Following on from the last article, we are now digesting the information obtained from the leaked information.
The school’s parlous financial state was revealed upon closure when it said borrowings were piling up and that it was making losses that could not be sustained, this is despite the school allowing £393,000 of school fee debts to build up.
The information was supplied to us by a senior member of management within the school as they felt it was in the public interest to disclose the financial issues at Abbots Bromley School.
In the coming days and weeks, we will break down the information into several separate articles before performing a data dump of all information for full disclosure in the public interest.
Today we can reveal that when school closure was announced the school was set to announce a £300,000 loss for the 2019/2020 financial year.
This loss figure is a part of Woodard’s justification for closing the school, but on this basis, we must ask a grave question.
Why did the governing body not actively pursue those with school fee debts and allow parents to run up significant debts over the course of 12-24 months often without any payment arrangement in place?
The school fee debts have been allowed to accrue without a clear debt collection policy in place as the governing body felt they could not pursue as they had charitable objectives and needed to fulfil its public benefit charter.
While these credit control policies would have been challenging to apply in all circumstances, it is a fact that schools with proper credit control procedures, including a CCA Licence, backed by a policy of exclusion, have fewer problems with debt. It is therefore vital that these policies and procedures are adhered to and regular updates are provided to Governors on the management of debtors.
The charitable objective is the part that raises alarm bells for me if as a business you choose to not pursue school debt as its not charitable to do so, how can this particular debt then be seen as justification for the closure.
As a charitable model, you either decide to allow public benefit while underwriting the losses, or you become more efficient in managing the debts owed.
Many parents have spoken out about the financial mismanagement over recent years with examples such as:
- Invoices not raised by the school on time
- Incorrect invoices raised by the school.
- Payments not banked by the school and later claimed to be owed.
The financial mismanagement is solely the Bursars job, but we must remember a few key points:
- The school had 4 bursars in 5 years
- The Bursar reports weekly to the headteacher
- The Bursar reports to the governing body
- The Bursar is appointed by the governing body and is accountable to the governing body.
- The governing body recruits the Bursar.
Coming back to the projected loss of £300,000 for the 2019/ 2020 financial years before closure, now look at the debts for the school which were owed but not actively pursued recovery.
Now take a look at the significant debts owed to Abbots Bromley School which have been left to escalate without any real attempt to recover debts owed and only once the school closure was announced did they involve legal recovery experts to seek repayment of the debts, that alone raises many questions.
After the closure announcement, Solicitors were involved in sending threatening letters to parents authorised by the governing body.
Did it suit the Woodard board and the Abbots Bromley School governing body to have a significant debt owed as justification for closure and did this debt allow them to appear to be making large financial losses when the financial situation could have looked a lot healthier?
Debts owed and listed within Abbots Bromley School data dump