Shaer Halewood, Director of Resources introduced the report which outlined the factors which led to Woodchurch Road Primary School reporting a deficit of £442,901 by the end of the 2018/19 financial year and what was in place to prevent a similar situation occurring in other schools. The report also considered the arrangements in place within the Council to manage school budgets including licensed deficits in its schools and to manage Service Level Agreements (SLAs) with schools.

Members were advised that as of 31 December 2018, the projected budget deficit for the school for the year – ending 31 March 2019, as reported to the school’s Finance Committee on 6 March 2019, was £32,754. Members then heard how the actual budget deficit at year end was £442, 901.

The report outlined to Members that the primary reason for the sudden change in reported deficit was that, to the Council’s knowledge since 2014/15, debtor and payment in advance accruals at the year end had been inflated. A result of this had been a falsely reported increase in the level of income and reducing the level of expenditure in the current year, thus concealing the true financial position in school financial reports. Members heard how this practice, and therefore the true financial position became evident in March 2019.

Members were assured how, as a result of issues arising at Woodchurch Road Primary, additional control measures had been put in place that will mitigate the future risk of the primary issue that led to the budget deficit occurring again. Members heard how the school had acted quickly to strengthen controls once the true deficit became apparent in March 2019. Actions taken included:

·  purchasing the Premium Bursar service from the Council’s LMS Finance team;

·  reviewing all relevant procedures in school and introducing additional person checks where appropriate;

·  attending Finance training provided by the Council’s LMS Finance team;

·  promptly actioning audit recommendations;

·  introducing additional checks for the review and sign-off of accruals.

It was further reported that some changes have also been made by the Council’s LMS Finance team to budget monitoring and budget setting reports to improve reporting and more clearly identify the in-year saving / deficit position.

Members had been advised at the previous meeting of the Audit and Risk Management Committee that a report had been suggested to be put to the Children, Young People and Education Committee. Members then heard that upon agenda setting with lead officers and the Chair and Spokespersons for the Committee,  it was advised that a workshop would be best placed to inform Members and would be arranged in due course.

In response to a question by a Member, the Committee heard how Finance Officers are continuing to be proactive with schools and that there is a programme in place to assist schools with their governance arrangements.

In response to a further question, Members were advised that the standard Service Level Agreement that Woodchurch Road Primary School had purchased from the Council had been basic and the Council’s Local Management for Schools service (LMS) had not been obliged to check transactions under the terms of the SLA. Members heard that additional controls have now been put in place in order to mitigate risk of a similar occurrence as reported earlier.

In response to a question by a Member the Committee heard that whilst other concerns had been raised surrounding additional school, but the matters are not of the same nature.

Members were assured that a full review of the school would take place in the future to ensure that a similar situation does not occur.

On a motion by Councillor S Whittingham and seconded by Councillor S Kelly it was

“Wirral Council continue to work with the school in a constructive way to minimise job losses and the effect on children. 

The motion was put and unanimously agreed

Resolved – That

1.  the report be noted and;.

2.  Wirral Council continue to work with the school in a constructive way to minimise job losses and the effect on children.