Since it was set up in April 2012, the Education Funding Agency (the Agency) has succeeded in getting money to schools, local authorities, colleges and other education providers on time. It needs to improve efficiency, transparency and accountability in the education sector, especially in respect of the growing number of academies. The Agency needs complete, accurate and timely data, such as on academies' finances, and needs to be more robust in relation to academies that fail to comply with financial reporting requirements. As the Department for Education (the Department) itself acknowledged, where the Agency does have the data, it needs to be quicker and smarter at spotting risks and intervening quickly in cases of poor financial management and governance in academies, including free schools.
We recognise the scale of the task that the Agency faces as it deals with an expanding workload whilst reducing its costs by 15%. But it is essential that the Agency now gets to grips with effective oversight to improve public confidence in the system. Our recommendations are designed to help it in that task. We also recognise that, by consolidating academies into its accounts, the Department is now providing a more complete picture of spending in the education sector. But the Department is still struggling to solve the problems of reconciling different financial year ends, of clarifying who exactly owns academies' land and buildings, and of improving the data it receives from academies. Finally, the Agency must be prompt to act in response to any evidence suggesting conflicts of interests, where academy trusts buy goods and services from individuals and organisations connected to their schools.