Reviewer of college financial oversight ‘welcomes’ sector views after ESFA blunder

College leaders are being asked for their views on the ESFA’s oversight of financial management – after the FE Commissioner found staff there had failed to accurately assess Hadlow College’s finances.

It was announced last week that Dame Mary Ney would lead a review into the way the government monitors college finances.

The review was promised in May by then skills minister Anne Milton after the FE Commissioner revealed that Hadlow College, now in education administration, had misled the Education and Skills Funding Agency (ESFA) over the health of its finances.

The report, published in May, said: “The college’s finance record for 2016/17 shows an automated financial health score of ‘good’. However, when this is compared to the annual accounts there are material differences, particularly in relation to loans. When the finance record is amended to reflect the annual accounts the automated health score is ‘inadequate’.”

So it would appear the ESFA had not thought to read the Hadlow College published accounts.

The findings from the review are expected to be published later this year, and Ney is now asking the sector for their own insights.

In an update published yesterday, the DfE said: “Dame Mary would welcome written comments from anyone with views on the functioning of financial oversight of the college sector. If you would like to contact the review please email FEOversight.REVIEW@education.gov.uk.”

The DfE told FE Week there is no fixed deadline for submissions, but they should come in by early October to give Ney enough time to review them.

Ney’s review will determine whether the government has “monitored and exercised” its oversight of those colleges’ finances and financial management, including the work of the ESFA and the FE Commissioner’s team.

It will recommend changes that would “reduce the risk of such problems recurring, taking account of colleges’ independence and the need to minimise regulatory burden”.

The launch of Ney’s review comes less than a month after the National Audit Office said they were also preparing to launch a value for money review on the management of colleges’ financial sustainability.

Read more about Ney’s appointment here.