Checks increased as council warned £500,000 Smethwick school fraud could happen again
The £500,000 fraud at a Black Country primary school which saw its headteacher living a lavish lifestyle could happen again, council chiefs have admitted.
Sandwell Council’s Audit and Risk Assurance Committee has been told there is no guarantee there won’t be a repeat of the swindle which saw hundreds of thousands of pounds being stolen using false invoices.
The warning came as council officers reported on plans to claw back money embezzled from the Smethwick school over five years.
The fraud was masterminded by headteacher Michelle Hollingsworth, who had responsibility for administrating and protecting the school’s budget, helped by school secretary Deborah Jones, who falsified invoices.
Peter Farrow, audit services and risk management manager, told the committee: “The complexity around this case was the two most senior people at the school, the head teacher and the secretary conspiring and also conspiring with some suppliers.
“So some of the normal checks and controls you would see, like separation of duties, didn’t really work here.”
Mr Farrow added additional checks on invoices were now being carried out and schools were being given extra training on counter fraud, but he warned : “Can we guarantee this won’t happen again in the future?
“Difficult to give that guarantee because the separation of duties, the ultimate control, in this case unfortunately had very little effect.”
Between them, Hollingsworth and Jones spent thousands of pounds on furniture, paintings and expensive clothes.
In addition they issued invoices for hundreds of thousands of pounds for work which was overpriced or never carried out to construction companies with links to their families.
In November, the pair were jailed for a total of nine years and nine months for their roles in the scam, while Hollingsworth’s builder husband, Joseph, was sentenced to 12 months.
Sandwell Council said it conducted audits on schools on a cyclical basis and controls meant no single individual has full control when making payments.
"At Annie Lennard Primary, this control was overridden by the two people with the most senior, trusted and responsible financial posts, conspiring with each other in order to process fraudulent payments," the council said in a statement.
“This was further compounded by third parties, in this case a number of suppliers, also actively participating in the collusion.
“It was in this context that council officers highlighted that no organisation could guarantee that, particularly where collusion took place, a fraud could not be committed.”
It added: “The council remains vigilant to detecting and preventing fraud. We are also rolling out enhanced training for schools to raise awareness of the issues arising from the Annie Lennard Primary case, and to help them promptly identify any such instances in the future.
“This was a unique case and the seriousness of the headteacher and secretary’s actions was reflected in the sentences handed out in court.”
Full coverage of the trial
Take a look back at coverage of the trial from the Express & Star's reporting team.
- School fraud trial told of cash for cheques scam claims
- Niece denies family plot in Smethwick school fraud case
- Headteacher's sister-in-law 'paid £12k for child special needs training services'
- Estimated costs for school works 'inadequate', fraud trial hears
- Secretary in school fraud trial says headteacher was behind scam
- Head in school fraud wrangle never saw its bank statements, court told
- Headteacher accused over school fraud 'lied through her teeth'
- Alleged fraudster headteacher 'bought clothes at boutiques for school non-uniform days'
- Alleged fraudster headteacher 'offered secretary cash to take blame'
- Alleged fraudster headteacher ‘wanted cash back on school toilets’
- 'I can’t use a computer' says headteacher at centre of fraud trial
- Estimates for primary school works were inflated, trial told
- Primary school fraud trial told of grudges and gambling debts
- Carpenter admits role in primary school fraud
- Former Smethwick headteacher accused of fraud was 'manipulative'
- Primary school headteacher's family ‘told boyfriend to take fraud blame’
- Black Country primary school headteacher ‘gave contracts to family’
- School secretary 'husband’s firm paid £74k for phantom work'
- Headteacher and secretary 'siphoned thousands from school accounts'
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