Free School Cash Checks 'Not Good Enough'
Checks on how taxpayers' cash is spent on the Government's flagship free schools are not good enough, a Commons watchdog has warned.
In a damning report, the Public Accounts Committee (PAC) said the system relied too heavily on whistleblowers to expose problems.
The committee said standards of financial management and governance in some free schools were "clearly not up to scratch".
MPs pointed out that less than half of free schools submitted their financial accounts for 2011/12 on time to the Education Funding Agency (EFA), as they are required to do.
The committee highlighted recent problems at Al-Madinah School in Derby, Discovery New School in Crawley, West Sussex, which was closed down last month, and Kings Science Academy in Bradford.
These cases indicated the Department for Education (DfE) and EFA's systems for overseeing free schools "are not yet working effectively to ensure that public money is used for the proper purpose", according to the report.
It adds that both the DfE and the EFA "seem overly reliant on whistleblowers when problems should have been identified through their own audit and review processes".
PAC chairman Margaret Hodge said: "The department and agency have set up an approach to oversight which emphasises schools' autonomy, but standards of financial management and governance in some free schools are clearly not up to scratch."
Ms Hodge said that the Government needs to improve its systems for scrutinising free schools "so that we can follow the taxpayer's pound and satisfy ourselves that public money is being used appropriately".
According to latest figures, there are now 174 free schools open, with around 116 in the pipeline. It is estimated that around £1.1bn had been spent on the initiative by March this year.
The Department for Education said many of the committee's concerns were "misplaced", insisting oversight arrangements are more robust for free schools, with the Government intervening quickly to deal with failure.
A spokesman said there is a "clear expectation" for free schools to submit their accounts on time and if they do not do so without a good reason, they could face being served with an official Financial Notice to Improve.