A college is under fire for failing to publish accounts for the fourth year in a row.
The “unusual” situation at Brooklands College comes amid a £20 million clawback dispute with the government following an apprenticeship subcontracting scandal, which was uncovered in 2018 but remains unresolved.
A union has criticised the “lack of transparency” which amounts to a breach of the college’s funding agreement with the Education and Skills Funding Agency.
The Surrey-based college recently announced plans to sell a historic building and land in a deal understood to be in the region of £45 million to help balance the books. Stakeholders who fear they are being kept in the dark about the scale of financial problems, have called for the college to open its books.
A Brooklands College employee who did not wish to be named told FE Week that staff were keen to know when the accounts would finally be published but they have received “radio silence” from management. The source added: “They keep the finances very close to their chest.”
University and College Union regional official Michael Moran said: “It beggars belief that Brooklands College has failed to publish its accounts for four years running, despite recent financial scandals. Staff, students and the wider public have every right to be concerned about the lack of transparency at the college and we call on management to open up its books as soon as possible.”
Colleges must publish their audited accounts in an easily accessible location on their website to “maximise transparency and to support accountability” by January 31 in line with ESFA requirements.
The agency’s rules state that stakeholders have a “right to expect information on the financial performance and results of a corporation to be published on their website” and failure to do so is a “breach of the corporation’s funding agreement with ESFA”.
Brooklands College’s last filed accounts are for the year ending July 2018.
An FE Week investigation later exposed how the college subcontracted out almost £20 million to a small private training provider called SCL Security Ltd in just three years.
The ESFA, FE Commissioner and Ofsted stepped in to investigate the private provider, headed by Andrew Merritt, was subsequently kicked out of the apprenticeships market.
Among other findings, the agency discovered that apprenticeship funding was being used to pay the wages for the 16-to-18-year-olds, which is strictly against the funding rules.
SCL Security Ltd filed for insolvency in October 2020.
The ESFA demanded Brooklands College pays up to £20 million back to the government after the scandal came to light.
However, a liquidators’ statement of receipts and payments for SCL Security was published on January 4, 2023, and revealed colleges and the ESFA have submitted claims worth £22.5 million to the company.
The claim is a result of the ESFA’s review “in respect of monies paid by a number of colleges and agencies to the company, which have been challenged for various breaches”, the statement said.
“Consequently, colleges have written to us claiming full recovery of all monies previously paid to the company.”
The statement continued: “The claims of the colleges, due to the basis on which they have been calculated as damages claims for breach of contract, are complex and the formal process of adjudicating the claims will involve further work and, in all likelihood, further information will be required to adjudicate the claims, individual creditors will be contacted with such requests.
“Due to the quantum and nature of the claims received the joint liquidators instructors lawyers from Andrew Jackson solicitors to provide legal advice in relation to these claims.”
Auditors that spoke to FE Week described Brooklands College’s failure to publish accounts for four years as “unusual”, but added the ESFA isn’t known for penalising colleges for being late on their accounts as they are usually aware of the reasons behind this.
A spokesperson for the college’s leadership team said: “We are aware of the ESFA requirements for the publication of our annual report and financial statements and it is our intention to publish these early this year. The college is in regular communication with the EFSA who are fully aware of the college’s position and plans.”
The ESFA confirmed it was aware of Brooklands College’s accounts issue and said officials continue to meet regularly with leaders to resolve matters.