The Charity Commission has opened a statutory inquiry into the Durand Education Trust, a charity associated with an academy school whose headteacher had a stake in a dating agency that was registered at the school’s address.
The Durand Academy Trust, an exempt charity that is regulated by the Education Funding Agency, runs a primary school in Stockwell, south London, and a state boarding school in Stedham, West Sussex.
The two schools’ land and buildings are owned by the charity the Durand Education Trust, which is regulated by the Charity Commission and has been the subject of an operational compliance case since October because of concerns about its governance and potential conflicts of interest.
Paula Sussex, chief executive of the regulator, told MPs on the Public Accounts Committee last month that the commission was considering escalating the case into a statutory inquiry.
The regulator issued a statement today saying that it had opened an inquiry into the Durand Education Trust because of concerns about whether trustees had properly carried out their duties; the governance of the charity, including whether conflicts of interest had been identified and/or managed and if there had been any unauthorised private benefit arising from the charity’s activities; and whether there had been mismanagement and/or misconduct by those running the charity.
"The commission’s investigation has been opened in light of recent public interest in the activities of the charity and its relationship with the school and the exempt charity, and the need for public accountability in the administration of the charity," a statement from the commission said.
Two days before Sussex gave evidence to the PAC, the committee had heard from Sir Greg Martin, the headteacher of Durand Academy, who received almost £400,000 from his school salary and from income earned through running a leisure centre on the school’s site in 2012/13.
Martin confirmed to the committee that he had earned £229,000 from the school in 2012/13 – a 56 per cent rise on the previous year – plus an additional £161,000 from being the sole director of a company called GMG.
GMG receives a fee for running London Horizons, a not-for-profit leisure and accommodation business that operates from the same site as the school and makes income that is returned to the academy.
Martin was asked by the committee about his role in a dating agency of which he had been the director and which had been registered at the same address as the school.
Martin told the committee that the business was dormant and was not being run from the school’s address.
A letter sent last week by Margaret Hodge, chair of the Public Accounts Committee, to Chris Wormald, permanent secretary at the Department for Education, and copied to Sussex, said that the commission should have acted earlier.
"It should not have needed an evidence session with the Public Accounts Committee to trigger action from the Charity Commission and a new sense of urgency from the Department for Education," the letter said.
"We expect a clear articulation of the governance arrangements at Durand Academy and assurance that these are in line with acceptable practice for academies and charity law."
Asked by Third Sector if the statutory inquiry had been opened in response to pressure from the Public Accounts Committee, a Charity Commission spokeswoman declined to comment.
In a statement, Tom Cornwall, chair of governors at the Durand Academy Trust, said: "Durand Academy Trust is looking forward to working positively with the commission to bring clarity and reassurance to all of those involved with the school, as it continues its pioneering work that has delivered so much for children and the local community in one of the country’s most disadvantaged areas."
He said that the opening of an inquiry was not in itself a finding of wrongdoing.
"All too often, we find that conversations about the Durand model are ill-informed and clouded by misunderstanding," he said. "The Charity Commission’s work, we hope, will be an opportunity to set the record straight once and for all."