standards in schools was adopted by assent at the meeting.
The Local Democracy Information Service approached the school for comment, but was directed to Wirral Council who declined to comment further.