A BARROW school has been served with a financial notice to improve and warned it faces losing its funding if it does not address the failure.

Chetwynde School Trust, which runs Chetwynde School, has been issued with a written notice to improve financial management, control and governance by the Education Funding Agency.

The EFA says there has been a "failure to demonstrate appropriate levels of financial management and governance" and the notice reflects "the continued concerns about governance and the oversight of financial management by the board."

Chetwynde School says a raft of measures have already been put in place and that its three-year recovery plan will turn the situation around.

The high-performing Rating Lane school became Cumbria's first free school in September 2014, after previously being a private fee paying school.

Chetwynde almost closed due to falling pupils numbers in July 2012 and a community campaign saved it. Chetwynde became a free school - an independent state-funded school - to secure its future.

During the expansion, which included an big increase in teachers, Chetwynde says it did go "over the line" financially to protect educational quality as it grew pupil numbers.

The EFA has been monitoring the trust's progress towards meeting the requirements of the Academies Financial Handbook.

In her letter to Chetwynde headteacher Sian Jeffreys and chair of governors Simon Mardel, Sue Baldwin, director of Academies and Maintained Schools Group, wrote: "I remain concerned about the failure in governance and financial management and control which led to the Trust’s 2014/15 accounts accompanying management letter citing a number of actual and potential material weaknesses in the accounting practice and internal control systems of the Trust.

"There have been continuing issues with provision of information on the Trust’s current financial position and quality of data returns. The Trust has also been slow to recognise and tackle issues around safeguarding at the site. The evidence reviewed does not provide the EFA with assurance of good financial management and governance and breaches elements of the Academies Financial Handbook."

The EFA has revoked all delegated authorities and all transactions by the trust now come through the agency for approval.

Chetwynde has been set requirements to meet, including the three-year financial recovery plan, before the notice can be lifted.

The school has been warned that if it fails to meet the requirements of the notice, to the satisfaction of the Secretary of State, its funding agreement could be terminated.

Chetwynde School Trust said: "

Our transition from independent to free school status, whilst enabling our school to continue to support our community, has been challenging for all of us. There have been many changes around monitoring of teaching, assessment and financial performance, for instance. Following the filing of the first year annual accounts, the Education Funding Agency - the department of the DfE responsible for funding the school - expressed concern over the robustness of reporting and monitoring of financial performance and forecasts in particular. The EFA has decided that we would benefit from increased support and monitoring in the short term and has issued a financial notice to improve to indicate this. The head of school, chair of governors and business manager welcome this approach as we believe it will enable the school, which is still less than two years into free school status, to both learn and improve in these areas and secure the appropriate ongoing funding we require. The head, chair and finance committee along with the business manager have already gone a long way to meeting the EFA’s requirements and have communicated these to them. The next stage, in order to comply with the notice, will be to produce a three year business plan which the EFA and the school will monitor against so that the school may grow even stronger over the coming years."

The recommendations include;

*Providing a three-year financial recovery plan from 2016/17 to 2018/9 that shows in-year and cumulative surpluses across the period.

*Providing monthly management accounts that accurately show the current and forecast financial position, including a rolling 12 month cash flow forecast and which demonstrate that no requests for financial support will be made to the EFA.

*Ensuring that it is complying with requirements to submit financial returns to the EFA including the Budget Forecast Return and audited financial statement of accounts by the prescribed deadline and without qualification.

*Undertake an external review of financial management and governance controls, carried out by independent qualified persons agreed by the EFA

*Provide assurances that the accounting officer, chair of governors and chief financial officer have the qualifications, skills and abilities to carry out their roles effectively.