There has been a small, but regrettable, number of cases of headteachers coming unstuck over financial payments. Most of those in the public domain involve high-profile, successful heads whose educational talents have led to them running more than one school, but whose financial skills and moral compass do not match their ability to improve schools. This is not a new phenomenon, but it appears to have increased in recent years. It is time to set out some simple rules for heads to follow good financial practice, and to be seen to do so.
When I was general secretary of the Association of School and College Leaders (ASCL), I encountered several cases of financial wrongdoing by heads, a small number of which resulted in custodial sentences. I was sufficiently concerned about what was happening to issue guidance to heads at a time when many of them were working as school improvement partners (SIPs) for other schools and being paid a daily rate for doing so. Some SIPs paid all or part of the money into the school budget, while others pocketed all the fee themselves.
On school time
Heads’ contracts do not confine their working year to 195 days, so any work that they do is technically in “school time”. The extent of this activity has increased hugely since the SIP work of the early 2000s and heads - and other senior and middle leaders - are now rightly engaged in school-to-school support work across the country. Indeed, the success of the school improvement system depends on successful school leaders working beyond their own school.
A set of rules for financial conduct on pay beyond normal salary should be set out, preferably by ASCL, the NAHT headteachers’ union and the National Governors’ Association along the following lines:
- All additional money earned by a school employee on education-related contracts should be paid to the school.
- The employee should be given an additional reward in recognition of this work if the school governors judge it to be merited.
- There should be complete clarity and openness about how, and how much, all employees are paid.
- Employees and governors should declare all external interests and these should be on the public record.
- There should be no related-party transactions on the pay of employees.
A related-party transaction is a business deal or arrangement between two parties who are joined by a special relationship prior to the deal. For example, a related party could be a company in which a head or a governor has a financial interest, which is awarded a contract by the school.
International Accounting Standards require disclosures about transactions with related parties. The compensation of key personnel is specifically mentioned in the regulations.
Professional distance
Good governance requires that the governing body, and particularly the chair, keep an appropriate professional distance between themselves and the head. This is especially important in matters of finance and pay, and it is good governance to have the same professional relationship with the school business manager, too.
School leaders deserve to be well paid and the public recognises this. With complete transparency, it can be seen that a head, or other senior member of staff, has earned money for the school through supporting other schools and that this money has been paid directly to the school. As a reward for the additional work involved, the governors can then pay the employee a sum that is recorded in minutes, if they deem it appropriate to do so. This is how wise heads and governing bodies operate. It would be good for the school system if everyone operated in this way.
John Dunford is chair of Whole Education, a former secondary head, general secretary of the Association of School and College Leaders and national pupil premium champion. He tweets as @johndunford
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