Four colleges are yet to publish their annual accounts for 2021 – one of which has now failed to publish financial statements for the previous three years.
Clawback disputes, last-minute and “frustratingly slow” funding assurance reviews, audits and bank loan negotiations have all contributed to the delays, according to the colleges involved.
FE Week spotted the issue after analysing the Education and Skills Funding Agency’s annual college accounts spreadsheet for the year ending July 31, 2021, which was published this week.
The data file contains 227 of 231 expected returns. Those missing include Brooklands College, Fareham College, Stoke on Trent College and Kingston Maurward College.
Government rules state that colleges must publish their audited accounts in an easily accessible location on their website no later than January 31 each year to “maximise transparency and to support accountability”.
This is the third year in a row that Brooklands College has failed to file financial statements. The college, based in Surrey, was stung by a £20 million apprenticeship subcontracting scandal back in 2018.
Brooklands College has been negotiating repayment demands from the ESFA ever since.
Principal Christine Ricketts said the college is “well advanced in discussions to resolve outstanding issues and we are expecting to publish the accounts before the end of this financial year”. She added that the college “continues as a going concern”.
Fareham College in Hampshire was a surprising inclusion on the list of colleges to not yet publish accounts. The college is judged ‘outstanding’ by Ofsted and has no financial notices to improve from the government.
A spokesperson told FE Week the college received a “random sampled ESFA funding assurance review” very late in the normal cycle, the pace of which to conclude has been “frustratingly slow despite best endeavours by the college to work proactively with the ESFA”.
“The delay to the publication of the college financial statements for 2020/21 is simply down to ensuring correct procedures are followed for sign-off of the accounts and is not a reflection of the financial health of the college,” the spokesperson added.
Kingston Maurward College, a land-based college in Dorset, has faced financial challenges over the past couple of years due to a big hit on its commercial income during the pandemic and associated lockdowns.
The college received a financial notice to improve as well as an FE Commissioner visit earlier this year and is currently undergoing a structure and prospects appraisal.
Principal Luke Rake told FE Week his college breached loan covenants due to the income impacts of Covid-19, and as a result “our banks and ourselves have been in conversations for some time as to how these breaches should be treated”.
This is taking place alongside a “very amicable discussion about refinancing to consolidate loans and give the college an even better financial position in conjunction with our strong post-Covid recovery,” he said.
Rake added that both banks have been “exceptionally supportive” but until these discussions are complete the college “is not in a position to fully sign off the accounts”.
Lastly, Stoke on Trent College said the delay to its accounts is due to the “finalisation of an ESFA funding audit”.
A spokesperson told FE Week this has now been “successfully completed” with a “very small clawback of just over £250”. The accounts are expected to finally be signed at the end of this week.
Stoke on Trent College had spent six years in government intervention, partly because of a £20 million bailout in 2018, but the ESFA lifted its financial notice to improve in May 2021.
The college has been on the mend and recorded an underlying operating surplus of £165,000 in its 2020 accounts.
The college’s self-assessed financial health grade for 2019/20 was ‘outstanding’, and the FE Commissioner’s team praised the college that year for being on a “strong trajectory of improvement”.