The committee said the Department for Education must evaluate arrangements for audit and accountability of free schools, and address poor levels of compliance by free schools with financial reporting systems. Fewer than half of free schools submitted their required financial returns for 2011-12 on time.
The DfE and Education Funding Agency are also “overly reliant on whistleblowers” to identify problems in free schools rather than using appropriate audit and review processes, says the report.
A DfE spokesperson said: “The financial accountability systems for free schools are more rigorous than those for maintained schools.”
The PAC report also called for the DfE to be “more open about publishing the reasons for determining that a free school application be progressed”, saying that the department was “unable to give us a consistent explanation of how its decision-making process leads to certain applications’ approval and others’ rejection.”
Following the publication of the report, a series of leaks highlighted tensions between secretary of state Michael Gove and the Lib Dems. Last Friday, the BBC reported that Gove had warned that implementing deputy prime minister Nick Clegg’s plans to give all primary school pupils free school meals could affect teaching quality. Reports then emerged that a senior Lib Dem called Gove a “zealot” for diverting money from other budgets to spend on free schools, and on Monday the Guardian reported that Lib Dem Treasury minister Danny Alexander has told Gove to bring the free schools budget “back under control