URGENT changes are required at Caerleon Comprehensive School where financial losses are expected to reach £1.6 million within the next 18 months, a report has said.

No recovery plan is in place to reduce debts that include a £500,000 loan from Newport City Council, which appointed auditors to investigate the school’s practices in March.

The auditors also found that some new staff members were not always subject to DBS (Disclosure and Barring Service) checks, while employees accrued lieu time and sick leave without evidence of authorisation.

Following the review, Caerleon Comprehensive received an unsatisfactory audit opinion, meaning its financial practices “are not well controlled” and that “changes are required urgently”.

The auditors say the sizeable deficits pose a critical risk to the council, which will invest £3.5 million in school budgets this year.

A total of 27 significant issues were identified during the review, with one critical issue being that of the school’s financial position.

“The school was operating with a large budget deficit which is projected to reach in excess of £1.6 million within the next 18 months,” says a report to the council’s audit committee.


“No recovery plan was in place to reduce the deficit amount and the School had exceeded the licenced deficit amount without obtaining further approval from the local education authority.

“The school was in breach of the June 2014 intervention plan and unable to repay the £500,000 loan agreement with the local education authority.”

It has also emerged that the school’s private funds were being spread across more than the permitted number of bank accounts, which were audited in 2017/18 by an employee and not an independent auditor.

The school’s treasurer also had online bank account access and the ability to move funds “without any prior authorisation or oversight”, say the auditors.

The report says: “Supporting documentation to identify the date and source of school private fund income being initially received was not present to support the school trip income.

“Teaching staff were collecting and holding significant sums of money which was in excess of the school’s insurance arrangements.”

But budget issues were not a standing agenda item at the meetings of the school’s governing body or finance subcommittee, according to recorded minutes.

Safeguarding concerns include the DBS checks and insufficient reviews of driving at work documentation on an annual basis, while staff responsible for driving students did not have their licence reviewed every six months.

Staff were also found to be accruing high levels of time off in lieu (TOIL) and paid leave without clear evidence of approval from senior staff.

The report says: “Staff were permitted to take three days paid leave of absence if their child was unwell.

“There was no documented policy at the school and evidence of governing body approval for these arrangements was not provided.”

“The school did not have a TOIL policy and when requesting days off using accrued TOIL, full information was not provided to the deputy headteacher.

“TOIL earnt was sometimes paid as additional hours.”

Newport City Council’s audit committee will receive the report’s findings on June 6.